| By Bill Bonner, Chairman, Bonner & Partners I’d vote for a Republican, if I could find one. – A Dear Reader TULUM, MEXICO – Human progress, at least recently, has been largely a shift from brute force to brute fraud. Fake money is used to rob people of trillions of dollars. Fake news robs them of what little brain power they had. Fake democracy, the Deep State, and runaway regulations rob them of their liberty. And the longest war in U.S. history robs them of their children and their money. Today’s subject is war. And we’ll come back to it in a minute. Meanwhile… | Recommended Link | Is “Black Monday 2.0” right around the corner? This chart pattern has appeared before every market big move… Up or down. Before Black Monday… Before the Dotcom Boom… Before the Financial Crisis… And, here’s what we’re seeing now… These 7 charts are critical indicators of what’s about to happen in the world’s markets… And they are ALL pointing to something BIG. It could be a melt-up. It could be pointing to a crash. |
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Down in the Tropics The change in this part of the world is breathtaking. It is as if the development that began in Florida in the 1920s skipped over the Caribbean and started up again on the Yucatán Peninsula in the 1990s. Warm weather, white sand beaches, and a cost of living well below that of the Florida coast. We guessed yesterday that U.S. and Canadian retirees would find it irresistible. An apartment that costs $500,000 in Florida might only cost $200,000 here. The missing part is medical care. When Mexican doctors and hospitals begin accepting Medicare payments, it will open the door to millions of retirees more. They will be looking for a good life down in the tropics… And looking to get away from snow, inflation, and crime north of the Rio Grande. But let’s move on… Boys in Uniform Of all the claptrap agencies and scammy departments in the swampy bayous of the Deep State, the military sits on the highest ground. It is considered by many to be the most reliable institution in the U.S. In many circles, criticizing the boys in uniform is considered unpatriotic, almost treasonous. But we’re not criticizing the boys in uniform. It’s their bosses – both in and out of uniform – we have in mind. Not only do they waste trillions of dollars, they toss around the lives of their men and women as if they were tin soldiers. A thousand to one hell-hole. Two thousand to another. Some are instructed to kill. Others get their legs blown off. As for patriotism, they treat it like small change. They use it like the Federal Reserve uses fake money – to rip off the public. Genuine patriotism, like real money, is limited and precious. Waste it on stupid wars and you may have none left when the real shooting starts. (Our own patriotism, by the way, is beyond question. If southern Anne Arundel County, Maryland, is ever invaded by hordes of Chinese or New Yorkers, we will be the first to flee across the Chesapeake. If they want it that badly, they can have it.) | Recommended Link | | 200 Billionaires Say Genesis Will “Fundamentally Change the Way we Invest” The rich rarely reveal their secrets… But in a stunning new report from UBS, 200 of the richest families on earth – worth an average $1.2 BILLION – let slip they believe a new technology will “fundamentally change the way we invest.” “You can feel the electricity,” said one of the families. “It’s almost like you felt in the 1990s with the Internet.” One of America’s most esteemed (and successful) investors recently met with 4 different billionaires. And he reveals the truth about this revolutionary new technology. As well as what it means for regular investors… |
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Looking Out for No. 1 But let’s stick with the Pentagon. The defining feature of an empire is its military. It uses armed force to rule over other nations. Then, as the empire ages and degenerates, the army typically shucks its civilian control and looks out for No. 1. That is, it ceases to serve the homeland at all; it serves only itself. That is the real explanation for the Pentagon’s misadventures in Iraq, Afghanistan, and elsewhere. How many ordinary citizens would have been willing to sacrifice their children… or their money… to stomp on the Shiites, or the Sunni, or the Druze, or the Zoroastrians, the Kurds, the Wahabi, the Pashtuns, Punjabis, Balochs, Gilaks, Kawliya, Lurs, Mandeans, Mazanderani, Nawar, Tats, or any of the other strange tribes around the Mideast? The homeland had no dog in any of those fights. Who were the good guys? Who were the bad guys? Who knew? Nobody… But the Deep State didn’t need to know. The War on Terror brought the military and its contractors billions of dollars. It brought stock options, consulting gigs, think-tank sinecures, promotions, medals, and fancy houses in Northern Virginia. To the military/industrial/surveillance chiefs, 56,000 American casualties, including 10,000 dead, and as many as a million deaths among the local people, must have seemed like a small price to pay. Compared to WWI, WWII, or Vietnam, it was a bargain. And now, it appears that a new peace treaty with Afghanistan will more or less return things to the way they were before the U.S. got involved. And Iraq wants to kick U.S. soldiers out of the country. A commander with any real sense of honor would plunge his sword into his chest, like Brutus after he was defeated by Antony, or Antony, himself, after he was defeated by Octavian. Or, at least, he should go home… and in the dark of night, pray for forgiveness from a generous god. But no… | Recommended Link | | America’s Top Options Trader Reveals His “3-Stock Retirement Blueprint” It’s the blueprint that changed master trader Jeff Clark’s life… And helped him retire at 42. All it takes is just 5 minutes a day… And no advanced stock market knowledge is required. He’ll show you how it works… He’ll share his track record… And he’ll even give you the names and tickers of the 3 stocks you can use to get started. |
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Intellectual Fog A new report, out last week, tells us that the gap between U.S. defense spending and that of other nations is increasing. The Deep State’s armed wing now spends nearly four times as much as its nearest rival, China. The Military Balance Blog reports: In 2019, the United States remained by far the world’s largest defence spender, widening the gap between it and the second largest spender, China. US investments in weapons procurement and R&D alone were larger than China’s total defence budget. The United States’ defence investments in weapons procurement and R&D were also worth around four times as much as European states’ combined. Why? The simple answer is that the money appears to be free – it flushes freely out of the fountain of all things fake. And, now, President Eisenhower’s nightmare plays out during working hours: The military and its cronies have so much power and money available, they can buy or bully the votes they need to get more. And then, the fake money does its work – corroding, corrupting… rotting the military as it has the economy, Congress, and the bureaucracy. Tim Bakken, a professor at West Point, concludes: The hubris, arrogance, and self-righteousness of officers have isolated the military from modern thinking and mores. As a result, the military operates in an intellectual fog, relying on philosophy and practices that literally originated at West Point two hundred years ago. In an interview with The American Conservative, Bakken went on: In the end, the proof is in the pudding, in the wars in Korea, Vietnam, Afghanistan, and Iraq… the generals do not know how to win these wars, and they don’t have the courage to tell Americans that we can’t win and that we shouldn’t be fighting them. Best and Brightest Come the next real war, and the U.S. military will probably get whupped… badly. It is too larded with fat-duff careerists and expensive, over-sophisticated weapons to be an effective fighting force. And its standards are too low. West Point, for example, claims to be a top-notch center of learning, equal to Harvard or Yale. It is a lie, says Bakken. The American Conservative elaborates: West Point boasted that it received 15,171 applicants for the class of 2016, but only accepted a fraction, suggesting an acceptance rate in the low double-digits, if not single digits, like Yale and Harvard. The reality is, the school was counting student requests for information as “applications.” It turns out that the school only received 2,394 “fully qualified and nominated” applications that year. Of that number, 1,358 were accepted for the class of 2016, resulting in an acceptance rate of 56.7 percent. He said he and other professors raised concerns about this, but nothing changed. As far as West Point only taking the “best and brightest,” Bakken notes that West Point and the equally lionized Naval Academy in Annapolis were ranked 111 and 112 in average SAT scores among American colleges and universities in a 2014 study. As the end of the British empire came into focus, in WWI, their army was similarly incompetent. The top brass, comfortably lodged in London, wasted hundreds of thousands of young men in foolish trench warfare. It was a case of “lions led by donkeys,” said the analysts. And now, as the U.S. empire reaches its closing chapters, we should expect more mistakes. With luck, the jackasses in the Pentagon will stick to fraud and keep the death toll down. But we wait to find out… Regards, Bill Like what you’re reading? Send your thoughts to [email protected]. TRADING INSIGHT: BEST WAY TO PLAY WEAK EURO Maria’s Note: Longtime readers know Bill is a self-proclaimed “fuddy duddy” when it comes to investing… and he certainly doesn’t claim to be a trader. But currency trading legend Andy Krieger spotted a pattern too good to ignore. Andy made the front page of The Wall Street Journal after booking a $300 million profit from a single trade. And in a special event at 8 p.m. ET, he’ll break his silence about that trade for the first time on camera. Seven lucky folks will even get Andy’s research and trade recommendations, completely free. If you’re interested, find out more here. Then read on for Andy’s timely analysis on how to play a weakening euro…
By Andy Krieger, editor, Andy Krieger Trading Take a look at this monthly chart of the euro against the U.S. dollar (EUR/USD)… The pair has quietly worked its way lower over the past month, grinding its way to levels not seen since 2017. Though after being so quiet, for so long… at first, I was skeptical about whether the recent weakness could turn into a major trend. Now, though, I believe that the answer is a resounding yes. 
Since 2015, the pair has traded in a range of just over 21% (between 1.0340 and 1.2559). That is extremely tight for a pair that can move move 15% – or more – in one year. In fact, during the past year, the pair has traded in a range of just 6% (between 1.0830 and 1.1480). However, the macroeconomic developments in the U.S. and Europe have diverged in recent years, so it makes little sense for their currencies to trade in such a tight range. Upon further inspection, you will note that the euro has been slowly creeping lower since mid-2018. What you’ll also see is that the euro could head MUCH lower if it breaks through certain key support levels against the U.S. dollar – namely the low just below 1.0340 from the beginning of 2017. Still you might wonder, “Why sell euros now?” The eurozone’s negative fundamentals have been in place for some time, but the market has essentially chosen to ignore them, with the result being an unnaturally stable currency. One key factor driving my view is that Europe is extremely vulnerable to a slowdown in China. China is one of the largest importers of European goods and services, so the economic meltdown in China will hit the two biggest economies of the eurozone – Germany and France – very hard. With China’s growth rate set to plunge in the first quarter of 2020 (and maybe beyond), Europe is going to get slammed. European exports, a crucial component of European economic stability and growth, will surely be disappointing, and well below the expected levels for the year. In fact, my bet is that before the first six months of 2020 are done, we will see some sort of concerted economic support by governments and central banks to deal with the coronavirus outbreak once the economic impact becomes clear. And that clarity may cause traders to look more deeply at European fundamentals. My guess is that once people analyze the data carefully, the prospects for a weaker euro will become overwhelmingly apparent. Another factor is that the eurozone has seen tepid growth over the past decade, despite trillions of euros’ worth of easy money being pumped into the system. It is in this way that the ECB’s experiment is failing. The limits of monetary policy are being tested. What happens when Europe goes into its next economic downturn? Monetary policy is another negative factor for the euro. Negative interest rates discourage foreign investment in short-term euro-denominated money market instruments. In fact, the lower the euro goes, the more the global investors with eurozone exposure will feel the pressure to hedge their euro exposure and rotate into the dollar. In fact, I have received numerous calls from people in Europe who are fed up with the current situation – in which they must pay their bank about 1% in order to deposit euros into their account. They are progressively more willing to convert their euro savings into dollars to earn some interest, taking on some currency risk in the process. They feel that the euro’s upside potential in this environment is negligible, so holding dollars becomes sensible by default. The problems in Europe are so extreme, I doubt the euro will respond to any significant uptick in risk sentiment over the coming weeks and months. I advise all traders to prepare for a continued decline in the euro by selling short the EUR/USD currency pair. It will probably grind slowly lower for a while longer… But if things play out just right, the euro’s slide may start to accelerate and develop into a powerful down move. My ultimate target is potentially much lower – even past the 2017 low under 1.0340. You’ll earn good money shorting the euro… due to the interest rate difference between the euro and the dollar…. and likely pick up a sizable capital gain over time. But don’t forget to keep a trailing stop. I think a trailing stop of 1% is sufficient to prevent any losses in the event of a strong reversal. – Andy Krieger P.S. At 8 p.m. ET, I’m coming forward after years of silence to reveal what could be the biggest trade of my career… In short, I’ve spotted a unique pattern of compression across multiple asset classes. It’s signaling a massive turning point in the markets, due just months from now. This big trade will be the basis for an apprenticeship program I’m starting… If you want to be a part of it, with the chance to do so for free, sign up for tonight’s event right here. FEATURED READS Economic Policy Nonprofit Raises Concern Over Global Corporate Debt
Corporate debt hit an all-time high last year. And experts say both the amount and poor quality of debt issuances will be weak points for a faltering economy… Traditional Asset Allocation Models Won’t Work Anymore
Teeka Tiwari left his 30-year career on Wall Street to help average folks grow their wealth. Here, he explains why Wall Street’s traditional investing model no longer works… and shares a new asset allocation model that can help you make more money – with less risk… MAILBAG Mixed thoughts from Dear Readers about Tuesday’s Diary, “Assigned Democrat at Birth”… Maybe you should work directly in the mainstream press. Maybe having a business where you sell your products, keep your personal political views to yourself. That’s the problem in America today, people thinking their thinking is what’s right. Life/religion doesn’t work that way. We’re all flawed. – Kyle W. I’ve been saying this for some time and was surprised when I read it on your website: People are born with only emotions, but no wisdom, life experience, or common sense, so they default to being Democrats. If they are intelligent and not living off the government, they transition to Republican. Once they realize that Republicans compromise principles for votes, they become Libertarians. Then, the problem becomes… Do you vote for the Libertarian and waste your vote, or vote against the lesser of evils, Republicans? My first election, I voted for McGovern. I told my dad, a Republican, and he said I was crazy. Eventually, I decided he was right. The old saying, "If you’re a Democrat at 20, you have a heart. If you’re a Democrat at 30, you don’t have a head," is one of the best sayings and very true. Of course, personal greed causes a lot of people to support Democrats for the money, rationalizing they are doing the right thing. Another saying is that people either worship God or government. I think the trend in this country (and the world) is abandoning God in favor of looking to government as the ultimate savior. I don’t think God is happy with this trend and we will pay the price. – Jon J. While another isn’t all too happy with Bill’s take on the U.S. economy… Your comments on the current economy are just a repeat of GOP and Trump codswallop. Easily checked and false. Let him ride on the economy, the Dems will take him down. – Joseph A. Should Bill keep his political ideas to himself, like Kyle suggests? Is political affiliation something that changes as we age, as Jon suggests? Write us at [email protected]. IN CASE YOU MISSED IT… Like Learning About BIG TRADES? Imagine making big trade after big trade… And leveraging your money to potentially multiply your position 30X long-term… Turning every $1k in to $30k… Turning every $10k in to $300k…. Or even more… With defined and limited downside. That’s the strategy you can start using on Thursday, February 20th… 
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