| By Bill Bonner Wednesday, April 14, 2021 YOUGHAL, IRELAND – This morning, the Irish Independent reports: “US consumer prices climbed by the most in nearly nine years in March as the end of pandemic lockdowns triggered a rebound in travel and commuting that pushed up the cost of petrol, car rentals and hotel stays.” The death of an empire begins with a whimper… and ends with a bang. Yesterday, we trod lightly over the whimpers. After all, they are mostly silly… and puerile. Together, they generate a lot of noise, but they mean nothing. They are pointless… stupid… time-wasters. Big Deal Today, we sink into more serious matters. The Big Bang, that is. Yes, the Katastrophenhausse. The empire suffers a thousand paper cuts – trivia, distractions, and BS. But the deeper wound comes from the people who control the money. The logical and inevitable consequence of the Federal Reserve’s money-printing and reckless spending is inflation. Prices go up. No big deal? Well… actually… Inflation is not always, everywhere, and only a monetary phenomenon. It is much more than that. It is an economic, social, and political catastrophe. [Featured: This Revolutionary Tech IS the #1 Investment of the Century] Asset Inflation Before we go further, we will point out that “inflation” refers to increasing the money supply. This “inflation” then goes somewhere… but not always where and when you want it to go. So far, in the 21st century, it has mostly gone into asset prices. The Nasdaq-100, for example, home to many of America’s leading tech companies, has gone up more than 500% over the last 10 years. But Sanford Bernstein Research tells us that 37% of companies in the tech sector are unprofitable. Housing, too, has been distorted by price inflation. We are now in the second housing bubble of the century, with prices rising even faster than they did in the last one. Politico reports: Home prices in January – typically a slow month for the market – were up 14 percent over the same month the previous year, while sales jumped 24 percent, despite an unemployment rate that was almost twice as high. Demand for existing homes is so strong that the average residence is on the market for just three weeks, and inventory is at a record low after seeing its steepest drop last year since the data was first tracked in 1999. Inventory is at a record low? Didn’t Trump and Biden’s $5 trillion of “stimulus” increase output… including the supply of new houses? No, it didn’t. While house prices are 43% higher than they were at the height of the last housing bubble, the rate of new house construction is down nearly 50%. Hmmm… More money… Fewer houses available to buy? What do you get? Well, let’s take a look. | Recommended Link | | Man Who Picked Apple Under $2 Issues NEW Urgent Buy He picked Apple back in 2003… BEFORE shares skyrocketed almost 48,000%. He picked Bitcoin when it was trading for just $428. Since then, it has exploded over 9,000% . And now he’s saying this will be the hottest investment of 2021. | | | -- | Road to Ruin Let’s take a little trip… a little vacation… to the biggest island in the Caribbean. There, we will find an example of what we’re looking for – a social, political, and economic catastrophe approaching its climax. Back in the 1950s, Cuba was a vacation spot. A jewel, with the fifth-highest per capita income in the Western Hemisphere, equal to 41% of the U.S., making the average Cuban wealthier than the typical American in the poorer states such as Mississippi or South Carolina. Cuba was second to the U.S. in ownership of automobiles and telephones, and first in ownership of TV sets. It was a mecca for American tourists. A friend recalls, as a child, family vacations every year in Cuba. Ernest Hemingway lived for 20 years outside of Havana. And Lucille Ball’s husband – Desi Arnaz – brought the popular Cuban rhythms to New York and American television. Had it been allowed to evolve in a normal way, Havana probably would have become like Las Vegas – but with Latin culture and a beach – rather than the dilapidated metropolis it is now. But so desperate are people for government – like children for parents – that they will put up with almost anything, no matter how bad. And so it was that the Castro regime – with its central planning and price controls – set Cuba on the road to ruin, where it stayed for the next 60 years. [Featured: Shocking Prediction Made Two Years Ago in Motion Now.] Dire Economic Crisis This week, the Castros’ reign comes to an end. Financial Times reports: Cuba’s last Castro is set to leave the political stage, as Fidel’s 89-year-old brother Raúl cedes power to a younger generation at next week’s communist party congress which must also tackle a dire economic crisis and growing political dissent. The “dire economic crisis” is the rather obvious fruit of dumbbell policies pursued over the last six decades. They began with the appointment of Che Guevara, the famous revolutionary, as head of the central bank of Cuba. Mr. Guevara knew no more about banking than current U.S. Treasury Secretary and former head of the Federal Reserve Janet Yellen does. The result was an early setback for the new government… to be followed by many more over the years – almost all of them driven by activist bureaucrats, who thought they could do a better job of allocating capital than the “market.” The end result is now on display. “This is cattle country,” the FT quotes a source in Camagüey province, “but there’s no milk, butter, yogurt or meat.” Cuba imports 60% of its food. And when its tourism industry hit the skids in the COVID-19 panic of 2020, it left very little money available for other things. Over the years, some 1.4 million Cubans left the island. Those who remain live like paupers. That is not to say they are necessarily unhappy or unwell. But its pursuit of “equality” left most Cubans poorer. Government can’t equalize up; for that would require creating new wealth. It can only equalize down, by taking away money and redistributing it… and destroying much of the wealth-generating capacity of the free economy in the process. At first, Castro’s Cuba relied on the Soviet Union for subsidies – selling its sugar at inflated prices. Then, it depended on Venezuelan oil money to keep going. Both of these socialist paradises have gone into the ditch. And now, Cuba is on its own… desperately trying to hold itself together. | Recommended Link | | Reclusive Best-Selling Author Issues Final Warning The Founder of the largest "underground" financial research firm in the world… Has one last warning to readers. Bill Bonner founded The Agora in 1978. Today – after 40+ years in the publishing business – he's coming forward with his final warning. And not a moment too soon… With offices in 11 countries… millions of daily readers… and two New York Times best-sellers to his name already… Bill's latest – and last – warning may be the most important of his career. | | | -- | End in Sight But alert dear readers are already wondering: Why doesn’t the Bank of Cuba just print up some more money, like the U.S. is doing? Doesn’t it know the “stimmy” trick? Well, what do you think? Of course, Cuban central bankers read the same books and journals as those everywhere else. The Cuban government recently devalued the peso by 96%... and raised salaries for everyone who works for the government – but not for the 40% of workers who actually produce goods and services. And guess what? Cuba approaches its Big Bang finale. Consumer price inflation there is said to be approaching 500% this year. And new revolutionaries gather around Havana… like sharks off the Playa Paraiso… ready to take a bite out of Havana’s aging rulers. More to come… Regards, Bill
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MAILBAG Dear readers share scenarios that they believe contributed to America’s decline… The decline in Christianity directly correlates with the Republican takeover of the Faithful. They have traded in Jesus and the Bible for Fox News and the corruption of Donald Trump via the Conservative Republican establishment. My Bible teaches me, amongst other things, “Thou shalt not bear false witness.” Simply put, lying is a sin! Thanks to QAnon, Trump, Kellyanne Conway, and Fox… alternative truths, which are just a dressed-up way of saying lies, are somehow acceptable. This is at the very core of the downslide. You put this along with the inexcusable wealth gap, which is clearly traceable back to President Reagan (the beginning of the big “Trickle Down” lie), and the blunt-force attack on blue collar, working America. I could go on and on about the causes. But in the end, if we don’t get a handle on truth and transparency in our economy, the likely outcome is an already charted course. God help us. – Jonathan V. The elite universities of America have to take some of the blame for the country’s current troubles. The people that you meet at our elite universities can best be described as weird people who know a lot about weird things. They have a great deal of esoteric knowledge but are deficient in basic knowledge. They know a great deal about Andy Warhol, Glenn Gould, and Frank Kafka, but have their facts all wrong about key historical events, like the Great Depression, the Industrial Revolution, World War I, World War II, and the Civil War. And nearly all our elite universities have very poor departments of economics, run by crackpot Keynesian economists. – Christopher C. Some historians believe, as I do, that Rome fell because its armies and conquests extended into the Middle East and beyond. This put too much of a strain on the economy. I currently believe that the cost of keeping our military in the Middle East is similar. It costs over $1 trillion for the lifetime of a single F-35 fighter jet (and the maintenance costs of this airplane are huge). And the country has spent $7 to $9 trillion for the war in the Middle East... – Howard S. Meanwhile, another shares Bill’s essay, “The Feds’ Dumbbell Monetary Experiment,” with his coworkers… Great story. I’ve reposted in our own company Teams chat. Great way of keeping everyone up to date. I am involved in IT and am writing about my mom’s brush with COVID-19, so your perspective on all things economical and financial is what I long to read about every day. Keep up the great work. – Luke K. Is the Big Bang finale coming for the U.S. as it is for Cuba? What are you doing to prepare? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… The One Mistake That Could Haunt Investors Today Are you about to make an expensive mistake? Investors who bought Cisco at the peak of the dot-com mania are still down 40%—more than 20 years later! Right now, many popular tech stocks are flashing warning signs. And many investors are about to repeat this classic “Cisco mistake.” Don’t be one of them. The man regarded by many as America’s most accurate tech investor just put together a list of the most dangerous tech stocks. Get the full details here… 
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