The IMPERIAL SUICIDE of America

By Bill Bonner

Now, what we see is the whole kit-and- kaboodle of life in the US giving way to desperation, delusion and an irresistible impulse to commit imperial suicide. The economy turns sour. The military becomes malignant. Households are corrupt, bankrupt and dependent. Even the churches sing their hallelujahs to Caesar now.

What's "imperial suicide?" It's what empires do. If no other empire arises to kill them...they kill themselves. China will probably eventually crush the US militarily. But that is far in the future. The US can't wait. It lets the zombies run wild.

At home, Congress debates a "debt ceiling" measure, as if it made any difference. They've raised the ceiling 93 times since they first imposed a debt ceiling 94 years ago. What are the odds that they will hold the line this time?

Zilch. Instead, they'll continue borrowing and spending until the nation goes broke. Count on it.

The US economy was a free-market success story for a hundred years...from the end of the US War Between the States to the end of the Vietnam War. It was the richest, fastest-growing, most innovative, most competitive, and most admired economy in the world. But then, in 1971, Richard Nixon replaced a more-or-less solid dollar, vaguely backed by gold, with a pure paper dollar, backed by nothing but the good intentions of government employees.

As the money went, so went the nation. Our friend and colleague Byron King opines:
The problem with the US over the last 40 or 50 years is that there's too much free money...

We raise three generations of population who are untied from the basics of monetary education - millions of minds poisoned by Economics 101 in universities across the land. "Elastic currency," courtesy of the Fed.

Media & political classes are no smarter than the dummies who walk the land, so they make policy based on "free" money from the Fed... Deficits don't matter.

Currency circulates and inflates the general price levels... People learn to live with it. Even make a virtue of it, doing things like "buy as much house as you can afford; the market will rise and you'll make money." That kind of idiocy.

There's all this excess currency sloshing around the economy, leading to people doing stupid things like drugs, too much alcohol, divorce (Cherchez les femmes), food (obesity), theft, etc...

"Wars cost much silver," wrote Sun Tzu. [Lack of money] kept a lot of nations out of a lot of trouble over the years. Not any more. Who needs silver when you can just print up bricks of paper cash and fly it over to Iraq and such.

Kind of gives a whole new meaning to the term American Exceptionalism... yep, we're exceptional. That's for sure. More prisoners in jail than anywhere else. We fight longer wars than anyone else...and don't win. We give more welfare to more idle people than anywhere else on earth...and we're proud of it.

There's so much money that we don't know how to say no. No limits. Just raise the debt ceiling...spend until you can't spend any more. Then spend some more.

Well, there are no limits until there are limits. Per Ayn Rand... "You can avoid reality. But you cannot avoid the consequences of avoiding reality."

In the space of 40 years the US lost its winning ways. Real, hourly wages stopped growing in 1973. Stock prices, in real terms, peaked out in '99...about the same time that real, per capita private sector growth came to a halt. The number of full time jobs topped out about two years later...and housing hit its peak in 2007.

Abroad, US armed forces continue to squander the most magnificent advantage that a military has ever had. The Pentagon spends 7 times as much as the next biggest spender. And it doesn't even have a worthy opponent. Where does it get the money? It borrows from the Chinese!

And what does it do with all that money? It engages in pointless, blood sucking zombie wars. Its three current engagements alone are expected to cost $4 trillion, according to the latest independent estimates - about as much as its trade deficit over the last 10 years.

Ask your neighbors. What strategic advantage does the US gain from fighting in Afghanistan, Iraq or Libya? They will have no good answer. Probably some claptrap about 'fighting terrorism' is the best they will be able to do; that's what they were told on TV.

A 94-year-old retired Army colonel came over to our house for the 4th of July festivities. A Silver Star winner in WWII, veteran of the Korean War too...we asked what he thought of the Pentagon's strategy in North Africa and the Middle East.

"I am disgusted," he replied. "Those guys just don't know what they're doing. We have no business getting involved in these things...especially in Libya. They're just traps. I have arguments about it when I go into the VA hospital. The young guys - you know, they're in their '80s - are in favor of these wars. Wave the flag. Rah rah...let's go in and do the job. Teach them a lesson... That sort of thing.

"But real war is not a football game. And nobody learns anything...except not to do it again."

Who - with the exception of a 94-year-old veteran - objects to squandering the national treasure, blood and honor on these wars? Almost no one. Why not? Because they've all drunk deeply from the intoxicating cup of imperial power. An ordinary nation fights wars to protect itself. An empire fights wars because that is what an empire does. And it continues fighting until it finally beats itself.

Why didn't Rome pull back its troops from the Rhine or Anatolia or North Africa...in order to protect its homeland from the barbarians? Why didn't Alexander retire to Macedonia, while he still had breath? Why didn't the Germans retreat to the banks of the Oder when they still had the means to resist the Soviet onslaught?

Why doesn't the US bring home its troops, cut its spending, balance its budget and protect its future? Ha...ha...you know the answer. Because the system has been taken over by zombies...people who want to see the spending continue, no matter what the cost. Zombie wars. Zombie social spending. And zombie finance.

And every time we look at it, we see more evidence. California, the West Coast Greece, is going broke. Any guess why?

How Should Men Define Personal Success?

The question came up on the Mancoat forum about redefining male success. We need to be careful about the term success, because it means different things for different people.

Ask yourself what would give you lifelong personal fulfillment. Are you at the point of personal fulfillment? If not, you are not a success just yet.

Personal fulfillment comes in many forms. Mother Theresa was personally fulfilled by living in poverty to help the less fortunate. Donald Trump is personally fulfilled by making successful business deals and appearing in the media. The hick from West Virginia is personally fulfilled by catching his dinner each night in the woods, and cooking it up on the wood stove.

The problem is that American culture, via Hollywood and Corporate advertising, put out the notion of success being the "American Dream" and most silly Americans bought into that. Many suffer from that mistake today.

What is success for me? Living abroad on a good salary, early retirement at age 50, and having serial relationships with women half my age. I don't need to be a millionaire, but money enables my success life so it is important. I don't want to be married, I don't need kids, and I don't buy into the nonsense that traps too many other men into wage slavery. In that sense, I'm a success too.

Success is a deeply personal assessment and don't let anyone determine for you what constitutes personal success for you.

The American Myth of the Teen "Carefree Years"

We've heard it all before. The cliche that adolescence and high school are the "carefree years." The proponents of this myth could not be more wrong.

The teenage years are the most fraught with embarrassment, humiliation, angst, and misery. These are the years when anorexia, bulimia, bullying, drugs, underage drinking, acne, sexual confusion, etc, are everyday struggles for teens.

As a forty-something who has been having the time of his life since age 30, I can attest that the most carefree I have ever been is the present.

Perhaps married people look at their tortured lives and refer back to their single days as carefree years. If that's the case, I pity them.

In more wise societies, the teen years are seen as preparatory years where hard work and toil lead to lives of prosperity and wealth. All but the most savvy Americans believe that to be the case for their children, and we have a generation of poorly prepared "millennials" ruining workplaces the country over as proof.

So reject that myth. Impress upon your children that these are the days of hard work and delayed gratification. As much as my parents got on my nerves about this, I see now they were correct.

Would You Trust This Arrogant Nerd's Financial Advice?

Sometimes we Americans can allow our financial better judgment to be suspended by clever marketing, polished wall street analysts, and the seductive power of CNBC, CNNf, etc. It was not enough to endure the dot.com bubble from 1995-2001. Oh no, Americans listened to the same pinheads tell them to stay fully invested for the long term, and to diversify their portfolios over a wide variety of stock classes.

Those who fell for this nonsense are now paying the price for their misplaced trust.

I removed the greater portion of my stock holdings in 2007 in reaction to the felling of market overvalue. My reaction was private as I did not want to subject myself to the jeers of my peers. I have been vindicated, no doubt, by the market drop of 2008-2009.

The myth of "diversifying" over a wide variety of stock classes is not diversification AT ALL. I fell for this scam back in the late 1990's but then noticed that all stocks (even international ones) were highly correlated in trend. No variety of stock classes would have saved anyone in the current downturn!

My point of this piece is to urge you to spread your assets between US dollars in a reputable US credit union (not a bank); a Euro cash account in a country like Switzerland, Germany, or France; the US stock market (10 to 25 percent according to your time horizen); a municipal bond fund; and precious metals like gold and silver (via ETFs like GLD or SLV). This is the diversification.

I do believe we all should be dollar cost averaging into the US stock market at the present time, but we should be doing it moderately and with the intention to continue over the next several years.

US stocks will correct again and again. When the doom and gloom are heavy on CNBC, that is the time to take chunks of your wealth and bottom feed an S&P 500 or Wilshire 4500 fund. This is called contrarian investing and you will reap great rewards if you can purchase cheap shares when the pessimism is high.

Resist the nerds who want to be fully invested at all times so their fees can still be generated from your holdings. They are out for their interests, not yours. You've been warned.

American Things I Just Don't Get

The following concepts in Americana perplex me:

American Idol: Sadistic show meant to spark ridicule and scorn while rewarding a lucky few.

Birkenstocks: The absolute most ugly footwear ever made. Why would one ever want to be seen in public with them on?

Super Size fast food: Does anyone really need a pound of fries and a huge greasy triple burger for a meal of one sitting?

Oprah Winfrey: She is a cult figure now who uses her show to further feminist orthodoxy.

Tattoos: These are for narcissistic and short-term thinking people. Most regret getting them after a few months.

Lack of Geographical Knowledge: We seem to think that only the USA matters in the world. Learn where the Balkans, the Caucasus, the Falklands, and the Azores are for crying out loud!

The Marriage Strike Misnomer

Many in the men's rights movement have embraced the term "Marriage Strike" to describe American men's increased refusal to be duped into an arrangement that is socially, legally, and financially against their self-interests.

But the term is not a good one. A strike implies a refusal to work or perform for want of improved conditions. Implicit in the concept of strike is personal sacrifice on the part of the strikers who agree to do without the benefits of thing they are striking against. This is the fatal flaw of the term marriage strike.

American men are not sacrificing anything by forgoing marriage, although some think they are. To reject marriage is to insulate yourself from state-sponsored wealth transfer, lower standards of living due to higher expenses, and social emasculation due to women having more comparative power in a marriage.

Some cite the benefits of marriage to be companionship, sex, and the ability to raise children. All of these can be had as a bachelor, potentially in better quality. Marriage dooms you to an aging, waist-growing, individual female. Being unmarried permits you the freedom to seek sex and companionship from any woman you choose while having the resources to attract them.

I do concede that children ought to be raised with a mother and father present, but one can still do this in a live-in partnership arrangement without the oppressive collar of marriage around one's neck. Men can also choose to adopt or take in foster children if the feel the pangs of paternal instinct. So don't feel compelled to marry just because you want to have children.

Words have power, and the words marriage strike imply to women that wives are valuable when they are actually a detriment. It is better to calmly and passively proclaim that you choose to be a free, affluent, and happy real man unfazed by the beneficial marriage myth.

It's The Lack of Confidence, Stupid!

I just finished watching one of those weekend pundit shows with the 4 talking heads debating whether the economy needs a robust "stimulus plan" or more tax cuts. Folks, I think we are in trouble more than we realize when these so-called cognitive elites still don't get it.

People are not spending disposable income you idiots! Trillion dollar new spending from the federal government may employ a fraction of the unemployed (to include some illegals aliens), and a tax cut may enable a fraction more to save more, but neither of those strategies solve the core problem of getting people to spend, spend, spend.

Our elected officials are still in an intellectual holding pattern as to what to do. Perhaps years of decisions based on special interests created this mess.

The economy will turn around when there is more good news, and the doom and gloom reports decrease. Americans are terrified, and they are undoing years of stupid consumption. Eventually, the savings floodgates will gradually open and consumer spending will increase with the renewed prosperity. But until then, the beltway's insistence on arguing about supporting special interests under the guise of fixing the economy will only prolong our current malaise.

What Your Stocks Have to Return So You Can "Break Even."

Think of the current bear market in these terms. If your stocks go down by the down figure, the up figure is what you need to see in order to "break even." This is scary as we approach the 50% decline.

If you are down by: You need to see a return of the following to break even:

Down 5% Up 5.27%
Down 10% Up 11.1%
Down 20% Up 25%
Down 30% Up 43%
Down 40% Up 67%
Down 50% Up 100%
Down 60% Up 150%
Down 70% Up 233%
Down 80% Up 400%
Down 90% Up 900%
Down 95% Up 2000%

Anything down over 50% could take YEARS to earn back(if ever), so protect your nest eggs!

On the other hand, this is a silver lining for the contrarian investor like myself. Regardless of what people have been saying about dollar cost averaging, it works in protracted bear markets like this one. This is the best opportunity to invest since I have been investing (since 1997). Think like a contrarian; profit like a contrarian!