The Swamp Claims Its First Victim

The Swamp Claims Its First Victim

We arrived on Sunday morning.

São Paulo can have terrible traffic. It is a sprawling place of 12 million people.

But it was early when we pulled into town; the traffic moved swiftly.

We decided to go to mass at the old São Paulo (Saint Paul’s) Cathedral downtown.

The area is a bit rundown. Derelict. Bums and half-wits congregated in the park in front of the church…and inside the church, too.

More on that story in a minute. First, we check in on the world of mammon.

Darkening picture

US stocks have seen their sixth straight day of losses as the economic picture darkens.

Houses are selling again. But there’s a big problem: The average house buyer is less able than ever before to buy the average house.

His income, compared to the cost of buying a house, is the lowest on record. Thus housing takes up a disproportionate share of his wages, leaving less for other spending.

It’s part of the reason why retail sales are so weak…and why middle America’s mall stalwarts J.C. Penney, Sears, Macy’s, and Kmart are all closing outlets.

Not only is spending shifting online, but also their customers don’t have any money. As many as 3,500 major retail stores are due to lock up.

Defaults on auto loans are also rising — worse than 2009.

The middle classes don’t earn enough money to support housing, retail, autos, and their debt — at current levels.

Deep State in charge

The Main Street economy is a win-win-deal economy.

But over the last 30 years or so, the balance has shifted from win-win to win-lose.

It’s left working people worse off. And now the feds control too much of our time and resources — by way of legislation, regulation, or the fake-money system.

All of them are win-lose deals.

The Fed has announced plans to back off. It says it will pursue ‘normalisation’ — gradually raising interest rates.

You’ve heard our prediction: It won’t happen. The Fed will never voluntarily return to normal market-set interest rates.

It will only raise rates so long as it doesn’t matter…that is, as long as the ‘natural’ rate is higher.

The Establishment — Wall Street, Big Business, the feds, the Deep State — depends on money borrowed at preferential interest rates.

They aren’t going to give it up.

And now we offer a companion forecast for Congress: It will never voluntarily cut spending.

The swamp critters need funding. Part of it they get from the Fed. They get another big part from Congress. They won’t give that up, either.

There will be no intentional turnaround. Not under Donald J. Trump. Nor anyone else. The Deep State is in charge. And the Deep State wants more of your money.

Meanwhile, back at São Paulo Cathedral…

Liberation theology

The church edifice is a bit like Notre-Dame in Paris — with side walls supported by flying buttresses and a roof held up by large columns.


Sao Paulo Cathedral in Brazil
[Click to open in a new window]

It is impressive stonework, but not particularly attractive. The grey-brown granite is a little dull. And the ceiling, painted white, lacks the decorative excitement of many European cathedrals.

The music had an antique quality; the whole ceremony seemed a bit out of date, recalling the ancient Hebrew laments from which it is derived.

We settled into a pew at the rear of the church and followed the service as best we could. We don’t speak Portuguese. But the liturgy and the Bible readings were familiar.

Most important, we know how the story turns out.

We couldn’t follow the sermon very well, but we heard several telltale words: ‘social justice,’ ‘community,’ ‘solidarity’.

We couldn’t be certain. But it appeared the bishop had fallen for the ‘liberation theology’ that was so popular in Latin America in the 1960s and 1970s.

The idea was that the church should encourage people to become engaged politically and push for more activism on the part of government to cure whatever ailments they saw afflicting society.

Get thee behind me

Religious people — Christian and Muslim — are always tempted to back their faith with the brute force of the state.

The first amendment to the US Constitution specifically forbids it.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.

But churches in America are often adorned with US flags and state flags as well as the flags of the church.

Jesus warned against trying to ‘serve two masters’. But many churchgoers seem to want to give it a try.

Even in our little church in Maryland, we say prayers for ‘our men and women serving in the armed forces’ as if they were doing God’s work.

Over and over, Jesus emphasised the responsibility of the individual — the Good Samaritan, for example — to do the right thing.

As for government, he seemed to despise it…or at least keep his distance. (‘Render under Caesar that which is Caesar’s,’ he said, tossing a small coin.)

And at one point, Jesus was invited to join the Deep State insiders. Political power…the power to force win-lose deals on others…was offered to him:

And the Devil taking him up into a high mountain showed unto him all the kingdoms of the world in a moment of time…

And the Devil said unto him, “All this power will I give thee, and the glory of them; for that is delivered unto me: and to whomsoever I will give it. If thou wilt worship me, all shall be thine.”

And Jesus answered and said unto him, “Get thee behind me, Satan…”

Jesus had no truck with the Feds.

Sleeping it off

While thus engaged in our thoughts…a woman shuffled into church and lay down on one of the pews in front of us.

Dirty. Dressed in odds and ends.

She scratched herself for a few minutes as though she had fleas…and then fell asleep.

A few minutes later, a young man came in and sat down. The atmosphere was one of movement. People came and went. Some listened to the sermon intently. Others talked. Some got up and left.

There was little formality; many people were dressed in shorts or sports outfits.

So it was not unusual for this man to come in in the middle of the service and sit down casually in front of us. But then he made no effort to synchronise his movements with the rhythms of the service.

We kneeled for Confession; he stayed seated. We rose for the Evangile (the Gospel lesson); he remained in his seat, his arm thrown over the back of the pew.

Then his head went back…and he, too, fell fast asleep.

More tomorrow…

Regards,

Bill Bonner,
For Markets & Money, Australia

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 MoneyDice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010. 

To have Bill's reckonings delivered straight to your inbox subscribe to Markets and Money for free here.

Read more

Bill Bonner

Latest posts by Bill Bonner (see all)

Leave a Reply

Be the First to Comment!

avatar
  Subscribe  
Notify of
Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to letters@marketsandmoney.com.au