11/26/10 Baltimore, Maryland – This week, Americans sit down in their sturdy chairs to enjoy a national feast. Businesses are shut down. Congress is adjourned. For one day at least, citizens can enjoy their peace.
In every hamlet, urban ghetto and rank suburb they gather, sacrificing turkeys to their deities, whoever they might be. Before they tuck in, they bow their heads and give thanks. But for what?
There have always been two parts to the Thanksgiving holiday – one sincere and personal, the other national, fraudulent and delusional.
One of the first Thanksgivings took place in 1623. The colony at Plymouth Rock had barely survived. The supply ships from England had not brought enough food. Harvests were poor. People died of hunger, cold, disease and malnutrition. Like all central planners, Governor William Bradford blamed it on the weather. Then, when communal farming was abandoned, what luck, the weather improved:
“The Lord sent them such seasonable showers, with interchange of fair warm weather as, through His blessing, caused a fruitful and liberal harvest…for which they blessed God. And the effect of their particular [private] planting was well seen, for all had…pretty well…so as any general want or famine had not been amongst them since to this day.”
Thanksgiving wasn’t made a national holiday until 1863. Then, it celebrated not the success of the American experiment, but the end of it.
Imagine a battle today in which 500,000 American soldiers died – almost as many as died in WWI and WWII combined. As a percentage of population that was the death toll at Gettysburg. That was what Lincoln chose to follow with a day of thanksgiving. Thanksgiving for what?
“…peace has been preserved with all nations, order has been maintained, the laws have been respected and obeyed, and harmony has prevailed everywhere [EXCEPT IN THE THEATRE OF MILITARY CONFLICT].” Emphasis added…. [And we] “commend to his tender care all those who have become widows, orphans, mourners or sufferers in the lamentable civil strife in which we are unavoidably engaged.”
Lincoln should have proclaimed a day of mourning. The battle and the War Between the States were not glorious achievements. They were national disasters. The fondest hope of the founders – that people could decide for themselves what kind of government they would have – died on the battlefield. But the nation’s course was set.
America may be in the New World, but it has one of the oldest governments on the planet. France, Italy, Germany, India, China – all have newer, fresher governments, as much as 200 years younger. Newer economies bustle with more energy and money too. America appears near exhaustion by comparison. China and India eagerly court the future; America seems desperate to hold onto the past. Her armies are stretched over the globe, trying to prevent anything really new from coming about. At home, her politicians and economists try to prevent anything old from going away. At great cost, banks and businesses, as well as the old timers themselves, are propped up…supported…and sustained.
Still, the typical American has much reason for gratitude. His house is bigger and gaudier than ever before. His car is a plush monster. He has more than enough to eat. He has gadgets and gizmos galore – including a machine that blows the autumn leaves off his asphalted driveway. And behind him is still the mightiest government the world has ever seen – ready to protect his vital interests in the Hindu Kush as well as Wall Street.
Yet, all his blessings seem to come with fuses attached. If the winter is severe, he may not be able to heat his palace. If the price of gasoline rises, driving his land barge could ruin him. If he looks in the bathroom mirror, he might get depressed. Our own polling tells us that 1 in 10 households will give thanks for their government this week. They should reconsider. Didn’t the federal government tempt them to buy a house by giving him tax breaks and subsidizing mortgage rates? Didn’t it egg them on to spend money by reducing the value of the dollar by 97% over the last 97 years? Didn’t the feds stymie every attempt to correct their over-consumption by cheapening credit and stimulating consumption even more? And isn’t it the government that has run up a net national “finance gap” of more than $200 trillion…so that each newborn American faces a burden of $700,000 in debt even before his first diaper has been changed?
And now, the government practically mocks him in an outrageous way. Ever since an amateur terrorist set his underwear on fire, the airport polizei are determined that a man should have his genitals checked before he boards an airplane. Thank god the would-be terrorist didn’t tuck his explosives into a body cavity!
It is fascinating from an ethnological point of view; the poor American has been led along, put upon and knocked around so much. Foreigners must look on in amazement, wondering how much abuse he’ll take. And now, his head bent over…the “butterball” turkey waiting for him…the American must feel the weight of his blessings. He is broke. He may lose his job. His country is in decline, headed for bankruptcy and his leaders are incompetents and scoundrels. To make matters worse, his central bank is keen to commit a new act of sabotage – intentionally trying to undermine his savings…his labor…and his standard of living.
Like Lincoln, he can say to himself…except for that…everything is okay…
Regards,
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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AH HA BILL!! I have been waiting patiently for you to once again trot out your scary story about how the government had hurt people by by reducing the value of the dollar by 97% over the last 97 year.
Today you repeated that. So I feel free to repeat my rebuttal from October 16.
Here it is… again…
Bill Bonner laments that since 1914 the American dollar has lost 95% of its value.
About this he constantly whines, belly-aches, and flaps his gums (or flaps his typing fingers). Often he does all three at once, which is quite a skill in itself.
But just how bad is a 95% loss of value in the dollar in 96 years? It sounds omnious, but how about a little math to illustrate it?
You will notice it has not stopped Bill Bonner from getting rich. He constantly jets between Baltimore, Paris, Florida and Argentina. He has a family office in Ireland to look after all his loot. He’s done okay by the old paper greenback, in spite of inflation and (horror of horrors) no Gold Standard all his working life.
Now let’s calculate how much inflation it takes for it to cost today a $1.00 what cost a nickle in 1914. (A 95% loss in purchasing power)
The answer is 3.17% inflation per year on average.
Try it, $0.05 times 1.0317 to the power 96 = $1.00
Now how harmful is that loss in purchasing power?
Well consider if you have money you will likely in short order a) spend it or b) invest it to make a return.
Imagine a guy with $1000 in 1914 invests money in a trust fund to be given to say his great grandson 100 years later.
Well as long as that money returned at least 3.17% on average return after all costs and taxes on the investment then that $1000 in purchasing power is still intact today in 2010.
If that $1000 earned 5% on average per year over 96 years (not a hard thing to do) it is now worth $108,186 in nominal dollars and about 5% of that or $5409 in 1914 dollars. So far it does not look like this terrible 3.17% annual inflation, this teriible 95% loss in purchasing power had done any great harm.
Now imagine that the $1000 from 1914 has managed to earn 10% per year (a stretch but do-able). Now it would be worth $9.4 million in nominal dollars in 2010 or about $470,000 in 1914 dollars. Oh, the horrors!! (Purchaing power up 470 fold!!)
The point is my friends that inflation is not bad as long as it is moderate and especially as long as investments return more than inflation.
That is the math folks…
Only if old grandpa was dumb enough to hide his $1000 in a time capsule in 1914 has inflation been a problem.
Now of course hyper-inflation is a different story and is ruinous.
But to suggest, as some of you will, that 3.17% inflation is runious because hyper inflation is ruinous is equivalent to suggesting that eating one candy bar is death just because perhaps eating a 100 per day for years on end would be.
And so Bill you can stop whining, belly aching and flapping those typing fingers and calm down. A little inflation is not such a bad thing. There, there, Bill, you can go back to counting your loot now. Rest assured Bill, your money will increase in purchasing power over the decades, inflation or not, as long as it is invested properly.
That’s pretty much how it seems to me.
Bill, you often say in affect that the world is awash in debt.
But one man’s debt is another man’s savings
Therefore the world must also be awash in savings.
And… since interest rates are at reocrd lows, it appears that the real excess is in the savings side.
There are so many people, countries, and institutions, with savings that the price to borrow their money has been driven down to record lows.
Reckon on that Bill.
They are only savings if the borrower can repay them….
Do you suspect, in the aggregate, that those borrowed savings that were often frittered away for rank consumption, can be returned to those who lent them?
Neither do I. A pile of IOUs does not a nest egg make.
I, for one, am thankful I have not slit my wrists in despair.
There weren’t 500,000 engaged at Gettysburg. You might be thinking of the total dead on both sides for the entire Civil War.
By and large, in the end, the international policy of expansionary has only nurtured, has only fed, has only benefited the ZOMBIES. Whether homegrown zombies or foreign zombies are the only and sole beneficiaries. Beware, zombies are the most dangerous animals on earth who could wreck the entire solar system.
Local or foreign angels do not share a penny of the printer based economic prowess, not an iota of it.
sterling-
He didn’t say 500k were engaged at G. Read it more slowly this time.
What’s this about 1863 being the first official Thanksgiving? Didn’t George Washington proclaim November 26, 1789 to be “A DAY OF PUBLICK THANKSGIVING AND PRAYER”. Try Googling “WHEREAS it is the duty of all nations to acknowledge the providence of Almighty God…”.
His proclamation was a great deal better than Lincoln’s, and I agree that Lincoln was a bastard. I heard only today that a new book out explains that it’s only because of a freaky “Princess Diana”-type reaction to his corpse being transported around the country after his death that he became revered. He was hardly revered in his own time, and those were the folks who actually knew him.
…” Pumpkin head refers to the earliest of American hair styles. The barber supposedly put a pumpkin shell over the head of a New England colonist and cut along the shell’s edges to trim the hair into the proper Puritan shape”…we’ve come a long way, baby!…
Bill for heaven’s sake man get back on your meds! Governments have screwed people over for years. Put some of your focus on your family and friends. The DR has done a lot for people and saved a lot of them from doing dumb things. But it will not help any of us unless you step a bit back from the edge. You and folks like you can not change the whole situation but you can open the eyes of some of us too busy to follow all of this every day. I appreciate the guidance and I love the Guru and you. Maybe turn off the news for a few days?
REPLY TO INVESTORS FRIEND…
YOU STATE ON YOUR WEBSITE THAT,
“Since the beginning of 2000, our Stock Picks have turned $100,000 into substantially more than $300,000 dollars with no further investments. And this occurred despite two market crashes in that time. This performance wallops the market.
Bill said in 2000, “buy gold”……Let’s see if I had bought $100,000 worth of gold in 2000 would I have been better off?
Keep on Reckon…….Bill
When the time comes the US government will default on its debt. Any investor who lends money to the government is begging to lose it. The big investors are making a fortune shorting the debt of Greece, Ireland etc. The Germans are being plundered by others as they try to save the Euro. The US sends money to the IMF so we pay too. Eventually, taxpayers in Germany will end the Euro as their life savings melt away.
Japan will fall next with 200% debt to GDP.
The rotten combination of military interventions and nanny state will then blow up the American dollar. We should default on our dollar debts and return to gold.
All the time I read the DR is about reckoning what others are doing wrong. Te Feds, the bankers, the CEOs, etc. But, Ive never read a proposal of what should be done instead.
Bill´s posture is that the market is going to correct itself, but that doesnt solve the problem if society keeps in the same economic model in which we have lived since 1945.
If the correction comes, and it shure will, the whole thing will happen again to the grandchildren.
Thats the only thing I dont like about Bill, he is not proposing anything to change the economic model. Creative destruction is not the solution.
There is a solution.
Tell us the solution, Bernardo!
@Investors Friend:
1) Do you understand the concept of Bankruptcy?
2) Do you pay Bill to pimp your website on his?
Debt is Debt.
But Paul, you did not buy $100,000 of Gold in 2000 did you?
I left my (about 4100,000) money in stocks in 2000 and more than tripled it.
You are talking shoulda, woulda coulda. I dida.
Bill is excellent I just asked him to turn his wisdom to the FACT that the world is awash in savings.
Not-harry… actually I did pay Bill some money sort of. I attended an AGORA event in fall 2006 in Del Ray Beach Florida. Bill was there along with his son Will bot as presenters. And on this Site I give more than I get. What do you contribute?