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Beneath the Surface

From Butter to Guns

Loading ...Bill Bonner

September 8, 2025 • 4 minute, 28 second read


Guns and Butter

From Butter to Guns

“Guns will make us powerful, butter will only make us fat.”

-Hermann Goring

September 8, 2025 — “You’re going to see employment leaping.”

That’s what Commerce Secretary, Howard Lutnick, said in April, attributing the good news to the trade war.

But instead of leaping, employment is falling down dead. Last month’s new job count, at 22,000, was statistically insignificant. Most of the numbers that are reported are later revised lower. This one is likely to go to zero.

The whole purpose – at least, as stated publicly – of the trade war was to bring good-paying manufacturing jobs back to the US. But with last week’s report, the number of ‘goods producing’ jobs has fallen by nearly 50,000 since January. Since 2007, more than 400,000 manufacturing jobs have been lost.

Poor Donald Trump. He is one year older than we are. But while we simply observe, safely and comfortably, from our home office, he is out and about…with the cares of the whole world resting precariously on his shoulders. His hands turn purple. His ankles swell. And nothing seems to be working out as advertised. Formerly friendly nations are ‘conspiring’ against him. His gunship diplomacy seems likely to trigger more conflict. The trade war is backfiring. The whole program — an awkward mixture of guns and butter — is proving to be either ineffective or illegal…or both. And hopes for the Nobel Peace Prize seem to be fading.

Still, here at BPR, we always look on the bright side. And there, warmed by the sun, everything is still going according to plan. Not Donald Trump’s plan. Not Hillary Clinton or Gavin Newsome’s plan. And certainly not our plan.

It is going according to History’s great plan. He that doth ride so high must be brought down low. And the USA in 1999 was a source of inspiration and awe all over the planet. She was on top of the world, admired and imitated…with the strongest economy on earth. From an historical perspective, she needed leaders who could help her down the mountain.

So along came George W. Bush, with his ‘war on terror.’ Then came Barack Obama, who added $8 trillion to the national debt. Joe Biden helped too — with his Inflation Reduction Act…which helped boost the rate of inflation to a 40-year high…and increased the debt to over $35 trillion. Biden should also be credited with promoting ‘woke’ and DEI fantasies and thus clearing the path for the man who was suited to do History’s heavy lifting: Donald J. Trump. To fulfill his historic mission, he had to step on the gas, speeding up the pace of wrecking the nation’s finances…and wasting its military.

When Trump leaves office in 2029 US debt should be nearing $45 trillion (if nothing goes wrong!) As for his work on the Pentagon, a little context is called for. German Chancellor Merz:

“The welfare state that we have created can no longer be financed with what we produce in the economy.”

He is right. The ponzi math of the welfare state system no longer works. Too many old people. Not enough young people to pay for them. What to do? How to keep ‘The People’ in line and on your side when you can no longer fulfill your promises? Switch from butter to guns! TIME:

Merz…pledged that Germany’s military would be the “strongest conventional army in Europe,” …. Merz will push to increase troop levels from the current 182,000 active-duty soldiers to as many as 240,000 by 2031 (most likely by reintroducing the draft). Germany will also replace aging aircraft, tanks, and ships. The rest will go toward defense-related infrastructure.

Germany’s last re-armament began ninety years ago. Maybe it will work out better this time, who knows?

America faces much the same math. Last year, US births outnumbered deaths by about 500,000. But more than half US counties have more elderly people than children. And many of the births happen among immigrants. Money Talks:

Hispanic and Asian Growth Offsets America’s Declining Birth Rates

If the goal were to accelerate the insolvency of the Social Security system, what would the feds have to do? Get rid of the immigrants, of course.

An estimated 1.6 million ‘illegals’ left the US in the first six months of this year. This puts the net population change at MINUS a million people so far in 2025. We haven’t seen any reports on the subject, but it must mean that Social Security will go broke sooner than expected.

So, where does that leave the welfare state? Does it turn into a warfare state?

Is that the ‘historical’ reason the Trump Team proposes to change the ‘defense department’ into the ‘war department?’ Is that the real motivation behind naming drug dealers as ‘terrorists’…to distract the Pentagon with a no-account, ersatz enemy? And was that the real reason the US military gunned down people on a boat in the Caribbean last week?

More to come…

Regards,

Bill Bonner
Bonner Private Research & Grey Swan Investment Fraternity

P.S. from Addison: We’re hard at work planning this week’s Grey Swan Live!. If you aren’t already a member, sign up here to become one so you can get the full insights from our weekly guests.

If you’d like, you can drop your most pressing questions right here: Feedback@GreySwanFraternity.com. We’ll be sure to work them in during the conversation.


The New Great Wall of China

October 21, 2025 • Andrew Packer

Some historic irony, here.

China invented paper currencies in the Tang Dynasty in the 7th Century. Known then by the Mandarin characters that mean “flying cash,” the currency, like all paper money, lost its value.

Today, as the rest of the world goes all-in on fiat, and begins to digitize the dollar, China’s rediscovery of gold as an asset suggests that gold’s run isn’t over… yet.

The New Great Wall of China
“No Kings” or Just Bad At Math

October 20, 2025 • Addison Wiggin

The “No Kings” crowd might one day discover that the tyranny they fear doesn’t wear a crown. It wears a smile, signs checks, and calls itself “the common good.”

And like all monarchs in the end, it will demand obedience — long after the cheering stops.

If history rhymes, as it seems to, we’re somewhere between the late 1930s and the late Roman Republic. The crowds are restless, the debt insatiable, the elites insulated, and the reformers convinced they can vote their way to virtue. The yachts are still in the harbor; the customers are still swimming.

“No Kings”? Fine. But remember: every time the crowd dethrones a monarch, it tends to crown a bureaucracy. And bureaucracies, unlike kings, never die.

“No Kings” or Just Bad At Math
A Look Ahead to 1940

October 20, 2025 • Addison Wiggin

Wall Street will always sell tickets to the parade—radio in 1929, dot-coms in 1999, GPUs in 2025. Some parades end in confetti; others in subpoenas. Schwed’s wisdom still stands: you don’t need to time the last note, just keep your seat close to the exit.

If the boom continues, your portfolio participates. If it falters, your ballast buys you time—and maybe your own modest “yacht,” which Schwed would remind you is simply a sturdy rowboat, with good oars and a sound hull.

A Look Ahead to 1940
Wall of Worry, Indeed

October 20, 2025 • Addison Wiggin

Wall Street traders have a term for this phase: the wall of worry. As long as investors get fearful enough, the market top isn’t in.

At the top, investors will go all-in – in what’s known as the “blow of top”,  like they did with dotcom stocks in 1999, or as many did with SPAC companies in 2021.

We haven’t quite gotten to the “this time is different” mentality that causes investors to throw on the blinders – yet.

Wall of Worry, Indeed