The Return of the Cattle Market

Nothing much happened in the markets yesterday…so that is what we will write about, nothing much. Besides, we don’t have much time anyway…we’re headed out to the desert…out of range of the Internet.

While everyone else invested in corn, wheat or rice – all of which have been soaring – we put our money into cattle. Recently, you could barely give cattle away.

“People were getting rid of cattle,” our old friend Doug Casey explained to us today. “They all wanted to get the cattle off the land so they could plant soybeans. But that killed the cattle market, of course. Don’t worry, though. Cattle will come back.”

Okay. We weren’t worried anyway. Still, we’re headed up to the Andes, to see how our beef cattle are doing.

In the meantime, many people think the feds have done it. By aggressively cutting rates and pushing money out to the banks…and helping to save Bear Stearns…they’ve turned it around. It is as if they had diverted a giant meteor; the world is saved.


But what does it mean, anyway? Let’s say they were successful? What would that mean? Have they somehow erased Americans’ debts? Are all those upside down homeowners now flipped over so they’re sunny side up? And how about all that subprime debt…and all those leveraged loans for mergers, acquisitions and buyouts that didn’t quite work…and all those hedge funds who stretched so far to get into the most dangerous investments at the most dangerous time? Have all these mistakes somehow been wiped away?

Oh, dear, dear reader…we feel a religious experience coming on. Somehow, we have all been forgiven our sins…the slate has been washed clean…our errors have been pardoned by an authority more powerful than God himself – the feds.

Could it be?

If it is not…then what does it mean when they say the feds have ‘succeeded’ in averting a real crisis? What, exactly, have they averted? If they have not erased the mistakes, what have they done with them? If they have not prevented people from getting what they’ve got coming…who, then, is going to get what those people had coming?

Ah, there’s the rub…if the mistakes cannot be magically made to vanish…then someone will pay for them. Perhaps then, the ‘success’ is really in shifting them…from the people who deserve to pay to the people who don’t…that is, to the general public and the taxpayer?

Personally, we like mistakes. It is our mistakes that made us what we are. Yes, we would happily erase a few of them from the record, if we could. But inasmuch as all of them contributed to what we are, getting rid of any of them might have drastic consequences…causing the whole universe to slip into some kind of alternate reality. We might disappear too…why take the chance?

The feds must like mistakes too. As near as we can figure, ‘success’ – for them – must mean getting people to make more of them. That’s why they are lowering borrowing rates – so an over-indebted nation can borrow more. And that’s why they’ve given out tax ‘rebates,’ so that people who spend too much can spend more.

And if they spend and borrow more, what does that mean for the future? The next generation must spend and borrow less. That’s it, isn’t it? That’s what ‘success’ really means…

…robbing the next generation. Spending their money today so they will spend less tomorrow.

Bill Bonner
Markets and Money

Bill Bonner

Bill Bonner

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.
Bill Bonner

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Diggin it!

Go Bill, blow away that smoke and smash those mirrors then poke them where it hurts!

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