Last week, we saw the breathtaking madness of both Democrats and Republicans.
Donald Trump proposed to spend $2 trillion more…in addition to the $2.2 trillion already committed…
…and Nancy Pelosi seconded the motion.
Cronies started planning vacation homes. Lobbyists subscribed to yachting magazines. Drug dealers started building up inventories. CEOs breathed easier, with their jobs and bonuses now guaranteed by the feds.
And small business…well…they’ll get some crumbs, too. But Big Government looks out for Big Business, not small business. The little guys don’t have the lobbyists to play this game.
We remind Dear Readers that all these trillions in new spending will not save a single codger from COVID-19. The fight against the coronavirus is barely a sideshow…
Coronavirus war fever
In a few months, the dreaded molecule will be just another virus on a long list. But The Swamp will be deeper than ever.
After all, when you’re at war…all the resources of the nation are marshalled under the feds’ control. Here’s The Globalist magazine’s senior editor, Uwe Bott:
Restructuring into a (health) war economy
For the next 5-6 months, what remains of the U.S. economy must be completely restructured into a war economy. We don’t need new cars, we need ventilators. We do not need new furniture, we need hospital beds.
Again, the list is long…We must fully mobilize our military and reservists to step in in order to fill the gaps of critical personnel that we need to beat this.
And here’s MarketWatch with more on the war fever:
With U.S. borrowing costs at historic lows and people feeling a patriotic urge to do something in the war against a viral outbreak, the hot idea swirling around Washington is coronavirus savings bonds.
Economist Jack Rasmus has more details:
Here’s three ways the U.S. financed and paid for economic war mobilization in 1942-45 and how we can do the same today:
Congress in 1942 passed a massive tax increase bill to help fund the war. It followed it up with more tax increase bills in 1943, 1944, and 1945. It then issued victory bonds to help finance further. The U.S. Treasury can do the same today. The U.S. can also run a budget deficit, to be repaid later—again as we did in World War II.
What a bunch of dopes. Wrong about everything.
The feds aren’t going to raise taxes; they’re going to cut them.
People aren’t going to buy Victory bonds. They’re going to dump their U.S. Treasuries. Investors know they will never be repaid.
Big swamp power grab
As we put it on Friday, this is not a fight against a virus. This is a naked, third world-ish, sh*thole-style money-printing lollapalooza.
But what you can get away with in the fog of war!
And like so many of America’s wars over the last 100 years, this one is phony. It is just a smokescreen for the insiders to shift more power and wealth to themselves.
WWI. Vietnam. Korea. Drugs. Poverty. Terrorism. Now, a protein molecule.
Here’s how it works…
First, both the press and the government hype up the threat. The mob becomes hysterical. It hears lurid tales of how evil the enemy is.
In WWI, Americans read about the Huns bayonetting babies and mass-raping nuns. None of it was true. In Vietnam, we were told that if the reds weren’t stopped in Da Nang, they’d end up in Detroit.
Then, in 1975, we were warned that marijuana would turn us into a nation of heroin addicts. In 2003, we were told that Iraq had ‘weapons of mass destruction.’
Then, as the war fever grows, more and more of the nation’s output and energy is shunted towards the war effort.
A new coronavirus hysteria
In WWI, auto factories were commandeered to build tanks; now they’re told to build ventilators. The War Against Terror consumed some $5 trillion. The War on Poverty cost $27 trillion, according to a Heritage Foundation estimate.
Finally, new ‘emergency’ legislation gives the feds more power to keep people from challenging the ‘war’ narrative.
In 1918, the Sabotage and Sedition Acts allowed the federal government to punish anyone who expressed an opinion that was ‘disloyal, profane, scurrilous or abusive.’ On this basis, the Post Office stopped delivering anti-war publications.
Passed in the heat of war fever in 2001 (apparently, no member of Congress read it), the Patriot Act gave the government broad, new powers to eavesdrop, seize property, and invade privacy.
It was an ‘emergency’ measure…but its worst features are still the law of the land.
And now, a new war…a new hysteria…and another big power grab by the swamp creatures. In little ways and big ones, the feds take more power. Here’s Zero Hedge:
The Senate-approved stimulus bill repeals the sunshine law for the Fed’s meetings until the President says the coronavirus threat is over or the end of the year (spoiler alert: the coronavirus threat will never be over).
That could make any FOIA lawsuits to disclose details of what is taking place in Fed meetings a non-starter since it has been codified in a federal law.
Get it? We’re not allowed to know what the Federal Reserve is up to. Because we’re ‘at war’ with a virus?!
Monstrous absurdity
By the way, these ersatz wars are disasters.
The 1919 Armistice led to reparations, which led to hyperinflation, which led to Adolf Hitler.
The Vietnam debacle led to the 1971 repudiation of the gold-backed dollar…
…which led to $20 trillion in trade deficits…
…which led to the loss of millions of manufacturing jobs…
…which led to the decline of the U.S. empire…
…which led to the election of Donald Trump with his MAGA theme…
And now what? The feds lock down the economy…output declines. They also increase the supply of printing-press money. Let’s see…
More money…fewer goods and services…
Hmmm…what does that sound like to you? Inflation!
After 40 years of falling yields and dropping inflation rates…consumer price inflation would be just the kind of curve ball you might expect.
And it’s coming…
Homeowners: Hold onto those low-interest, long-term mortgages.
Investors: Switch to hard assets…gold, silver, oil, land.
Everyone: Prepare for lower living standards, chaos, and monstrous absurdity.
Stay tuned…
Regards,
Bill Bonner