GUALFIN, ARGENTINA – “Bill, you are living in a dream world,” our local lawyer began (not using these exact words).

“You are a smart guy. But you’re not that smart. You bought a marginal ranch. It’s getting more and more marginal every year.

“Every year, we lose more money. You thought you were smart because you bought it so cheap. But it’s a liability, not an asset.

“Look, the whole valley is for sale. The owners are giving up. These guys have a lot more experience than you do. They know. There’s no way to make these ranches profitable. Those days are over. You’re living in the past.”

The rest of that story will have to wait until next week…

High Noon

Meanwhile, Yale economics professor and Nobel Prize-winner Robert Shiller says it’s high noon for stocks.

The bright sun is at its zenith. Only twice in history has the sun been higher in the sky, he says – 1929, 1999… both before major stock market plunges.

Instead of looking at stock prices relative to last year’s earnings, Shiller prefers to look at the average of the past 10 years of earnings, adjusted for inflation.

This, he says, helps smooth out year-to-year swings in earnings to paint a clearer picture of value.

And with the S&P 500 trading at a Shiller P/E of 29 (the market peaked at a Shiller P/E of 30 in 1929), the shadows stretch out like a drunk on the sidewalk.

Get ready for a showdown.

Bloomberg reports that two of Wall Street’s most influential insiders, CEOs Larry Fink of BlackRock and Jamie Dimon of JPMorgan Chase, have started to notice the fading light:

Fink said Thursday that U.S. growth is slowing on concern whether the Trump administration’s agenda will get through Congress. Dimon lamented that “it is clear that something is wrong” with the nation in a letter to investors Tuesday. Both CEOs are part of a group of business leaders that advise President Donald Trump.

Fink expressed chagrin over the pace of changes so far under the new administration. He told CNBC the U.S. economy is slowing as both consumers and businesses wait to see if the new administration can deliver on tax reform and deregulation following the failure of the health-care bill in March.

"There’s a greater worry that these proposed changes are going to be harder and harder to execute," said Fink, speaking on CNBC Thursday. "You’re seeing a slowing down of our economy."

Costly Myth

Let’s see…

No O’care repeal… no military cutbacks… no curbs on entitlements… no reform of the phony money system.

Trump aides Steve Bannon and Jared Kushner “are fighting non-stop,” reports The Daily Beast. Congress is a free-for-all.

Meanwhile, the feds are burning cash and bumping into a debt ceiling.

What are the odds that the Trump team can corral congressional Republicans and pass a big tax cut and big infrastructure program?

Long. But let’s try to look a little closer…

The “Trump Boom” may be the worst kind of myth: a costly one.

The reality we see is that the system cannot be reformed in any serious way because the people who control it don’t want to reform it. Like alcoholics who haven’t hit bottom, they aren’t ready to give up.

Cronies, contractors, bankers, politicians, campaign contributors, lobbyists, favored Deep State industries, and especially Wall Street – none are ready to give up the sauce.

Instead, they want more of it.

Where do they get it?

Taxation, regulation, and the money system.

Tax revenues – passed around like a bottle of Four Roses – is one source of juice. But it is limited. Squeeze the taxpayers too hard and they give out a howl.

The insiders also get a buzz on from regulations.

Rules, paperwork, restrictions, licensing – each one adds costs on businesses and consumers… but a payoff or some crony somewhere.

Who wins?

The insiders who write the rules, of course.

The “Bezzle”

Most interesting to us is the third source: the credit-money system.

Who complains about cheap credit?

Even savers, who have lost an estimated $2 trillion because of repressed interest rates since 2009, are bamboozled into thinking cheap credit stimulates the economy.

The system is dishonest and unfair. A dear reader explains…

Before 2009, I like many believed I had money, savings, and a retirement vested and guaranteed. The work was supposedly done. That crash began a study that revealed the above wasn’t true.

When the medium of exchange can be created at someone’s will and spent according to that will, that someone is literally the god of all who use this tender. It is quite literally political capital or political money… It’s nothing but theft writ large and we are all parties to it.

Another dear reader adds a worthy insight:

In Leviticus 19:35-36, “You shall do no wrong in judgment, in measures of length or weight or quantity. You shall have just balances, just weights, a just ephah, and a just hin [units of dry measure].” And in Proverbs 11:1 it says, “A false balance is an abomination to the Lord, but a just weight is his delight.”…

I lived in Japan from 1992 to 2012, and during that time America became ruder and less honest. The distance gave me a perspective that too few others have. I can’t help but believe that dishonest money is a subtle but significant factor in the decline of the morality of the common man.

It’s easy to see the larceny when it is wrought by inflation. Your money loses value day by day. And there’s an even-handedness to it: Rich and poor are robbed proportionally.

But the larceny of unlimited and underpriced credit is subtler. It is what economist John K. Galbraith described in his book on the 1929 stock market crash as a “bezzle.”

He observed that in any economy, there is an element of theft and fraud. But when the credit is flowing and markets are rising, the “rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly.”

Wealth passes from the Main Street worker to the Deep State insider… and neither of them knows what has happened. The average guy doesn’t know whom to blame – Mexicans, Chinese, robots?

The insider thinks he is a genius.

And the economy – and its wealth – declines.

More to come…




Editor’s Note: Bill continues to send in pictures from his adventures in Argentina.

Today, he shares a few more with you.

The burros wait patiently in the Argentine desert

Fixing the backhoe back at the ranch

Market Insight


A housing boom becomes unsustainable if real estate prices go up faster than household incomes.

That’s what happened in the United States before the housing collapse in 2007. We’re seeing the same pattern in Canada today.

The chart below shows the average home price in the U.S. and Canada and compares it to each country’s median household income.

As you can see, American home prices peaked at nearly six times higher than the median household income in 2005–2007… right before the real estate crash.

Canadian home prices are now reaching that dangerous territory.

Nick Rokke

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High praise continues to fill up the mailbag in response to Bill’s misadventures in the Argentine desert published in Tuesday’s Diary, “Wanted by the Police in Argentina…

I’ve been laughing for two days over your misadventures with the truck, in Argentina. That’s exactly the kind of thing I’m always doing and that always lands me in trouble. Keep ’em coming, Bill!

D. Armelin

Hey, Bill! After yet another brush with disaster in the Argentine outback, the following question comes to mind: If you enjoy endangering your life with risky stunts, why don’t you make selfie vids and post ’em on YouTube?

 After watching some idiot teenager try a bicycle flip from a rooftop, we can watch Bill and Elizabeth stranded (yet again) in the middle of literal nowhere hoping they survive somehow. How old do you have to be, dear Bill, before you are TOO OLD for this nonsense?

G. Clark

Great story Bill (24 hours to Gualfin)… and a great punchline! As I was reading I wondered, ‘what’s the "Wanted by the Police…" all about?’ My suspense kept building. Then the ‘reveal’ in the last sentence. Made me laugh. And what a great gal your Elizabeth is!

B. Kirk

Hello Mr. and Mrs. Bonner so glad you "found" a taxi in the middle of nowhere. I will post your bail if needed.

N. Hall

Meanwhile, one longtime reader called in to the Bonner & Partners offices in Delray Beach, Florida. A customer service representative passed along this message from R. Guiley…

One reader has been following Bill since 1984! He wanted me to pass along that back when Bill was writing Strategic Investments in the ’80s there was a book written called Regions of Opportunity where Bill and a man named Jack talked about “New Aspens” – places they felt would soon become thriving cities such as Aspen, Colorado.

One of those cities was Bend, Oregon. The reader moved to Bend upon Bill’s recommendation. At the time the population was only 25,000. Today the city has a population of over 100,000 and is ranked one of the most attractive places to go in the Northwest.

He just wanted to pass this along to Bill to thank him for his insight and to say to keep up the great work!

In Case You Missed It…

You may have heard of bitcoin. It’s the cryptocurrency that allows people to store and spend their money without relying on government-printed currency. Bitcoin created a new class of millionaires when it shot up more than 8,000% in 2013.

But bitcoin was just the beginning. Our friend Teeka Tiwari over at the Palm Beach Research Group recently uncovered what he believes will be the next cryptocurrency to see bitcoin-like growth.

Watch this brief presentation to see for yourself.