The Real Threat Is in Washington

What’s going on now? In all the excitement we risk losing the plot.

Close the border with Mexico? A trade deal with China? A WWE wrestler punched in the mouth?

No news report is so foolish and so obviously insipid that it fails to be taken seriously. But what matters? What doesn’t?

Let’s back up and see if we can figure it out…As you will see, there is a real national emergency…a genuine catastrophe at least equal to Prohibition…shaping up.

But it has nothing to do with the Rio Grande.

Travel update

Before we get to that, we’ll give you a quick travel update. Something very unusual happened in the Calchaquí Valley, last week. It rained.

No one could recall rainfall this late in the year. And no one didn’t like it.

But it caused problems.

‘Boss, I’m not sure you’ll be able to get out,’ said our foreman.

‘The rain washed out the road. And even if you get to the river, you may not be able to get across.’

We recalled that a neighbour once went for three years without being able to visit his property. Every time he came up to the valley, the water was running fast. He couldn’t cross the river.

But we have grown to like our 4-wheel-drive Toyota pickup. It’s the small model, not available in the US, favoured by drug dealers in South America and terrorists in the Middle East. It is comfortable and reliable, and it goes almost anywhere. So, we headed out.

After two days of rain down in the valley, the mountains on both sides were covered in snow. Sharp blue sky. Bright white snow. The scene was breathtaking.

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The road out of the property turned out to be in pretty good shape. There were deep ruts here and there, but nothing that would stop us. But when we arrived at the river, there were cars and motorcycles beside the road.

They had not been able to get across. So, they simply camped out on the riverbank, waiting.

Ahead of us was a river, perhaps a hundred yards across, running with red water, of unknown depth, and mud the colour of an unfired brick. Behind us, in the back seat, was Nolberto.

A retired ranch hand, Nolberto had asked for a ride to town. We were happy to oblige. But now we turned to the old-timer for help.

‘Well, Nolberto, what do you think? Take a chance? Try to get across?’

‘Sí…go for it,’ said the old man, a broad smile on his face. Asking Nolberto for driving advice was like asking Natalio to proofread our letters. Natalio is illiterate. And Nolberto has never driven a motorised vehicle in his life.

But we didn’t like the idea of waiting; and judging by two people who were wading across, the river was only about knee-high. We gunned the engine and headed into the red muck. At first, the truck seemed to sink and slow down.

But then, the wheels must have found the bottom and it moved forward, throwing up muddy water but advancing steadily. Finally, it emerged triumphantly on the other side.

Nolberto smiled. ‘Ah ha…no problema.’

Real threat

So, here we are in Paris…and today, we turn our attention to some serious dots that need to be connected.

When Donald Trump was elected, the Obama Team and the Bernanke Fed had already set the stage. The national debt had increased $9 trillion in the last eight years, and the Fed had printed up an additional $3.6 trillion to buy bonds.

Those things weren’t the end of the show…they were just the opening act…like the guy who would eat a live chicken on stage, warming up the crowd for Shakespeare…But if they kept to that script, it would end up as a tragedy. GDP is increasing at 2.5% per year. Federal debt is increasing twice as fast. No way is that going to have a happy ending.

But the Democrats insisted that they had everything under control. They only increased the deficits so much because they had to…or so they claimed. The crisis of 2008-2009 was a national emergency; thenceforth, the deficits would be coming down.

The Fed, too, had begun ‘normalising’ interest rates and planned to remove the $3.6 trillion of emergency funny money it had put in the system.

‘Don’t worry about it,’ they said…’we know what we’re doing.’ But in Obama’s last year, the deficit was still $590 billion — a shocking amount for a boom year.

We opined at the time of the 2016 election that neither foreign terrorists, nor illegal immigrants, nor cottoning up to Russia, nor Iran constituted a real threat to the US.

The real threat was homegrown…in the swamp of Washington, DC, not overseas.

Unless the White House and/or Congress figured out how to walk on two legs — with some foresight and backbone — the country would go broke…

And that — as we’ve seen in Weimar, Germany, Venezuela, Zimbabwe, Brazil, and Argentina — is not just a matter of money.

When the money breaks down, other things tend to break down, too — politics, order, justice, civil society…almost everything.

But getting something for nothing is a hard habit to break. And by 2016, people were hooked. The baby boomers were retiring; they paid taxes — including Social Security — all their lives. They expected to be taken care of in their old age.

It didn’t matter to them that the feds had already squandered every penny. As for the finances of the government — that was someone else’s problem.

But whose? Let’s look at that tomorrow.

Regards,

Bill Bonner