| By Bill Bonner Monday, January 4, 2021 WEST RIVER, MARYLAND – Our Christmas tree is still up. The eggnog still flows. We are not ready for 2021. We entered a new year on Friday. But there is still so much to figure out about the last one. It was the most preposterous year of our lives… and, we think, a real hinge point in our history. It will take historians many decades to decipher it… which is to say, to make up convenient and flattering lies about it. But here, today, with the corpse of 2020 still unburied… having barely cooled to room temperature… we will attempt a dissection. Trigger warning: It ain’t gonna be pretty. Mathematical Conundrum Let us begin by getting out the Sawzall to open up the cranial cavity. Surely, there was something wrong in there. It was supposed to be a Plague Year. Even at the end of it, our holiday festivities were greatly limited. Few friends or family stopped by for Christmas cheer. Our church held a virtual service on Christmas Eve. And BWI airport, where we went on New Year’s Day to drop off one of the children, was almost empty. Early in the year, COVID-19 sent almost everyone into a panic. Already, there were signs of mental distress. All over the world, governments – rather than make a serious effort to identify and protect their vulnerable citizens – closed down their economies. Travel and leisure industries – any business where people congregate – were hit especially hard. But they weren’t the only ones. Offices and parking lots emptied out. Gasoline sales slowed to a trickle. The whole economy tightened up. Instead of growing by 4%, as forecast, the global economy shrank by 4%. [Featured: Stock Options are DEAD! "Penny Trades" have WON…] In the U.S., the feds pretended to offset the real losses – which included some 30 million people losing their jobs – by printing and distributing fake money. During the entire year, the loss of income caused by the lockdowns toted to less than $300 billion. But the feds pumped an additional $4.4 trillion into the economy. Dear readers will notice that the two numbers have little to do with each other. One explanation is that members of Congress cannot add and subtract. A better one is our chief insight for the year ahead: Inflate or die. Third Option The feds have gotten the nation into a classic debt trap. When you owe too much money, every setback is a crisis. You either borrow more… or you admit that you can’t pay your bills. But sovereign governments have a third option. They have “printing presses,” on which they can create the cash they need (thus inflating the currency). That does not solve the problem. But it distorts and delays it. And as it runs its course, it turns a simple, honest bankruptcy into a corrupt, catastrophic disaster. But we’ll get to that anon. For the moment, let’s just focus on 2020. [Featured: This one stock could be a game changer for you] Rising Stocks What happened to all that money the feds put into the system? Like water, it has to go somewhere. Some of it was used to buy drugs. Some bought new cars. Some paid off political debts and bought off cronies. Some went into normal consumer spending. But much more went into capital markets. For, while the Main Street economy turned down, Wall Street turned up. Worldwide, stocks were worth about $80 trillion when the crisis began. Less than a year later, they are worth $100 trillion. Huh? How come stocks can be worth $20 trillion – 25% – more… in less than 12 months… while the companies they represent are seeing fewer sales and lower profits? In the U.S., earnings are nearly 30% below projections made at the start of 2020. | Recommended Link | | The economy will never go back to normal… It wasn't the least bit normal when this crisis started. New York Times best-selling financial author Bill Bonner spent the majority of his career trying to figure out how an economy can function on "fake" money. Bill and his partner Dan Denning have discussed this challenge for years. In fact, Bill has been working on this issue since the money system changed on August 15, 1971. In a new presentation by their colleague Tom Dyson, Tom explains how that change set in motion a whole financial cycle. He reveals the climax of that cycle, what it means for America, and how you can save your money, instead of losing it in the midst of what could be the worst crisis of our lifetime.
| | | -- | Pie in the Sky And look at the electric car manufacturer Tesla. It ended the year at a valuation higher than all the other major automakers put together. It has cumulative losses of $6 billion… and no plausible way to ever be worth $6 billion, let alone $600 billion. At least Tesla makes something. There are other companies that have no products at all. Companies with neither products, sales, nor profits are supposedly worth more than some of the biggest titans of the Industrial Age. Just look at QuantumScape. It is said to be developing a battery. But it has no battery… no sales… no showrooms… no service network… no revenue… and no profits. But just before Christmas, its market cap – the market value of all its shares – was almost as much as GM’s. Over the holidays, we found we could buy a mince pie for $15, a price that had changed little from the previous year. At the beginning of 2020, one bitcoin sold for less than $8,000. So one bitcoin would have bought you 533 mince pies. By the end of the year, that same bitcoin would have paid for 2,000 pies. Mince pie has many things in it – sugar, salt, flower, meat, suet, molasses, apples, raisins, and God knows what else. By contrast, Bitcoin has no physical being, no profits, no CEO, no press secretary, no coffee breaks, no enlightened, gender-conscious management, no sales, no office. Bitcoin has nothing. And yet, there it is… worth more than $30,000 per coin, and with a total market cap of $579 billion – almost equal to Tesla. Pie-in-the-Sky Inflation And that’s where the feds’ new money went. Not into mince pies. But into pie-in-the-sky inflation. Which makes us wonder even more about the gray matter of those handing out the fake money… and those buying the shares. Tomorrow, we probe deeper… Regards, Bill
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Cryptocurrency expert Teeka Tiwari holds differing views on investing than Bill and his Rogue Economic colleagues Dan Denning and Tom Dyson. But Teeka has a solid track record of growing wealth. Here are six tips he recommends for building your nest egg this year… MAILBAG In the first mailbag of 2021, dear readers give their take on Bill’s use of the “royal we” in the Diary… Bill, I like reading most of your musings. But as I commented many months ago, your use of “we” is both incorrect and confusing. You climbed and explored the mesa. I did not. You helped me to imagine what it was like with your written account of it, but we didn’t do it. If you go and steal a loaf of bread, I am not guilty. If you teach a man to fish, that is not my accomplishment. Your claim of universal complicity in what you do by laying claim to “we” is indeed grandiose. You may intend to be modest, but even the best intentions are no excuse. I still enjoy your writings, but on this point, I have to disagree with you. Of course, with the way things are today, expressing my conflicting opinion might get me cancelled. I can only hope it does not. – Gary C. Having read your commentary, I appreciate your common “we.” For some unknown reason, to me, I frequently think about, and ponder, the Tomb of the Unknowns. I ponder it from the perspective that it is a reminder to all of those who fought for freedom while in our military.
As a memorial, I see it also honoring all those who contributed to the war efforts, not just those overseas, across this nation and around the world. While a certain few will enjoy the pages of history, the vast majority, like you and I, will disappear into time, forgotten by those still present. In that perspective, even the royal “we” becomes a commoner, as so many have and will do.
My grandfather was an investor. He managed to do well enough to live well, albeit frugally, in his later years. What I learned from him was from afar. He never really spoke of it. He learned the hard way. I guess I have, too. With his passing, he joined all those who are forgotten and ignored by the present. In his own way, he fought for the same freedoms as those memorialized by the monuments. He fled Europe on the last ship to leave Norway before the Nazis shut it down. He, and thousands of others, worked the construction of war materials. He was as much a commoner as you and I. Were it not for the commoner, there would be no royal “we.” That we never forget the wee people. – Steve M. Nicely stated. From one of the hapless "we," lol. In the words of that sage philosopher Pogo, “We have met the enemy, and he is us.” – Keith C. Is Bill’s use of the “royal” – or “common” – “we” grandiose, as Gary believes? Is the individual meaningless, as Bill argues? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… Man Who Predicted the Smartphone in 1994 Issues Shocking New Prophecy George Gilder, the most accurate technology prophet on earth, reveals a shocking announcement every American must hear. Investors could have made millions on the trends he's talked about, years ahead of the curve. What's he saying now? Click this link to find out… 
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