ON THE HIGH SEAS – Yes, we are at sea… rounding England from Ireland, on our way to Cherbourg, France.

We’re doing far more back-and-forth traveling this year than we would like.

With a little luck, though, we’ll be able to settle into our new digs in Ireland next year, and not have to move around so much.

The sea was rough last night.

We ate our evening meal with trepidation and made our way to our cabin, bouncing from one side of the corridor to the other.

But it seems to have settled down this morning, allowing us to work at our laptop without getting nauseous.

Opening it up… we find the following items:

Our old friend, Charles Koch, has dared to defy the Trump team. The Donald says Koch is now a “total joke” in the Republican Party.

As for the president himself, he says he threatened to shut down the government if he doesn’t get his wall – a threat that he may or may not have already disavowed.

In the two reports, we find the end of the Republican Party… and the end of the Republic itself.

Libertarian Bent

Charles Koch, for dear readers who don’t know him, runs the multinational company that bears his name.

He is a very traditional conservative with a libertarian bent. His goal is a small government with short arms. It does not reach for the stars. It does not support the zombies in idleness… nor the cronies in luxury. It minds its own business.

Donald J. Trump is not a conservative. But he has very long arms. And he has captured the hearts of many people who say they are conservatives.

He has also captured the soul of the Republican Party, to the horror of at least one old-fashioned, thinking Republican – George F. Will – who now says we’d be better off with Democrats.

So what is it that has The Donald so cross with Koch?

The New York Times sets up the contretemps:

Mr. Koch’s simmering frustrations with the president over trade and immigration have now spilled over into an ugly public feud with Mr. Trump and candidates who side with him. By calling Mr. Trump’s trade policies “detrimental” and denouncing divisive leadership, Mr. Koch is making a provocative political move that – be it hardball strategy or more of a ploy – threatens to complicate Republican efforts to hold on to their slim congressional majorities in the November midterm elections.

Mr. Trump hit back on Tuesday by attacking Mr. Koch; his ailing brother and business partner, David; and the powerful political network they founded as “totally overrated” and “a total joke in real Republican circles.”

“I never sought their support because I don’t need their money or bad ideas,” Mr. Trump fumed on Twitter in an early morning series of posts. And several Republicans, including some allies of the Kochs, accused them of self-aggrandizement.

Poor Charles. He is a man of ideas. He reads widely and thinks deeply. He could have an intelligent discussion with Thomas Jefferson or Charles Darwin.

He could hold his own with Archimedes, Newton, Planck, or Boyle. But he’s no match for The Donald. Not in a public food fight. Not in 2018.

Core Principles

As a republic degenerates, so, too, does the level of public discourse.

Instead of taking on the Kochs’ conservative, small government ideas – which were once the backbone of the Republican Party – Mr. Trump uses the skills learned over decades in the tabloid press and reality TV to attack, ad hominem, the brothers themselves.

He even kicked David Koch off his golf course in West Palm Beach, Florida.

Charles Koch hopes to bring Republicans back to their core principles – balanced budgets, free trade, and limited government. That is, he would really like to see Mr. Trump follow through on his campaign promise to drain the swamp.

Yesterday, we guessed that the economy has not really revved up. The latest number – 4.1% – for GDP growth is, we believe, a fluke and a fake.

Nothing meaningful has happened to change the tepid growth rates we’ve seen since 2008, or to put a brake on the slide towards bankruptcy.

Tax cuts – without spending cuts – merely postpone the problems. Trade barriers make them worse. So does increasing the Pentagon budget.

The rest is eye wash.

Save the Republic

Charles Koch is right. The way to save the Republic is to go back to basics: honest money and small government.

But it is a little late in the imperial cycle. Too many zombies voting for handouts. Too many cronies with too many sticky fingers in too many pots.

And neither party could win the popular vote by relying on ideas. There just aren’t enough thinking voters.

Instead, as the Republic matured, elections had to be fought and won on feelings, preferably fraudulent ones.

Traditionally, the Democrats had to pretend to care about equality – the poor, minorities, cripples, orphans, and half-wits – offering to rob the rich to redistribute money to the poor.

The Republicans had to pretend to care about security. They were hard-hearted, but they could be counted on to make sure the nation’s finances were in good hands and the bolsheviks were kept out of the suburbs.

Alas, both parties are now parties of Big Government.

Both want to use more federal win-lose power – spending, policing and regulating – to cure the problems caused by Big Government.

And neither seems to know or care that they are headed for catastrophe.




Editor’s Note: A few minutes before publishing, Bill sent a note in to our team. He arrived safely in France, and shares a picture as he debarks from his vessel.


William, Duke of Normandy in Normandy, France


By Joe Withrow, Head of Research, Bonner & Partners

As Bill has reported before, runaway debt will ultimately be what hobbles the United States.

Today, we look at one of the places where cracks are forming. State public pension plans are going broke…

That’s the story of today’s chart, which maps the unfunded liabilities – the amount of future payment obligations that exceed the present value of funds available to pay them – accrued by state public pension plans from 2002 to the most recent estimates from 2016.


As you can see, state pensions have been running deficits ever since the dot-com bubble burst… and they have accrued nearly $1.4 trillion in unfunded liabilities. That’s roughly the GDP of Australia.

That means state pension plans owe retired public workers – policemen… firefighters… teachers – $1.4 trillion more in retirement benefits than they have on the books.

State pension plans are in this situation largely because state governments made ambitious pension promises when finances were better… and because their investment returns have generally underperformed the market over the past decade.

Going forward, there are only two ways to close the funding gap. State pensions must generate significantly higher investment returns… or they will have to cut benefits for retired workers.

But as we showed you recently, stocks are more richly valued today than at any time in the past 10 years. This suggests that future returns from stocks will be lower… forcing state pensions to cut benefits.

– Joe Withrow


Are Buybacks Strangling the Economy?
Stock buybacks are popular with investors. A company will purchase its own shares and “erase” them, effectively increasing the value of the remaining shares. Stock buybacks have hit record levels in 2018… but at a price.

Your Next Investment: It’s Written in the Stars
Investors and fund managers will do almost anything to add an extra few percentage points to their returns. Now, one fund manager is trying something unprecedented: looking for investment ideas in the movements of the heavenly bodies.

Trump’s Other War With China
The trade war continues to dominate headlines. But behind the scenes, the White House is waging another war with China… and America is losing.


In the mailbag, dear readers wonder how the American Republic ends

You are so right about the end of the American Republic being nigh. So it is. America is precariously balanced on the edge of a razor. Anything could tip it over, either to the right or to the left: a disputed election, a controversial ruling by the Supreme Court, the inevitable crash of our financial system… The list is endless.

Whatever the cause, I’m willing to bet money that it will happen on Trump’s watch. The man is such a narcissistic, egomaniacal, corrupt ignoramus with a hair-trigger temper that anything – anything – could set him off at any given moment. And the cretin would declare martial law while in the throes of an infantile tantrum.

Hopefully, the generals and admirals would have the good sense to refuse to follow his orders, and Congress would impeach him and throw him out of office. (Hah! Fat chance of that happening with the Republicans in charge of everything!)

– Dale A.

How about the generals stage a coup and impose a military regime – as they have done in so many nations when civil order breaks down? That might actually be the best we can hope for, at least in the near term… especially if they ultimately return to constitutional law instead of the semi-socialist mish-mash that the politicians have given us in the last half-dozen decades or more.

– Chuck B.

As for your concern about what the military might do in an electoral dispute, senior military members receive more training on their constitutional responsibilities than on all other subjects combined. While they report to the president as commander-in-chief, their oath is taken to uphold the Constitution.

The joint chiefs are trained to remove from office any president who orders them to take clearly unconstitutional actions, such as disbanding Congress or disregarding a vote by the Electoral College.

– Gary M.

Meanwhile, Bill’s work on the old barn gets readers talking…

After looking at your barn roof and thinking about your other projects, I’m sorry I never met you. I think I could have called you something I’ve called very few: a friend.

– Tony D.

Bill, that’s not a barn; it’s an old coach house. The wide door in the middle was for the carriage. I think it’s terrific how you are bringing it back to life.

– Dennis B.

I admire the hard work of you and your cohorts in tackling that barn project in Youghal. It proves that constructive madness and romance are not dead. I am up the road from you in Carrigaline, and have been living in Ireland since leaving the U.S. in 1980. I once had grand plans to buy a ruined castle, restore it, and live like a high king. Those dreams, for one reason or other, never came to fruition; it’s probably a good thing.

If you would like some help with anything – some free labor, tying up loose ends while you are away in foreign parts, or just some good, old-fashioned moral support – you only have to ask. Keep up the good work, both online and on the barn.

– Billy T.


Nearly a hundred years ago, a group of professors from the University of Chicago proposed a radical plan for America’s money…

If passed, this plan would have put the money in your bank account firmly under the control of the government.

The plan was shelved. But it could soon make a resurgence. Read on here.