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Don't Test This Yourself

Bridge-building the Roman way...

LAST WEEK we guessed The Donald would back down on his threat to impose a 25% tariff on Chinese goods coming into the US, writes Bill Bonner in his Diary of a Rogue Economist.

Not because it would be a $50 billion tax on his own base – consumers who are already living close to the edge. The president's fans are solid. They will not desert him, even as he stabs them in the back and walks over their bodies.

No, he will back down because the Chinese tariffs risk a real trade war with China. And a real trade war with the world's biggest economy would be a disaster for the people with the most to lose – the elite, the "One Percent", and the Deep State...

...including The Donald himself.

There is some $115 trillion in excess debt in the world – that is, debt above and beyond what can be comfortably supported by the real economy.

That debt is a liability to Main Street and the public. But it is an asset to the rich. As we have described in these pages before, it's EZ credit that is the linchpin in today's fake-money system.

The Deep State's stocks, bonds, and real estate values...not to mention its careers, incomes, and reputations...depend on it.

And it is made possible by the China Chinese workers who put in long hours in miserable conditions in order to stock the shelves of Walmart with cheap Chinese manufacturers who undersell their competitors to keep consumer price inflation in the US at low levels...and by Bank of China, which holds some $1.25 trillion worth of US bonds...thus propping up the whole wobbly capital structure.

But let us take a break from the imminent collapse of the world economy and the consequent Great Depression...probably accompanied by catastrophic wars.

Instead, let's focus on something important: our barn roof in Ireland.

Several dear readers wrote to point out our mistakes. One said the collar ties were too high. Another said they weren't bolted on properly. Still another said he thought he saw one-by-fours rather than the two-by-fours we claimed.

More than one suggested that we were not a very good carpenter.

And here, we protest! Now, you're going too far, dear readers...Our pride engaged, we respond in dudgeon.

Okay, we are often wrong about politics and economics...But who isn't? It's all guesswork.

But we're not wrong about how to frame up a barn roof.

They were two-by-fours, not one-by-fours...We did bolt the collar ties to the rafters...and the collar ties were in the right place (there is no snow load in Ireland to worry about).

In Maryland, we would have put the rafters on 18-inch centers, with the nailers on 24-inch centers. But here, even with the rafters on four-foot centers and the nailers on three-foot centers, the locals thought we had overbuilt it.

Our only regret was that we had wanted to attach the rafters to the sill plate with "hurricane ties" – galvanized metal brackets. But none could be found.

Another feature of this Irish barn is that the gable ends – not shown in the photos I showed you previously – will be built up, in stone, above the roofline, with the edges of the tin embedded in the cement. This keeps the wind from getting under the roof and prevents the roof from drifting from center.

"There's something very attractive about a man when he is focused on his work," said Elizabeth as we were getting off the ferry from Ireland.

She was, alas, not recalling her husband's burning stare at two-by-fours and two-by-sixes...nor his almost-maniacal drive to get the job done before his ship sailed.

She was watching how the stevedores managed traffic on the lower decks.

"When a man is really working, you sense his whole attention directed towards his work. That is how the world we live in was built."

The ancient Roman aqueduct at Segovia, Spain, for example, is breathtaking – with its many arches. Supposedly built under the Emperor Trajan in about 100 AD, it is still in use.

The bridge at Pont du Gard in France is even older. Of similar construction, it is a triple-decker of stone arches – one on top of the other, elegantly complex, and a marvel of engineering – that carried water to the ancient city of Nîmes.

How is it possible for masons and architects to build bridges that last two millennia...and 1,500 years more than the empire that financed them?

There is no BS in bridge-building. The feedback loop is so dramatic and conclusive that it eliminates the kibbitzers.

A bridge stands. Or it falls.

During the Roman era, the architect of a bridge stood beneath it as the scaffold was removed. If he did his job poorly – using fake calculations, humbug statistics, or claptrap theories – it would fall on his head.

Surviving architects and builders took notice. "I won't do what he did," they said to themselves. They learned from past mistakes. They accumulated knowledge and wisdom – which became almost instinctive in their trades.

Bridges still fall down from time to time, but rarely.

Likewise, our barn roof will either stand or fall. We bet it will be there long after the asset bubble, the fake Dollar, the trade war, $115 trillion in excess debt, and Donald J.Trump are history.

In politics and economics, BS is all there is. The calculations are almost always fake; the statistics are quackery; the theories are devilish nonsense. And bad ideas never entirely disappear, they just re-emerge after a few years...often dressed in new duds.

Socialism – which should have been thoroughly discredited when the Soviet Union fell on the heads of its architects in 1989 – is back.

Ms.Alexandria Ocasio-Cortez, the 28-year-old congressional candidate from New York, for example, calls herself a Democratic Socialist.

She recently beat the Democratic incumbent in the primaries and will almost certainly be going to Washington come the November elections.

The national socialism of Hitler and Mussolini is back, too – now commonly known as crony capitalism or nativist protectionism.

And the strongman politics of Chávez, Perón, and Castro now have two new leading men: Putin and Trump.

Once limited to the Third World, the wogs, and the crackpots...these creeds are now in the US mainstream.

We have learned over and over again that fake money – whose value or quantity can be manipulated by the authorities – always leads to disaster. (Rome...France...the Weimar Republic...Yugoslavia...Zimbabwe...Argentina...Brazil...)

We know that protectionism leads to higher prices and poverty. (Does anyone remember Misters Smoot and Hawley?)

We know that the government that governs least, governs best. (Does anyone recall Thomas Jefferson?)

We know that you can't spend more than you earn, you can't start wars, and you can't force win-lose deals on others...without paying a heavy penalty. (Hey...check out World War II.)

But heck, we're going to do it all again anyway...and learn the same lessons all over again.

Advice to readers: Don't stand under the bridge.

New York Times best-selling finance author Bill Bonner founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group exposed and predicted some of the world's biggest shifts since, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and the election of President Trump (2016). Sharing his personal thoughts and opinions each day from 1999 in the globally successful Daily Reckoning and then his Diary of a Rogue Economist, Bonner now makes his views and ideas available alongside analysis from a small hand-picked team of specialists through Bonner Private Research.

See full archive of Bill Bonner articles

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