I don’t think we should ever shake hands ever again.
—Dr. Anthony Fauci
That does it for us. Now we’re convinced. America’s war against the COVID-19 virus is being run by morons.
People have been shaking hands for about 3,000 years.
It is a sign of good intentions, as in friendship or sealing a deal. It is just one of the many vernacular customs and manners that mark civilized life.
But Dr. Fauci seems to think that the only thing that matters in life is not getting sick.
If all we cared about was staying alive…
…we would give up sex. God knows what kind of STDs you might get…or have a heart attack from the exertion, like Nelson Rockefeller, in 1979.
…if Pearl Harbor is bombed again, we would immediately surrender. Fighting wars is dangerous.
…we wouldn’t play football…or go skiing…
…we wouldn’t have any farmers (one of the most dangerous occupations) or lumberjacks, or firefighters, or deep sea divers…or dozens of other hazardous occupations…
…and we would lower the speed limit to 20 mph.
And if staying alive were the only goal in life, we would all stay home…all the time.
Like business magnate Howard Hughes, we would shuffle around our houses with Kleenex boxes for shoes…and use Kleenex tissues to pick up things for fear they might have germs on them.
Did that prolong Hughes’ life?
When he died in 1976, he was just 70 years old, and still one of the richest men in the world. But it was as if he had starved to death. He was 6’4’ tall, but weighed only 90 pounds.
He was such a wreck — unwashed, unkempt, unfed — that the FBI had to check his fingerprints to identify him.
What kind of a damned fool would want to live like that?
War against the economy
With Dr. Fauci as its commander in chief, the feds’ war against the COVID-19 virus seems increasingly preposterous.
But their war against the U.S. economy will probably do more lasting damage.
Yesterday, it came out that the unemployment toll over the last three weeks has reached nearly 17 million…the most in history.
Jay Powell, the Federal Reserve chief who claimed the economy was in ‘a good place’ just a month ago, now says:
People have been asked to put their lives and livelihoods on hold, at significant economic and personal cost…We are moving with alarming speed from 50-year lows in unemployment to what will likely be very high, although temporary, levels.
As we pointed out earlier this week, the U.S. government is conducting one of the biggest…most bizarre…and most futile experiments in economic history.
First, it is destroying the heart and soul of our prosperity — the win-win, give and take deals in the free market economy. Second, it is setting out to replace real economic losses with fake money.
And we think we know how this is going to turn out.
Beginning of the end
Yesterday brought a preview of what’s ahead.
Stocks rose. But the economy fell. Another 6.6 million people applied for unemployment benefits.
And that is not the end…nor even the end of the beginning. It’s the beginning of the end.
People won’t be paying taxes because they haven’t earned any money. And they won’t be paying their credit card bills. Or their rents. Or their mortgages.
Check this out from Bloomberg:
Mortgage Defaults Could Pile Up at Pace That Dwarfs 2008
Mortgage lenders are preparing for the biggest wave of delinquencies in history. If the plan to buy time works, they may avert an even worse crisis: Mass foreclosures and mortgage market mayhem.
Bear markets do not end with investors looking for the bottom…and eagerly buying the dip. They end in desperation and capitulation…when animal spirits have disappeared…and optimism has been wrung out the system.
At the end, investors are not looking for bargains. They’re not calling their brokers, hoping to get in on the next bull market.
Instead, they want nothing to do with stocks and would like to punch their brokers in the face.
Mad experiment for our economy
Of course, the feds won’t sit still while these remarkable things are happening. They will make them worse.
That is what the second part of this mad, mad, mad experiment is all about…and it’s where the biggest losses will occur.
The feds are trying to disprove Say’s Law…which tells us that real wealth comes from producing things, not from money.
Whether locking down the economy made sense epidemiologically or not, we don’t know. But it surely magnified the nation’s real losses.
Now, the feds claim to be ‘making up’ for those losses by showering the economy with helicopter money — trillions of dollars’ worth of printing press money.
Like manna from Heaven, it is dropped on the just as well as the unjust…the prudent as well as the reckless…the unemployed as well as those still with jobs…on those who need the money, and those who don’t.
Seven out of 10 small businesses are already in line for the $350 billion giveaway they were promised in March. And big businesses have their lobbyists all over Washington, eager for their piece of the Fed’s $2 trillion-plus relief package.
But while the feds may be able to fake out investors, and boost stock prices with fake money, fake money can’t produce real wealth.
Get rich or get crucified
Looking ahead, we see more carnage…nonsense…and delusion to come.
There will be wailing and gnashing of teeth. There will be scapegoating…false idols…and demagogues with quack solutions.
There, too, riding into town on the back of a donkey, is the innocent, win-win economy. But the mob has turned against it.
‘Give us Donald!’ shout the rabble. ‘Give us Nancy!’ ‘Give us a Universal Basic Income and free toilet paper!’
And one man — one of the most famous public officials since Pontius Pilate — stands as judge. U.S. Treasury Secretary, Mr. Steven Mnuchin, will play a commanding role in deciding who gets rich…and who gets crucified.
And whatever else comes of this crazy period, we’ll bet that he and his friends will emerge even richer than they are now.
Regards,
Bill Bonner