Note from Nick: Before I hand over to Bill, I want to make sure you’ve seen this. Labour’s Budget is set to be announced this month. And it’s no secret that taxes are set to rise – with inheritance tax very much up for plundering. Changes ahead could put your wealth at risk. That’s why at The Fleet Street Letter, our team want to help you leave your family a financial legacy, rather than a huge tax bill – before it’s too late. We’ve wrapped up our advice in one report, Eight Legal Ways to Sidestep Inheritance Tax – find out how to get your copy here.
Now, over to Bill…
In today’s issue:
- Who wants war this time?
- Worse than the Great Depression
- War and inflation forever
War.
Inflation.
Bubbles and boondoggles.
All require a little madness… suspending good taste and sound judgement… delaying the reckoning… going along with the flow — to Hell.
The Mirror:
Iran’s missile attack on Israel is ‘first step toward WW3’ as just one factor is preventing all-out war
Iran launched over 180 ballistic missiles toward targets in Tel Aviv and Jerusalem late Tuesday evening, with some striking buildings. Most failed to launch or were intercepted by the country’s Iron Dome defense system and by U.S. Navy destroyers stationed nearby.
NBC follows up:
Live updates: Israel sends more troops into Lebanon and vows Iran will pay for missile attack
Israel’s military said Wednesday it was sending new ground forces into southern Lebanon, as Iran warned the U.S. and its ally against retaliation for its ballistic missile attack.
What do you do? Buy Nvidia? “Defence” stocks? Gold? Find a cave somewhere?
So far this year, thanks to the Fed, the S&P is up 18%. But gold is up even more — almost 20%. Since 2021, the S&P has gained about 20%… while gold is up more than 30%. The feds can juice up the stock market, but they can’t control the value of the dollar. As stock prices go up, the economy slumps… and the dollar falls against gold.
That trend is likely to stay with us for many years… as the war drums beat louder, central banks cut rates, and debt needs to be inflated away.
Around the campfire today dance the familiar figures, Republican and Democrat… painted up and ready for (someone else) to die in battle.
Their blood is up. And amid the whooping and hollering there is no time to study the ledgers or consider the long-term implications. This is a time for action… a time to fight. A time to die. And a time to print!
In love, war, drugs, gambling, inflation and desserts — you count the costs later.
This week marks the anniversary of the Munich Conference. There will be “peace in our time,” said Neville Chamberlain, when he returned to London. The newspapers repeated it. Most people believed it.
But peace didn’t happen. Because both Germany and Italy had been taken over by people who didn’t want peace. They wanted war.
Today, 76 years later, the world has changed. Who wants war now?
America’s leading politicians believe they are heirs to Churchill, not Chamberlain. They think they have learned their lessons. No appeasement! No isolationism! Bombs away!
The BBC:
The country is lost’: Fear and uncertainty in Lebanon as Israel invades
Now that this has been confirmed, with what the Israeli military describes as a “limited, localised and targeted” operation, the fear is that this could be the start of something wider. History shows that it is easy for Israeli troops to enter Lebanon, but difficult for them to leave.
Just another killing spree? A limited regional war? Another step towards a more permanent West-vs.-East WWIII?
And the costs? We won’t know for years. But war is unpredictable; and hard to control. So are the costs. And money (and lives) is what the costs get counted in. The US military budget is already about two times larger (inflation adjusted) than it was under Jimmy Carter. And now, more money will be needed.
Debt goes up and up. And there is not much anyone can do about it. In the heat of battle, currencies are devalued. Consumer goods give way to military goods. And debt drags the whole economy down.
Since 2008, US debt has grown at the rate of $1 trillion per year, while GDP growth averaged only 1.8% per year — piddling, in other words.
Even during the Great Depression, growth came in at 1.9% per year.
The ‘30s Depression led to the ‘40s WWII. In depressions, people become desperate. They aim for solutions… but they hit residential apartment buildings. Could today’s depression be leading to WWIII… or war and inflation forever?
We don’t know.
But do you own gold, dear reader? We hope so.
Regards,
Bill Bonner
Contributing Editor, Fortune & Freedom
PS Note from Nick: As Bill says, we don’t know exactly what will happen. Which is why it is best to be as prepared as possible. My colleague John Butler aims to help his Southbank Wealth Advantage members do exactly that. His long-term wealth strategy is designed to help investors through the good times and the bad. Find out more and how you can join, right here.
