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February 21, 2019 | America: 52nd in Freedom

Is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of the daily financial column, Diary of a Rogue Economist.

GUALFIN, ARGENTINA – Let’s see, Dear Reader, what were we talking about?

We are on a walkabout… looking at others in order to see ourselves.

And, oh yes… the gist of the last few days’ conversation was that you should be more generous… and more open-minded.

You should be ready to give your money, your freedom… and maybe even your life… for “our” benefit.

 

E-Money

The Democrats want you to pay higher tax rates, for example, so “we” can provide guaranteed incomes, free tuition, and other goods.

The Republicans think you should be willing to take on more government debt (which you or your children will suffer) in order to rebuild “our” military or rebuild “our” bridges…

And they both think you should do as you are told. Paul Pillar reports on the latest score from Freedom House:

The United States still is rated as “free” in a threefold typology in which the other categories are “partly free” and “not free,” but in Freedom House’s numerical scoring system the United States ranks behind 51 of the 87 countries that are labeled “free.”

And don’t forget the stimulus. A proposal from the IMF (International Monetary Fund) suggests creating a new kind of money so that the feds can steal your savings without an act of Congress. Here’s an important paragraph:

The proposal is for a central bank to divide the monetary base into two separate local currencies – cash and electronic money (e-money). E-money would be issued only electronically and would pay the policy rate of interest, and cash would have an exchange rate – the conversion rate – against e-money. This conversion rate is key to the proposal. When setting a negative interest rate on e-money, the central bank would let the conversion rate of cash in terms of e-money depreciate at the same rate as the negative interest rate on e-money. The value of cash would thereby fall in terms of e-money.

In other words, the Fed could apply a kind of wealth tax of its own. It could then set the interest rate, say, at negative 3% or 5%. Instead of receiving interest on your savings, you’d have to pay that much just to keep your money in the bank.

And if you took it out of the bank – in cash – the Fed would lower the exchange rate on it, so that you ended up paying the same amount.

But please don’t get all worked up about these things, Dear Reader. They’re all for a good purpose – keeping the insiders flush!

Tax revenues, deficits, negative interest rates – it all goes to the same place: wherever the Deep State deciders want it to go.

And that freedom you lost? Where did that go? To the insiders too, of course. There’s the “us versus them” that matters. But we’ll come back to that.

 

Trade Warriors

Also in the news this week is word that the deadline for China-U.S. trade talks wasn’t a deadline, after all. It was only a target date.

Months ago, we guessed that the Trump Team would not go Full Retard on the China trade issue. There’s too much at stake – including Donald’s personal fortune.

We’ve seen how the stock market is ready to pitch over at any moment. And since the “rich,” including the Deep State and its cronies, are the ones who would suffer most – they own most stocks, bonds, and real estate – none of the deciders want to see a correction… and none wants to risk setting off a stock market panic.

So, the trade talks will go on… and on… and on – punctuated by loud hosannahs about the “great strides” being made – until the Chinese have time to transfer production over to other low-cost producing centers, notably, Mexico.

And then the trade warriors can come with a new “them” – targeting the land south of the Rio Grande… and then Indonesia, Vietnam, Bangladesh, Thailand, Myanmar, Guatemala, Kenya… and every other poor country with a hankering to export.

A trade barrier of any sort is dumb enough, but a country-specific trade barrier is especially absurd; cheap production will simply move to another country where people are willing to bust their humps for $5 an hour or less.

And there are still a whole lot more countries to work through until you even get close to today’s U.S. wages.

Which just shows you how rich the U.S. once was… and how far you’d have to go to make America great again.

The average factory wage in America today is actually lower than it was – in real terms – 50 years ago. Which is to say, U.S. wages – compared to much of the rest of the world – have been going down for half a century. During that time, for example, China’s wages have multiplied five times.

 

Submerged Anger

As we ramble around the world, one thing we notice almost immediately: Americans may have some of the world’s richest people, but they also have some of the most wretched.

Take a trip. Travel around Ireland, France, England, Denmark, Sweden, Germany. Where are the abandoned cars? Where are the trailer parks? Where are the broken-down houses, the desperate, rat-infested cities, the rural meth labs?

Or make a visit to Nicaragua, Argentina, Morocco, or India.

The poverty figures don’t tell the whole story. There are a lot of people in the world who have little money.

But it’s hard to match the trashiness, desolation, and despair of America’s poor… or the submerged anger of its once-proud working classes.

But wait… they’re “us” too, aren’t they? Why, then, is it all right to protect asset holders at their expense?

More to come…

Regards,

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Bill

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February 21st, 2019

Posted In: Bill Bonner's Diary

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