BALTIMORE – “Don’t go there!” was practically the universal response to yesterday’s Diary.

Readers, friends, business partners, well-wishers – all agreed; questioning God is not going to get us anywhere.

At least one reader recommended heavy-gauge lightning rods for our Baltimore headquarters. Others are out in front of the office, putting firewood around a stake.

Myths Are Worth Wondering About

We agree, of course; God can do what He does. He doesn’t need our approval.

But wondering is what we do, here at the Diary, especially wondering about myths. “Myths” are not necessarily untrue. They just can’t be known or proven in the way, say, that Archimedes could prove that the king’s crown was made of gold.

The Old Testament reports on God, for example, could be literally true… symbolically or metaphorically true… or complete fantasy. Unless you get hit on the head with a rock, or an angel speaks to you from a burning bush, you can’t know for sure.

Likewise, we can’t know for sure which candidate for president would be better.

Poor Donald Trump is sinking in the polls; the media says his reckless comments are catching up with him. But who knows?

We can’t see into the future… only God can. So, we make our decisions based not on facts, but on which myths (assumptions and prejudices that can’t be tested) we believe.

In newspapers, elections, and most of public life, myths are more important than provable facts. They direct trillions of dollars of spending… and set off wars in which millions are killed.

The largest demonstration in history was in India, with millions of people taking to the streets to protest the killing of cows. In short, myths are worth wondering about.

The Fed says it wants 2% consumer price inflation. But there is nothing scientific about it.

Is 2% better than, say, 1%? Or no inflation at all? It is myth.

Yesterday, the prophet Janet brought forth the expected blah-blah. Sticking her neck out, she said the Brexit vote next week “could have consequences” for the financial system.

Hey, what couldn’t?

Amor Fati

When you don’t want to do something, it’s not hard to find reasons not to do it.

Don’t want to mow the lawn?

The grass is too wet. Or it’s too late in the day. Or the lawnmower needs oil.

Don’t want to take a chance on raising rates?

The British could vote to leave the European Union. The Orioles could lose a home game. Or someone, somewhere could catch a cold on his way to work.

Amor fati” was Nietzsche’s famous expression. Literally translated, it means “love of fate.” 

It is a white shoe yearning for mud. It is a turkey looking forward to Thanksgiving. Or an investor stoically preparing for a bear market.

We use the term to describe the grace and courage you need to meet a complex, unknowable, and uncontrollable future.

We are all human… all God’s fools… and all bound for the grave. No use going there with a sour look on your face! And no use pretending it isn’t so.

Deeply in Debt

Cowardice has been a sub-theme in the Diary for the last week or so.

The Fed provides us with an illustration. Rather than own up to the mess it has made, it hides behind a silly and superficial myth – that it can protect the economy with centrally planned  interest rates.

And now, thanks largely to its own mismanagement, the world is deep in debt, with far too many people all over the world who earn far too little income to support it.

Every loan comes with a fuse. And the world now has $200 trillion worth of debt… and plenty of matches. Brexit is just one of them. Sooner or later, we’re going to see some fire and brimstone.

Ms. Yellen pretended not to notice yesterday. As we guessed, she wasn’t taking any chances.

What may be significant is the market’s reaction. Until now, every time the Fed has dodged fate, investors bought stocks. They expected stocks to rise, in celebration of more EZ money.

Not this time. In yesterday’s press announcement, Janet Yellen backed off her previous commitment to gradually raise rates… and instead strongly hinted that interest rates may stay depressed for a long time.

But instead of rising on the news, the Dow registered its fifth straight day of decline.

Myth Magic

Yes, dear reader, it looks as though the Fed’s zero-interest-rate policy has finally lost its myth magic.

There is now $10 trillion of government bonds trading at sub-zero yields. Corporate profits are falling. Productivity is falling. And even with interest rates at a 5,000-year low, U.S. GDP growth has been falling for four straight quarters… and may already be running below zero.

And that’s just in the U.S.

Europe is only barely limping along… with Britain possibly deserting the EU next week. Writes our old friend Rob Marstrand:

I believe the EU will fall apart over time, sooner or later and in one way or another. When it comes to investing, there will be winners and losers along the way, so it’s something that needs to be watched.

According to the Pew survey, the majority of people in Britain, Greece, France and Spain have an unfavorable opinion of the EU. And opinion in Germany and the Netherlands is only slightly in favor of the EU.

Taking Up the Slack

Meanwhile, China’s problems grow.

While the whole world adds debt – by trying to stimulate consumer “demand” – China adds debt to stimulate “capacity,” so it can make more things for foreigners who can’t pay for them.

Officially, the Chinese central bankers have announced their own insight into amor fati. You can’t fix a problem caused by over-investment by providing more cheap investment capital, they said.

Although this sounds as though they are ready to turn away from the errors and omissions of the past… the banks keep lending and builders keep building.

Already, there is not enough aggregate demand in the whole world to absorb all that capacity, says Richard Duncan, editor of “big picture” advisory service MacroWatch.

And there’s no way local buying is going to take up the slack. The Chinese can’t afford to buy more stuff either. The average wage in the Middle Kingdom is just $8.13 a day – far too little to sustain a big increase in domestic demand.

What will happen next? What fati is coming?

Watch this space!




Investing Insight

Will Bonner, Publisher, Bonner & Partners

I tell my sons we have to invest a certain amount in [this] each year… We have a tradition of investing, and I think this is the main reason we continue to be where we are.

– Ugo Beretta, CEO, Fabbrica d’Armi Pietro Beretta

Most people have the completely wrong idea about how the “Old Money” rich invest their wealth…

When you think of successful multi-generational families you might think that they are very conservative, traditional, and risk averse. You might think that they just sit on their investments and business holdings as if they are frozen in time. But, you’d be wrong…

Take the Beretta family, of northern Italy, for example. They’ve been in the weapons manufacturing business since the late 1400s. The company is considered to be the world’s oldest industrial enterprise. It is currently transitioning to the 15th generation of family leadership.

Academics at Harvard Business School studied Beretta and found that the company has consistently embraced the latest technology and manufacturing techniques in each of six great industrial epochs since the end of the 18th century.

Investment in new technology is a critical part of how Beretta has been able to endure for half a millennium.

The Old Money rich do not live in a bubble. Their businesses must constantly compete in the marketplace. When you talk to them you’d be very surprised by how obsessed they are with staying “dynamic.” 

From my experience you’d be hard pressed to find a successful multi-generational family that didn’t invest heavily in technology, every year. That’s because these families have to be very forward-looking. They are investing not for the next six months or a year, but for decades… 50, even 100 years… They are investing for the world that their children and grandchildren will live in.

All of the ultra-rich families I know of have a speculative portfolio of technology companies. They typically invest at least 3% to 5% of their wealth in these businesses.

And that’s why we brought on Jeff Brown to run our Exponential Tech Investor service.

Jeff’s research helps us understand what the future will look like and what technologies are going to take off. The small- and micro-cap technology companies that succeed offer the potential for exponential returns. Those are the kind of returns that family offices are looking for in their speculative portfolios. Over the years my family has invested plenty in speculative investments.

In The Bill Bonner Letter and his daily Diary my dad often criticizes the technology sector. He’s right that there can be a lot of empty hype in the tech industry. But, as an investor you are always long or short something.

If you are not invested in the future… in cutting edge gene-editing technology… artificial intelligence and advanced robotics… self-driving cars… crypto-currency… etc., then you are “short” these breakthrough technologies. More dangerously, you are “long” the old ways of doing things. 

If I were you, I would take a page out of the playbook of the world’s wealthiest and most successful families and wouldn’t short the future…

Editor’s Note: Going “long” on the future is the strategy behind every one of Bill’s investment decisions. And now it’s the idea behind a major change in his business.

It’s a way for you to gain unrestricted access to more research… for less money… for the long term. And he went on camera to explain the details personally. Just click here to watch.

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Yesterday’s issue, about mass murder in the Bible, prompted a lot of interesting feedback.

One Diary reader summed it up perfectly…

Holy c**p Bill. I think you have stepped on a hornet’s nest. The tirades that are coming your way from "Arguing with God" and "Fire and Brimstone" will make the feedback from your duty to fight stuff sound like Mary Poppins.

Getting under the skin of perceived patriots is nothing compared to stirring the ire of the religious. Good luck on this one.

— Kenneth P.

Most of the rest were not so magnanimous. They reckon Bill “crossed the line” by tackling the subject of violence in the Bible…

You and your friend who wrote the play are clearly not born again nor have any glimmer of a regenerate spirit. The Bible is the greatest love story in history, but it is not discerned by those in the flesh and not the spirit.

My subscription expires next week and I will let it lapse. You offer more foolishness on the important issues than wise on the inane issues of modern investing.

— Scott I.

I have valued your research for many years. But you have crossed over the line. When your "opinion" waltzes from financial topics to saying that reading another’s opinion about the God of the Bible, makes you wonder about that God, hmmm, Bill, you better start taking eternity seriously.

More important, where you chose to spend it. What we have made or lost financially won’t matter one whit.

— Bruce W.

God had to do those things to preserve the genetic line for Jesus to be born through. It was done out of love to bring salvation to the whole world once and forever.

— Doug E.

“One outrageous act of murder… after another.” Really? Says who? Some mortal? Some “man”

I would duck in fear after saying that. Let me remind us that the only GOD in the universe… the one who created it to begin with… set all of the rules on how every single aspect of it would operate does not murder anything.

Since HE brought all of it into existence, HE can do what HE wants… when HE wants… how He wants… just because HE wants. And when HIS creation misbehaves, HE can judge them and destroy them in perfect righteousness (whether Old or New Testament).

No one in Orlando, or anywhere else for that matter, has the authority to do any such thing. Just saying!

— John B.

I never do this, but was disturbed at your mentioning God wiping out entire races and being upset with His people without letting your readers know why.

These races were so wicked that there was no hope for them, and God knew that their wickedness would seep into His people and corrupt them as well.

Do we think we know more than God when we do not understand His actions? It looks horrible, yes. It WAS horrible, yes. But He is Creator, not us.

— Anonymous

What’s your point, Bill? Although, I do wonder how many who read the Bible find themselves unable to answer this question, as you say, about God Himself, this Diary seems a little reckless, and off your standard beat.

— John W.

I suggest you stick to the business of keeping your readers informed of matters relevant to successful investing

— Bob L.

It’s obvious that you and John Henry lack what it takes to discern The Word of God. Still defending the Muslim and Islam by making fun of God and Christianity? Still biased?

God is so far above your finite intelligence, which is bothering isn’t it? You are trying to fit God to your little box. Good luck with that. But if humbly you seek Him, who knows? He might have mercy, but doesn’t sound likely that you will seek Him.

— Omar L.

You may want to look at a study Bible regarding Abraham and Isaac and the real meaning of the scripture. You apparently took the wrong ramp.

You also need to realize the Old Testament is the initial covenant setting the stage for the New Testament – the final covenant. You have got to understand that.

Perhaps you should stick to finance. Good luck.

— Kent C.

Should Bill stick to commenting about the economy and the markets? Write us at [email protected].

In Case You Missed It…

Bill just announced a major change to his business. It’s an opportunity for you to “partner” with him and his business. And it could help you spend less for our research… but get even more.

To learn more, view Bill’s special invitation to you.