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Daily Missive

Day of Reckoning

Loading ...Bill Bonner

August 13, 2025 • 6 minute, 11 second read


dollarReckoning dayUS dollar

Day of Reckoning

“People will take you very much at your own reckoning.”

— William Shakespeare

A special note to Grey Swan subscribers: This week’s Grey Swan Live! will be held on Friday at 11 a.m., not tomorrow. We’re in the middle of some new groundbreaking research – and will have even more details that afternoon. But our paid-up Fraternity members will get an early sneak peek at what we see developing.

Sneak Peek Grey Swan Live!
 Friday, August 15, 2025
11am ET

We set up a “VIP access” hot list for non-paying members of the Grey Swan Investment Fraternity. To be reminded before Friday’s event, click on this link and add your name and e-mail to the list.

August 13, 2025 — The Big Man keeps getting bigger.

And the old conservatives…or what’s left of them…must be trying to remember…

Why was it that the founders wrote a constitution? What was the purpose of imposing rules…limits…restraints? How did they know what challenges a future POTUS would face? Reuters:

Trump takes over DC police in extraordinary move, deploys National Guard in capital

They must have had a reason…the founders, that is. They wrote up a constitution that would function like a junkyard dog’s electronic collar. The feds could go only so far…and no further.But today, we have a Big Man who can spend as much money as he wants…round up people and put them in jail — without charges or trial…threaten foreign governments and foreign heads of state…bomb foreign capitals…sponsor two murderous wars at once (one in which women and children are the main victims)…and enact the biggest tax increase in world history with no debate and no vote.

He growls and snarls…and bites the hands that feed us all. But where does it lead? The Wall Street Journal:

President Trump is imitating [the] Chinese Communist Party by extending political control ever deeper into the economy.

Fortune:

President Trump has seized control of private enterprise’s strategic decision-making and investment policies while invading corporate board rooms so that he may dictate leadership staffing, punish corporate critics, and demand public compliance with his political agenda.

MAGA has gone Marxist and even, increasingly, Maoist.
Pence, Bannon, Carlson, Owens, Rogan, Paul…and many others — they must wonder, ‘Is this really what we signed up for?’

Even in a consensual democracy, the yoke of a police state never entirely disappears, but it is light…and controlled by accepted rules. We all drive on the right…and get where we are going. The feds are supposed to stay in their lane too — as spelled out in the US Constitution. It tells our rule-makers how far they can go.

But come the election of 2024 and the Big Man seems to have slipped his collar.

We are looking at what may or may not be an important fissure in Magaland. Traditional Republican conservatives still believe in the Constitution. They also believe in free trade, not trade managed by federal bureaucrats. They thought the Constitution backed them up:

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports…

No serious economist favors tariffs. And thoughtful people can’t help but notice that the tariff edifice is built on false premises. Kenya Times:

Trump’s Tariffs Mean ‘Massive New Taxes’ on Americans, Chamber of Commerce Says

Americans pay for them, not foreigners — as Mike Pence pointed out yesterday. They are a tax on US consumers, not a gift from overseas. And they will raise prices as well as deepen the swamp. Lobbyists seek delays, exceptions, and adjustments — and get them.

That is another feature of shape shifting Big Man government. There are no rules that can be applied evenly and fairly. There is just deal making, Deep State lobbying…and what you can get away with.
Also in the news was this from the Independent:

President Donald Trump extended a trade truce with China for another 90 days Monday, delaying once again a showdown between the world’s two biggest economies.

China’s position as the world’s leading purveyor of strategic metals forced the Big Man back down. Asia Times:

Lithium price jump exposes China’s chokehold on supply

CATL battery maker’s Yichun mine shut down spikes global prices as Beijing clamps down on competitive markets.

Weaker nations were not so lucky. Poor little Switzerland faces a 39% rate. What did it do wrong? And India is up against a 50% tariff. AOL:

Higher Tariffs On India May Be Driving Crucial US Ally Closer To Russia, China

Indian Prime Minister Modi hastened to Beijing the day after Trump announced his tariff hit.

And now…Carlson, Owens et al must be wondering, as we are…is there any more effective way to drive the world’s most populous country to make common cause with China…

Or to prepare a late, degenerate empire for its day of reckoning?

Regards,

Bill Bonner
Bonner Private Research & Grey Swan Investment Fraternity

P.S. from Addison: If you haven’t made a note, please do. This week’s Grey Swan Live! will air Friday, August 15, at 11 a.m. ET — not our usual time slot tomorrow.
There’s a good reason.

We’re in the thick of some groundbreaking research and pulling together VIP access for select folks outside the Grey Swan orbit. But paid-up Fraternity members get the early look Friday morning.

It’s a fitting date. August 15 marks 54 years since Nixon took the U.S. off the gold standard, dismantling the Bretton Woods exchange rate system. That single move flipped the global monetary order from gold-backed stability to one backed only by the “full faith and credit” of the U.S. government — and put more political heat than ever on the Federal Reserve’s “dual mandate” to tame inflation and maintain full employment.

Back in 1971, markets initially cheered Nixon’s decision — the Dow popped nearly 4% the next day. But the party didn’t last. Within a decade, inflation was running into the double digits, gold had rocketed 15-fold, and the Fed was forced into the brutal rate hikes of the Volcker era to restore credibility.

That same dual mandate is why Jerome Powell is squarely in Trump’s sights today. We have reason to believe the outlines of a new Fed regime are already forming… and we’ll be unpacking the details live.

The CPI inflation data from the BLS is suspect. Trump has threatened to sue Powell over the cost overrides of the Eccles Builing, the Fed’s D.C. headquarters. According to Treasury Secretary Scott Bessent, yesterday, the list of names in line to replace Powell has grown to ten. The drama surrounding next week’s Jackson Hole meeting of the world’s central bankers couldn’t be more intense.

We’re going to unpack it all… and give a free trade to Grey Swan Live! Attendees.

Mark your calendar:

Sneak Peek Grey Swan Live!
Friday, August 15, 2025
11am ET

We set up a “VIP access” hot list for non-paying members of the Grey Swan Investment Fraternity. To be reminded before Friday’s event, click on this link and add your name and e-mail to the list.

(Clicking the registration link above will instantly register you for urgent reminders and details leading up to the event on Friday, August 15th at 1pm ET. You may unsubscribe anytime.)

Your thoughts? Please send them here: addison@greyswanfraternity.com


The Ghost of Bastiat

October 6, 2025 • Addison Wiggin

By then the receipts on my desk had arranged themselves into a sort of chorus. I heard, faintly, another refrain—one from Kentucky. In the first days of the shutdown, Senator Rand Paul stood alone among Republicans and voted against his party’s stopgap, telling interviewers that the numbers “don’t add up” and that he would not sign on to another year that piles $2 trillion onto the debt.

That, I realized, is what the tariff story shares with the broader budget theater: the habit of calling a tax something else, of shifting burdens into the fog and then celebrating the silhouette as victory. Even the vote tally made the point: he was the only Republican “no,” a lonely arithmetic lesson in a crowded room.

The Ghost of Bastiat
The Dollar’s Long Goodbye

October 6, 2025 • Addison Wiggin

Senator Rand Paul, (R. KY), who was the sole Republican to vote against a continuing resolution, seems to care about the actual finances of the government. “I would never vote for a bill that added $2 trillion in national debt,” Paul said in various interviews over the weekend.

The $2 trillion he’s referring to is the lesser of two proposals made by the national parties… and would accrue during this next fiscal year.

Oy.

We liked what Liz Wolfe at Reason wrote on Friday, so we’ll repeat it here: “One of the dirty little secrets of every shutdown is that everything remains mostly fine. Private markets could easily replace many federal functions.”

It’s a strange kind of confidence — one where Wall Street soars while Washington goes dark.

The Dollar’s Long Goodbye
A Vote For The Yen Carry Trade

October 6, 2025 • Addison Wiggin

The Liberal Democratic Party victory has sent Japanese stocks soaring, as party President Sanae Takaichi – now set to become Japan’s first female Prime Minister – is a proponent of stimulus spending, and a China hawk. The electoral win is a vote to keep the yen carry trade alive… and well.

The “yen carry trade” is a currency trading strategy. By borrowing Japanese yen at low interest rates and investing in higher-yielding assets, investors have profited from the interest rate differential. Yen carry trades have played a huge role in global liquidity for decades.

Frankly, we’re disappointed — not because of the carry trade but because the crowd got this one so wrong!

A Vote For The Yen Carry Trade
Beware: The Permanent Underclass

October 3, 2025 • Addison Wiggin

Back in the Global Financial Crisis (2008), we recall mass layoffs were driving desperation.

Today, unemployment is relatively low, if climbing.

Affordability is much more of an issue. Food, rent, healthcare, and childcare are all rising faster than wages. Households aren’t jobless; they’re stretched. Job “quits” are at crisis-level lows.

In addition to the top 10% of earners, consumer spending is still strong. Not necessarily because of prosperity, but because households are taking extra shifts, hustling gigs, working late into the night, and using credit cards. The trends hold up demand but hollow out savings.

It’s the quiet form of financial repression. In an era of fiscal dominance, savers see easy returns clipped, workers stretch hours just to stay even, and wealth slips upward into assets while daily life grows harder to afford.

Beware: The Permanent Underclass