Bill Bonner – Bill Bonner’s Diary (United States) –
ÎLE D’YEU, FRANCE – We are spending a couple of days with friends out on a tiny and charming island in the Atlantic, Île d’Yeu.
We took the ferry from the Fromentine harbor, near the city of Nantes, on Sunday.
Since then, we’ve been enjoying the salt-soaked air.
The old castle on Île d’Yeu
The castle you see in the photo was built in the 14th century and attacked many times – by Spaniards, Arabs, and English pirates. But locals claim it was never taken by force.
The engineers who built it were either geniuses, lucky, or both.
“In World War II, it was used by the Germans,” explained a friend.
“The Nazis were convinced that the Allies would try to land near here on the mainland. So they put thousands of troops on the island with long-range artillery.
“It was probably the best assignment any German soldier ever had. It’s a tiny island. And nothing happened. There was no resistance here. There was nothing much to do. The D-Day landing happened in Normandy, hundreds of miles away.
“After spending the war here… fishing, drinking, taking in the sun on warm days… the German troops got on boats and went back to Germany.
“And the fortress kept its reputation as impregnable.”
Meanwhile, back in the U.S.…
Business revenues (sales) are becalmed… growing at less than 1% a year over the past 10 years. And that’s before you account for inflation!
And business profits are going nowhere. They’re rising at a rate of about 2% a year… or roughly equal to the rate of inflation.
Household incomes and hourly wages – though subject to a lot of fudging – are dead in the water, too.
Officially, they are now back to where they were at the end of the last century.
But for some segments of the population – men with no college education – the situation is catastrophic; they’ve lost real income for the last 50 years.
A dead man lies immobile for a long time. But a debt-fueled economy cannot even sit down. It is inherently unstable. It must move forward… or collapse.
Consumers spend money now they hope to earn later on. The feds, too, promise benefits they can afford only if the economy – and tax revenues with it – grows fast enough.
Over the next 10 years, the U.S. government is on course to spend $10 trillion it doesn’t have. It has also committed to a further $80 trillion in entitlements for which it has no known source.
Only growth can save it.
But like a bicycle that has slipped its chain, you can pedal as hard as you like; you still won’t get anywhere. The only thing that may help the economy now is a major tax reform.
But that is almost impossible…
Strutting and Squawking
President Trump, elected by Republicans but now charting his own course, teams up with the Democrats on important issues.
There is no way Democratic Deep State pols are going to vote to cut one of their major sources of funding.
“What I admire about Mr. Trump,” we told our friends here on the island, “is that he understood – instinctively, perhaps – that he didn’t need to be tied to any party, policies, or programs.
“The details are too complex and unknowable. Are we fighting the Sunnis or the Shiites? Who can remember? And who knows what is on page 997 of the Obamacare act?
“And what difference does it make? The important decisions are made by the entrenched Deep State insiders. The president and the voters don’t have much effect on them.”
The military junta – Generals Mattis, McMaster, and Kelly – control foreign policy. And a sordid cabal of Democrats and Republicans, cronies and zombies, controls domestic spending.
All squawk and strut shamelessly about monuments, transgender bathrooms, racism, immigration, and other symbolic issues.
Fans in the cheap seats take sides. They are red. Or they are blue. They are for Trump. Or they are against him.
It scarcely matters. The bicycle slows. Soon, it will fall over.