Exiled in San Martín

[Bill Bonner’s Diary]( Exiled in San Martín By Bill Bonner, Chairman, Bonner & Partners [Bill Bonner] SAN MARTIN, ARGENTINA – Hunker down. Keep your distance. Sit tight. Hit the pause button. We will return to the money world tomorrow. But, in short, it is evolving as expected. The bubble has developed a big hole. The feds are trying to plug it with fake money. Here is the latest from the Wall Street Journal: The Federal Reserve cut its benchmark interest rate to near zero and unleashed an aggressive set of additional moves aimed at stabilizing markets as the new coronavirus pushed the U.S. economy toward a recession. Too little, too late? Or quack medicine? Michael O’Rourke, chief market strategist at JonesTrading: They blew it. The Fed panicked and the market is spooked. The S&P 500 registered all-time highs less than a month ago and the Fed has expended all its conventional and unconventional tools. The key takeaway will be that they have truly expended all of their ammunition and this is the action of a central bank that is scared. In 2008, the mortgage industry had reached too far. The feds bailed it out with more cheap finance. Now, the problem is in travel, energy, retail, restaurants – nearly a third of the workforce. The feds can boost stock prices, but can they make someone book a cruise or hire more waiters? We don’t think so. More on what is likely to happen next, tomorrow. Recommended Link [Crypto Millionaire: “I Need You To See THIS Before March 18”]( [image]( Prepare for takeoff! On Wednesday, March 18, YOU get to fly private with Teeka Tiwari, the most trusted person in cryptocurrency. Your destination: The hidden epicenter of a millionaire-making phenomenon coming to crypto in 2020. It only happens once every four years. And it’s 100% guaranteed to occur. The last time it struck (in 2016), you could’ve turned $500 into $5 million… in 10 months after this phenomenon occurred. Spots for Teeka’s historic online event will fill fast. Register for free and grab your digital “boarding pass” while you still can. [Click here now]( -- Mortal Combat Meanwhile, your editor has a long history of lung trouble. Were he to get in a mortal combat with the C virus, he would put his money on the bug. Yet by dumb luck he has found a refuge so remote, but still so comfortable and so beautiful… …it’s as if he’d just been sentenced to three-months’ house arrest… but now he’s looking forward to it! Flights from America and Europe are now banned in Argentina. The country has a few cases already; it doesn’t want more. Here’s the notice from the U.S. Embassy: The U.S. Embassy in Buenos Aires strongly encourages all U.S. citizens to reconsider travel to Argentina and advises U.S. citizens with plans to depart Argentina to do so as soon as they can while commercial flights remain available. We arrived the day the ban was imposed. We spent two nights at a nearly-deserted hotel and then set off for our exile. “I don’t know if we’ll be able to get back home,” said an American woman at the hotel. She and her husband had come as tourists. But now, being a tourist has become a challenge. Flights are canceled. Events are postponed. Museums, theaters, and bars are closed. Recommended Link [100 Billion 5G iPhones Need This]( [image]( Apple is expected to release its long-awaited 5G iPhone on or around Sept. 22. But it’s not Apple’s stock I think will soar the highest. Instead, one company makes a tiny piece critical to 5G phones. And its shares could soar. This video gives you a sneak preview of this brand-new device. And why it could be the No. Tech Stock of 2020. [Click here now]( -- Turned Away Even here, in far-northwest Argentina, we intended to stop at a well-known restaurant for lunch. But we were turned away. “A French tourist showed signs of the virus,” explained a guard. “We had to close down.” Continuing on our way, we drove from Salta to Cafayate (the center of the wine business in the Calchaqui Valley), and then up the valley to the tiny settlement of San Martín. Rain had washed out the main road in places. We put on the 4x4 drive and plunged through the mud. But when we finally got to our farm, the river was too swollen to cross. Typically, when the water is high, we cross either on a tractor or on horseback. But on Friday, the water level was so high… and the current so swift… we could do neither. Fortunately, there is a rickety pedestrian bridge across the river about a mile downstream. It was a wreck when we bought the farm. It has been repaired, but still feels a little funky. [image]Your editor on the footbridge [image]Elizabeth crossing the river We walked over the bridge and put our luggage onto a wagon, which carried us up to the house. [image]Last leg of the trip Out of Control We bought the two farms at San Martín two years ago. They had been abandoned 20 years before. But it looked like the old irrigation canals could be cleaned out, and the fields cleared, so that we could plant alfalfa. Our cattle at Gualfin nearly starve to death in drought years. And since there is a rough trail over the mountain, from Gualfin to San Martín, we figured we could drive them down here in the winter months, where they would have more to eat. When they’re not here, we cut the hay and roll it up into “rollos” that we can truck up to Gualfin. So far, the plan seems to be working. We have about 300 acres of green grass down here… and the young steers that we sell are now twice as heavy as they used to be. San Martín also had a broken-down adobe house on it. We had no use for it, but it was too nice – an old colonial, with columns all around – to let go to ruin. So, we put a local crew on the case… giving minimal instruction. Labor is cheap down here; inflation has cut our dollar cost in half. And the materials are all local, too. Floors, walls, and roofs are all made of mud (terracotta on the floors). Posts and beams come from the trees we cut down. And most of the roof trestles were still usable. So, it seemed as though it would be a cheap and simple project to keep the place from falling down… But things have a way of getting out of control, especially when you’re not on the job site. One “might as well” turned into another “might as well.” And when we arrived on Friday, we found that they had rebuilt the old ruin into a delightful and even elegant place to live… Recommended Link [Robert Kiyosaki: “BOMBSHELL I learned from CPA Trump called the best of the best”]( [image]( Once you get your hands on this intelligence, you’ll call your accountant right away to tell him what you found. Some of this stuff may seem unbelievable… But everything is 100% legal. [Click here to see for yourself]( -- Charming Interlude “What a nice place to enjoy the end of the world,” said Elizabeth. It is as if we were just starting out in life. Our only furniture is a bed… and a grand piano, given to us by our lawyer. It took up so much space, his wife wanted to get rid of it. Talk about social distance! We are in a dry, sparsely-populated area. And we are on the far side of a river, with only a footbridge that most people are afraid to cross. Nobody is going to “drop over” for a visit. No postman delivers the mail. Domino’s Pizza… Amazon… Uber Eats – we’re out of range of them all. And we have no reason to leave. Here is where we fatten our calves. We grow onions, lettuce, potatoes, and beets on the farm. We have a spring for water. And we’ve brought down a stock of our own wine – enough to get us through a couple of months. No conferences. No coffees. No drinks. No PowerPoint presentations. No meetings. No cocktails. No tête-à-têtes. Nowhere to go. Nothing to do. What a charming interlude! Most of our life is spent getting and spending. But now, we can neither get nor spend. What do we do with ourselves? A Step Away From Eternity There’s something romantic about being condemned to a period of vacation… enforced idleness… a pause in the rush of life. It gives you time to listen… to think… to talk… to wonder… Like moments spent in a quiet graveyard… or on the edge of a cliff… you are only a step away from eternity. In The Decameron, 14th-century author Giovanni Boccaccio sets his tale in an abandoned villa in the countryside, where 10 young people have fled to escape the Black Death. To pass the time – this was well before TV or the internet – they told tales, some of them so racy that they needed to be scrubbed by translators. The classic film Casablanca is also set in a place where many people were forced to hide out or hold up… during WWII. Waiting for visas… for ship passage… for money – they passed the time at Rick’s Café American. It is there where American expatriate Rick Blaine says the famous line: “Of all the gin joints in all the towns in the world, and she walks into mine.” And now, here we are… waiting… and wondering how it will all turn out. Regards, [signature] Bill Like what you’re reading? Send your thoughts to feedback@bonnerandpartners.com. MARKET INSIGHT: OUR DOOM INDEX CALLED THE CRASH By Houston Molnar, Analyst, Bonner & Partners Less than one year after we raised our crash flag in April 2019, stocks have entered bear market territory. The chart below shows our Doom Index levels by quarter. We created the Doom Index in 2017 to sound the alarm ahead of the next crisis. It tracks 11 key indicators to detect when there’s stress in the economy and markets are overheating. The red bars below indicate a reading of 8 or higher. That’s when we raised our tattered crash flag and told investors it’s time to prepare for a crash. [Chart] Since we raised the crash flag last year, the S&P 500 is down 15%. And from the peak set one month ago, the S&P 500 is down 29%. The crash flag continues to fly high above the Bonner & Partners headquarters, signaling greater downside ahead. If you haven’t yet, we urge you to revisit your asset allocation strategy. Maintaining a diversified portfolio helps you manage risk during turbulent times, like we are seeing today. – Houston Molnar --------------------------------------------------------------- Maria’s Note: Maria Bonventura here, managing editor of the Diary. If you’re a paid-up subscriber of Bill’s monthly newsletter, The Bonner-Denning Letter, you can [see his latest asset allocation guide in full here](. Bill and coauthor Dan Denning break down the five asset classes that belong in every investor’s portfolio today… what percentage to devote to each… and why. If you don’t have a subscription to The Bonner-Denning Letter yet, [read on here](. Dan explains why it’s not too late to protect, and even grow, your wealth in the bigger crisis he and Bill see coming. MAILBAG In today’s mailbag, Dear Readers weigh in on criticizing the president and analyze his performance in the White House, after Melvin wrote in and said: Bill, why do you have to be so vocal on your hatred for our president? You offer some interesting points but you have so “poisoned the well” with your negative thoughts of Trump that much of what you say is compromised by your nastiness… I have finally tired of the constant cynic! Your readers laud you for it and say it’s healthy to be cynical of your government. They say Trump can’t drain the swamp because he is the swamp. Well, after years of following you I have had enough pessimism to last the rest of my life!! I like President Trump and recognize his faults but his good far outweighs them, and I see a positivity in him that is certainly missing here and in his enemies! – Millie H. It defies belief that there are Dear Readers who are so blind and brainwashed by Trump’s BS that they criticize Bill for occasionally shining a light on the moronic and self-serving antics of the narcissistic wanna-be dictator now sitting in the Oval Office. If anything, Bill takes it far too easy on him! – Dale A. Mr. Bonner is right to criticize Trump. If one is to be honest and fair, one must criticize all wrongs equally. I’ve seen Mr. Bonner criticize the left as often as he does Mr. Trump. Readers who think Mr. Bonner is being unfair to Trump are not paying attention. Mr. Trump is not a conservative – he is whatever he thinks will benefit him at the time. The Republican party as we have known it exists no longer – it has become a cult of personality for Trump. Leftists like Sanders, Warren, the “squad,” etc. are just as wrong as Trump is. – Keith J. I am a huge fan of Mr. Bonner’s newsletter. He keeps us informed with a clear and reasoned analysis of the day’s events as well as the much bigger historical truths. His point of view is inevitably both thoughtful and entertaining. Perhaps Mr. Bonner’s admonitions are not so likely to appeal to the magical thinkers who choose to believe in never-ending riches created out of thin air. However I suspect Mr. Bonner would not have fallen for the debacle of the Dutch Tulip mania that so many others did. Thank you for your thoughts, views, opinions, and solid insights into our own nature (and our future lest we not wise up soon.) – Chris S. Does President Trump’s good outweigh his faults, as Millie says? Has the Republican party become a “cult of personality for Trump” as Keith believes? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… [“The Man Who Refused $100 Million”]( Legendary stock picker Teeka Tiwari – who picked Apple way back in 2003… and Bitcoin in 2016 – was recently asked to manage $100 million… But he refused. Why? Because he recently discovered what he believed will be [his single biggest investment winner]( A novel technology (not 5G!) the World Economic Forum believes will grow 295,762% over the next 7 years… And Teeka wants “the average” guy to get a shot, too. “This shouldn’t stay in the hands of the elite only,” says Tiwari. 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