Tag: Bill Bonner

Guest Post by Bill Bonner

Printing paper money at a printing press in Perm.

(Photo credit: Alexey Kudenko)

Stocks are trading at a new record. Works of art hit a new record too.

From Bloomberg:

“An almost 6-foot-tall Jeff Koons white plaster sculpture of a woman holding three Hermes Birkin bags sold for $4 million last night at a charity auction in New York, 60% more than similar works fetched in the past.

The sale of “Gazing Ball (Charity)” followed last week’s tally of $673 million for Impressionist and modern art sold at Manhattan auctions, setting the stage for a potential record season if high prices continue this week.

“I’m long-term bullish on the art market,” Rajiv Chaudhri, president of Sunsara Capital LLC in New York and an art collector, said at the event at the Four Seasons restaurant in New York. “Prices will keep moving up. There is still so much private wealth being created. Art is the ultimate asset.”

Mr. Chaudhri is wrong about several things …

First, private wealth is not being created; it is being fabricated by central banks.

Second, art is not the ultimate asset but probably a poor and unreliable one.

And third, the art market is not going up the way he imagines. When the money drains away, the aficionados will be punished: They’ll be stuck with their purchases.

Imagine being stuck with this all this plaster, knowing you paid $4 m. for it … of course, for Jeff Koons art, it’s actually cheap (yes, cheap).

(Photo © Jeff Koons)

Oceans of Liquidity

Still, Mr. Chaudhri is right about one thing: There’s a lot of money around. Yes, rich people have gotten a lot richer in the last few years. The top 1% now own 35% of America’s wealth. The bottom 80% owns only 11% of it.

Where did all this money come from? We’ve seen estimates for the effect of QE on the balance sheets of the country’s asset holders. Over the last five years QE has added between $2.5 trillion… to as high as $9 trillion.

Now, with so much loose change in their pockets, the rich can bid for Jeff Koons’ confections… Manhattan condos… or whatever they want. But that still leaves the question: Where does the money come from?

You already know the answer: from the central banks. And you know where they got it: from nowhere. Central banks have created oceans of liquidity. Like water, it had to go somewhere. In the event, it went into stocks, real estate, art… and many other things.

And now that the QE program is officially on “pause” in the US, the Japanese and the Europeans are taking over.

Jeff Koons with one of his balloon rabbits. His “balloon dog” sold for $58.4 million a year ago (see “The Bubble in Modern Art” for more details on what’s been going on this space, including some neat pictures). Now, we don’t know why anyone would pay $58 million for the balloon dog, even in the face of the printing presses running day and night, but we do know one thing: namely why Jeff Koons is laughing all the time (you will be hard-pressed to find a picture in which he actually manages to suppress his nigh-permanent grin). He sure has fooled ‘em. Got to admire the chutzpa and his success, even if it required the help of the NY art dealer mafia. Koons performs a valuable service for mere mortals as well, by proving to them that people who are so rich they are almost literally drowning in money can be complete morons, irredeemably out of their gourd. By the way, this is not meant to be a comment on his art as such: we do think he has great ideas and we personally like the economy and Zeitgeist feel of his stuff. We’d consider buying it too, if the decimal points on the price tags were moved several steps to the left.

(Photo credit: Ben Stansall/AFP/Getty Images)

Trendsetters

“ECB council backs €1 trillion euro-zone rescue,” was the headline in the Financial Times as last week came to a close.

“Mario Draghi has secured unanimous support from the European Central Bank’s governing council to inject €1 trillion to rescue the Eurozone economy from stagnation,” continues the report.

And that comes on the heels of remarkable reports from Japan.
The Bank of Japan has a new governor, Haruhiko Kuroda. Apparently, he is even more reckless and retarded than Prime Minister Shinzō Abe.

Kuroda has upped the central banks asset buying to ¥80 trillion ($700 billion) a year. And part of the deal includes direct purchases of Japanese REITs and ETFs. As the Real Time Economics blog reports:

“In addition to bonds, the BoJ is investing heavily in private assets […] by buying stocks in the form of exchange-traded funds, or ETFs, and real estate through Japan real estate investment trusts, or J-REITs. Those assets had been in the mix before, but will be tripled. The figures are small compared to the JGB purchases – ¥3 trillion for ETFs, ¥90 billion for J-REITs – but can have a big influence on markets.”

“Hey … you want a wealth effect? I’ll give you a wealth effect!”

The Japanese are the trendsetters – at least in the world of suicidal financial policies. So, it probably won’t be long before the Fed gets back into the money-printing business. Most likely, it’ll wait for the stock market to crack. Then it, too, could begin buying stocks directly.

BoJ assets explode into the blue yonder as debt monetization goes into overdrive – good for the Nikkei, bad for the yen – click to enlarge.

The US stock market will fall because there is less and less fabricated money holding it up. The $3.6 trillion in QE helped push up the S&P 500 by 200% since its crisis low on March 9, 2009.

But QE is, as we said, now on “pause.” And the money-printing operations in Japan and Europe will probably not leak fast enough into the US to keep the water level high. Instead, liquidity will drain away – gradually … and then suddenly.

The Nikkei vs. the yen (the yen is quite appropriately mostly colored in red) – click to enlarge.

The Other “QE” …

Not only has QE stopped, but so has the big boost that the US used to get from its trade deficits. At its peak, America’s current account deficit reached $800 billion. That money – largely credit-financed – went out of the US to buy foreign-made goods.

To stop their currencies from appreciating versus the dollar, foreign central banks – particularly the People’s Bank of China – had to print local currency to buy these dollars. They then reinvest these dollars back in the US. This was like QE before there was QE, says our friend Richard Duncan.

The US got a flood of liquidity from overseas money-printers. This is what helped inflate the stock market bubble of 1999 and then the housing and financial bubble of 2008. But that’s gone too.

The current account deficit is only about half of what it once was. And as America’s oil industry coaxes more and more crude from the ground, there will be fewer US dollars headed overseas to buy energy and a lower current account deficit as a result.

This will mean less buying of US assets by the foreigners… and “excess liquidity” to float asset prices. The energy boom will not buoy up asset prices; it will help sink them.

Even though “hot money flows” into China are reportedly on the upswing again, even China’s foreign exchange reserves have dipped slightly of late – click to enlarge.

Image captions by PT

Charts by: St. Louis Federal Reserve Research, Tradingeconomics, StockCharts

The above article is from Diary of a Rogue Economist originally written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.

Guest Post by Bill Bonner, Chairman, Bonner & Partners

Source: Pixabay 

[N]othing is more essential than that permanent, inveterate antipathies against particular nations and passionate attachments for others should be excluded, and that in place of them just and amicable feelings toward all should be cultivated. The nation which indulges toward another an habitual hatred or an habitual fondness is in some degree a slave.

Dear Diary,

QE is dead. Long live QE!

This time it was the European Central Bank that bought the drinks. US investors bellied up to the bar and helped themselves; the Dow rose 69 points. Gold kept slipping.

Since the Fed ended its QE program, the Bank of Japan and the ECB have come forward promising more money for stock markets.

Draghi has faced increased pressure to do more to support a slowing euro-zone economy after the Bank of Japan last week unexpectedly announced it would add the equivalent of another $730 billion to its balance sheet.

And at the end of its two-day policy meeting yesterday, the ECB announced a plan to buy another €1 trillion in asset-backed securities. This will bring the ECB’s balance sheet back to 2012 levels.

Broken Promises

According to the standard narrative, the US is on the road to recovery, as Japan and Europe struggle.

Globalization? Forget it. The US has apparently “decoupled” from the rest of the world. And now Japan and the euro zone need more QE.

The story is appealing. But untrue. The US has not and cannot decouple from the rest of the world. The US is struggling too.

That was the real message from the midterm elections. The Democrats had promised a lot. They hadn’t delivered. The voters – whose real incomes have been going down since the turn of the century – knew the truth.

Now it’s the Republicans’ turn to make promises they can’t keep. They can’t keep them because it will take major changes to turn the economy around. Voters don’t really want any major changes. And the Republicans don’t plan to make them anyway.

Giveaways and special privileges have zombified the electorate. It doesn’t want anything different. It just wants more.

What would be different?

Easy: a flat income tax rate, a neutral foreign policy, and a balanced budget.

Any chance of those things? Did you hear Mitch McConnell promise them? Would a single member of Congress vote for them?

Russia has a flat income tax rate of 13%. Simple. Easy. Cheap to administer.

A flat tax would save billions of dollars and help businesses, investors and households. But Congress will never vote for a flat tax because it would mean giving up its power to hand out special favors.

That is what makes a national election at least as uplifting as professional wrestling – and not just because the contestants can be gaudy and breathtakingly stupid. Sometimes there’s something really at stake: the private interests of the elite against the public interest of everyone else.

A “Savage” Threat

As for a neutral foreign policy, we could just butt out and watch the Sunnis and Shia kill each other without our help or our heavy artillery. That might be good for them and good for us, but it would be bad for the security industry.

But wait… There is “a savage global terrorist threat that seeks to wage war on every American,” said Mitch McConnell and John Boehner in yesterday’s Wall Street Journal.

The terrorists don’t seem to be gunning for the Swiss.

Why not?

“Avoid foreign entanglements,” said Washington, thinking ahead. But today, the city named after him – and especially its northern Virginia suburbs – never met a foreign affair it didn’t want to get entangled in.

A balanced budget?

Oops… have we said something wrong?

The professional economists in the room are covering their mouths and suppressing giggles.

What a terrible mistake that would be, they will tell you. We have to encourage unbalanced budgets. We need to lure people to spend money – citizens, corporations and the government – not save it.

Ordinary Americans are wisely dragging their feet on this; US household net debt has gone down since 2007. But corporations and the government are doing stout service in the name of increasing debt slavery.

Why is it supposed to be a good idea to spend money you don’t have?

Well, there is something called the “paradox of thrift.” The paradox is that saving may be good for an individual, but it is bad for an economy as a whole.

When a single person saves, he improves his personal finances. But when many people save, consumer spending goes down. Then sales go down… profits go down… and the entire economy disappears down some uncharted rat hole.

Failed Policies

That’s why Martin Wolf said Japan has “too much” savings in Wednesday’s Financial Times.

Like so much of modern economics, the “paradox of thrift” is nonsense.

Savings gives families a cushion against disaster. It also gives them the capital they need to improve their standard of living.

On our farm, for example, we have a woodpile about 50 yards from the kitchen door. In the winter, we spend a fair amount of time just bringing in firewood.

So, we put aside some savings… and use the money to build a woodshed closer to the house. Time saved. We can live more comfortably (a higher standard of living) and we have time available to do other things (more household output).

The same thing happens in an economy. Money spent is money gone forever. But money saved and invested is money that increases our standard of living, raises wages and adds to our wealth.

The US, Japan and Europe are still stimulating consumption and discouraging saving.

In Japan, this has been going on for more than 20 years – with little to show for it aside from the world’s highest government debt-to-GDP ratio. These policies have failed everywhere. That is one of the reasons the American voter turned against the Democrats; he held them responsible.

But they are extremely popular with Wall Street – the single biggest source of funding for Mitch McConnell’s reelection campaign. Over the last five years, the Fed has added $3.6 trillion to the financial system, much of it passing through or coming to rest on Wall Street. Whatever campaign contributions it took to support the unlocking of the Fed’s vault must have been the most successful investment ever.

QE dead?

With that kind of adrenaline pumping in Wall Street’s veins, it will be amazing if we don’t have more of it.

Regards,

Bill

Further Reading: Bill delves deeper into the world of money, power and wealth in his new project, The Bill Bonner Letter. We’ll automatically add you to Bill’s mailing list when you pick up a copy of his latest book, Hormegeddon. To read a full review… and find out how to get access to Bill’s new project… follow this link.

Guest Post by Bill Bonner, Chairman, Bonner & Partners 

Source: Wikipedia

The best thing about human beings is that they stack so neatly.

Frank Underwood, House of Cards

Dear Diary,

This morning, before we left for New York, there were at least 20 big trucks parked around the square in front of our building in Baltimore. Crews dressed in black unloaded boxes, wires, booms and derricks… filling up the sidewalks with equipment of all sorts.

“What’s going on?” we asked at the office.

“They’re filming that TV show House of Cards. It’s supposed to take place in Washington. But this looks like Washington. And it’s much cheaper and easier to film here.”

The characters on the show – politicians, journalists and Washington fixers and Capitol Hill apparatchiks – are unscrupulous, opportunistic, merciless, murderous and nasty. We had to stop watching; it was too much like real life. Except that most of the people who play these parts in real life are not nearly as clever, bold or attractive.

When we were 10 years old our teacher told us that any one of us could grow up to become president. We looked around the room and wondered. But now, seeing who gets elected, we believe she was right.

No impediment – moral or intellectual – is such a handicap that it prevents getting elected. No character failing, no matter how grave, stands in the way of the Capitol or the State House. No lack of charm, intelligence or humor prevents a successful career in politics.

It was remarked of Hubert Humphrey that the only thing standing between him and the presidency was a heartbeat. But a beating heart is the only real requirement, too.

Of course, that’s also the only requirement for voting…

Looking Out for No. 1

Every half-wit and chiseler has suffrage. In a properly functioning democracy, people with a personal interest in the outcome excuse themselves. They have a conflict of interest: between what is good for them and what is good for everybody else.

That is still the protocol for civilized groups, be they boards of governors or church vestries. People with a dog in the fight “declare an interest” and go wait outside until the vote is over. But in modern politics, everybody gets to vote, no matter how many dogs they have scrapping for handouts.

And guess what? They vote their own interests.

That is the conclusion of Jason Weeden, a lawyer and psychology researcher, and Robert Kurzban, a professor of psychology at the University of Pennsylvania. They wrote a book about it, The Hidden Agenda of the Political Mind.

As Weeden and Kurzban put it in the New York Times on Monday:

Most people aren’t ideologically pure, and most don’t derive their opinions from abstract ideologies and principles. People are more strongly influenced by the effects of policies on themselves, their families and their wider social networks. Their views, in short, are often based on self-interest. […]Unemployed people are more than twice as likely as people working full time to want unemployment benefits increased. African-Americans are by far the most likely proponents of affirmative action and government help for African-Americans. Rich white men are especially likely to oppose income redistribution.

What do you expect from such a government? Everyone pretends to be acting for the good of the country – politicians and voters alike – and they are all looking out for number one.

The newspapers reported that Tuesday was a big day for Republicans. But it was a bigger day for zombies. Red states… blue states… the zombies won everywhere. As you know, zombies do not produce; they take from producers. Politics is their method of choice.

A Country for Old Men

Yesterday, we explained how young people get a bum deal. Over time, more and more special interest groups find ways to use government to keep out new competitors. The young are always new. They are shut out.They can’t get a job because the economy isn’t growing. Since 2000 the US economy has grown at an average rate of just 1.8% a year – only half the average rate of the second half of the 20th century.

Part of the reason the economy won’t grow is because old people have already claimed too much output. Debt and debtlike social welfare costs depress growth. Old people already hold existing jobs, too.

And it’s tough to start a business, because the geezers have stymied competition with high hurdles to new entrants – regulations, licensing, certifications, insurance, taxes and labor rules.

The old folks make up for their lack of energy and imagination with treachery and cunning. They usually have the candidates in their pockets before Election Day.

Old people have accumulated property and privileges. They vote for people who promise to help them keep what they’ve got. And the cleverest of them also bid for the candidates directly.

That’s how Mitch McConnell raised $31 million for his reelection campaign. The Blackstone Group, for example, was his single biggest contributor. It put in $227,000. Wall Street ponied up $2.1 million. The insurance industry tossed McConnell another $1.2 million bone.

What return did they expect on their investment? We don’t know. But Blackstone Group CEO Stephen Schwarzman – 67 years old – is surely expecting something.

Creative destruction can wait. McConnell, 72, urged voters to support Republicans in the elections to “end gridlock.” This was similar to President Obama’s fraudulent appeal to support “change.”

But change is the last thing either of them wants to deliver. They’re at the top; they want to stay there.

Senator McConnell’s top five donors, in addition to Blackstone, include two other Wall Street firms, JPMorgan Chase and Elliott Management, and two health care colossi, Humana and Kindred Healthcare.

Together, they put in nearly half a million dollars. The return on investment must be huge. A single grid, locked up nicely by McConnell and his cronies, could earn billions in profits for these companies.

Surprising, to us at least, is that the security industry was so cheap. According to OpenSecrets.org, it invested only $23 million in buying candidates in the midterms.

But the security industry does such a good job of scaring the voters, and it has such a complete lock on Capitol Hill, that it doesn’t need to buy the candidates. They are already bought and paid for.

Most voters make their decisions like investors – based on fear, greed and self-interest. They fear Ebola, ISIS and drug-crazed loonies. And they want free pills, a better retirement than they could afford and cheap cable TV.

They vote for whomever makes the most convincing promises. This year it was the Republicans.

Regards,

Bill

Further Reading: As Bill writes in his new book, Hormegeddon. Zombification happens when “growth rates slow as much of the society’s energy is diverted to unproductive uses. In short, more and more money goes to zombies.”

This kind of insight is far beyond what you get in most books about economics. And it opens up an entirely different way of seeing the world. That’s what Hormegeddon is all about. And it’s fast become an “underground best-seller.”

For a full review… including details of how to access a very special new project Bill is working on… go here now.

Guest Post by Bill Bonner

Going Broke

“Hi, this is Michelle Obama…”

You hear the most amazing things on the streets of Baltimore. On Election Day, a loudspeaker mounted on a white van makes its way up and down the streets with a recorded message.

As near as we could make out, Mrs. Obama was urging grown-ups to vote. As they say on Wall Street, she was “talking her book.” The political elite needs the voting masses like a tractor-trailer needs diesel fuel – to get where it is going.

In the Wall Street Journal last week our spirits were buoyed when we realized that we had more life left than we thought. New figures show a man who reaches age 65 will likely live to be 86.6 years old – a full two years more than the last forecast.

Two more years? What will we do with them? Run for public office? Learn a foreign language? Rob a liquor store and serve 24 months in jail? Wait. There must be a cloud to go with this silver lining. “The new estimates […] could eventually increase retirement liabilities by roughly 7%,” says the Journal.

The last time we looked, the US was already so far underwater it was almost sure to get the bends. According to GAAP accounting, Washington owes about $212 trillion – most of it in money it doesn’t have – to pay pensions and health care benefits.

If people are living longer, those liabilities must increase. Let’s see, 7% of $212 trillion… Hmmm… You can do the math as well as we can. The new total should be about $15 trillion more. And if that is so, what does it mean for government pension and health care systems throughout the developed world?

What it means is that they are all going broke. Led by those aging pacesetters: the Japanese. Yes, in the race to see which modern, debt-funded social welfare state will go broke first, Japan is in the lead.

Projected cost of social security benefits, Japan

Armed Robbery

As longtime Diary sufferers already know, the essence of government is armed robbery. Coaxed to the polls by Michelle, voters may fantasize that they set the course for the United States of America. But it is the elite who are in the driver’s seat.

That is our observation … and the conclusion of two university studies reported recently in these pages. The public merely votes for whichever candidates have done the best job of hoodwinking it.

Then the elite use the police power of the state to transfer wealth and power from the voters to themselves. Which is why the paramilitary buildup of local police forces is so alarming: It suggests they are going to strong-arm us all.

In the old days, they were unapologetic about it. Even as late as the 19th century, Napoleon’s army stomped over Europe with Liberty, Equality and Fraternity on its lips. But larceny was in its heart. The soldiers of the Grande Armée stole everything they could cart away.

Modern government demands more fraud than force. Capitalism depends on complex, trusting relationships and long-term fixed investments. Stealing things outright disrupts it. Output goes down. Nations that have no respect for the requirements of capitalism have weak economies. And weak economies can’t afford much firepower.

That was what led China and Russia to abandon their Communist creeds in the late 20th century. Command economies are weak economies, and weak economies can’t compete militarily.

Global military spending 2013

Wolves and Lambs

After the French Revolution, almost all major countries found they needed to make the common people feel that they were in charge of government. And after Bismarck, political parties found they needed to offer the voters some form of social welfare. Otherwise, they faced a “revolt of the masses.”

That is what turned today’s governments into huge kleptocratic insurance companies. They run grossly inefficient health care and pension programs; the elites steal a large part of the cash flow (sugar subsidies, QE, Fannie Mae, pharmaceuticals, bailouts, etc.).

This model has worked reasonably well for the last 150 years. Capitalists added more meat to the average man’s diet and more leisure to his time. Wealthier, he demanded… and was able to support… increasingly ambitious insurance programs.

But Bismarck’s model reached its peak in the last half of the 20th century. In Europe and the US, substantial real income gains ended in the 1970s. The old Fords and Rockefellers were gone. And the new capitalists were so fettered with taxes, rules and regulations that they found it hard to move ahead.

Debt and demography, too, reduced growth rates. But people still wanted more benefits. They looked to the government and the credit industry to supply them. Presidents Johnson and Nixon cut the dollar loose from gold in 1968 and 1971 – making it possible to go deeper into debt than ever before.

As benefits rose, the more important they became to the people receiving them… and the more costly they became to the governments. Politicians found they could not raise taxes or cut benefits. All they could do was borrow more. As is recounted superbly by former Reagan budget adviser David Stockman, in the fight for balanced budgets in the early 1980s the Republican Party took a dive.

Thereafter, there was no serious opposition to deficits. By early in the 21st century, more than half of the voters were receiving support from the government. The wolves outnumbered the lambs at the polling stations; the dinner menu was a foregone conclusion.

In the US, cutting military spending could still finance social welfare spending. But the security industry too has been turned into a giant part of the insurance complex – with millions of wolves relying on jobs, contracts, health care and retirement benefits.

And now – with graying populations, falling birthrates, heavy debt and slow growth – claims rise. The insurance company model is headed for a bust.
The good news from last week’s life expectancy numbers is that we have a good chance of living long enough to see it.

The pre-programmed end of the welfare state – click to enlarge.

German chancellor, General Otto von Bismarck – the inventor of the welfare state

(Photo via Wikimedia commons)

By Bill Bonner, Chairman, Bonner & Partners 

Around the world, stocks have been doing well. Even our top recommendation, beaten-down Russian stocks, are moving up fast. The Russian market rose 14% in May (leaving it still down about 9% for the year).

Why?

Maybe world debt levels hitting mega highs has something to do with it. Over $100 trillion was the last estimate we saw.

Meanwhile, why worry? Volatility is ultra low. The VIX measures investors’ worry levels by looking at implied volatility in the options market. The index just posted its lowest monthly close since 2007.

Investors are not fearful. And not necessarily greedy, either. They are just complacent, sure that nothing bad will happen.

Keys to Daddy’s Car

The source of that complacence is not hard to find. Governments and central bankers are all working night and day to make sure nothing changes.

As we keep saying, the US financial industry should have been spanked hard in the crisis of 2008. Instead, like a spoiled rich kid after a traffic accident, the financial industry got bailed out of jail and was given the keys to a new car… with a bottle of whisky under the seat!

When the price of money goes down banks’ profit margins go up; by moving to zero interest rates, the Fed handed them higher earnings. And by guaranteeing the debt of the weakest institutions, the Fed gave big bonuses to the worst managers.

Now, the alcohol is taking effect. All around the world markets stagger. Economies slur their words. Investors have severe memory loss. Businessmen can’t tell up from down. And the poor consumer gets a headache every time he checks his bank balance.

We have tried to chronicle the oddities of today’s zero-interest world. Everywhere we look we see something strange… something that shouldn’t exist in a sober world.

The talking heads and bleeding hearts are up in arms about wealth inequality. But the real cause of inequality, as we have illustrated, is largely the feds’ bubbly credit booze.

A Rigged Game

Some people have access to the free money. Others don’t.

Those with the access tend to be in the financial elite. It is no wonder the rich get richer; the game is rigged.

We saw that most recently in the housing market. Supposedly, the housing market is recovering. But when you take a closer look at the market you find that houses that sell to the 1% are soaring. Sales volumes and prices for the 99% – the overwhelming majority of the population – are flat or falling.

Likewise, the averages distort the real picture in earnings and household wealth too. Huge increases for the 1% pull the averages up. But the typical person… and the typical household… are slipping backward.

As we reported yesterday:

Since the feds took gold out of the currency – in 1968 – the typical man has lost about $3,000 of income every decade, when the numbers are adjusted for the “official” inflation rate. Adjust them to a more realistic measure of inflation, and the loss has been closer to $5,000 a decade.

Even on the official numbers, since the end of the recession of 2009, the typical household has lost $5,000 in wealth.

Low interest rates have made it possible for corporations to borrow more money than ever before. There’s now more corporate debt outstanding than mortgage-backed securities.

And guess which corporations benefit most from these low rates?
The weakest borrowers, of course. They are the ones that normally pay the most for credit. Now, with all rates squeezed like passengers in a Japanese subway car, the unwashed borrowers are cheek by jowl with the prudent, well-funded ones.

The curiosities continue through every corner of the markets – with dozens of barely profitable billion-dollar companies that wouldn’t exist at all were it not for nearly-free capital.

Regards,

Bill

Further Reading: Bill and his son Will have been fighting Washington corruption for decades. Twenty-eight years ago, they sued the US Secretary of the Treasury in a class-action case. They lost. But they continue to try to level the playing field in favor of ordinary Americans. Will recently prepared a free report on how to escape the rigged system and build wealth independently. If you haven’t already, read it here now.