| By Bill Bonner Friday, December 11, 2020 WEST RIVER, MARYLAND – This week, we’ve seen that real science… with its doubts and limitations… is easily brushed aside in favor of fake science. “The science” allows people to “know” things they can’t possibly know… or believe things that aren’t true… And – much like religion before it lost favor – it’s used by the elite to bludgeon the masses and keep them in their place. Fantasyland Nowhere is this more in evidence than in “economic science,” where, ex cathedra, smart people give themselves up to fantasies that even a child can see are nonsense. One of those fantasies took center stage in the news cycle this week – another bailout. It is the idea that you can help a starving man by giving him Styrofoam cookies. The feds have no real money. All they have is fake money, which, even in the best of times, distorts crucial price signals, lowers real savings rates, reduces long-term investment, and undermines the health of the economy. There’s never been a case in history where an economy has been helped by it. But, heck, the Federal Reserve has more than 400 Ph.D. economists on staff. Those guys must know what they’re doing, right? | Recommended Link | | Cryptos Soaring – FedCoin Coming Next? On January 20, America will swear in a new president… And his first priority could change the way Americans spend, borrow, save, and invest – forever. In just a few weeks, you might not recognize the money in your own pocket – if you’re still able to put it in your pocket at all. A few months ago, a small group of Democratic lawmakers led by Nancy Pelosi introduced legislation that would literally make cash a thing of the past – replacing it with a FedCoin-type digital substitute… And now that Democrat Joe Biden is set to be sworn in… This kind of law will be easier than ever for Pelosi and her crew to pass and enact. The result? Most Americans could be devastated… but if you can see it coming early enough, you can connect the dots and sidestep this disaster. You only have a few days to prepare. | | | -- | In Agreement Alas, this week, the bailout bosses flubbed their lines. The Democrats wanted more money. The Republicans wanted less. This was bad news for the voters. If there’s anything Democrat and Republican voters can agree on, it’s this: They all want a bailout. Here’s Newsweek: The vast majority of Republican and Democrat voters want a second stimulus bill to be approved by the end of this year, with millions of Americans facing unemployment and the threat of deep rent arrears. A new poll from Data for Progress and Vox found that 81 percent of all voters either strongly or “somewhat” agreed that Congress needed to pass another COVID-19 relief bill before the end of the year. By comparison, 11 percent of polled voters said they disagreed that a fresh stimulus bill needed to be passed in the coming weeks. A further 9 percent told pollsters they didn’t know how they felt. Yes, if there’s one thing that now unites left and right, blue and red, it’s that they all want more of each other’s money. What other possible source is there? Every dollar is now in someone’s hands. If it goes to Paul, it must have come from Peter. Which just goes to show how low the Great Republic has sunk… to the point where four out of five voters are craven mooches, ready to live at someone else’s expense. But the quacks tell us that they have some magic… some knowledge that surpasseth human understanding… that makes it possible to conjure up wealth – out of nowhere. “Don’t worry about Peter,” they say. “Paul neither. This money is free!” What is the "1170" Investment Account? Free-Money Habit Many of the feds’ giveaway programs are scheduled to come to an end at the end of the month. People will have to begin paying their rent, for example. But they’ve gotten used to the free money. They think the feds have their backs. Like stock market investors, they expect a “bailout” when it is needed. What a mess it would be if the bailouts didn’t come! Stock prices would fall – probably by half – and not come back. And the proletariat – some of whose members are still enjoying more money from unemployment than they were getting when they were on the job – would have to go back to work fast. | Recommended Link | | Under normal circumstances, you'd pass this stock by Getting in on the ground floor of exciting stocks like Google and Amazon happen once in a lifetime, if you’re lucky. Fortunately, those aren’t the only stocks out there. Some stocks are – simply put – dependable players that perform over and over again. These are the stocks that interest master trader Jeff Clark. They are the same kinds of stocks that enabled his retirement from money management at age 42. Today, he shares the name of one of these “dependable workhorse” stocks. | | | -- | Damaging Rescue This week, too, we saw what happened when the feds didn’t come to the rescue. In the 1921 depression, they more or less let people figure it out themselves. So the U.S. economy quickly shucked its weak businesses, its obsolete industries, and its bad investments. Within 24 months, it was thriving again. By comparison, the feds’ rescue after the 2008-2009 mortgage finance crisis boosted stock prices and made the rich richer. But manufacturing – the backbone of the working class economy – never recovered. And the bailouts added some $20 trillion in new debt – to households, businesses, and the government – which now makes a vigorous recovery almost impossible. Viral: 1.3 Million Folks have Already Seen This Message. Hard at Work Over the last 11 years, those Ph.D.s at the Fed have been hard at work. Using tools that had never been fully operational – such as quantitative easing (QE) – they were able to do more stimulating than ever before. They quintupled the nation’s monetary foundation – the Fed balance sheet. They took their key interest rate – which they charge member banks when they lend them money – down to zero. In real terms, it stayed there for more than a decade. They bailed out Wall Street so well that the Dow went from a low of 6,547 in March 2009 to over 30,000 this year. And yet, in terms of what it did for Main Street and the typical working family – measured by GDP growth – the bailout was a flop. All that stimulus produced the weakest recovery since World War II. | Recommended Link | | What is this pile of cash doing here? Do you see this pile of cash? That’s how much it would cost you to buy one share each of Apple, Amazon, Google, and Tesla. Why bother? When you could profit off the growth of those same companies – and the tech bull market overall… For just $3. | | | -- | Bread and Circus What is clear to us from this experience is that “stimulus” measures are a fraud. The “science” behind them is quackery. The theory is preposterous. In practice, stimulus never works. And, in the end, both Peter and Paul are going to be robbed by inflation. But no matter… if it’s bread and circuses the people want… bread and circuses they will get. They have been trained to expect a clownish – but bountiful – government. Now, they depend on it. If the political impasse continues, we will most likely see a panic – either on Main Street or Wall Street. Maybe both. Then… bring out the Styrofoam cookies! Regards, Bill
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MAILBAG One dear reader responds to Bill’s essay, “What Milton Friedman Did to Capitalism”… The economy? In my corner of the world, the western USA, I see a lot of big trucks going north and south: box trucks, flatbeds, refers, bulk trucks, car haulers. Tons of freight, moving all summer and fall. I see lots of FedEx triples moving tons of orders. Somebody is producing a lot of stuff and somebody is buying it. I see lots of U-Haul moving trucks. Where are all these people moving to or from? Are they moving for the economy or because of the economy? – Kent M. Meanwhile, others give their take on Thursday’s Diary, “The Fed’s Science Is Bogus”… I’ve long been a Bonner fan. He’s the guy standing safely on the other shore while this side burns. Would there be a “right” answer to the aftermath of the presidency of the greatest con man in all of world history? The destruction in his wake includes a lack of intelligence not previously seen in our leadership ranks. – Mark B. I may agree that sick people should maybe wear a mask to keep from spreading their sickness. But to make it more profitable to be unemployed than to work is insane. Do we require a mental exam for the people who are elected to office in this country? We should. – William N. A target unemployment rate is nonsense without a target employable rate. If we took care of the latter, the former would take care of itself. Useless education, entitlement attitudes, drug addiction, etc. Many problems to solve before employment. Or is our goal really to make businesses so desperate for employees that they have to hire anyone, regardless of qualifications? – John W. Would there be a “right” answer to the aftermath of a Donald Trump presidency, as Mark suggests? What might a “target employable rate” look like? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… MUST SEE A.S.A.P. Jeff Brown just went on record: One small cap biotech could legitimately possess a possible cure for blindness. And thanks to an FDA mandate, it could be set to deliver the fastest and largest gains in stock market history. If you don’t get this information ASAP, you could miss out completely. I’m sorry. There’s not enough space here to explain what’s going on. JEFF EXPLAINS EVERYTHING HERE. 
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