2020’s Two Most Boneheaded Decisions

2020’s Two Most Boneheaded Decisions, by Bill Bonner.

First shut the economy. Then revive it with fake money…

The “rich” working remotely … the poor barely working at all.

The “rich” in their suburbs, vacation homes, and Zoom Towns … the poor struggling to pay their rent or mortgage..

The “rich” enjoying their stock market gains … the poor waiting for their next check from the government.

The rich, fat, and sassy, ready to send in their ballots … the poor picking up rocks, ready for a revolution. ….

Like Sweden, now that the virus has cut through the Empire State, the number of new Covid-related deaths has dropped to the floor. In New York restaurants today, you are more likely to die by choking on a piece of meat than from catching the coronavirus.

But the politicos/world improvers have found a new way to manipulate and control the masses. We doubt they’ll give it up easily.

In airports, travelers still submit to screening and pat downs – 19 years to the day after the 9/11 attack. Now, to enter a restaurant in Manhattan, they will have their temperature taken. Will restaurant owners still be checking diners’ temperatures in 2039?

And don’t expect a “deus ex vaccine” to suddenly return things to normal. No vaccine for a coronavirus has ever been proven effective. And even if one is eventually developed, it won’t be widely employed any time soon.

Meanwhile, people are getting used to a new economy — one where they depend more heavily than ever before on the government…not just to tell them what to do, but to give them money.

That is what marks a big step down in America’s descent. The Federal Reserve can support Wall Street; the “benefit” is immediate and unmistakable. The harm, on the other hand, is long-term and almost invisible.

As we’ve seen over and over, the fake money raises asset prices and makes investors happy. It also shifts their attention from long-term, productive investment — new factories, new products, new employees — to short-term money-hustles.

Share buybacks, mergers and acquisitions, and borrowing money to fund bonuses and dividends — all provide quick gains for investors, but no real benefit to the economy. …

And now, the feds are giving the same scammy treatment to Main Street that they’ve been giving to Wall Street for decades.

But what happens when you give money to the 90% of people who don’t own stocks? What do you get? Do you make them all richer? Richer than whom?

Ah … there’s the flimflam. Counterfeit money never adds to a nation’s wealth; it merely moves it around.

The investor is “richer” when he can cash in his stocks and buy more goods and services in the Main Street economy. He’s “richer” than the 90% without financial assets.

But who will the 90% be richer than? From whom will they buy real goods and services? Only themselves.

The printing press is never the answer in the long term, but it’s working hard now. Inflation coming. Got gold?