Bill Bonner

We’re not getting any older. Or, are we?

Yes, dear reader, it is all coming together…and falling apart.

First, this is a quiet time in the markets. The Dow barely moved yesterday. Gold, however, fell $10 to close under $1,600.

You know the drill. Sell stocks on rallies. Buy gold on dips. This formula has worked beautifully for the last 12 years. We don’t see any reason to give it up. Has anything important changed? Is there a new man at the Fed who is determined to save the dollar and the bond market? Has Congress suddenly decided to stop spending more than it takes in?

If so, we haven’t heard about it.

And so what if gold falls to 1,400? Or 1,200? You know what we call that. A buying opportunity!

But a lot of people don’t agree with us — thank God. They think gold has made its big move. They think we’re back in 1980…looking ahead to another big bull market in stocks and another big bear market in gold.

Not that there aren’t similarities. Let’s see…similarities…hmmm…hmmm…

Oh yes. The Fed chief then and the Fed chief now both walk on two legs!

But seriously, as Warren Buffett says, if you’re in a poker game and you can’t identify the patsy, you’re it. These people who see parallels between 1980 and 2011…who expect a recovery…and a boom…they must be the patsies.

If they’re not, we are. They are buying stocks and selling gold. We’re doing the opposite.

But you know something, dear reader… You know what we really think…? We consulted the Mayan calendar. It began on August 11, 3014 BC. And it ends…you guessed it…in 2012. And you know what that means? We can stop putting on seat belts. And stop worrying about M-2. Or M-1. Or any other M.

We mean, what’s the point…with the end of time coming and all?

And we can stop taking those nutritional supplements. Instead, we’re going to have an extra drink. What harm can it do? After all, if the Mayans are right, we’re not getting any older.

By the way…we’ve all heard of how Mayer Amschel Rothschild built his banking empire. What we don’t hear much about is how his wife, Gutle, did the hard work — preparing her children for the challenge ahead. We know now that any fool can run a bank…it’s almost a job requirement. But not any woman can build a team of children who are capable of running a banking empire.

Gutle outlived her husband. Despite the family’s great wealth, she lived all her life in the same tiny house in the Frankfurt Judengasse (Jewish alley) where she and Mayer had started out.

When she was in her 90s she consulted a doctor.

“What do you expect,” he said to her. “I can’t make you any younger.”

“You misunderstand, Herr Doctor,” she replied. “I want to be older.”

We think gold has further to fall. We also think bonds have further to rise. And we think this Japan-like slump has further to run.

Here’s something interesting. We have been predicting that the US would “turn Japanese” for nearly 10 years. Maybe more. Many were — and are — the parallels between the US and Japan. But one thing that never seemed to line up was the population trend. The Japanese are getting older…and fewer. Americans are still relatively young…and the population is still growing.

But wait. What’s this? The latest census data tells us that immigration in the US has fallen to a 20-year low…and population growth has slowed to 0.7% per year — the lowest level since before the Baby Boom generation was born.

Maybe we are turning Japanese after all.


Bill Bonner
for The Daily Reckoning

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success in numerous industries. His unique writing style, philanthropic undertakings and preservationist activities have been recognized by some of America's most respected authorities. With his friend and colleague Addison Wiggin, he co-founded The Daily Reckoning in 1999, and together they co-wrote the New York Times best-selling books Financial Reckoning Day and Empire of Debt. His other works include Mobs, Messiahs and Markets (with Lila Rajiva), Dice Have No Memory, and most recently, Hormegeddon: How Too Much of a Good Thing Leads to Disaster. His most recent project is The Bill Bonner Letter.

  • SupremeLeader

    Are we going to have the long-awaited war in 2012? I believe so, and a temporary jump in gold price.

  • Mark H

    I am guessing you are kidding, but don’t buy into the Mayan world-is-ending prophecy. Most serious students of Mayan language and history, and there aren’t that many of them, believe the Mayan calendar end in 2012 is not at all synonymous with the Mayans believing the world would end in 2012. In fact, the Mayans expected life to go on, too. We have enough to be worried about in 2012 without bringing false Mayan prophecies into the discussion, I think you’d agree.

  • Delmar Jackson

    I was not aware we were at 20 year lows for immigration, last time I checked with numbersusa we were still handing out clsoe to 100,000 green cards a month in the midst of very high unemployment.

  • John

    I did a little research Bill and it turns out that the Mayan calendar ends in 2012 because the Mayan government went bust and couldn’t continue to send out paychecks to the government astrologers. It seems the Mayan Empire was loaded with zombies also.

  • Model T

    I asked a stonemason, and he said the Mayan calendar ends in 2012 because the Mayan craftsman doing the carving probably ran out of room.

  • The InvestorsFriend

    Bill has apparently been selling stocks on rallies and buying Gold on dips for 12 years now.

    Just how many freakin’ stocks does dis the man start out with? Or have there beemn too few rallies.

    Bill conveniently forgets that is trade of THIS decade was to buy Japanese stocks and sell Japanese bonds. He forgot that trade as soon as he announced it.

  • The InvestorsFriend


    See for yourself, it was buy japanese stocks, sell U.S treasures

    I believe a few days later he modified it to sell Jampanes treasuries, either way no Gold involved.

  • The InvestorsFriend

    ‘Dar’s GOLD in ‘dem ‘dar Stocks! (hills?)

  • JMR

    If I’m not mistaken, Bill is not comparing today’s US economy to today’s Japaneese economy (where the forecast may or may not be good for Japaneese stocks), but Bill is comparing today’s US economy to the Japaneese economy of the 1990’s. Maybe it didn’t go without saying that that was the comparison he was refering to when he started out by saying that some were comparing today’s US economy with the US economy of the early 1980’s

  • The InvestorsFriend

    Buy Japanese (they are hard workers), Sell Americans? (But to whom?)

  • Bill B. Bonner

    Shawn, veuillez cesser de prendre des montants doubles de la médication. Vérifier votre orthographe aussi.

  • rico

    If the Mayans were so smart how come they didn’t know about their own end.

  • Bob

    I think ‘turning japanese’ has an alternate meaning.

  • Bruce Walker

    The sad part about the decline of the Mayan Empire, they were replaced by the Aztecs who were not nearly as civilized. Which just goes to show, civilization does go backwards at times, oftern for centuries at a time.

  • Borealis

    2012 promises to be a good DR vintage considering BB’s year end articles. Was Gutle also responsible for the Lafite Rothschild branch of the family? 2010 LR Bordeaux Future asking price is currently at $1,450/btl, 14% higher than 2009 ($1,275/btl), 66% higher than 2005 ($875/btl), in my highly taxed part of the world. LR does not seem affected by the deflationary environment, until Asians stop buying perhaps.

  • gman

    “Americans are still relatively young…and the population is still growing.”

    the number of warm bodies is increasing, oh yeah. the number of americans … is not.

  • Chris
  • Boris Badenoff

    Wake me up when someone finally figures out what gold (or silver) are going to do……

  • Dave M

    When JP Morgan said to invest in gold I knew something was going on.

    Now Sorros says gold is on the decline…to me that is a signal to buy.

    Who knows, maybe cash [even fiat] is still King for now.

  • CT

    The Mayans didn’t end. There are still Mayans in Mexico, and Guatemala. The golden age of Mayan culture did end as this culture is ending. Over population, and wars over resources does it every time.

  • Benton H Marder

    The Mayan Great Cycle, which transitions on 22 December 2012, does not necessarily imply the end of the world. It can imply a magnetic polar shift or, in worst case, a geologic polar shift. Back in their day, a magnetic polar shift would not signify what it could nowadays. A geologic polar shift, however, implies very bad bleep going down. Not very nice.

  • DRS

    UK debt is 1000% of GDP and UK financial debt is 600% of GDP.

    Why is no one discussing this regarding Europe?

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