Bill Bonner

The welfare state model no longer works; the center — consensual democracy — wobbles towards the extremes. What to do? Beat our plowshares into swords?

It’s one thing to skim the profits. It’s another to own the business. The feds don’t know, and don’t care, how to manage an enterprise. They are parasites, not producers; wolves, not shepherds.

Thanks largely to the EZ money era wrought by America’s funny money, the world’s reserve currency, feds everywhere spend too much money. Economies adapted to the cash flow.

Officially, consumer price inflation meant that stocks lost about half their value. The price of gold, meanwhile, jumped from $35 in the beginning of the 70s, to $540 at the end.

Some of Mr. Trump’s tariffs are so peculiar, it’s not clear where they fit into the constitutional structure. They are used as sanctions, punishments, bargaining chips and foreign policy weapons.

The ponzi math of the welfare state system no longer works. Too many old people. Not enough young people to pay for them. What to do?

Tariffs are essentially a sales tax. And a sales tax — averaging maybe 15% — is going to reduce consumer purchasing power…and cut into sales and profits. That is, it will be downer.

The story of Rome’s imperial decline is a story of shrinking consensual civilization and rising brute force. The center weakened. Armies fought with each other to gain control of the government.

Wealth is not created by politicians or their programs, policies or money-printing bamboozles. Instead, it is the fruit of taxi drivers, doctors, accountants, jewelers…millions of people.

Empires, like people, become more fragile when they get old. They sit, as if atop a great mountain, ready to roll down in any direction.