Off the Rails “The next war... may well bury Western civilization forever.”
— Aleksandr Solzhenitsyn  Beyond the clash of AI bulls and bears is the future of civilization itself. September 26, 2025 — There are some things we humans cannot do. We cannot fly without artificial wings. And we can’t manage a currency system without artificial guardrails.
As to flying, here in Paris, a tailor thought he had made himself a ‘flying suit’ that would permit him at least to glide through the air. He put it to the test on February 4, 1912 by jumping off the Eiffel Tower. Alas, he fell like a sack of turnips and died on impact.
Yesterday, we walked over to the site. The city was sad. It rained. Gray. Cold. The buildings were gray and cold. The people seemed gray and cold too.
We thought of the dot.com investors...and how they had come crashing down. And of today’s AI investors, putting on their flying suits...hoping to soar.
Then, we met an old friend for a drink. She had bright cheeks and a warm manner. That’s the nice thing about Paris. There’s always a place to have a drink and always someone to have it with.
The temperature in Paris has fallen sharply. Just a week ago, we might have sat outside at a table on the sidewalk and enjoyed watching the chic Parisiennes walking by. But it is now too cold to sit out. And France, fighting its ‘climate emergency’ with all the reckless enthusiasm with which America shoots at ‘terrorists,’ has outlawed the gas heaters that used to make sitting outside, even in cold weather, so agreeable.
So, we went indoors...and managed to find a small table, vacant, sandwiched in ‘twixt two others.
“The Germans have a word for it.” The young, blond woman published our last book, in French. She knew what we were thinking.
“A word for what?”
“For the sad feeling you have when you realize that the world is going to hell in a handcart. It’s ‘weltschmerz.’
“At least, our part of it,” she continued...after a pause. “The west.”
“Did you hear Trump’s speech to the UN? He thinks immigration and energy policies are the big problems. If so, those are relatively easy to fix. You could seal the borders and take away all the windmills and solar panels. But the major problem would still be there.”
Our friend is also a Greek and Latin scholar. “The real problem is popular democracy. As the ancient Greeks explained, it works for a while...but not for long. People always want more free stuff. And then, you can’t take it away...even when you’re going broke.”
America’s founders read the classics too. They tried to dodge the problem in two ways. First, they put some distance between the feds and the ‘vox populi’ of the voting masses. Our friend, John Henry, founder of the Committee for the Republic, explains: ‘For more than a century, the United States has undergone a transition from a constitutional republic to an unconstitutional democracy with overpowering global ambitions. In fits and starts, we went from voting for Democratic and Republican candidates who jealously guarded our liberty-centered republic to politicians who systematically dismantled our Constitution in pursuit of making the world safe for so-called “democracy”. No one asked how we could make the world safe from something we weren’t ourselves. Under our Constitution, we are a republic – not a democracy.’
The founders also tried to limit military expenses, by requiring an act of Congress before going to war...and to limit spending generally by insisting that there should be no other coinage but ’gold and silver.’ Both of these guardrails were taken down, the latter finally junked in 1971 by Richard Nixon.
The ‘golden guardrail’ was particularly important. John Dienner recalls this passage from Friedrich Hayek, written in 1975, that explains why: ‘The pressure for more and cheaper money is an ever-present political force which monetary authorities have never been able to resist. ...With the exception of this 200-year period of the gold standard [in the 18th- 20th centuries] practically all governments of history have used their exclusive power to issue money in order to defraud and plunder the people.’
The gold standard came into being in the 18th century. It got gassed in WWI. Then, after WWII, it was re-established, sort of. The dollar was made the key financial reserve. And the dollar was linked to gold.
Then, in 1971, the last link with gold was cut. Since then, several efforts were made to re-install some sort of guardrails. In the ‘70s, we were personally part of the drive for a Constitutional Amendment that would make deficits illegal. In the ‘80s, our friend Grover Norquist succeeded in getting prospective members of Congress to sign The Pledge, crossing their hearts and hoping to die if they increased taxes.
And then there were debates over raising the debt ceiling...which ended up as political theatre. The debt ceiling has been raised more than 80 times since the 1960s.
So, the guardrails are down. All of them. We are back to the ‘bad old days’ when we can count on the elites to rip off the public with funny, ‘paper’ money.
“In that UN speech,” our friend continued, “Trump boasted that ‘inflation has been defeated in America.’ But I don’t see how that is possible.”
Yesterday, we made a mistake. (Yes, we are all-too-human, too.) We grossly understated the debt build-up in the US. Deficits are running at $2 trillion per year. Neither Republicans nor Democrats are willing to tackle spending and, and even at the current rate, the US dollar will lose about 80% of its value as the two parties add $55 trillion in debt over the next thirty years.
The guardrails are down; what’s to stop them?
Regards,
Bill Bonner
Bonner Private Research & Grey Swan Investment Fraternity Continued Below... | 
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