Prices — including the price of credit — are primarily information. They signal the relationship between money available for lending and the demand for loans.
Trump knows bankruptcy.......six so far.......and those were corporations. He is now set his sights on the U.S. economy and following up with the world's economy. He has no clue on developing a strategy for anything. Wars........just fire it up. Agreements - not worth the paper they are written on. The World now knows - and no one trusts anything coming our of Washington. He unfortunately may be the fall guy for the presidents that came before starting after Clinton. They were all bought and paid for and now us peons are going to feel the heat. Trump just can't stand that the world is on to him. He gets no respect - some give him lip service - but the world is coming to understand the U.S. isn't what it used to be. Going to get uglier.
Is BPR right about the UNAVOIDABLE coming Big Loss?
Morgan Housel suggests we ask who has the best, most motivating STORY about the USA's financial and political stability today? Most motivating to the US population's swing vote, perhaps.
Or to the armament industry and/or military?
Or to the US deep state, or China? Or to...?
What surprise is hiding that will reverse the course?
Well, Clinton is the only President to have the Public Debt (ie., budget surplus) become less since the 1969 Johnson/Nixon transition. In his presidency Public Debt, money owed to outside investors, was paid down (or reduced) by $453 billion in his 4 years in office. Total gross federal debt (2001): approximately $5.8 trillion
Debt held by the public (2001): approximately $3.2 trillion — a decade earlier this had been projected to reach $6.4 trillion by 2001, but shrinking deficits and growing surpluses brought it down to $3.2 trillion instead, representing 31% of GDP. Today, at $40T, it is just over 122%. And, so far in his 2nd Term, the Bankruptcy King has add $11.2T to the Total Debt.
Anyone think it is going to be less ahead? Anyone?
Bill has blamed teams for the national debt but it is easy to blame Trump. After all under his 5+years in office the debt has increased by more than $11 trillion. But, not to worry, George Soros's right hand man, Scott Bessent, is on the case.
If only Scott would stop worrying about destroying the economy of Iran and wreaking havoc on the civilian population there.
I still don't understand why MAGA fanboys didn't have a problem with this Trump appointment. Soros is the nemesis of the right but Bessent is a great guy?
While our Neros are all playing their fiddles, I must still pay my bills with money I earn. I chose the wrong profession. I should have been a government.
In some ways Kevin, all homes, all individuals all are mini-governments. We set budgets. We hire contractors. We earn money and we spend it. We even take out credit, repay loans invest in the future and eventually and hopefully, reap what we sow.
Except for the fact, that we are beholden to keeping our books honest. By the powers (the governments and the banks) that be. And if not, we are quickly turned from fruitful "mini-governments" (citizens) to governments on a blacklist (one of the homeless).
And yet the true models of government, be they municipal, state, provincial and federal are not held to that same standard.
Children under twelve enter free because they’ll be receiving the bill later.
Inside you’ll find:
THE TARIFF TILT-A-WHIRL!
THE MORTGAGE MEAT GRINDER!
THE WALL STREET HEADS-I-WIN, TAILS-YOU-PAY!
THE FEDERAL RESERVE INFLATABLE CASTLE!
And our newest attraction:
BONDS TO BOMBS!
When monetary policy just isn’t getting the job done!
What a beautiful metaphor for modern economics. Everything’s a carnival game. Knock over three milk bottles and win a stuffed animal!
Except the milk bottles are interest rates, the baseball is monetary policy, and the stuffed animal costs your grandchildren $14 trillion.
Carnival games have always been wonderful because everybody understands they’re rigged. That’s part of the charm! Nobody throws three dollars at a carnival barker thinking:
“Finally, a fiduciary.”
You know you’re getting screwed! You hand him five bucks. He hands you three rings. You throw them at a bottle and they bounce seventeen feet sideways.
He says:
“CLOSE!”
That’s Wall Street! Except instead of losing five dollars…your pension disappears, and then the carnival operator says:
“Ladies and gentlemen, we’ve suffered an unprecedented ring-toss emergency.”
What happens now?
YOU BUY HIM NEW BOTTLES.
That’s the magnificent arrangement.
When ordinary people gamble and lose:
PERSONAL RESPONSIBILITY.
When enormous financial institutions gamble and lose:
SYSTEMIC RISK.
Imagine trying that in Vegas.
“Sir, you lost $40,000.”
“No, no. I’ve experienced a liquidity event.”
“You lost Sir.”
“If I lose, several important people may become uncomfortable.”
“Security!”
“TOO BIG TO FAIL!”
Suddenly the Federal Reserve crashes through the ceiling carrying a wheelbarrow of money.
Now apparently America and Canada are having another tariff disagreement.
Canada! We’re fighting with CANADA.
That’s impressive. How do you piss off Canada?
These are people who apologize when YOU bump into THEM.
Canadian diplomat:
“Unfortunately, we may have to impose retaliatory tariffs.”
American:
“IS THAT A THREAT?”
Canadian:
“No, sorry.”
“WHAT?”
“Sorry about saying sorry.”
“ARE YOU MOCKING US?”
“Oh gosh, no.”
“50% TARIFF!”
Canada retaliates.
America retaliates against the retaliation. Canada retaliates against the retaliation of the retaliation.
Six months later a microwave costs $14,000 and nobody remembers what the original argument was about.
Economists call this:
TRADE POLICY.
Normal people call it: Two drunks arguing over who owns the shopping cart.
And the beautiful part is politicians always say:
“THE OTHER COUNTRY WILL PAY!”
Really?
Because somehow whenever governments announce somebody else is going to pay…my Visa card starts sweating.
The interesting thing about interest rates is that they’re prices.
People don’t like prices when prices tell them something unpleasant.
So naturally we attempt to change them.
This works beautifully.
For example, my bathroom scale says I weigh 230 pounds.
I disagree.
So I adjusted the scale.
It now says 175.
I’ve never felt healthier.
My doctor remains strangely unconvinced.
He claims changing the number doesn’t change the underlying condition.
The idiotic teaching and following of Keynesian economics has served the US economy very poorly. The Austrian School of Economics to any logical thinking mind makes perfect sense. Why do we pursue this magical thinking?
When I read Bills last paragraph today I envision the Treasury updating the gold "we are suppose to hold" from $42.22 / oz to "mark to market". That would add a lot of "Monopoly" cash to the treasuries game board. It would make a lot of us mile ear to ear!
Patrick G. Thank you for the reply. I try to reply back , but it said only for pays subscribers. I am a page subscriber. Is that number for all currencies globally , or just the u s?
Thanks for your daily missives. I agree there is an over spending problem, but you have not talked about the revenue side (taxes). The way I see it is that we need less spending and more revenue simultaneously.
Isn't it that most of the US Treasury bonds in Japan are not held by the government? So there's not a lot to sell if Japanese investors, funds, pension funds, don't sell. They have no reason to. Bessent is scared of a default because of contagion. Can you agree on that?
Trump knows bankruptcy.......six so far.......and those were corporations. He is now set his sights on the U.S. economy and following up with the world's economy. He has no clue on developing a strategy for anything. Wars........just fire it up. Agreements - not worth the paper they are written on. The World now knows - and no one trusts anything coming our of Washington. He unfortunately may be the fall guy for the presidents that came before starting after Clinton. They were all bought and paid for and now us peons are going to feel the heat. Trump just can't stand that the world is on to him. He gets no respect - some give him lip service - but the world is coming to understand the U.S. isn't what it used to be. Going to get uglier.
“Going to get uglier.” Amen. And uglier BIG-TIME.
"It's the best story that wins."
Is BPR right about the UNAVOIDABLE coming Big Loss?
Morgan Housel suggests we ask who has the best, most motivating STORY about the USA's financial and political stability today? Most motivating to the US population's swing vote, perhaps.
Or to the armament industry and/or military?
Or to the US deep state, or China? Or to...?
What surprise is hiding that will reverse the course?
Just curious. Why "after Clinton?" No snark intended.
Well, Clinton is the only President to have the Public Debt (ie., budget surplus) become less since the 1969 Johnson/Nixon transition. In his presidency Public Debt, money owed to outside investors, was paid down (or reduced) by $453 billion in his 4 years in office. Total gross federal debt (2001): approximately $5.8 trillion
Debt held by the public (2001): approximately $3.2 trillion — a decade earlier this had been projected to reach $6.4 trillion by 2001, but shrinking deficits and growing surpluses brought it down to $3.2 trillion instead, representing 31% of GDP. Today, at $40T, it is just over 122%. And, so far in his 2nd Term, the Bankruptcy King has add $11.2T to the Total Debt.
Anyone think it is going to be less ahead? Anyone?
Clinton had a budget surplus because, he didnt have control of congress, the Republicans didnt like what he wanted to spend the money on
Ol P.G. - people here are on to you as well. There is an ol' saying - if you think you know, you don't know. Amazin' how blind some can become.
Bill has blamed teams for the national debt but it is easy to blame Trump. After all under his 5+years in office the debt has increased by more than $11 trillion. But, not to worry, George Soros's right hand man, Scott Bessent, is on the case.
If only Scott would stop worrying about destroying the economy of Iran and wreaking havoc on the civilian population there.
I still don't understand why MAGA fanboys didn't have a problem with this Trump appointment. Soros is the nemesis of the right but Bessent is a great guy?
While our Neros are all playing their fiddles, I must still pay my bills with money I earn. I chose the wrong profession. I should have been a government.
In some ways Kevin, all homes, all individuals all are mini-governments. We set budgets. We hire contractors. We earn money and we spend it. We even take out credit, repay loans invest in the future and eventually and hopefully, reap what we sow.
Except for the fact, that we are beholden to keeping our books honest. By the powers (the governments and the banks) that be. And if not, we are quickly turned from fruitful "mini-governments" (citizens) to governments on a blacklist (one of the homeless).
And yet the true models of government, be they municipal, state, provincial and federal are not held to that same standard.
And isn't it ironic. Don't you think?
SAME STANDARD???
…Trump: The ultimate intervention is our military. And if we have to use that, we will.
MEANING??? Bonner opines:
When fraud no longer works, the feds turn to force. Bonds give way to bombs. Governments declare ‘emergencies’ ...and send in the marines.
[…into Main Street? Unbelievable, but is there any other logical interpretation?????]
Step Right Up Folks!
Welcome, ladies and gentlemen, to…
🎪 BUBBLELAND! 🎪
America’s Premier Financial Amusement Park!
Admission: FREE!
Exit: $40 trillion plus interest.
Children under twelve enter free because they’ll be receiving the bill later.
Inside you’ll find:
THE TARIFF TILT-A-WHIRL!
THE MORTGAGE MEAT GRINDER!
THE WALL STREET HEADS-I-WIN, TAILS-YOU-PAY!
THE FEDERAL RESERVE INFLATABLE CASTLE!
And our newest attraction:
BONDS TO BOMBS!
When monetary policy just isn’t getting the job done!
What a beautiful metaphor for modern economics. Everything’s a carnival game. Knock over three milk bottles and win a stuffed animal!
Except the milk bottles are interest rates, the baseball is monetary policy, and the stuffed animal costs your grandchildren $14 trillion.
Carnival games have always been wonderful because everybody understands they’re rigged. That’s part of the charm! Nobody throws three dollars at a carnival barker thinking:
“Finally, a fiduciary.”
You know you’re getting screwed! You hand him five bucks. He hands you three rings. You throw them at a bottle and they bounce seventeen feet sideways.
He says:
“CLOSE!”
That’s Wall Street! Except instead of losing five dollars…your pension disappears, and then the carnival operator says:
“Ladies and gentlemen, we’ve suffered an unprecedented ring-toss emergency.”
What happens now?
YOU BUY HIM NEW BOTTLES.
That’s the magnificent arrangement.
When ordinary people gamble and lose:
PERSONAL RESPONSIBILITY.
When enormous financial institutions gamble and lose:
SYSTEMIC RISK.
Imagine trying that in Vegas.
“Sir, you lost $40,000.”
“No, no. I’ve experienced a liquidity event.”
“You lost Sir.”
“If I lose, several important people may become uncomfortable.”
“Security!”
“TOO BIG TO FAIL!”
Suddenly the Federal Reserve crashes through the ceiling carrying a wheelbarrow of money.
Now apparently America and Canada are having another tariff disagreement.
Canada! We’re fighting with CANADA.
That’s impressive. How do you piss off Canada?
These are people who apologize when YOU bump into THEM.
Canadian diplomat:
“Unfortunately, we may have to impose retaliatory tariffs.”
American:
“IS THAT A THREAT?”
Canadian:
“No, sorry.”
“WHAT?”
“Sorry about saying sorry.”
“ARE YOU MOCKING US?”
“Oh gosh, no.”
“50% TARIFF!”
Canada retaliates.
America retaliates against the retaliation. Canada retaliates against the retaliation of the retaliation.
Six months later a microwave costs $14,000 and nobody remembers what the original argument was about.
Economists call this:
TRADE POLICY.
Normal people call it: Two drunks arguing over who owns the shopping cart.
And the beautiful part is politicians always say:
“THE OTHER COUNTRY WILL PAY!”
Really?
Because somehow whenever governments announce somebody else is going to pay…my Visa card starts sweating.
The interesting thing about interest rates is that they’re prices.
People don’t like prices when prices tell them something unpleasant.
So naturally we attempt to change them.
This works beautifully.
For example, my bathroom scale says I weigh 230 pounds.
I disagree.
So I adjusted the scale.
It now says 175.
I’ve never felt healthier.
My doctor remains strangely unconvinced.
He claims changing the number doesn’t change the underlying condition.
Clearly he’s unfamiliar with monetary policy.
We tariff you - our government takes the money - OUR people pay it.
The US charges tariffs - the US citizens pay the tariffs.
You tariff us - your government takes the money - YOUR people pay it.
Canada charges tariffs - the Canadian citizens pay the tariffs.
I guess that constitutionally qualifies as taxation WITH representation.
Right?
I swear that I thought that the next line in Bill's commentary:
"𝑊𝑒 𝑐𝑜𝑢𝑙𝑑 𝑠𝑢𝑔𝑔𝑒𝑠𝑡 𝑡ℎ𝑎𝑡 ℎ𝑒 𝑜𝑝𝑒𝑛 𝑀𝑖𝑠𝑒𝑠, 𝐵𝑎𝑠𝑡𝑖𝑎𝑡, 𝑜𝑟 𝑅𝑜𝑡ℎ𝑏𝑎𝑟𝑑. 𝐵𝑢𝑡 𝑤ℎ𝑎𝑡’𝑠 𝑡ℎ𝑒 𝑝𝑜𝑖𝑛𝑡?"
...was going to be:
"We all know that Scott Bessant can't read."
"𝑊𝑒 𝑐𝑜𝑢𝑙𝑑 𝑠𝑢𝑔𝑔𝑒𝑠𝑡 𝑡ℎ𝑎𝑡 ℎ𝑒 𝑜𝑝𝑒𝑛 𝑀𝑖𝑠𝑒𝑠, 𝐵𝑎𝑠𝑡𝑖𝑎𝑡, 𝑜𝑟 𝑅𝑜𝑡ℎ𝑏𝑎𝑟𝑑. 𝐵𝑢𝑡 𝑤ℎ𝑎𝑡’𝑠 𝑡ℎ𝑒 𝑝𝑜𝑖𝑛𝑡?"
If only.
The idiotic teaching and following of Keynesian economics has served the US economy very poorly. The Austrian School of Economics to any logical thinking mind makes perfect sense. Why do we pursue this magical thinking?
OLD BARKERS. BB.. I only know of two.
Bob barker , who knows the price is right.
Bill Bonner, who knows the price is wrong.
What about Ronnie Barker who would say it is both right, and wrong, depending on your state of mind!
PS Ronnie Barker was an English comedian.
When I read Bills last paragraph today I envision the Treasury updating the gold "we are suppose to hold" from $42.22 / oz to "mark to market". That would add a lot of "Monopoly" cash to the treasuries game board. It would make a lot of us mile ear to ear!
Jim Marshall
Patrick G. Thank you for the reply. I try to reply back , but it said only for pays subscribers. I am a page subscriber. Is that number for all currencies globally , or just the u s?
Either way, thanks.
If gold was to be the base of all currencies, what would be the value of gold today? Would it be absurd?
How much? Maybe 40 trillion? Would that not make it pretty much in useless Is there any other use industrial or otherwise? Men are
already wearing rubber wedding rings....for safety.
Thanks for your daily missives. I agree there is an over spending problem, but you have not talked about the revenue side (taxes). The way I see it is that we need less spending and more revenue simultaneously.
Dear Dan
Isn't it that most of the US Treasury bonds in Japan are not held by the government? So there's not a lot to sell if Japanese investors, funds, pension funds, don't sell. They have no reason to. Bessent is scared of a default because of contagion. Can you agree on that?
Regards
Daniel
Dude! Negros playing fiddles? If you can still pay your own bills. You must be in government.😁