NORMANDY, France – A family matriarch – such as JFK’s mother Rose Kennedy – may speak for her entire clan…
…former mayor William Donald Schaefer used to claim he spoke for all the people of Baltimore…
…French president Charles de Gaulle, grandly spoke for the French…
…but only a leading economist, or a complete lunatic, would claim to speak for the entire planet.
The Great Fixer
Many adjectives can be applied to Larry Summers: pompous, foolish, asinine. But not small-minded. His brain is big… impossibly big.
Go ahead. Ask him anything. Really, there is no subject so complex, so remote, or so gnarly that it can stump Mr. Summers.
MIT and Harvard alum… former president of Harvard… former secretary of the Treasury… former chief economist of the World Bank… Summers now writes for British newspaper the Financial Times.
In his columns, we find humankind’s problems fixed… the world’s challenges met… galactic issues resolved.
Yes, Larry – one of President Obama’s candidates to replace Ben Bernanke at the Fed and the former director of the president’s National Economic Council – is the Great Fixer.
Never has a situation appeared for which he had no fix. And never has one of his fixes failed so miserably to fix a problem that he didn’t come forth with yet another fix to fix the fix the faulty fix failed to fix.
We will come back to Mr. Summers in a moment. We pause, briefly, to have a look at what’s going on in the markets:
“Wall Street indexes drop 1% as rate hike looms” says a Reuters headline. One percent doesn’t seem like very much. Not in a stock market that has gone up 210% since its low in March 2009.
It would take another 113 straight days of compounding that sort of drop to erase the gains brought by the Fed’s fix.
U.S. stocks went up so much largely thanks to rate cuts and quantitative easing. Rate hikes are likely to send them in the other direction.
This will all probably happen the way it always seems to happen: gradually, then all of a sudden.
Debt – particularly the weakest (subprime) links in the bond market – will stretch, and then give way. Stocks will lollygag around, not sure what to do. Then, investors will rush for the exits.
At least, you should be alert to the possibility. No one really knows what the future holds.
The World’s Shepherd
But that must be why we have people such as Lawrence Henry Summers.
He knows things that other mortals don’t. He has answers to questions the rest of us never even considered worth asking.
Take China, for example. Who knows what is going on in China?
Is that a problem?
Not really. Why do we need to know?
The Chinese householder needs to figure out how to pay for his rice and fish eyes. The Chinese factory owner needs to bribe his local politician and put off paying his debt. The Chinese investor needs to guess which way markets are going – just like investors everywhere.
We all have our challenges, in other words… and tight limits on our range of competence.
Then, along comes Larry Summers. All of a sudden, the barriers of honest thinking and modest fitness are brushed aside. No problem is too big for Larry’s brain. And no detail is too small for his feet to trip over.
He is not even thinking for himself; he has become the brain, the voice, and the shepherd of the entire world. Here’s Summers writing in the Financial Times:
[T]he world lacks shared understandings regarding goals for the evolution of the Chinese economy, the objectives of China policy in the short and medium term, and the institutional structures needed to manage both cooperation and inevitable tensions.
We gasp for air!
What manner of man is this? When did the world ever have a “shared understanding” of anything? How could you have a “goal” for the “evolution” of the Chinese economy?
They let this guy into Harvard?
Evolution happens without goals… without conscious thought. It is a trip without a destination.
It is also the way economies work; they do not respond well to manipulation by self-important meddlers.
But if you are speaking for the entire planet, you have already gone way beyond the theory of evolution.
You are in a world without theory… without science… without experience or history.
You are in a world of make-believe – where pundits pretend to know what they are talking about and newspapers fill space with mythical claptrap. Summers again:
The world cannot expect economic cooperation from Beijing if its objective is to inhibit Chinese economic performance.
Why would “the world” expect cooperation from Beijing? Why would “the world” have any interest in inhibiting “Chinese economic performance?” Why would “the world” give a damn about any of this?
He also claims to know not only what is best for Larry Summers, the Summers family, the members of the Harvard faculty, the people of Brookline, Massachusetts, the Yankees north of the Mason-Dixon Line, the citizens of the United States of America, and all the residents of the Americas, north and south… but also all the people who live on Earth (presumably including its fauna, its flora, and its inanimate objects):
The world is likely to benefit from recognising that its deepest interests lie in China pursuing more not less reform, even at the expense of modest reductions in its contribution to global demand over the next couple of years, and possibly more exchange-rate depreciation than we would prefer.
How does he know these things?
Summers only knows!
Further Reading: To sign up for Bill’s monthly publication, The Bill Bonner Letter, follow this link. If you’re already a subscriber,read on here to learn more about the benefits of a Lifetime membership.
[Editor’s Note: We’ll soon be launching a new investment advisory, Exponential Tech Investor, to help you profit from game-changing innovations. Below, editor Jeff Brown identifies an exciting area of breakthrough technology.]
Do you think 3D printing is only for plastic figurines or spare parts?
If you do, you’re mistaken. One of the most exciting frontiers of 3D printing – also known as additive manufacturing – is “bioprinting.” This means “printing” organs, tissue, and bones.
Publicly-traded Organovo Holdings (NYSE:ONVO) is the leader in this exponentially growing field. It is focused on the production of functional human tissues used for drug discovery and medical research. The goal: to apply this technology to replace damaged or diseased tissue.
In the labs at Carnegie Mellon University, they’re working on leading-edge “bioprinting” technology that has the potential to print coronary arteries – or even a heart.
The organs are “printed” into a hydrogel material that acts as a scaffolding for the organ. Once the bioprinting is complete, the hydrogel is heated up to a temperature where it melts away. This leaves the new organ ready for transplant.
Another company I am following is called EpiBone.
It “grows” bones from a person’s own cells. EpiBone uses sophisticated scans of damaged bones, along with a patient’s stem cells, to create defect-free bone grafts. This improves bone formation and regeneration, and reduces recovery times.
We’re truly on the cusp of an exponential leap in medical treatment… and a great opportunity for massive gains.
P.S. If you want to be among the first to learn about my top picks for breakthrough tech stocks on the verge of huge gains, follow this link.
All the Pundits Are Totally Wrong About China
Most observers are predicting an epic collapse in China, but one Asia expert expects the complete opposite… and he’s got the facts to back it up. He’s also got a few tips for how to profit from the coming China surge.
The End of Banking as We Know It…
Can you imagine buying your next house on your smartphone? It’s not as crazy as it sounds. New technological breakthroughs mean it will soon be possible to carry out all your financial transactions online.
QE Is Economic “Communism”
The Bank of Japan wants to use QE to buy shares of publicly traded Japanese corporations. This is nothing less than the stealth nationalization of industry… exactly what the Communists tried with disastrous results.
Yesterday’s issue on Bill’s Red Wing work boots, and the decline of America’s factories, got a lot of great feedback.
I laughed out loud when I read about the Red Wing boot dilemma.
Here in Alaska, we have worn XtraTuf rubber boots for decades. They are particularly loved by fishermen. I wear them when I am tramping around on the beach – I am 62, female, and have lived here all my life.
Until a few years ago, they were made in the U.S. The factory has since moved to China and, at the same time, they are now a fashion statement. Pretty young girls with heavy eyeliner are wearing XtraTuf work boots. Wild.
– Farrel L.
Great article. A couple of notes, though: Based on the price you paid for Red Wings, I believe you bought their Heritage line. It’s a line of boots that are identical to styles of Red Wings made in times past, aimed primarily at hipsters, since, right now, it is hip to wear work boots. These boots come with names such as “Iron Ranger” and “The Foreman.”
Red Wing also has their Made-in-China line of boots, priced at about $100, alongside their “Made-in-USA” boots, priced at around $200.
Both carry the same warranty. They’re still great boots. I just bought another pair.
– Brock A.
I have a pair of Red Wing boots. Pricey. After a few days discovered they were made in China.
– Donald H.
We also got more great general feedback on the work we’re doing at Bonner & Partners… including some more marketing tips…
Yes, as you stated in the editorial, I am new to your newsletter. And I enjoy reading every issue.
I am also new to the failing money/currency issues you talk about. And because of this, I want to stay in tune with the nation and its currency issues and where it may be heading in the near and distance future.
I am completely green when talking of investing, although I want to educate myself and get more of an understanding. As far as the list of sponsors we see every day in the Bonner File, they don’t bother me in the least. I find them long-winded and very repeatable, but many are interesting. So, in my opinion, leave them in and, as far as myself… keep sending me the report each day.
It’s helping me understand the business, if you will.
– David F.
My husband convinced me to look at your site while I had been watching the TV. I looked at the entire presentation. Very professional.
My only negative feedback is the money escalations. It conflicts with the message. If a potential customer says they want to try something for a while, stop there. Let them immerse themselves in the information and absorb it. After all, this is difficult information to wrap your mind around.
Don’t say okay now pay this, blah blah blah, or you can join this and pay this, blah blah blah. Integrity is everything.
– Sharynlee and Robbie M.
In Case You Missed It…
As mentioned in yesterday’s Special Edition of the Diary – “Three Reasons Why It’s Easier to Make Money in Bonds than in Stocks” – our friends at Stansberry Research are hosting a webinar about how to profit from investing in bonds – tomorrow night at 8 p.m.Eastern Time.
Don’t miss your chance to join in the free webinar… sign up here.