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…
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
