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Contributed by Bill Bonner
Publisher of: The Fleet Street Letter



Today:  What So Proudly We Hailed

In Today's Daily Reckoning:

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*** The 'Summer of Love' heated up yesterday morning - 
before Wall Street closed down for the 4th of July 

*** "Stocks rally on signs economy is slowing" said the 
Reuters headline. The economy does seem to be slowing. But 
only slightly. And the connection to the stock market is 
feeble. Stocks can go up or down without much regard for 
what the economy is doing. 

*** The Dow rose 112 points. The Nasdaq rose 25 points. By 
way of reference, the Nasdaq topped out at 5,048 on March 
10th. It fell to a low on May 23rd and then rallied back to 
4064 on June 21st. We're waiting to see how far this summer 
rally will take it.

*** The market looked healthy yesterday. 1976 stocks 
advanced. Only 796 fell back. There were 49 new highs, not 
many but still more than twice the number of new lows.

*** A Reuters poll shows that the pros are still very 
bullish. The Wall Street 'strategists' surveyed expected 
the S&P 500 to end the year up 9.1% above its current 
level. The Dow they thought would be 14% higher than today. 
And the Nasdaq, these dreamers guessed, would end the year 
up 26.5% at 5,150. If they are friend Jim 
Davidson will be heralded as a genius and I will be 
"downright stupid". 

*** Remarkably, not a single one of the pros thought the 
bear market might continue. None foresees lower levels for 
any of the indices by year-end. 

*** Meanwhile, the St. Louis Fed reports that the money 
supply as measured by MZM is going up at a faster clip. 
Could it be that "Easy Al" Greenspan has engineered the 
'soft landing' that everyone hoped for - with small, very 
public rate hikes...and quiet boosts in the supply of cash? 
The economy is slowing...stocks seem to be rising more 
slowly...and the most egregiously overhyped stocks, the 
dopey dot.coms, are dying downwards. 

*** Anything is possible. But some things are more likely 
than others. Most likely now is a continuation of the bear 
market that began in April of 1998 with a collapse of the 
Advance/Decline ratio...and climaxed with the topping out 
of the Nasdaq on March 10, 2000. My guess is that the bear 
is taking it easy during the hot summer months...but will 
get back to work in September. But, as I say with tedious 
regularity, who knows?

*** When I was just a little girl
I asked my mother, what will I be?
Will I be happy? Will I be rich?
Here's what she said to me:

Que sera sera, 
Whatever will be, will be
The future's not ours to see
Que sera sera

*** Gold rose 80 cents. Platinum moved up $9.

*** A comment on the World Gold Conference, that took place 
in Paris last week (whose source I have forgotten): "There 
are only 24 people in the world who care about gold and 
none of them are central bankers attending this week's 
annual Paris gold conference. Gold has been stuck in a $275 
to $290 per ounce range for most of the year. Central 
bankers are dumping their gold reserves. A bad inflation 
number these days doesn't budge bond yields or currencies. 
Food for thought: When have you ever seen a large group of 
central bankers agree on anything and be correct?"

*** Do you have what it takes to be a millionaire? 
Author Thomas J. Stanley, well-known for his book The 
Millionaire Next Door, has a new book out, The Millionaire 
Mind. According to Stanley, the richest of the rich - that 
is, the top 1% of U.S. households - did not get that way 
from either the ability to reason (intelligence) nor 
inheritance. The typical rich guy is a 54-year-old man who 
has been married to the same woman for 28 years and has 
three children. He has an average net worth of $9.2 million 
and earns $749,000 a year. He got into college with an SAT 
score of 1190 and usually got B's and C's. Nearly half are 
business owners or senior corporate executives. They 
attributed their success not to their brains, but to 
qualities such as honesty, discipline, a supportive spouse 
and the ability to get along with others.

*** "It's a puzzlement" says Ray DeVoe. Housing accounts 
for almost 40% of the weighting of the CPI. But even though 
HUD says there's a "crisis in affordable housing" because 
housing prices are rising at twice the rate of inflation, 
the people who keep the CPI have housing rising 2.9% year-
over-year...while the CPI itself is up 3.1%. 

*** Humans can make the best out of bad situation and the 
worst out of a good one. It's genetic. As I write this, it 
is a perfect 4th of July day here in Ouzilly. Deep blue 
sky, perfect temperature...birds singing in the trees, and 
an aroma coming from the Linden tree that is intoxicating. 
So, how do my little boys make use of such an idyllic day? 
War! The french kids have come over from next door; they've 
chosen up sides and armed themselves with water balloons. I 
hear Jules commanding: "Gabriel, you circle round to the 
left in a diversionary tactic. [Poor little Gabriel, 6, is 
always used as the bagman or the suicide brigade.] Edward 
you and I will circle around and attack them from the 

*** Who am I? Who among us has not asked that question of 
himself? Now, we have an answer. Janet Reno, Attny. General 
of the United States during an Interview on CBS "60 
Minutes" on June 26, 1999: "A cultist is one who has a 
strong belief in the Bible...who frequently attends Bible 
studies; who has a high level of financial giving to a 
Christian cause; who home schools their children; who has 
accumulated survival foods and has strong belief in the 
Second Amendment; and who distrusts big government. Any of 
these may qualify a person as a cultist but certainly more 
than one of these would cause us to look at this person as 
a threat and his family as being in a risk situation that 
qualifies for government interference."

*** Now I know, I am a cultist. I contributed substantially 
to my local Episcopal church and I home-schooled my 
children. And I have far more faith in the Acts of the 
Apostles than in the Income Equalization Act or the 
Humphrey-Hawkins Act. My family must be in a 'risk 

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"What good did the theories of the philosophers do us? Did 
they help us to take a single step forward or backward? ... 
Did they alter our forms of contentment? We are. We argue, 
we dispute, we get excited. The rest is sauce. Sometimes 
pleasant, sometimes mixed with a limitless boredom, a swamp 
dotted with tufts of dying shrubs."

Tristan Tzara, 
The Dada Manifesto

On July 4th, 1776 a group of rich men and philosophers in 
the American colonies got very excited. They were so 
annoyed at Britain's mercantile restrictions and petty 
taxes that they decided to take action...

The reasonable thing to do would have been to negotiate, to 
talk, to seek a concession here and there. The 
changes the colonists wanted were marginal ones. They did 
not seek a whole New World Order. They didn't want a real 
revolution - no new calendar, no Thermidor or Brumaire; the 
churches would not be burned; no palaces would be looted 
and no monarchs killed. They merely wanted to be able to do 
business as they saw fit, without the interference of a 
meddlesome government. They probably could have gotten most 
of what they wanted by being patient and reasonable. But 
their blood was up. And so they did something extreme. They 
announced their independence from Britain, putting their 
lives and fortunes at risk, and gave every American some 
names and dates that almost none could remember.

The consequences were disastrous for many of these men. An 
e-mail message I received yesterday tells the story:

"The men who sowed the path to freedom 224 years ago were a 
remarkable group of men. We know them as the signers of the 
Declaration of Independence. But to the British they were 
marked men and traitors to the Crown.

Here's what happened to the signers of one of the greatest 
documents in history.

Twelve had their homes ransacked and burned. 

Two of their sons were killed serving in the Revolutionary 
Army. Another had two sons captured. 

Nine of the 56 fought and died from wounds or hardships 
during the Revolutionary War. 

These men put their lives and everything they owned on the 

All knew that they would be jailed, tortured or killed if 

Carter Braxton of Virginia, a wealthy planter and trader, 
saw his ships swept from the seas by the British navy. He 
sold his home and properties to pay his debts and died 

Thomas McKean was so hounded by the British that he was 
forced to move his family constantly. He served in Congress 
without pay and died poor. 

Vandals or soldiers looted the properties of Diller, Hall, 
Clymer, Walton, Gwinnett, Heyward, Ruttledge and Middleton. 

At the battle of Yorktown, Thomas Nelson, Jr. learned that 
the British General, Cornwallis, had taken over his 
(Nelson's) home for his headquarters. Nelson urged 
Washington to open fire on his home, destroying his home 
and property. Nelson died bankrupt. 

Francis Lewis had his home and property destroyed. The 
British jailed his wife, and she died a few months later. 

John Hart was driven from his home, and he and his 13 
children fled for their lives. For over a year, Hart lived 
in the forest or in caves. Later Hart returned to what was 
left of his home: he died from exhaustion and a broken 

Norris and Livingston suffered from similar fates." 

These men pledged "for the support of this declaration, 
with the firm reliance on the protection of the divine 
providence, we mutually pledge to each other, our lives, 
our fortunes and our sacred honor."

Today, we remember these men and the sacrifices they made. 
But for what? What difference did it really make? For all 
their suffering have our contentments been altered in any 
way? Did anyone's life expectancy increase as a result? Did 
anyone's income go up? Are we really so much better off 
than the citizens of Britain? Or Australia? Or New Zealand 
or Canada? 

The founding fathers didn't know it at the time, but 
government was just at the threshold of a huge multi-
century bull market that would take it from something that 
had little impact on peoples' lives, to something that 
controlled nearly ever detail - from the price of rice to 
the amount of water in your toilet. The sacred honor of 
today's politicians seems concentrated on whether it takes 
two clicks for you to reach an Internet connection or just 
one. And it didn't seem to matter whether you were 
independent or not. In the time since the Declaration of 
Independence almost all the world's nations have suffered 
the same fate. 

In America today, nothing is too trivial or too private to 
escape the notice of the heirs of Misters Adams and 
Madison. Every aspect of your financial life, for example, 
is open to inspection. Every molecule you swallow is 
subject to government approval. Every root cellar and 
pigsty you build must have the permission of a swarm of 
agents. Instead of working less than 3% of the time to pay 
taxes, as did the American Colonists, we now work about 50% 
of our time to support federal, state, and local parasites. 
What's worse, we have to suffer through quadrennial 
political campaigns (which are stupider than game shows and 
much less honest) to determine who gets to rob us. 

And there is no escape. Imagine getting together a group of 
hotheads such as those who met in Philadephia in that 
summer 224 years ago. The Truths that were self-evident two 
centuries ago - are now threats to the republic. People who 
believe in the rights that were inalienable in the time of 
Jefferson - such as the right to liberty and the right to 
bear arms to maintain it - are seen as dangerous cultists. 
Try to assert your right to 'dissolve the bonds' that tie 
you to Janet Reno and the Clinton Administration and she 
will have you shot in the back.

Better yet, forget the whole thing. Grill some hot 
dogs...drink some the rockets' red glare and 
the bombs bursting in air and be thankful you don't live in 

Your very thankful eyes and ears here in France...

Bill Bonner

P.S. A nice thing about living in a foreign country is that 
it changes your perspective. When I lived in America, I 
viewed most of the news as a tragedy - a miscarriage of 
justice here...skullduggery there...numbskullery almost 
everywhere. But here in France, I read the papers and see 
things in a different light. It is all a comedy. I expect 
to be entertained and amused by the silly things people do 
- and I am rarely disappointed.
About The Daily Reckoning:
The Daily Reckoning... "more sense in one e-mail than a month of CNBC."  That's what readers are saying about The Daily Reckoning.

Bill Bonner, recognized internationally as a brilliant writer, entrepreneur
and publisher of The Fleet Street Letter, offers you his daily market
commentary absolutely FREE. For the first time, outsiders are getting a peek into his powerful and profitable investment insights. Bill's practical contrarian advice empowers even average investors to protect their hard-earned wealth and achieve amazing gains.

Bonner writes his email letter from Paris, France, each morning --
describing the wacky, wonderful world of investment, politics and everything remotely related. Irreverent. Sharp. Honest. Thoroughly, unabashedly contrarian. It's also among the fastest growing e-letter on the Internet.  It's a brand new service... but it has a distinguished history..

For nearly 62 year, The Fleet Street Letter, the oldest investment
advisory letter in the English language has consistently delivered
invaluable economic and political foresights to savvy investors. Current readers regularly enjoy impressive investment gains even as the market falters. Here's more from his online readers...

"My small portfolio has followed true to my wife's description of my
investment philosophy, "buy high and sell low." However, that has changed since I started religiously reading DR... I credit this reversal of fortune directly to The Daily Reckoning"

" Your Daily Reckoning is the best in business commentary... mixing
serious warnings and the state of the market with gentle humor"

"It is actually better than some of the newsletters that I pay to

"Your statements and philosophy have kept me from storming into the market and in fact [I'm] making some money in put options" (Frank)

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Last modified: April 02, 2001

Published By Tulips and Bears LLC