Scams and Flimflams

BALTIMORE – For weeks, the top news headlines have been about politics. And politics has been all about the Republican Party candidate for president of the United States, Donald Trump.


mediaTwo very different elections…


The Establishment, the media, and most right-thinking people look around and sniff the air. Something stinks. And the smell, they say, is coming from that skunk, Trump.

Meanwhile, Hillary, all greased up with expensive perfume, glides by – all her double dealing, her millions in Wall Street speaking fees, her crony friends and supporters.

She and her husband have a combined net worth of $110 million – after a career spent devoted almost entirely to “public service.” Who asks where the money came from? Instead, the headlines are all about poor Donald.

For better or for worse, the 2016 presidential campaign was all about him. Not about his policies. Not about calm analysis of what was wrong and how it could be fixed.

It was always about him. And now, the nation’s attention is still focused on him and his peccadilloes – rather than Ms. Clinton and her scams, corruptions, and Deep State flimflams.


hillaryclinton-scandals-vs-donaldtrump-attrib-afbranco-comicallyincorrect-051716Let’s focus on the really important stuff…


“Remember, it’s a rigged system.  It’s a rigged election,” said the candidate over the weekend. Is the election really rigged?  Probably not in the way Mr. Trump intends listeners to believe. But the “system” is so rigged that the election results hardly matter.

A real conservative would shift the debate away from fanny pinching and other ungentlemanly comportment to how it is rigged.  Americans want to know.  How come the economy no longer grows as it used to?  How come most Americans are poorer today than they were in 1999?  How come we no longer win our wars?

He would explain to listeners that much of the rigging took place while Hillary and Bill Clinton were collecting more than $150 million in speaking fees, telling us how to improve the world!

Then, he would help listeners put two and two together – explaining how the fake dollar corrupted the nation’s economy and its politics, too. And he would offer real solutions. As it is, nobody seems to care. Not the stock market. Not the bond market. Not commentators. Not Hillary. Not Donald. Nobody.


Dark Movement

As long-suffering Diary readers will know, the global economy now depends on three things:


  1. Rising U.S. asset prices – The world’s wealthy have parked much of their money in American lots.
  2. Low consumer price inflation – If inflation rates spike unexpectedly, the bond market will implode. Trillions of dollars of imaginary wealth will be lost.
  3. China’s economy – China is the No. 1 buyer of commodities and the No. 1 shipper of finished goods. When it goes down, so do a lot of other things.


Let’s look at them in order.

U.S. markets will remain stable until they become unstable. That pretty much sums it up. When the next crisis will come is anyone’s guess; we’re surprised it hasn’t already come.


1-spxBubble trouble is bound to sneak up on us soon… – click to enlarge.


But there is a dark movement afoot for the world’s central banks to buy stocks in addition to the bonds they’re already buying under QE, and in almost unlimited quantities (see our comments on former Treasury Secretary Larry Summers’ wacky proposal here).

That may help keep stock prices high and maintain the illusion of stability. As for higher levels of consumer price inflation, they are surely coming, too. But not necessarily anytime soon.

With the economy slowing, the velocity of money – the rate at which money is used to buy and sell stuff – tends to slow down, too. The fewer transactions there are, the less upward pressure there is on prices.

Plus, wages are more or less stagnant or falling in the developed world. And there is still a huge supply of labor available in the developing world for less than $20 a day. If we’re waiting for labor costs to push up consumer prices, we could have a long wait.


2-purchasing-powerIt may be a long wait, but we trust in the effectiveness of the “guardians of the currency”. When it comes to debasing its value,  they are second to none – click to enlarge.


The China Factor

Which brings us to China.  An alarming report in Friday’s Financial Times warned us that “China exports fall sharply as concerns over demand grow.” Chinese exports are falling – in dollar terms – at a rate of 10% a year.

China buys raw materials. It sells finished products. It is the greatest “export-led” success story of all time.


chinaAs China goes, so goes the world?

Illustration by Baurka


But if China can’t sell its products, it can’t afford to buy resources… resource prices plunge… and consumer prices follow, aggravating weak demand with lower prices, falling money velocity… gloom, doom… recession, depression… and worldwide deflation.

Then, as the world’s attention is fixed on the sordid business of the U.S. election, with its contest between reality-TV Big Shot Donald Trump vs. Deep State Shill Hillary Clinton, the world economy wobbles.

Stay tuned.


chairman-tienanmen-square-beijingForbidden City in Beijing.

Photo credit: fmh


Charts by: StockCharts, St. Louis Federal Reserve Research


Chart and image captions by PT


The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.



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3 Responses to “Donald is Right – The System is Rigged”

  • tpgaynor:

    I’m not sure I can add anything more meaningful and correct than mannfm11: except that now that I’m retired and driving part time for A major car rental company I pick up and deliver cars to customers and bring them home about 20 customer a day. Inevitably while driving the small talk conversation often turns to the election.Fwiw, For the last year and a half. I have never heard any one person say they would vote for Hillary. I have never heard one person say it’s ok and acceptable what the FBI did with Hillary emails and its ok not arresting the entire Clintons family it’s ok that Barack Obama is bringing in Middle East refugees by the hundreds every day is acceptable to them. I don’t understand how the polls are what they are with Hillary Clinton in the lead. I’m just hoping everyone who is eligible and able gets out and votes. It may be your last opportunity if Clinton wins. And That thought alone makes me want to vote for Trump.

  • Bam_Man:

    Hear, hear, Mannfm11!

  • Bill, you hit the nail on the head. As long as we are playing with paper money, bankers will be unjustly enriched, government bureaucrats will prosper and the rest of us will pay. Debt has a depressing force on economic growth, if it isn’t self liquidating.

    Gold limits credit, keeps bankers and governments in check and balances trade. As it is today, bankers draw a fee on everything and are never held accountable, when their policies fail. Rothbard repeatedly pointed out that most banks cannot mark their liabilities to time and when they can’t deliver, the government has prohibited them from being held accountable.

    It might be too late, as the assets of average Americans have been stripped, through the use of debt and credit. Centralized power has destroyed competition and American creativity. The phony education system has destroyed common sense and the capacity to think. The stage show goes on.

    Trump hit the nail on the head, when asked how it was rigged. I quit voting, because I realized the candidates were stand ups, given to us to okay. Notoriety and wealth allowed Trump to break the mold. He pointed out last night that the fact Hillary was on the ticket, was prime evidence it was rigged. How could such a scumbag, I mean a woman that went from one scandal to another and had a history of taking bribes, even get within a million miles of the White House, yet be a few weeks away from actually being elected. Why is the press protecting her and mauling him? The truth isn’t be heard, intentionally.

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