Clinton, Trump: Both Products of the Deep State

Good news for investors…

US stocks went up again yesterday. This brought the Dow to within 60 points of the psychologically important 18,000-mark.

And grim news from our ranch in Argentina…

Here’s a report we got yesterday from our man on the scene:

The war with the originarios [the local indigenous people who believe they have a claim on the land] has settled down. The police were at the ranch for a couple weeks. Things were tense. But now it is so cold, everybody seems to have forgotten about it.

The temperature [in the high pasture] fell to 20 degrees below zero. The cattle have nothing more to eat. So, we made a deal with [a neighbour] down in the valley. We’ll drive the cattle down to his place. We’ll rent his pastures for 10,000 pesos per month.

It won’t be easy. We’ll have to take the cattle up over the pass and overnight them there. Then…down to the valley. The [cowboys] haven’t done this in more than 10 years. Jorge is coming back to help. It will be hard on them and the cows. Some of the cows won’t survive. But we have no choice. Otherwise, they will all die.

We’ve been eyeing a neighbour’s ranch. He has more water. We need it.

He has 75,000 acres. He wants to sell…but at 10 times as much, per acre, as we paid for our land. What to do?

Bums and bumblers

But, in general, things are looking up south of the Rio Grande.

While America’s presidential contest comes down to a race between a huckster and a hack, Argentina, Peru, and Brazil have all chosen leaders who seem sane, sensible…and perhaps even honest.

South America has had enough of bums and bumblers. It is ready for better leadership. It appears to be getting it. Macri in Argentina. Kuczynski in Peru. Temer in Brazil.

Meanwhile, we’re connecting our dots; today we draw a line to some big ones.

The press notices that ‘populist’ candidates are getting widespread support even when they don’t seem to deserve it.

Inquiring minds want to know why…

I was on the right side of that issue [Brexit],’ claimed Mr Trump, speaking to an industrial-age crowd in Monessen, PA. ‘I was with the people. Hillary was with the elites.

Voters seem to have a choice. Those who like the status quo can go with Ms Clinton. Those who want a change can select Mr Trump.

Then, the Deep State can continue calling the shots.

Creepy money

Almost no one has noticed the role of the Deep State’s creepy money in creating BOTH Mr Trump and Ms Clinton.

And almost no one has noticed how it, more than anything else, caused Chinese capital investment to go wild…cut US productivity…increased drug, alcohol, and suicide rates in Monessen and the rest of the US heartland…and now brings the world economy to the brink of a historic crisis.

In 1971, President Nixon cut the last ties between the US dollar and gold.

In doing so, he switched the US — and the world — from money based on wealth to a new kind of money, based on debt.

This new money was ‘flexible’. The feds and their banking cronies could create almost as much of it as they wanted. The only trouble was, each dollar added to the world’s debt, not to its wealth.

King of debt

The new money system was like a computer program with a built-in virus.

It would function reasonably well for 30 years. Then, the doomsday virus would be triggered. Here’s how it worked:

The insiders were first in line to get the new money. Everyone else had to either earn it from them…or borrow it from them. Gradually, wealth flowed from Main Street to Wall Street…and to the Deep State. The rich got richer. But the poor and middle-class struggled to keep up with student debt, auto debt, housing debt…and every other kind of debt the financial industry could put on them.

I’m the king of debt,’ boasts Mr Trump. He made his money from leveraged real estate — which paid off as cheap credit raised asset prices. ‘I made a fortune off of debt. It was good for me. But bad for the country.

At least he seems to understand it. Ms Clinton has no idea. Her entire career — and now her campaign for the White House — depends on the credit-financed Deep State elite.

Ms Clinton says the ‘king of debt’ would bring a recession. (As though she wouldn’t.) She’s wrong; it will be much worse.

As debt mounted in the late 1990s, the system became more unstable.

Stocks crashed in 2000. The feds came in with more credit. Stocks crashed again in 2008. Again, the feds came back…this time with the cheapest credit in history.

Now, the world owes more than $200 trillion — more than twice annual global economic output…and $60 trillion more than when the 2008 crisis struck.

Meanwhile, growth rates have stalled…and interest rates are already BELOW zero on more than $10 trillion in government bonds.

What will happen the next time stocks crash? What will happen when the economy goes into recession?

We don’t know. But this is something you can count on: We will find out.


Bill Bonner,
For Markets and Money, Australia

From the Archives…

Yellen’s Legacy: The Greater Depression
By Vern Gowdie | 2 July, 2016

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.

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