FRANKFURT, GERMANY – It’s hard to know where to start. We connect the dots… but the dots just get wackier.
The stock market – already outrageously overpriced – goes higher!
The deficit – already way out of control – just gets worse!
America’s empire – already overstretched, over-indebted, and oversized – just gets bigger.
And the foundation myths – on which the whole edifice rests – just become further and further detached from reality.
Pack the Court
Last week, we looked at one of them. The Supreme Court, say the mythmakers, is the last bulwark protecting our freedom and guaranteeing our Constitution.
That’s what it says on paper. That’s what you learn in civics classes. And that’s why Supreme Court justices must spend their whole lives beyond reproach… unblemished by sin… unsullied by mistakes… and untainted by the kind of flesh-and-blood goofiness that afflicts the rest of humankind.
Only angels can join the Supremes; nominees must show their wings to gain admittance.
The measure of a great court is how courageous it is – that is, how far its judgements inconvenience the powerful and upset popular opinion. If the court is merely echoing the cronies and the mob, why bother having it?
In the mid-1930s, the august justices considered many of Franklin Roosevelt’s programs to be unconstitutional. In response, Roosevelt proposed to “pack the court.” Whenever a justice hit 70 years of age and failed to retire, the president would simply appoint an additional judge.
The plan never went into effect. The court backed down. And by 1938, the New Deal was no longer unconstitutional… It was the law of the land.
The angels flew along with the wind, not against it.
And since then, we can’t think of a single opinion that has significantly slowed the growth of the Deep State… nor any opinion that has been deeply at odds with public opinion.
Deep State Court
Thanks to the cowardice of the Supreme Court, the Deep State grows… and the power of states and individuals declines.
Since the 1930s, the feds have intruded into almost every aspect of our lives, with no enabling provision in the Constitution. Where were the Supremes?
And where have they been since the 1950s, when the feds began a long list of wars… without Congressional declaration?
And where have they been hiding out since 1971, when the feds substituted paper money for the gold and silver called for in the constitution?
And where in the Constitution does it give the feds the right to set prices… and to make one group of citizens (stockholders/Wall Street/cronies) richer at the expense of another group (wage earners)?
Where are the Supremes now… when the police, using a foul doctrine called “civil asset forfeiture,” with no due process of law, steal more money than freelance thieves?
Where are they now… when the president – on his own say-so – imposes taxes on hundreds of billions’ worth of imported consumer items, claiming it is a matter of national security?
Today, the whole idea of an independent court upholding the Constitution is fantasy. Justices are chosen by one branch of the Deep State – the administration – and approved by another, the legislature. Senators grill them harshly to make sure they don’t have any funny ideas – such as protecting citizens from the feds.
The Supremes shirked. And now, POTUS has more power than George III… and the feds can do almost anything they please.
But now, let’s turn to the trade war… the South China Morning Post caught up with Steve Bannon and asked him what it was all about:
Bannon, who claimed to have helped Trump draw up the trade war plan, said that in the past, tariffs had been limited to imports of between roughly US$10 billion and US$30 billion. But the sheer magnitude of the more than US$500 billion in question this time had “caught Beijing off guard.”
“It’s not just any tariff. It’s tariffs on a scale and depth that is previously inconceivable in U.S. history,” Bannon said.
“They never envisioned that somebody would actually do this.”
He’s right about that. They probably never imagined Americans would do something that could have such catastrophic consequences for everyone – including the Deep State.
And maybe they had a scholar who was an expert on the U.S. Constitution. Surely, he would have told China’s leaders that the U.S. president lacks the authority.
Tariffs are taxes; only Congress is supposed to have the power to levy taxes.
And surely, in the debate that followed, it would soon come out that it is not the Chinese who would pay the tax, but Americans… and that the tax would directly damage U.S. industry and households.
And yes… so far, it looks like we were wrong. Trade is what fattens up the goose. Kill trade and you strangle the poor bird. Then, everyone goes hungry… including the Deep State foxes who were planning to eat it.
We predicted that Mr. Trump would back down as soon as someone explained it to him.
Apparently not. Bannon says the president is ready to go all the way, even if it threatens the whole shebang. From the South China Morning Post:
Bannon said the aim was not just to force China to give up on its “unfair trade practices” – the ultimate goal was to “re-industrialise America” because manufacturing was the core of a nation’s power.
NBC News gives us a hint of what “re-industrializing” could be like:
The impact of President Donald Trump’s escalating tit-for-tat over tariffs is already being felt, say auto industry experts. New car prices are beginning to rise, and auto exports are dropping.
But a new report warns that sales could plunge by as much as 2 million vehicles a year, resulting in the loss of up to 715,000 American jobs and a hit of as much as $62 billion to the U.S. GDP.
But our concern today is not the economic impact – which is obvious – but the wacky incoherence of it.
Where in the Constitution does it give the feds the power to decide what kind of economy we have? Beats us.
But it’s probably a good thing Mr. Bannon and Mr. Trump have not decided to turn us into a nation of hunter-gatherers.
P.S. Alert dear readers will note that we are currently en route to Buenos Aires. We’ll be heading up to the ranch at Gualfin in the coming days. One order of business will be to check in on the progress of our vineyard…
This year, our entire supply of Tacana Malbec sold out in a matter of days. This led us to consider expanding the operation however we can. Should we plant more grapes for next year? You can help us decide by clicking right here.
TECHNOLOGY INSIGHT: DATA TRAFFIC SOARS
By Joe Withrow, Head of Research, Bonner & Partners
Today, something a bit different for our daily insight.
Mobile data traffic on wireless networks is exploding worldwide…
That’s the story of today’s chart, which maps the projected growth of global mobile data traffic from 2016 through 2021. You can think of mobile data traffic as the amount of data – emails, text messages, phone calls, pictures, music, and movies – that is sent and received over wireless networks.
Data traffic is measured in exabytes… One exabyte is equivalent to one billion gigabytes. To put this in perspective, the average computer hard drive holds between 500 and 1,000 gigabytes of data.
As you can see, mobile data traffic is on pace to more than double from 2016 to the end of this year – from seven to 17 exabytes per month.
And data traffic is projected to grow 188% from the end of this year through 2021 – from 17 to 49 exabytes per month. The amount of traffic flowing through wireless networks will nearly triple in just three years.
Why is that important?
Bonner & Partners chief technologist Jeff Brown warns that our fourth-generation (4G) wireless infrastructure can’t handle this explosion in data traffic. The network is already congested – leading to slow connections and dropped calls. And those problems will only get worse. From Jeff:
Just like when there’s a traffic jam on a highway and the cars aren’t moving… there can be too much data on a wireless network – and the digital packets of information just can’t get to where they are intended to go.
And Jeff points out that slow connection speeds aren’t just a problem for consumers. They also pose a threat to American businesses.
At an economic level, [slow wireless connection] is a significant competitive disadvantage. Work and digital services are mobile these days. Many companies have a “mobile first” strategy that prioritizes access to products or services via mobile devices like smartphones.
More and more business is conducted online, and productivity is dependent on having reliable internet access.
The problems with America’s wireless networks are the reason why Jeff has been pounding the table about fifth-generation (5G) wireless technology. According to Jeff, 5G speeds will be, on average, 1,000 times faster than what we have today.
With those speeds, America’s data traffic will flow freely once again. And the wireless congestion problem will be averted.
– Joe Withrow
P.S. The 5G infrastructure buildout will require around $2 trillion in private investment spending through 2025… making it the largest private infrastructure spending project in history.
And that makes 5G one of the single best investment opportunities of the next decade. But Jeff says investors need to position themselves now, while the buildout is just getting underway. To see how, go right here.
“An Unprecedented Amount of Fraud”
It’s been 10 years to the month since the collapse of Lehman Brothers. Wall Street has moved on. Even many of the Lehman employees have gotten back to work. But perhaps surprisingly, the fallout from Lehman’s mortgage mess is still being mopped up. And the attorney behind the clean-up fears it’s just a matter of time before the whole thing happens again…
The price of crude is climbing again. At $80 a barrel, oil is at a four-year high. And major traders are expecting prices to continue to climb… all the way up to $100.
This Will Replace the iPhone
The smartphone in your pocket will soon be obsolete. In its place will be a piece of sci-fi tech right off the movie screen. Jeff Brown, Bill’s top technologist, shows why the future of consumer electronics will be smartphone-free.
In the mailbag, conversation turns to the Kavanaugh controversy…
The best synopsis yet of the Kavanaugh circus. That they express deep pain for Mr. Kavanaugh is even richer than the farce they are putting us through. It really is all a distraction. It reaffirms a firmly held belief that the best life to be had is one lived in obscurity.
– Michael C.
Bill, your points are once again right on the money – unfortunately.
– Jerry M.
Thanks, Bill, for another great reflection. It would be very funny to see the expressions on the faces of politicians – all of whom are selfish, secretive, and hypocritical – if a proposal or law was made requiring complete life background checks. They’d all be heading for the hills.
– Kevin A.
Perhaps Washington should be empty… and maybe remain that way until decency is found in the hearts of those who choose to be leaders and have a responsibility to do it justly, ethically, and honestly. Otherwise, empty it out for now. Just my thoughts on the matter.
– Gloria B.
Yes, the Brett Kavanaugh spectacle is a Deep State distraction, but you didn’t carry it far enough, Bill. Besides distracting us, the Swamp critters turn us against one another so that we’re too busy fighting among ourselves to pay attention to what they (the real enemies) are doing.
– Dale A.
I agree with you on your main points. I have spent most of my 77 years studying history and economics, and the principal lesson I have learned is that humans continue to make the same mistakes over and over again. For example, Rome inflated its economy into ruin in order to carry on stupid, unproductive wars for centuries. When Rome collapsed, it had inflated away 99.5% of the purchasing power it had when Augustus took over. The figure for the U.S. since the Fed was established in 1913 is about 98%. How much longer can this country continue?
When Rome collapsed, it was followed by Persia, India, and even China and the Arab world, eventually. To me, the Kavanaugh situation centers on its misogynistic overtones. This has been a problem for thousands upon thousands of years. I happen to be one of those few people who consider all of us to be equal, regardless of sex or national origins.
– Ken G.
WILL YOU BE JOINING JEFF BROWN THIS WEDNESDAY?
Jeff Brown is hosting an urgent tech investing webinar this Wednesday at 8 p.m. ET. During this free event, Jeff will show you why one piece of technology will rewrite modern society… and make smart investors a fortune.
To save your spot, and get the four stocks on Jeff’s watchlist, go right here.