How America’s Wealth Is Drained, by Bill Bonner

You don’t really need to look too hard to find the reasons why the American, and indeed the global economy, are sputtering. From Bill Bonner at

POITOU, FRANCE – What does our Doom Index tell us now?

Here’s a quick update from Joe Withrow in the Bonner & Partners research department:

We are still waiting for second-quarter data to come in before we can update the index for the new quarter. But I have the monthly metrics updated… and there was one interesting change. The Fed quietly restated bank loan growth for Q1 2017. It was originally reported as 1.5%. It is now reported as NEGATIVE 0.6%.

Credit growth going negative bumps the index up to a 6 – which is our warning level. There have been a number of instances where the index hit this level and then cooled back off. So we aren’t definitely in dangerous territory yet. But this makes the second-quarter data especially interesting for us.

If doom is coming for a visit, the stock market is unprepared.

The music is still turned up loud. Investors are still partying. Stocks are still selling near peak prices despite a bit of nervousness in the tech sector.

But just because you don’t see an unwelcome visitor coming doesn’t mean you shouldn’t tidy up and put away the empty liquor bottles.

Sometimes, guests show up unannounced.

Steady Creep

Meanwhile, the media is abuzz over President Trump’s meeting with Russian President Vladimir Putin… and Donald Trump Jr.’s previously undisclosed meeting with a Russian lawyer who offered to give him dirt on Hillary.

Information is valuable only when it surprises you; nothing in the foregoing is at all surprising or interesting.

The only newsworthy thing to come out of Trump’s European tour was in a speech in Poland. Mr. Trump took aim at the “steady creep of government bureaucracy that drains the vitality and wealth of the people.”

“He’s right about that,” says our gardener. “Here in France, you can’t even [go to the bathroom] without filling out a lot of paperwork.”

But the creeps go far beyond the federal bureaucracy; they infest the cronies’ world, too… and the whole economy.

It’s not just the GS-1-through-GS-15 civil servants who drain the wealth and vitality of the people. Add the sectors of the economy that are under the feds’ control, and you have about 60% of the U.S. economy.

To continue reading: How America’s Wealth Is Drained


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