Our Third Bold Prediction

The comments below are an edited and abridged synopsis of an article by Bill Bonner

Bonner’s first prediction: The Fed would never normalize interest-rate policies, allowing the free market to set short-term rates, rather than the Fed itself. The second: Donald Trump wouldn’t follow through on his threat of a trade war with China.

Our Third Bold Prediction | BullionBuzz

The third: Jerome Powell, chairman of the Fed, has said that Modern Monetary Theory (MMT) (print as much currency as you like!) is wrong. Bonner predicts that he, or his successor, will change his or her mind.

With such low rates, unemployment supposedly at its lowest level since the 1950s, and the stock market near its all-time high, Powell can afford to tell the truth, at least about MMT.

But everything rests on lies: Fake money, fake interest rates, fake us-versus-them battles, tax cuts without spending cuts, and expensive social programs.

In Warren Buffett’s latest letter to shareholders, for example, he described the stock market’s run-up over the last 77 years as the result of ‘American mettle.’ That was a lie, too.

American entrepreneurial mettle is measured in GDP figures, not the S&P 500. And GDP growth has been running at only 2%-3% for decades, while Buffett’s portfolio was compounding about six times that rate.

How did that happen? It was a meddle, not mettle. Meddling by the feds twisted the world’s finances, making the rich richer, and the poor poorer.

That is what the insiders are desperate to preserve. Which is why neither the trade deficits, nor the policies that brought them about, are going away anytime soon.

There are those who go through life honestly, and there are those who cheat and steal, or use the muscle of the government to get something for nothing. That’s the fight that really matters.

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