POITOU, FRANCE – So passeth the last days of summer…

The sun sinks lower every day.

We put things away. We close the shutters.

And the cool night drafts seep in through the cracks.

Stones Whisper

Yesterday, we went to a concert in Montmorillon. The town sits on the river Gartempe, as it has for 1,000 years.


View of the countryside in Montmorillon

Church spires rise from the hills. The mairie (the local government office) dominates the town square. God on the high ground; the feds down low.

Between them are shops (many vacant) and elegant old houses, protected by high stone walls and huge iron gates.

Like almost all the provincial towns of France, Montmorillon is dying. Many houses are empty.

There are still a few bars and restaurants, but on a typical evening, there may be no one in the town square. And most often, it is quiet.

No factory whistles call in the young, calloused hands. No snorting trucks come and go, delivering their wares. No lively crowds hang out at neighborhood bars in the evening, gaily passing the late summer hours with pastis or pineau.

Still, like a ghost with a secret, the old stones whisper.

Manhattan Madness

We interrupt our recollection with a brief look at the financial news. In short, all is well… Our first locomotive – the Manhattan Madness, headed south out of Wall Street at breakneck speed – passed through Trenton with no trouble. The party onboard is wilder than ever… with Amazon trading at almost a trillion dollars!

Meanwhile, the Ol’ Deep State Cannonball just left Penn Station in Baltimore on its way north. The conductor, wearing a MAGA cap, says, in effect, “You ain’t seen nuthin’ yet.” (What… Amazon at $2 trillion?!)

He steps on the gas and warns darkly that there may be violence… if anything gets in his way.

All up and down the tracks, the sun still shines; but chilly winds begin to lick at the rails…

The dawn for this great era came in the early ’80s. The dollar had been cut loose from gold for 10 years by then; the feds were starting to get the picture. They could borrow and spend with almost no limit.

Since then, the Empire of Debt has spread the power of the U.S. elite all over the world, financed by cheap credit.

Interest rates have generally come down. Asset prices have generally gone up.

But growth rates and wages have fallen – despite huge technological advances and huge inputs of new credit.

And now, debt is piled up everywhere. Every household closet, corporate safe, and government warehouse is full of it. From just $3 trillion in the late ’70s, it has risen to $69 trillion today.

The trouble is, debt is like a pet elephant. It needs to be fed. It may come from the financial economy, but it is the rest of the economy that has to carry the hay and clean out the cage.

And gradually, lower and lower real rates of interest have produced less and less hay. Real GDP growth falls as debt mounts up.

Obviously, this can’t go on forever.

MAGA Program

And there’s nothing in the MAGA program to change these trends. The tax cut simply shifted the burden of government into the future.

Like all the feds’ flimflams, it is supposed to “pay for itself.” But every crackpot scheme is supposed to create a better, freer, more competitive, more efficient, and healthier society… and thereby “pay for itself.”

From alpha to omega… from Amtrak to zoos… we know of none – save, perhaps, the interstate highway system – that even came close.

Already, Mr. Market has tried to put the brakes on three times – with the Crash of ’87, the Nasdaq crash of 2000, and the debt crisis of 2008–2009.

Each time, the feds stifled the correction with even more debt. And each time, more and more massive inputs of credit produced less and less extra output.

But now, we are near the end of one of the longest business expansions/bull markets in history.

The feds should have stocked up on interest rates and surpluses. Then, they’d be ready to meet Mr. Market with both monetary and fiscal policies, dropping rates like heavy rocks as Mr. Market tried to scale the ramparts… and throwing more government spending – like hot oil – onto his battering ram crew.

Alas, they will be able to do neither. The Fed’s key rate is still negative, in real terms. And the federales had already shot their fiscal wad, even before the battle trumpets sounded. The deficit will soon be running at more than $1 trillion a year – in a boom!

So what’s ahead? The horrors!

It will be the “worst bear market of my lifetime,” says famed investor Jim Rogers.

What’s coming, says Ronald Reagan’s budget director, David Stockman, is a “political and economic sh*tstorm, the likes of which America has not experienced since the 1930s or even the Civil War.”

Long-Forgotten Place

Meanwhile, back at our concert in Montmorillon…

On stage was a trio of Eastern Europeans on violin, viola, and piano playing Tchaikovsky and Piazzolla. The latter was an Argentine whose remarkably complex and delightful music combined jazz with the tango tradition.

By 9 p.m., the concert was about half-finished. The cool night air was settling over the group. Out in the open, under the stars and streetlights, people reached for their sweaters.

We were sitting in the courtyard of one of the town’s oldest houses. Built in the 17th century, it was probably raised upon the ruins of some much older house. Now, it is locally famous for having been lived in by Madame de Montespan, mistress of Louis XIV, with whom she had seven children.

In this area, in the 3rd and 4th centuries, marvelous villas were built to Roman standards. Central heating… running water… frescoes… statues – all the comforts of home.

Aerial surveys can still make out Roman-era houses… walls… fields… and borders. One of them is just a mile or so away… up the old “Roman road” to the East.

Most likely, there were books, too – perhaps translations of Aristotle or Polybius. People were schooled in Latin… and sometimes Greek, too.

Christianity had been made legal throughout the empire in 313 AD. About a half-century later, the Emperor Julian attempted to restore the old gods.

The provinces, especially out here, with little economic or political importance, took little notice. They were less developed, and less Christian, but they had enjoyed the benefits of Pax Romana.

The empire – with free trade, a common language, good roads (there is one right next to our house), gold and silver coins, and a court system for sorting out disputes – brought civilization and culture to these far-flung outposts.


An ancient Roman road near Bill’s house in France is still in use

The Pax Romana ended with the crisis of the 3rd century… But many areas of the empire continued to enjoy relative peace and prosperity.

Run for Your Lives

But in the late 4th century, far out on the steppes of Eurasia, the Huns pushed the Alans; the Alans pushed the Goths; the Goths pushed the Tervinges, the Vandals, the Quades, the Burgundians, the Sueves, the Gépides, and the Sarmates.

And on some day, perhaps a day like this, at the end of summer in 408 AD, the refugees must have begun coming here, to the Gartempe valley.

They must have told terrifying stories about how barbarians had attacked their towns and villas, burning, plundering, killing everything that got in their way; and how they had stolen all their cattle and other livestock… how the women were raped and the men were killed… and all those left alive had been taken as slaves.

It must have been while the locals were listening with foot-wide ears that other runners arrived… breathless… and even more horrified.

“They’re coming… they’re just up the river… Run for your lives!”

What a shock it must have been. The empire had been in business for 400 years. Nothing had seriously challenged it since Hannibal was defeated in 183 BC. Who could have imagined that it was doomed?

And yet, it was all over.

“Everything is ruined,” reported a visitor to Gaul in 407 AD. “Fields, towns… everything looks different. Plague… famine… slavery… cold and heat… By all these hordes [of barbarians] at one time, humanity perishes. From every side, cries of war. Terror and fury in all our hearts… chaos… peace has disappeared from the earth. Everything you see comes to an end.”

Another described what it was like when the barbarians reached Spain:

[They] pillage and massacre without pity… And now famine attacks, too… mothers, also, feed themselves on their own children whom they have killed and cooked. Fierce beasts have gotten used to eating our corpses. Now, they attack the healthiest among us and run wild, intent on the annihilation of our entire human race.

Have a nice holiday weekend.





By Joe Withrow, Head of Research, Bonner & Partners

U.S. stocks account for nearly half of the total value of global stocks…

That’s the story of today’s chart, which maps the top seven countries as a percentage of the global stock market capitalization.


As you can see, U.S. stocks make up 40% of the world’s total stock market capitalization. In other words, 40% of the value of all stocks trading globally is from U.S. equities.

And it’s not just stock market capitalization. The U.S. economy also makes up the lion’s share of global economic output.

Global GDP clocked in at about $80 trillion in 2017. The U.S. makes up one-quarter of that figure, with a GDP of $20 trillion. The European Union makes up 20% of global GDP, with $17 trillion. And China rounds out the top three. With $12 trillion, it accounts for 15% of global economic output.

– Joe Withrow


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Whether it’s the president being snubbed from John McCain’s funeral, or POTUS’ plan to turn against the Fed, it’s all about Trump in the mailbag…

Trump’s not this… Trump’s not that… Trump is winning! And he is what America’s all about. John McCain is what the Deep State is all about. Why would Trump want to be invited?

– John S.

Or maybe Trump wasn’t invited simply because – in spite of short-term economic success – he still remains a serial-lying, five-time draft-dodging coward who seems to prefer the approval of the thug Putin to any of our traditional friends and allies.

– Anonymous

Trump is respecting McCain’s long-expressed wish that he not attend his funeral. Look it up in the press archives.

– Erich K.

The only thing that tempers my desire to see Trump ridden out of office on a proverbial rail is the fear of a President Pence. Ever watch the Hulu series, The Handmaid’s Tale? If Pence ever sits behind the desk in the Oval Office, we can expect an America much like the fictional Gilead.

And the really scary thing is that there are those who would support him. After all, Trump has his redcaps, who support him regardless of how outrageous his antics are. Pence would have his evangelical fundamentalists.

– Dale A.

Why aren’t the newspaper and television reporters presenting Trump’s celebrity feud game the way you are? There must be some brave reporter who can bring your voice forward into the general public news media sector. The whole of the U.S. needs to see what you eloquently and reasonably laid out in “How Trump Turns on the Fed.” Taking no sides, and with pure intent to inform with facts, you made it easy to see what is really going on.

– Maralissa T.

It is becoming obvious that Trump wants higher inflation. That is why he has begun attacking Fed chief Powell, whose mild push for higher interest rates might hold back inflation, if only a little. Trump knows from experience that higher income comes first; then, employers may consider giving a bit to employees. Higher income for employers means higher prices for everyone else, of course.

Trump is thinking smartly ahead to 2020, and wants to be able to claim credit for any increased income voters may have by then, even if it actually buys less. That may even be behind the inflation he knows his tariffs will cause. He will blame that on China and others, even though it results from his actions. He knows it is now too late for inflation to harm other politicians of his party in the coming elections. Just another dastardly political trick for the smart, but deceitful, politician he has become.

– Chuck B

Love your writing, Bill. Why? It’s based on facts and thoughts, not vapid beliefs… the two most vapid being: America’s “getting screwed” by the rest of the world, and the president “deserves a chance.” The very suggestion of America as victim is enough to make one choke; and why does anyone, particularly a lying, thuggish dolt, deserve a chance? Such people clearly do not deserve a chance.

I don’t always agree with what you write, but at least you make it possible to engage in a way that has almost been lost in modern discourse.

My only caveat: While I agree wholeheartedly with your thesis about the inexorable decline of the American empire, I kind of wish you had a better grip on the timeline so I could make lots of money and leave on the last stage.

– Dave H.