How the Deep State Squeezed America’s Wealth

Nick’s Note: It’s difficult for the little guy to strike it rich in today’s rigged economy. That’s why we spend hundreds of man-hours in the Daily researching ideas that can help our readers make money despite Wall Street’s shenanigans.

In today’s essay, though, we wanted to identify who’s doing the rigging. That’s why we turn to longtime PBRG friend Bill Bonner, who fingers the suspect…

By Bill Bonner, Chairman, Bonner & Partners

Salvator Mundi, said to be by Leonardo da Vinci, is the world’s most expensive painting.

On November 15, at auction, each square inch was valued at nearly $1 million—including the bummed-up, restored, and damaged parts.

The painting may not be da Vinci’s work. Or perhaps, since it has been so heavily doctored up, little remains of his work. And whoever’s work it was must have been having a bad day.

And yet, it sold for over $450 million (including auction-house charges)—a lot of money for such a depressing work of art.

Donald Trump as da Vinci’s Salvator Mundi

The question on the table: Why?

But since we don’t know the answer to that question, we’ll answer another one: How come so many people have so much money?

Made in the Middle

The latest GOP “tax reform” proposals raise questions, too.

Though billed as a “middle-class tax cut,” the middle class gets almost nothing from the proposed plan.

Instead, almost all the benefits go to: (1) business owners, and (2) the rich.

And since the feds are unwilling to cut spending, the middle class ends up with about $2.2 trillion of extra debt, which it will have to reckon with eventually.

We bring up the tax cut because we think it helps explain the painting. Not for nothing are Republicans and the modern Salvator Himself, Donald J. Trump, setting up the middle class for a huge bamboozle.

Our recent train ride—the Acela Express from Baltimore to New York—was subsidized by taxpayers from all over the country.

The train runs from one end of today’s modern economy to the other. It goes from Washington, D.C.—the center of politics—to New York—the center of money.

In between is nothing but poverty and dereliction. There are factories that last made a product in the ’50s. There are workers’ houses almost unchanged in half a century. There are abandoned warehouses… wrecked cars… junk steel… and burly men in orange vests working with machines.

The middle is where real work was done and real things were made, shipped, and distributed; it shows few signs of growth or prosperity.

It is as though a sausage had been squeezed in the middle, driving the rich meat to the ends. In between is lean… and greasy.

How come?

Deep State’s Fingerprints

Every crime scene has many fingerprints on it.

Most are of the innocent.

An aging population, for example, is not exactly something you can do anything about. Technological innovations, too, are largely beyond public policy control.

But there’s one set of fingerprints on the tax cut flimflam… the relative poverty along the Northeast Corridor… and the $450 million painting: the Deep State’s.

The insiders use fake money—the post-1971 dollar—to transfer wealth and power from the people who earn it to themselves. It is as though they loaded up the train in Newark and Trenton… and shipped everything to Washington.

You earn real money by making real things and providing real services. But fake money is different. You don’t earn it by adding to the world’s wealth.

You get it by subtracting from it… that is, by borrowing from future output.

Real money is not controlled by anyone. It is earned—freely—in win-win exchanges. Back in the 1950s and 1960s, it ended up in places like East Baltimore and Trenton because they used to make things people wanted.

But fake money takes a different route. It is created by the insiders… and controlled by them. It goes where they want it to go.

No Stimulus

Money always bows to politics; often, it is completely beholden to it.
In Russia, the oligarchs took government-owned property and used it to build their fortunes. In China, state-owned enterprises and favored entrepreneurs get government-backed credit to build their apartments, factories, and shopping malls.

And in America, the fake money is directed to favored sectors by 73,000 pages of the Internal Revenue Code… and 81,000 pages of the Federal Register.

So, it is hardly a surprise that the latest tax proposals favor the Deep State at the expense of the middle class.

Readers may argue that the money “stimulates” the economy… and that it “trickles down” to the common people. If so, there is little evidence of it.

As a percentage of the working-age population, fewer people have jobs today than at any time since the 1970s. Back then, the typical man had to work 900 hours to earn enough to buy a new pickup truck. Today, he has to work 1,500 hours.

Central banks have increased the world’s monetary base (and their own balance sheets) by $20 trillion so far this century.

This money didn’t go to the fellow in the orange vest. Instead, it went to Russian tycoons… Chinese billionaires… art collectors… hedge fund managers… and rich people on both ends of the track.


Bill Bonner
Chairman, Bonner & Partners

Nick’s Note: Bill says the source of unrest today is not the free market, race, the “One Percent,” or President Trump. It is not due to a lack of money or some rich guy having too much money. Instead, Bill says it has to do with a change made to the U.S. monetary system.

This change set in motion a sequence of events that is still unfolding today… one that Bill believes is already reaching a sudden and devastating conclusion for this country. Click here to read more.


From Chris R.: I looked through your Crypto Corner for a list of wallets to store cryptocurrencies, and I couldn’t find any mention of the Trezor wallet. Is there a reason for that?

Nick’s Reply: There’s a ton of valuable information in our Crypto Corner.

The Crypto Corner includes a dashboard that organizes all our content. If you’re looking for wallets, click the “Storage” button and it will take you to our recommended services. Subscribers can watch an instructional video on how to use the Trezor wallet right here.

From Charles M.: About two weeks ago, I signed up for Palm Beach Confidential after participating in your online cryptocurrency promotion.

I paid quite a bit for this service. Today, I received a promotion in my email for The Palm Beach Letter (which I also subscribe to) for much lower cost than Palm Beach Confidential. The kicker is it includes the Crypto Corner and the crypto buy-and-sell recommendations.

How can you justify offering all the meat of Palm Beach Confidential in The Palm Beach Letter? Please tell me I’m missing something here.

Nick’s Reply: Thanks for your message, Charles. We get lots of feedback from readers asking about the difference between The Palm Beach Letter and Palm Beach Confidential.

Each service fits into our overall wealth-building approach, but they use different strategies. Let me explain…

The Palm Beach Letter mainly looks for safe, conservative, income-producing ideas. However, we do set aside a small allocation in our PBL portfolio for smart speculations, like cryptocurrencies, and chaos hedges, such as gold.

On the other hand, Palm Beach Confidential is a small-cap and cryptocurrency advisory for more speculative investors.

That’s why we have more than two dozen crypto picks in the Confidential portfolio compared to just four in the PBL portfolio. So, you see, we’re not “offering all the meat”… just a few of the potatoes.

Note: So far this year, our average crypto pick in both portfolios is up 2,000%.


Bitcoin is skyrocketing. But Bill’s top technology expert, Jeff Brown, says that 99% of investors are missing the real story…

It’s the technology behind bitcoin, not the cryptocurrency itself, that will change the world. And Jeff’s found a way for readers to invest in blockchain technology without purchasing a single bitcoin. Read more here.

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