Why GDP is largely fraudulentâ¦
â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â June 11, 2024 Wealth Chimera âWealth, like happiness, is never attained when sought after directly. It comes as a by-product of providing useful service.â â Henry Ford [Special Reminder: In case you missed [our recent announcement]( The Essential Investor has merged with legacy contributors to Agora Financial. The new, larger, more inclusive project is called The Grey Swan Investment Fraternity. If youâre interested in the scope and benefits of our new endeavor, please see what prompted us to merge [here](. If youâve been a member of The Essential Investor, please keep an eye out for your new benefits.] Dear Reader, June 11, 2024 â Tomorrow, weâre engaging in a largely Quixotic endeavor. Weâve written a letter to members of Congress and the White House regarding the exploding national debt. Itâs only one page. Weâve dumbed it down as much as we could. Weâre sending the letter along with a copy [the third edition of The Empire of Debt](. Youâll remember, Cervanteâs character Don Quixote was a goofy old fool in the middle ages who tried to fight windmills because he thought they were giants. Among the most famous scenes in all of literature, Quixote has come to symbolize futile efforts of a once noble knight. Weâre including a copy for the Commander-In-Chief at the White House, who has made it a lifelong career trying to control Americaâs empire of debt and the people who happen to live in it. Hereâs the thing. Members of Congress and the occupants of 1600 Pennsylvania Ave. are required by law to accept public mail, messages from wee plebes. Most copies of the book will be formally declared âgiftsâ which they are obligated to notice, but not read. Some will end up in state libraries. Most others in a waste bin, we suspect. At this point, our practical goal is for entertainment purposes. But maybe some ambitious young Congressional Freshman will use it as a prop in a press conference or something. Who knows? Meh. Itâs unlikely. Fiscal responsibility is a barren concept for both major parties. The media doesnât help. In this election year, theyâre too busy trying to convince (themselves) that the economy is doing great⦠better than what normal folks are experiencing in their own lives. In todayâs guest essay Bill Bonner and Tom Dyson at Bonner Private Research look at how much of GDP â the standard measure of national wealth â is based on little more than misleading numbers ⦠if not âoutright liesâ. Enjoy ~~ Addison CONTINUED BELOW... --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- >>SPONSORED<< [American Retirees: Watch this Video
[Before the Govt. Bans It]]( [Turn On Your Images.]( The U.S. government, according to retirement whistleblower Bob Carlson, is coming after your retirement money. It's all because of a crippling new law The Wall Street Journal reports, â...upends 20 years of retirement planning and sticks it to the middle class.â Find out what's at stake for your retirement savings here in Bob Carlson's shocking new video â along with his #1 strategy, and what you can still do about it. [GO HERE FOR FREE ACCESS.]( --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- CONTINUED... Wealth Chimera [Bill Bonner and Tom Dyson, Bonner Private Research]( The subject is nothing. Zero. The thing that isnât a thing. If you have a little of it, you accept it for what it is. Like an empty wallet, you know it wonât take you very far. But what if you have a lot of it? Fifty trillion dollarsâ worth, for example. Then, you must feel a little like Donald Trump when he was down on his luck in the early â90s. He was reportedly in the hole by $100 million. But he was proud of it. The banks would never lend so much to a poor guy. Only a very rich man could be that poor. Americaâs great wealth is a source of pride too. But as we discovered, much of its proud tower is rickety, hollow or simply missing. Often, there is nothing where there should be something. And since a third of Americans live âhand to mouth,â weâre going to see what happens when the mouth realizes that the hand is empty. We have stocks that are not worth a fraction of their prices. We have âmemeâ and âzombieâ companies that are not worth anything at all. They may have negative value, in fact, since they take valuable resources and waste them. Money Good Goes Poof We have a mountain of debt... nearly $100 trillion of it... every penny of which is counted as an âassetâ on the creditorsâ balance sheets. Probably only about half of it is âmoney good.â The rest may go âpoofâ in the credit cycleâs downturn. The safest part of this pile is US Treasury bonds. And yet, in gold terms, weâve seen that they lost 30% of their value in the last four years... and 75% since 1999. And we have a GDP that is largely fraudulent... with as much as half of it directed, controlled or be-muddled by government, rendering it unfit for human consumption. Today, weâre going to look at more âwealthâ that isnât there â including $3 trillion of âghost money,â the strangest kind of nothing. But weâll begin with something simpler... Itâs not just Treasury bonds that pretend to have value they donât actually have. All across the fixed-return world, there are unrecognized losses and make-believe wealth. Hereâs the FDIC notice: Unrealized losses on available-for-sale and held-to-maturity securities increased by $39 billion to $517 billion in the first quarter.â¯Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase. This is the ninth straight quarter of unusually high unrealized losses since the Federal Reserve began to raise interest rates in first quarter 2022.⯠Banks were required to hold US Treasury bonds as âreserves.â That, they were told, would make them more antifragile. But it did just the opposite. Treasury bonds proved to be a terrible form of âreserve.â They went down, in nominal terms, by about 20% since 2020. In gold terms, they lost half again as much. The banks also had plenty of private debt that went bad. They lent heavily to real estate developers and speculators, for example. But now, commercial real estate is not worth what it was a few years ago. People donât go to the office as much. Employers need less space. And many speculators in commercial property deals are unable to repay. In addition to the loan losses, there are the losses on the collateral itself. Green Street reports that the âall-property commercial indexâ is down more than 20% since 2021. And hereâs yet another big category of fake money â crypto. The total market value of crypto is now approaching its all-time high, at about $3 trillion. That is $3 trillion worth of âmoney,â about the same value as Nvidia. But Nvidia makes something... and earns a profit. What does crypto produce? It boasts $3 trillion worth of new purchasing power... but where does it come from? How can you discount a stream of earnings when there are no earnings at all? âItâs hard to wrap your head around,â say the English. Crypto may be valuable. Or not. In a few years, it could even be more valuable than it is now. But where is the âthereâ that should be there? Or is crypto just a âghostâ of real wealth? It is illegal to counterfeit dollars. But not to create your own crypto currency. Nobody knows who really started Bitcoin. But now, the theory and the algorithmic formula are freely available. And as far as we can tell it costs little or nothing to create a billion new units of an entirely new crypto. Then, what will you have? Another âassetâ with no corresponding real world wealth? Fiction... fraud... or fantasy? Who knows? Crypto brought no new real wealth to the party with it. So, every dollarâs worth of it can only be valuable if it can take a dollarâs worth of something away from other assets. Or, to put it another way, the more ârealâ the crypto wealth becomes, the more of an illusion other forms of wealth must be; if there is $3 trillion of crypto wealth, $3 trillion of other wealth must vanish. Everywhere we look â stocks, bonds, property, crypto â much of the wealth we see is a chimera. Stay tuned⦠~~ [Bill Bonner and Tom Dyson, Bonner Private Research]( So it goes, Addison Wiggin, The Wiggin Sessions P.S. (How did we get here? An alternative view of the financial, economic, and political history of the United States from [Demise of the Dollar]( through [Financial Reckoning Day]( and on to [Empire of Debt]( all three books are available in their third post-pandemic editions.) (Or⦠simply pre-order [Empire of Debt: We Came, We Saw, We Borrowed]( now available at [Amazon]( and[Barnes & Noble]( or if you prefer one of these sites:[Bookshop.org]( [Books-A-Million]( or [Target]( Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com The Daily Missive from The Wiggin Sessions is committed to protecting and respecting your privacy. We do not rent or share your email address. 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