YOUGHAL, IRELAND – America desperately needs leadership; it gets jesters, jokers, and jackasses instead.

How come?

To make a long story short, the elites control the government. The government controls the “printing press.” The printing press gives them wealth and power.

How can they resist?

They sit in their panelled studies… pour a shallow glass of whiskey… open their laptops… and look at their 401(k)s.

“Another good month,” they say to themselves.

Infinite Cash

Stocks are trading at all-time highs. On Friday, the S&P 500 index, compared to sales, hit a new record. And the Tobin’s Q ratio, comparing a stock’s market value to the cost of replacing the asset behind it, has never been higher.

This stock market bonanza has helped the elites transfer trillions to themselves ($30 trillion is our guesstimate… and we’re sticking with it).

They also use this cornucopia of almost infinite cash – fake money from the Federal Reserve – to fund their own grab bag of wishes, fantasies, and claptrap theories.

Zombie Companies

But why is there so little (almost none at all) dissent from the programs and schemes that are bound to ruin the country? Why are there no wise men? No selfless graybeards?

For one thing, in a world of free money, there’s almost no penalty for being a numbskull. And no reward for prudence.

You run your business at a loss? No problem. Just borrow whatever you need.

Almost one out of four of the companies on the Russell 3000 Index are not making enough money to pay even the interest on their debts. That’s 44% more companies than last year.

And last year, these zombies owed about $1 trillion. Now, it’s almost $2 trillion.

When wobbly companies borrow, they call the loans “junk bonds.” Typically, investors demand a premium for lending to these companies, for the obvious reason – it’s likely that the loans will never be repaid.

And when investors are feeling particularly fearful – say, during a financial crisis, like we saw in 2008 – the yield on these junk bonds goes up. In 2008, for example, investors demanded a real yield (over inflation) of 20%.

Can’t Lose

But guess what?

Last week, the Bank of America’s index of junk bond yields fell below 4% – which puts it below the level of consumer price inflation. So now, the riskiest companies – those voted least likely to succeed – are able to borrow money at a profit!

Wall Street gamblers have never had it better. At today’s federal funds rate… and today’s consumer price inflation…

…the carry cost for the big speculators is hugely negative.

In other words, if they just took money directly from the Federal Reserve… paid the 0.25% interest (the Fed’s current key lending rate)… and gave back the money a year later… they’d make 4.75%!

Spreading Rot

But the rot spreads out… like gangrene. The universities all benefited from the feds’ student loan program. (Not to mention all the federal grants and giveaways to professors willing to debase themselves by studying “‘diversity.”)

And even the Pentagon has taken advantage of the public in the Bubble Epoch. The military budget was $300 billion in 1989 – when America’s last serious enemy, the Soviet Union, gave up.

At the time, former U.S. Secretaries of Defense estimated that the budget could be cut in half with no loss of national security. Instead, the budget doubled!

Whole new industries – with their own lobbyists – are eager to climb on board this bus. Move over lobbyists for Goldman Sachs and Raytheon. Make room for the Green Lobby… funded by… you guessed it… funny money.

NFTscryptosmeme stocksbillionaire space cadets, whee! There’s no penalty for self-indulgence… and no reward for hard work, self-discipline, and careful planning.

Big Hurrah

This is not supposed to happen. Cooler heads are meant to prevail. Old-timers are supposed to say: “This just isn’t right; it makes no sense. You folks over the Fed have gotta unwind this madness.”

Call in the old grumps… the wet blankets… the spoil sports!

But wait… The old-timers are corruptible, too. They have their stock portfolios. They have their contracts, their tenured professorships, their cryptos… and their reputations, too.

They were silent when Fed chief Alan Greenspan gave them his famous “Greenspan Put” in the late 1980s.

They said nothing when dot-coms went to the moon… or when houses became speculative investments.

And they cheered when another Fed chief, Ben Bernanke, bailed out Wall Street in 2008… and gave another big hurrah when the Jerome Powell Fed stepped up the bailouts in 2020.

And the stimmy checks? Well… if they help keep the peace… why not?

No Objection

And now, watching their accounts rise and preparing for retirement, they raise no objection… neither to the fake money… nor to the $3 trillion deficits… nor to any of the daffy policies that will surely end in tears.

But the trouble with trouble, as they say, is that it starts out as fun.

The elite graybeards forgot the lessons of the past and enjoyed more than 30 years of dabbling, dibbling, and doodling at the public’s expense.

And now, the party is wrapping up. And the graybeards have nothing more to say.




Like what you’re reading? Send your thoughts to [email protected].