The Nature of NIRP

AIKEN, South Carolina – Up down, down up. The Dow ended Tuesday down 189 points… or just over a 1% fall. Reuters has the story: “Wall Street slides as oil prices hit again.”

But it is the deeper story that interests us. What is going on? Where does it lead? Which dots should be connected to which other dots?  The last couple days have found us cogitating on the nature of NIRP. (Catch up here and here.)

 

historyThe road to NIRP

 

Most readers surely have better things to do… such as washing their dogs. We do, too. But each time we try to forget about it, it surges back into our consciousness like a vivid memory of a gruesome accident. The poor driver’s head smashed on the door frame… the caved-in front of the car… the skid marks and sirens.

NIRP is more than just another goofy policy. It is a warning: “Watch out… ice on the road… fog, too… and maybe a police speed trap.” Today, we draw the line from NIRP to the two most innovative figures in U.S. political history: Donald Trump and Bernie Sanders. We begin with praise; we’ll see how far that takes us.

 

Koch Feels the Bern

Both Donald Trump and his rival Bernie Sanders have a point: The system is corrupt. Here is business magnate and libertarian donor Charles Koch on Bernie Sanders:

 

“The senator is upset with a political and economic system that is often rigged to help the privileged few at the expense of everyone else, particularly the least advantaged.

He believes that we have a two-tiered society that increasingly dooms millions of our fellow citizens to lives of poverty and hopelessness. He thinks many corporations seek and benefit from corporate welfare while ordinary citizens are denied opportunities and a level playing field. I agree with him.”

 

bernNow even David Koch is feeling the Bern… who would have thought? We wonder what the socialists will make of this…

 

To their credit, neither Trump nor Sanders has been completely captured by the Deep State. Trump has lots of money. Sanders finances his campaign with small donations from his supporters. It’s Hillary who sucks up the big money from Wall Street and defense contractors.

But politics is never quite what it seems. The slogans are claptrap. The promises are empty. The claims are bogus. And many of the “facts” wheeled out in the debates are proven to be false within a matter of hours.

Bernie bases his candidacy on a theory… which is bogus. Trump bases his candidacy on a personality… which is a part fraud, part genuine, loveable oaf.

If you met either of them at an alumni event or a bull roast, you would probably find him insufferable – Bernie because he is a hack politician with a one-track mind… and Donald because he is a big-mouthed bore.

Most likely, neither of them understands what is really going on. And almost certainly, neither will want to. Give up the system of Deep State finance, and Sanders will have less of other people’s money to redistribute. As for Trump, he will probably go broke…

 

freeWhen a politician offers you stuff for “free”, there has to be a flaw, since the universe in which free stuff exists hasn’t been discovered quite yet…

 

State of the Union

The presidential election reflects the souls of the people and the state of their union. On the evidence, in America in 2016, both are in trouble. Still, Sanders and Trump are the best candidates; at least they are at odds with Deep State favorites Clinton and Rubio.

 

bernie_t810Hillary is feeling the Bern in her own terribly way

 

Sanders’ appeal is obvious. Young lefties know they are getting the short end of the stick. The system loads them with debt… largely to pay off older voters. They start with student debt… graduate to auto and credit card debt… advance to mortgage debt… and spend the rest of their lives trying to pay it off. They know instinctively, if not analytically, that politics is to blame. So, they look to politics to get them more of the stick.

Trump’s appeal is a little harder to understand. But he’s a fighter. And his target voter feels beaten up… and unappreciated. The Mexicans and Chinese take his job. Wall Street (or someone; he’s not sure who) takes his money. And popular TV shows, such as  Duck Dynasty and Trailer Park Boys,  make him the laughing stock of the entire world.

He used to be able to feel superior to blacks, Hispanics, and other minorities. Now, TV portrays them as doctors, scientists, and police chiefs… and almost always portrays him as a yahoo goofball.

 

trumpsterThe Donald keeps surging in the polls…and no-one seems to know why.

 

Big Man on Campus

Even worse, the latest studies show that the white working class is dropping dead. No kidding. According to two Princeton economists, Anne Case and Angus Deaton, from 1999 to 2014, mortality rates for middle-aged whites with no more than a high school education shot up by 134 deaths per 100,000 people.

 

death ratesThe sudden die-off of middle-aged white Americans – click to enlarge.

 

Why? Drugs? Despair? Who knows. But The Donald tells them it doesn’t have to be that way. “I’m just like you,” he says. “I got $10 billion… a hot wife… big buildings with my name on them…”

We grabbed one of Trump’s books, Think Big, to draw a measure of the man. He describes his business experience. He explains what he did and how he did it. It reminded us of the expression “big man on campus.

Trump doesn’t think deeply. But he thinks big. He’s not afraid of appearing to be an idiot. He’s not afraid of complications or setbacks, either. His brain focuses on the fight… the negotiation. There are no win-wins in Donald’s world, only win-lose. And he aims to be on the winning side.

 

think big andThe unabridged version of “Think Big”….

Image credit: Jaime Putorti

 

He’s a brawler – big, boisterous, buffoonish. He’s even a sympathetic example of the genre. In any community, he’s the sort of guy who’d be a success. In small towns, he’d have the biggest auto dealership…

“Come on down to Big Don’s Deals! If you’ve got a pulse, we’ve got your wheels.” If he were here in Aiken, he’d probably have a big modern house on the edge of town… with a swimming pool and probably an indoor arena where his wife could ride horses.

He would be a backslapper and a member of the local Kiwanis, perhaps head of the local school board and often a candidate for mayor or town council. Everybody in town would know “Big Don.” And for the most part, they’d like him.

 

Fatal Flaw

It might have gone no further than that. But Trump was ambitious. He was in Brooklyn, not Aiken. And he knew he wanted to sail across the East River to the Big Apple – that was the real challenge in front of him. What he didn’t know was what he had behind him – one of the windiest money systems the world has ever seen.

It was a system not for creating wealth but for transferring it. And much of it shifted in his direction. The financial industry, located in Manhattan, the very place that Trump had chosen for his base, was the biggest winner of all.

The credit-money system bailed him out of his bad deals… and helped him make money and build a reputation so large he could run for president. But the system has a fatal flaw. Credit expands. But it also contracts.

NIRP is a desperate attempt to prevent a correction. No one knows what it will do. But it won’t protect Donald’s fortune forever.  More to come…

 

neg rates gdp_0Countries producing almost a quarter of global GDP have adopted “NIRP” by now… the Hail Mary of central banking.

 

Charts by WSJ

 

Chart and image captions by PT

 

The above article originally appeared at the Diary of a Rogue Economist, 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.

 

 
 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

It is that time of the year again – our semi-annual funding drive begins today. Give us a little hand in offsetting the costs of running this blog, as advertising revenue alone is insufficient. You can help us reach our modest funding goal by donating either via paypal or bitcoin. Those of you who have made a ton of money based on some of the things we have said in these pages (we actually made a few good calls lately!), please feel free to up your donations accordingly (we are sorry if you have followed one of our bad calls. This is of course your own fault). Other than that, we can only repeat that donations to this site are apt to secure many benefits. These range from sound sleep, to children including you in their songs, to the potential of obtaining privileges in the afterlife (the latter cannot be guaranteed, but it seems highly likely). As always, we are greatly honored by your readership and hope that our special mixture of entertainment and education is adding a little value to your life!

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • Gold Price Skyrockets in India after Currency Ban – Part III
      When Money Dies In part-I of the dispatch we talked about what happened during the first two days after Indian Prime Minister, Narendra Modi banned Rs 500 and Rs 1000 banknotes, comprising of 88% of the monetary value of cash in circulation. In part-II, we talked about the scenes, chaos, desperation, and massive loss of productive capacity that this ban had led to over the next few days.   Indian prime minister Narendra Modi – another finger-wagger, as can be seen in this...
  • Gold Price Skyrockets in India after Currency Ban – Part IV
      A Market Gripped by Fear The Indian Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes would no longer be legal tender. Linked are Part-I, Part-II and Part-III updates on the rapidly encroaching police state. The economic and social mess that Modi has created is unprecedented. It will go down in history as an epitome of naivety and arrogance due to Modi’s self-centered desire to increase tax-collection at any cost.   Indian jewelry...
  • A Note on Gold and India – What is Driving the Gold Price?
      Hidden Motives It is well-known that India's government wants to coerce its population into “modernizing” its financial behavior and abandoning its traditions. The recent ban on large-denomination banknotes was not only meant to fight corruption.   Obviously, this very bad Indian has way too much cash. Just look at him, he looks suspicious! Photo via thenewsminute.com   In fact, as our friend Jayant Bhandari has pointed out, fresh avenues for corruption ...
  • Gold Price Skyrockets in India after Currency Ban – Part V
      A Brief Recap India's Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes will no longer be legal tender. Linked are Part-I, Part-II, Part-III, and Part-IV, which provide updates on the rapidly encroaching police state Expect a continuation of new social engineering notifications, each sabotaging wealth-creation, confiscating people’s wealth, and tyrannizing those who refuse to be a part of the herd, in the process destroying the very backbone of the...
  • Attaining Self-Destruct Velocity
      Bad Monday Some Monday mornings are better than others.  Others are worse than some.  For one Amazon employee, this past Monday morning was particularly bad. No doubt, the poor fellow would have been better off he’d called in sick to work.  Such a simple decision would have saved him from extreme agony.  But, unfortunately, he showed up at Amazon’s Seattle headquarters and put on a public and painful display of madness.   Good-bye cruel world! On this our planet,...
  • India's Currency Debacle – An Interview with Jayant Bhandari
      A Major Crisis Last week Jayant Bhandari related the story of the overnight ban of certain banknotes in India under cover of “stamping out corruption” (see Gold Price Skyrockets In India after Currency Ban Part 1 and Part 2 for the details).   Banned 500 rupee banknotes   The problem is inter alia that the sudden ban of these banknotes has hit the Indian economy quite hard, given that 97% of all transactions in the country are cash-based. Not only that, it has...
  • Will the Swamp Swallow Trump?
      Permanently Skewed TRUMP HOTEL, New York – Trump’s rambling army – professionals, amateurs, camp followers, and profiteers – is marching south, down the I-95 corridor. There, on the banks of the Potomac, it will fight its next big battle.   Lieutenants in Trump's army: Bannon, Flynn & Sessions Photo credit: Drew Angerer / AFP   Here at the Diary, we do not like to get involved in politics. But this is a special time in the history of our planet – a...
  • All Aboard! Trump’s Express Train to the Future
      Free Money! BALTIMORE – Last week, the Dow punched up above 19,000 – a new all-time record. And on Monday, the Dow, the S&P 500, the Nasdaq, and the small-cap Russell 2000 each hit new all-time highs. The last time that happened was on the last day of December 1999.   Ironically, two events that were almost universally expected to trigger large stock market declines were followed by quite rapid and strong gains. Would the market have fallen if Hillary Clinton had won...
  • There Are Two Types of Credit — One of Them Leads to Booms and Busts
      Stumped by the Bust In the slump of a cycle, businesses that were thriving begin to experience difficulties or go under. They do so not because of firm-specific entrepreneurial errors but rather in tandem with whole sectors of the economy. People who were wealthy yesterday have become poor today. Factories that were busy yesterday are shut down today, and workers are out of jobs.   What has caused the bust? The modern-day economic orthodoxy continues to be unable to provide...
  • Gold Bull Market Remains Intact – Long Term Fundamentals Outweigh Short Term Market Gyrations
      A Strong First Half of the Year, Followed by Another Retreat In early 2016 gold had a big bull run. The precious metal rose close to 25% this year, pushed higher in a summer rally that peaked on July 10th. Gold experienced a bumpy ride over the remainder of the summer though, as investors became increasingly concerned about a potential rate hike by the Federal Reserve. Uncertainty returned to gold market and has intensified further since then.   Initially, gold rallied sharply...
  • Too Early for “Inflation Bets”?
      The Trump Trade After 35 years of waiting... so many false signals... so often deceived... so often disappointed... bond bears gathered on rooftops as though awaiting the Second Coming. Many times, investors have said to themselves, “This is it! This is the end of the Great Bull Market in Bonds!”   The long bond's long cycle – red rectangles indicate when the post 1980 bull market was held to be “over” or “over for sure” or “100% over”, etc.  We have...
  • Putting an End to the Regulatory Industry
      Gross Regulatory Overburden Corporate life in America these days is fraught with tedium.  First the MBAs imposed their silly six sigma processes and reduced workers to mere widgets. Then the regulators went through and squashed out any fun that remained. Gone are the days when shrewd eccentrics could get rich using techno-babble to hawk the Turbo Encabulator.  Alas, there are rules and regulations stymieing all creativity.  In fact, as a matter of law, such restrictions are shoved...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com