Big Money

Bill Bonner, writing today from Baltimore, Maryland

Forbes:

Biden forgives $4.28 billion in student debt for 54,900 borrowers

The relief is a result of fixes the U.S. Department of Education made to the once-troubled Public Service Loan Forgiveness program.

Where did Joe Biden get the power to spend Americans’ money without asking Congress?

Who knows?

But while the president was doing unconstitutional acts… the markets were making unconscionable moves. Fortune:

Fartcoin hits $1 billion market cap as memecoin market explodes

And then, as expected… rather than force the feds to actually reduce spending, Republicans got together and agreed to spend even more. Tampa Free Press:

House Republican leaders have announced an internal agreement on a stopgap spending bill, also known as a continuing resolution (CR), to fund the government through March 2025, averting a looming shutdown set for Friday night. The proposed CR includes $110 billion in disaster relief for victims of Hurricanes Milton and Helene, along with a one-year extension of the farm bill, according to multiple reports.

What a lovely Christmas pageant it is! A grand parade of fools and knaves. A circus of freaks and clowns.

Yes, here at Bonner Private Research we are enjoying the show. But we’re closing up shop for the holidays. Our readers have more important things to think about than politics, economics, or investments.

But our goal is to prevent you from taking the Big Loss… and to that end, we bring some last-minute thoughts.

We believe we are watching a struggle between money and power… between Musk and Trump…between the Primary Political Trend of at least the last 50 years and (possibly) a new direction. Money wants a freer economy… with the usual grift and corruption. Power wants what it always wants — more power.

The outcome is in doubt… but many investors are anticipating a huge ‘melt-up.’ They think they face a once-in-a-lifetime opportunity, a new era created by the new MAGA-istas.

We hope it works out.

But just in case … here’s our contrary view…

Share Bonner Private Research

Almost all commentators, on the left and the right, have it wrong. They think we are looking at a struggle between conservatives Trump/Musk/etc on one side and the establishment, wokish, war-mongering liberals on the other.

If that were true, we could take our places in the bleachers, rooting for a victory for the conservative cause, hoping for lower deficits, lower inflation, lower interest rates — and a less expensive, less powerful government.

Then, we might even expect a business revival. Manufacturing would return to the US… and thousands of rapists and murderers would leave.

But that is not what is on offer.

The Republican elite, now including Donald Trump, have a very different agenda from Elon Musk. They spent a lot of time and a lot of money getting power. They’re not going to want to give it up. Instead, they’re going to use it in the same way elites always use government — to take money and power away from ‘The People’ and give it to themselves.

That has been the Primary Political Trend for at least 50 years. It will change at some point, but typically, not until some catastrophe comes along and the elites run out of other peoples’ money.

And that suggests that at some point in the not-too-remote future, Messrs. Musk and Trump are headed for a showdown. Mr. Trump is now the most powerful man in the world. He wouldn’t want to see his face taken down from Rushmore… even before it gets there, or share power with a rich guy from South Africa.

Besides… he has his weight to throw around. Bloomberg:

President-elect Donald Trump warned the European Union that its exports will get hit with US tariffs if its member states don’t buy more American oil and gas. 

“I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!,” he said on Truth Social.

Big Man politics require a Big Stick… which costs Big Money. It seems very unlikely that Trump would give up the pleasure of power for reasons he neither understands nor appreciates.

Look for bigger deficits, not smaller ones. And lower asset prices, not higher ones. And if we’re wrong…

Well, it won’t be the first time.

Happy holidays.

Regards,

Bill Bonner

Bill Bonner, writing today from Baltimore, Maryland

Forbes:

Biden forgives $4.28 billion in student debt for 54,900 borrowers

The relief is a result of fixes the U.S. Department of Education made to the once-troubled Public Service Loan Forgiveness program.

Where did Joe Biden get the power to spend Americans’ money without asking Congress?

Who knows?

But while the president was doing unconstitutional acts… the markets were making unconscionable moves. Fortune:

Fartcoin hits $1 billion market cap as memecoin market explodes

And then, as expected… rather than force the feds to actually reduce spending, Republicans got together and agreed to spend even more. Tampa Free Press:

House Republican leaders have announced an internal agreement on a stopgap spending bill, also known as a continuing resolution (CR), to fund the government through March 2025, averting a looming shutdown set for Friday night. The proposed CR includes $110 billion in disaster relief for victims of Hurricanes Milton and Helene, along with a one-year extension of the farm bill, according to multiple reports.

What a lovely Christmas pageant it is! A grand parade of fools and knaves. A circus of freaks and clowns.

But our goal is to prevent you from taking the Big Loss… and to that end, we bring some last-minute thoughts.

The outcome is in doubt… but many investors are anticipating a huge ‘melt-up.’ They think they face a once-in-a-lifetime opportunity, a new era created by the new MAGA-istas.

We hope it works out.

But just in case … here’s our contrary view…

Share Bonner Private Research

Then, we might even expect a business revival. Manufacturing would return to the US… and thousands of rapists and murderers would leave.

But that is not what is on offer.

Besides… he has his weight to throw around. Bloomberg:

President-elect Donald Trump warned the European Union that its exports will get hit with US tariffs if its member states don’t buy more American oil and gas. 

“I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!,” he said on Truth Social.

Big Man politics require a Big Stick… which costs Big Money. It seems very unlikely that Trump would give up the pleasure of power for reasons he neither understands nor appreciates.

Look for bigger deficits, not smaller ones. And lower asset prices, not higher ones. And if we’re wrong…

Well, it won’t be the first time.

Happy holidays.

Regards,

Bill Bonner

The last time Uncle Sam had this much debt rolling over, interest rates were effectively zero percent. That allowed for a massive expansion of total debt, even as total interest payouts shrank.

Having said all that, why does President Trump want Greenland so badly (other than as retribution for not being awarded the Nobel Peace Prize)?

He insists it’s for national security, but, as I mentioned earlier, the U.S. military already has broad access to the island, as spelled out in the 1951 agreement signed by the U.S. and Denmark. Further, Greenland is under the protection of NATO, of which the U.S. is a member. If Russia or China tried to attack it, Article 5 of the treaty would be triggered, activating NATO forces.

Recent reporting suggests that some of Trump’s wealthiest backers see Greenland not as a military outpost or mining play, but as a blank slate. According to Reuters, influential tech investors—including Peter Thiel and Marc Andreessen—have pitched the idea of turning parts of Greenland into a so-called “freedom city,” offering a low-regulation, quasi-autonomous hub for next-gen technologies.

Japan’s 40-year yield climbed to a record 4.21%.

Japan holds $1.2 trillion in U.S. Treasurys.

When their domestic yields spike, Japanese capital returns home. That means selling U.S. assets: stocks, bonds, ETFs. That selling pressure cascaded through the global financial system.

This mechanism isn’t new.

Social spending in Europe has roughly doubled in the past 30 years. But only in 2025 has defense spending returned to levels last seen when the Berlin Wall was still standing.

Treasury Secretary Scott Bessent estimated on NBC’s Meet the Press over the weekend that the US has spent 22 trillion dollars on its commitment to NATO. Or, roughly two-thirds of the U.S.’s $38 trillion in national debt.
Social spending in Europe has roughly doubled in the past 30 years. But only in 2025 has defense spending returned to levels last seen when the Berlin Wall was still standing.

The last time Uncle Sam had this much debt rolling over, interest rates were effectively zero percent. That allowed for a massive expansion of total debt, even as total interest payouts shrank.

Having said all that, why does President Trump want Greenland so badly (other than as retribution for not being awarded the Nobel Peace Prize)?

Japan’s 40-year yield climbed to a record 4.21%.

Japan holds $1.2 trillion in U.S. Treasurys.

When their domestic yields spike, Japanese capital returns home. That means selling U.S. assets: stocks, bonds, ETFs. That selling pressure cascaded through the global financial system.

This mechanism isn’t new.

Social spending in Europe has roughly doubled in the past 30 years. But only in 2025 has defense spending returned to levels last seen when the Berlin Wall was still standing.