POITOU, FRANCE – The corks popped last night all over the Washington, D.C. metropolitan area.

Architects anticipated grander and gaudier new assignments. Lawyers eyed their new vacation homes on the Delaware coast. The movers and shakers celebrated another victory…

…and stocks sold off.

Season of the Swamp

Our guess – still just a guess – is that U.S. stocks topped out on January 26, 2018. The “primary trend” is down… probably for a long time.

Trade barriers are going up. Win-win deals are giving way to win-lose deals. The government is getting bolder. Debt is increasing. And interest rates are rising.

It is the Season of the Swamp.

The swamp critters are already enjoying billions of dollars’ worth of crony contracts, billable legal hours, and lobbying fees from Donald Trump’s new “trade war.”

Earlier this month, The Donald slapped 25 percent tariffs on roughly $50 billion worth of Chinese imports, 1,102 items in total.

Every one of the 1,102 Chinese products targeted by the administration has a manufacturer, an owner, and a competitor. And every one of them is now writing a check – to a trade rep, a lawyer, a lobbyist, or a politician – trying to wrangle a better deal.

And now, insiders are anticipating hundreds of billions more as the president drags America’s most dynamic industry into the swamp, too.

Yes, he announced yesterday a whole new bureaucracy under the Foreign Investment Risk Review Modernization Act (FIRRMA) to watch over and approve any technology transfer that could affect America’s national security… or, according to the president himself, its prosperity:

Should Congress fail to pass strong FIRRMA legislation that better protects the crown jewels of American technology and intellectual property from transfers and acquisitions that threaten our national security – and future economic prosperity – I will direct my administration to deploy new tools, developed under existing authorities, that will do so globally…

Ominous Dots

Almost all our ideas, thoughts, and business transactions now run through some form of technology. Any or all of it could have some consequence for our security or our prosperity.

Want to sell your computerized widget in China? Nope. No can do. They may reverse engineer it.

How about your trucking coordination software? Nope. They might learn something important.

Want to partner with a European company… or buy your silicon wafers in India? Hold on… we need to check this out… By the way, did you make a campaign contribution?

That last question is the most telling one. It reveals the real effect of the whole program – to increase the Deep State’s power and wealth.

And soon, they won’t even have to ask.

Because – and here, we revisit the ominous dots that we looked at yesterday – they will already know.

Financial records, phone records, computer records… online conversations… purchasing histories… church memberships… political affiliations… clubs… friends… books… movies… jokes…

Already, Big Data allows governments and corporations to know you better than you know yourself.

Algorithms and machine learning tools monitor and interpret every action you take online. Geolocation trackers in your smartphone keep tabs on where you are… and where you’re headed.

On Monday, we went to get our tires rebalanced. We were told we needed new ones.

On Tuesday, we got an ad online for new tires. How did they know?

Did you exceed the speed limit on your way to work? Did you look at a naughty website? Did you laugh when your brother-in-law made a joke about Donald Trump, or fail to fill out your census questionnaire?

Stalin’s secret service couldn’t keep up with everyone all the time. But now, thanks to Big Data… it’s a piece of cake.

American Spy Hubs

From Amazon, Google, Facebook, Netflix, GPS, search engines, facial recognition apps, credit cards, and a host of other tech innovations… internet traffic flows into the vast spy centers already operating in eight American cities – where it is processed… reviewed… and analyzed.

The surveillance program, code-named “FAIRVIEW,” has been operational since 1985.

The Intercept has the details:

Atlanta, Chicago, Dallas, Los Angeles, New York City, San Francisco, Seattle, and Washington, D.C. In each of these cities, The Intercept has identified an AT&T facility containing networking equipment that transports large quantities of internet traffic across the United States and the world. A body of evidence – including classified NSA documents, public records, and interviews with several former AT&T employees – indicates that the buildings are central to an NSA spying initiative that has for years monitored billions of emails, phone calls, and online chats passing across U.S. territory.

And now FIRRMA helps to bring Big Data – already working on huge federal contracts – more completely under Deep State control.

A big-government democrat such as Hillary Clinton would have wanted to expand the Deep State.

But she would have faced the unrelenting, instinctive opposition of Republicans whose knees – weakened by years of kneeling – would have twitched wildly and uncontrollably whenever she suggested an increase of her authority. She would have been stifled. The Deep State would have had to wait.

But come The Donald… and the kingdom of Heaven is opened unto them… Republicans are back on their feet, cheering the very Big Government they despised a generation ago. It was a devil in the ’80s. But it’s an angel now.

And now, Big Brother… run by the Deep State… is becoming a reality – restricting the flow of information… manipulating public opinion… controlling money and how it is used… and finally, detecting and disappearing any opposition.

Already, when you search on the internet, the search engine (Google!) will direct you where it wants you to go. It can make sure you see what it wants you to see… and keep you from seeing what it doesn’t want you to see.

China is ahead of us on this. In our Beijing office, for example, we have to be careful what we write… or it will never get delivered to readers. And the Chinese feds may arrest us!

Subtle Control

In the U.S., the control system is more subtle.

We are regulated by “private sector” businesses (whose R&D may have been provided by the feds… whose market cap was bolstered by the Fed’s fake money… and whose profits may depend on fat Fed contracts) following rules that we are not allowed to see.

If our thoughts are too “extreme”… or too “frightening”… we will not get very far on the World Wide Web.

Imagine if this technological cone of silence had been around in 1939.

Imagine if we had foreseen then a grim period coming… with world war… massacres… concentration camps… and 50 million corpses. What if we had tried to warn people?

Had Google and Facebook regulators (backed by the feds) been on the case, our warning never would have made it beyond our small circle of loyal dear readers.

And now, the tech giants ARE on the case. And they appear to be coming together with the Deep State to create a society with little scope for dissent or traditional conservatism.

As we proposed yesterday, there is always an invisible struggle going on. It is between the elite insiders, with their win-lose deals… and the ordinary people, with their win-win deals.

Yes, Dear Reader, it is an age-old fight:

…makers are always forced to protect themselves from takers…

…civil society is always threatened by barbarians…

…and the hosts are always competing with the parasites.

The tech innovations of the last 30 years were thought to bring a new era of wealth, freedom, and happiness.

Instead, they seem to have given the parasites a huge advantage; it is the Season of the Swamp.

Stay tuned…





By Dan Denning, Coauthor, The Bill Bonner Letter

The Fed is tightening into a recession.

Specifically, the chart below shows the yield curve in U.S. government bonds. It’s the difference between the yields on 10-year and two-year U.S. Treasury notes.


In a normal world, interest rates are higher on longer-term notes and bonds. This compensates you for the risk you take when lending your money out over a longer period of time.

But in an abnormal world, the yield curve “inverts.” That simply means the yield on a shorter-term bond is higher than that on a longer-term bond.

These inversions almost invariably signal recession dead ahead.

Why does the yield curve invert? Good question. If it’s just market-driven, then it means short-term risks are higher than long-term risks (think terrorism, armed conflict, or some other event that drives up volatility quickly).

And when it’s not market-driven?

As Bill has shown in the Diary, the Federal Reserve system is run by people who have a flawed understanding of the economy. They always get it wrong. The Fed leaves rates too low for too long, leading to a bubble in the economy and the misallocation of huge sums of credit.

Then, once they realize they got it wrong, they get it wrong again by tightening too quickly and raising interest rates. Higher short-term rates, influenced by the Fed’s official policy, create the yield curve inversion.

And as the chart shows, when the curve inverts, recession is not far ahead.

Dan Denning

P.S. The yield curve hasn’t inverted yet. But with unemployment at an 18-year low, the Fed is all set to continue raising rates this year. Unless something changes, the curve will invert. The stock market, looking ahead at all this (as it’s supposed to), will correct sooner rather than later.

That is why you need to read up on the correct asset allocation strategy for that scenario while you can still do something about it. I recently shared an allocation strategy with readers of The Bill Bonner Letter. Bill and I call it the “new permanent portfolio.” Subscribers can access it right here. And to join The Bill Bonner Letter, and get access, go right here.


Silicon Valley Hates This Proposal
As Bill outlined, Silicon Valley giants like Facebook and Google draw their influence from the vast troves of data they collect on you. A proposed California law would deal these tech titans a serious blow. But the Silicon Valley companies aren’t going down without a fight.

Sorry, Cash Not Accepted
A strange trend is sweeping bars and restaurants across the world. You’re more than welcome to spend your money, but you better bring plastic…

And read also…

The Final Assault in the War on Cash
The War on Cash, the trend of governments and central banks trying to do away with physical currency, may be coming to an end. Dan Denning, Bill’s co-author on The Bill Bonner Letter, shows how financial independence in America dies…


Today, a mixed mailbag: Trump… trade… and Russian meddling…

I enjoy your articles as they make me think, but at the moment, I think your arguments regarding Trump are nuts. He is a pragmatist, nothing else. I wish we had him in Australia. When our left-wing politicians took over in 2007, we hadn’t an “asylum seeker” problem, as such. Within months of left-wing compassion, we had thousands flooding in on boats and hundreds drowning at sea. If we called them “welfare seekers,” it would be more accurate.

As to tariffs, to simplify, as you often do, if there was only one industry in the country, and you outsourced all the work to, say, China, how could the local population afford to buy the product that they now have to import? Yep, the only way would be to borrow the money from the people who now have the jobs. It doesn’t matter how cheap it is. Your win/win deals are between the captains of industry, shareholders, Wall Street, and bankers, not the workers.

– David H.

There’s very little Russian meddling. What we have most of all is the Democratic Party, the FBI, and the Department of Justice under ex-President Obama. Therein lies the massive meddling – an obvious attempt to overthrow the “democratic” election in favor of Hillary Clinton!

– Donald T.

It seems to me that the U.S. has been relatively open for trade, while many other countries have had extensive barriers – some tariffs, some regulatory, some just crony domestic deals. (China is really nasty in this respect – plus, it’s actively cheating on intellectual property.) As I read Trump’s efforts, he is endeavoring to force the lowering of those barriers by pushing back with U.S. barriers – not necessarily creating a permanent trade war.

– Bob T.

Tariffs are bad. That’s why Trump wants our trading partners to lower or eliminate them so we can have fair trade. Threatening to raise ours is to make that point forcefully and credibly, because decade-long complaints have been fruitless. I believe your theory is wrong. Foreigners have grown richer on our dime and our domestic economy has become poorer. Middle class wages have stagnated for decades. This despite foreigners having walls of sorts around their economies.

When you say there are more consumers than people working in export-focused manufacturing, you are forgetting that consumers must earn a living, probably working in a multitude of widget assembly lines. Those are jobs that would be eliminated by cheap imports. Import taxes could partially replace income taxes. But eliminating barriers of trade would let us enjoy cheap imports and increase exports, as China’s market, with a 360 million middle class, can absorb way more than the piddling $150 billion worth of imports it allows now. That would be win/win.

– Erich K.

Your elitist blathering about “tariffs and high walls” is a wonderful obfuscation, completely ignoring the premise of no country having any tariffs as being the ultimate “level playing field” you espouse in such a one-sided argument of the harm U.S. tariffs create.

Our president has clearly stated that the goal is not any or all of the examples of protectionism you propagandize in your prose, but appropriate levers towards other countries removing tariffs from goods produced in the USA for an entirely new form of “globalism;” true competition on equal terms.

I’ve said more – and said it more accurately in two sentences – than your entire essay of misinformation. You really ought to be ashamed. But no doubt, there’s no shame in what you do.

– Duke M.

Meanwhile, a dear Canadian reader confesses to being part of the great Canadian shoe heist…

I loved the article on Monday, particularly the hallucinations from both sides of the spectrum, and the commentary from around the world on trade, dripping with sarcasm. Some of your readers are just stupid enough to be offended by it. I’m a wily Canadian with squeaky new shoes. Great laugh today.

– George E.


Late last year, we had a phone call with Jeff Brown, Bill’s top technology expert.

“This will be the biggest technology story of the next ten years,” Jeff told us.

Jeff has already identified investment opportunities that have delivered gains as high as 211%, 222%, and even 345% in under eighteen months. But he says the gains from this next idea will blow all of those out of the water. Details here.