A version of this article by Porter Stansberry first appeared on April 17, 2020 in The Stansberry Digest, published by Stansberry & Associates Investment Research, an independent investment research firm. You can visit them at www.stansberryresearch.com.
Recently, an old friend said to me, Porter, I’m almost afraid to ask… but what do you think about all of this madness, about the government telling everyone they have to sit in their houses? How long do you think this can go on?
What do I think? You probably won’t like it. We are going through the greatest mass delusion in history. Never in my life have I ever been more ashamed of our elected officials. And never in my wildest dreams did I think our entire country would fall for such complete nonsense on such an enormous scale.
In [this article] I’ll show you why virtually everything we’ve done so far has made the impact of this virus worse than it would have been if we had done nothing at all. And I’ll also show you how simple doing the right thing could have (and should have) been. I can also predict what will (eventually) happen next – the only steps that can actually protect those most at risk from this virus.
But before I get to the facts that inform my view, I would like to review how completely inane and idiotic our political leaders have become in the midst of this health problem.
My favorite example so far? The thousands of outdoor recreational activities that have been closed or forbidden – including those that involve individual pursuits like surfing. And what did CBS News publish as a headline above the story documenting a surfer being chased down by patrol boats? It read: “Scientist Says Beaches Are Dangerous Right Now.”
How does anyone read this stuff and not laugh out loud? It’s impossible to watch the video of a surfer being chased down by patrol boats in the name of public health and not think something has gone terribly wrong in America. But what’s the root of the problem today? What’s the foundation of all of these bad ideas?
At the Heart of Every Mass Delusion, There’s a ‘Big Lie’
The big lie is a falsehood so outrageous and so obviously wrong, in retrospect people can hardly believe that anyone took it seriously.
The most famous example of the “big lie” is the Salem Witch Trials, where four bored teenage girls convinced their pastor they were possessed by the devil and that dozens of people in their community were agents of Satan. The pastor, in turn, convinced most of Massachusetts that the colony was inundated with witches.
Even though it’s hard to imagine today, some 200 people were arrested over the next year. One poor man, Giles Corey, was crushed to death under a pile of giant rocks because he wouldn’t confess to being a witch.
And what happened to those who did confess? They were forced to name more witches. Then they were hanged. Before anyone came to their senses, 30 people were put to death.
We “modern” Americans look back at these events and wonder how anyone could have taken seriously a bunch of teenagers prattling on about witches and devils.
But don’t be too proud… A court in Arkansas sent three teenage boys to prison in 1994 for murders they couldn’t have possibly committed, mostly because the jury firmly believed they were devil worshippers and thought they’d used black magic to pull off the crime.
And with COVID-19, Americans have become just as irrational as those Salem witch hunters or that Arkansas jury.
What’s The Big Lie Today?
The big lie today is that “we” are all in “this” together. It’s utter nonsense… “We” – the people of the world, the people of our country, of my state, of this city (Baltimore), and even the people in my neighborhood – do not share the same values, ideals, or circumstances. We do not have anything like the same immune systems or face the same risks of this virus.
While it might sound friendly to say “we’re all in this together” – the reality is that we are not. And enforcing policies that treat all of us the same is the very worst approach we could take to dealing with this health crisis.
Some of us are at much greater risk of serious harm by this virus. Some of us are much more susceptible to infection. Some of us own businesses or work for companies that haven’t been impacted at all. Others have seen their livelihoods, their careers, or even their life savings wiped out.
We are NOT in this together. As with everything else in our lives, our abilities and our priorities and the risks we’re willing to take all differ. We are individuals – not a monolithic polity. Saying “we’re all in this together” sounds like Mao’s China, where people abandoned the cities to die from starvation on communal farms. It seems like a disaster in the making… because it is.
Rather than assessing our own risks and our own priorities and then making our own decisions, we have decided to allow the government – really just a handful of governors and the president – to make one decision for all of us. And we’re told not following the rules means we’re putting other peoples’ lives in jeopardy.
It’s complete and utter nonsense. What’s putting all of us in jeopardy is the idea that Washington D.C. knows best and we could follow directions – because “we’re all in this together.”
Adolf Hitler, in his book Mein Kampf, explained why such “big lies” are at the foundation of all tyranny. If you want to understand how despots operate, you should consider how one of the worst in history manipulated large groups of people…
In the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie…
Not Only Are ‘We’ Not in ‘This’ Together,
We Shouldn’t Strive to Be Either
The strength and resilience of a free society is NOT based on the idea that we are all the same or should share the same goals – but upon precisely the opposite.
A free society recognizes a fundamental truth of nature: We are not the same. We do not have the same strengths, the same ideas, the same histories, or the same goals. There’s no such thing as “The Public Good.” There’s a myriad of competing interests, as Adam Smith explained in The Wealth of Nations more than 200 years ago.
What we do share, however, is a common philosophy that champions the rights of the individual and limits the power of the State. We do not exist to serve the State. The State exists to serve us. That distinction lies at the very heart of what it means to be an American, and I think our leaders have completely forgotten this fact.
Why is this idea so important, not merely for philosophical reasons, but for the best possible outcomes? Why do free societies produce so much more wealth and happiness than countries led by tyrannical governments?
America has proven, again and again, that the “spontaneous order” of free people and free markets evolve far superior solutions to every human need and want. If you want to botch something up, just ask the government to take over. If you want efficient solutions that work, allow people to compete in a free market.
That’s why America has long led the world in the creation of wealth and innovation. That’s why we produce the highest-quality creative art, entertainment, design, and technology.
What About When We Fail?
Look back at all of our country’s biggest blunders and you won’t find freedom or free markets. You’ll find a government that has far overstepped its constitutional limits.
It happens every single time: When we allow our liberty to be taken from us in the name of a political theory, disaster will follow.
Consider the Vietnam War, for example. Did Congress declare war as the Constitution requires? Nope.
Instead, the country was sold on yet another “big lie”… And it was a whopper. We were told that propping up a corrupt dictatorship in a tiny Asian nation was the key to stopping communism from spreading around the world. Meanwhile, without our involvement in that country’s internal politics, no one in America would have ever known who Ho Chi Minh was… or cared.
And ironically, all we had to do to stop the spread of communism was simply leave it alone. Empty grocery store shelves and hopeless lives were the only bane needed to wipe out that stain virtually everywhere.
Yes, some folks still seem determined to adopt those ideas and destroy their societies (Venezuela), but we seem to have finally wised up to the fact that the only thing we have to do to make sure it fails is simply wait a decade or two. It’s certainly nothing worth sending our kids to die over.
And that brings me back to today…
Should we all sit in our home prisons, with our freedom to work, to associate, and to speak taken away from us – all to universally support “flattening” a curve, because “we” are all in “this” together?
Or is this the public health service’s Vietnam?
I have a prediction for you… By the time this virus is thoroughly understood, what will become extremely clear is that these shutdown orders did virtually nothing to stop the spread of the disease or to reduce its lethality in the population.
Why do I believe that? Because it’s apparent already that at least five times more people have been infected than are reflected in the number of “confirmed cases”… and the real number may be much, much greater than that.
In a town in Germany, one of the only places where a reliable statistical sampling has been done, 14% of the population has antibodies for the virus, which means they have already been infected. Germany has a population of 83 million… so that’s more than 10 million people who have potentially already had this virus. And that’s only in one country.
Germany has also tested twice as many people per capita as we have, so they know far more about the actual spread of the virus and its real lethality.
So … How Dangerous is This Virus?
The official confirmed infected count in Germany is only 135,000. And almost 4,000 Germans have died because of this virus. That’s a 3% “case rate” mortality – that is, out of the population that has been proven to be infected, about 3% have died. That sounds really bad and scary. After all, the average annual flu has a mortality rate of between 0.1% and 0.2%, depending on the year. So, for example, in 2015 to 2016, the Centers for Disease Control and Prevention (CDC) estimates that 30 million people got the flu and around 60,000 people died, or 0.2%.
But, wait… we know for sure that far more people have gotten this coronavirus than have been tested for it. As I just noted, the statistical sampling of antibodies in Germany suggests a much, much lower lethality rate. The real mortality rate is probably somewhere closer to the regular flu.
So what do you want to bet that we eventually figure out that the population-wide mortality rate for this virus is about the same as all of the other coronaviruses?
But what if I’m wrong? I might be. Nobody knows how widespread the virus is already in the U.S. But since we don’t know for sure, why in the world are we ordering everyone to stay in their homes? Why don’t we find out and then decide?
Knowing the real lethality of the virus (which can only be calculated if you know how many people are infected) informs us how dangerous the virus is for most people.
We already know that this virus isn’t a significant killer for people under the age of 50. Virtually no one without serious existing conditions has died from this virus under the age of 50.
And we also know from places that have actual data that this coronavirus is no more dangerous than the other viruses that we know circulate around our country on a regular basis every year.
Knowing how many people are infected is also critical to figuring out which policies are needed to mitigate the impact of the disease on the hospital system.
After all, if tens of millions of people already have the virus, you’re not going to stop it by making people stay in their homes… It’s already too late. I strongly suspect that was the case here. I suspect we will eventually learn that this virus had been circulating undetected in the U.S. since at least December.
And what is certainly different about this virus, as compared with the regular flu, is that when it emerged, there was zero existing immunity to it… which meant it spread like wildfire.
But the good news is that super-contagious viruses also burn out quicker because herd immunity impacts the growth rate.
So… should we have shut down our entire economy for a month in March, long after the virus had spread to millions? No! What we’re doing will not reduce the total infection rate or the mortality rates of this virus.
It’s Far Too Late for the Strategy We’re Using
How do I know? The best evidence of how widespread the virus has become comes from studies of fecal matter in wastewater treatment plants…
A group of researchers from Harvard, MIT, the Brigham and Women’s Hospital, and medtech startup company Biobot Analytics has published research submitting that viral loads in the wastewater from an area in Boston suggests at least 2,300 people in the water treatment area are infected with COVID-19, roughly five times more than the official 446 confirmed cases. No one wants to go to a hospital or a doctor’s office right now unless they absolutely have to, so it makes sense that the vast majority of these infections go unreported.
And that’s not all we know about how fast this virus spreads…
Although nobody in Washington, D.C. wants to mention it, one group of people was thoroughly tested. This group offers a striking example of what happens when you lock people into their homes after this virus has been circulating amongst them.
We know exactly how many people on the Diamond Princess cruise ship were infected. We know when the virus appeared on the boat. And we know exactly how many people died.
There were 3,711 people on the boat (passengers and crew). We know that 712 people were infected, despite restricting everyone to their cabins as soon as the infection was discovered. That’s an infection rate of almost 20% in a matter of days. This is a very, very contagious virus. Keep in mind, the lockdown on the boat began on February 5, which was only four days after the first case was discovered in Hong Kong. This virus spreads like wildfire.
On the other hand, even in a population that is much, much older than average and that featured substantial population-wide comorbidities like high blood pressure and obesity, only 12 people died. That’s 1.7% of the people who got infected. Yes, that’s much worse than the average flu – but not if you adjust for the age and relative health of the population.
Researchers who have studied the cruise ship outbreak in detail estimate that this virus will have 0.5% lethality in the general U.S. population – which is, again, comparable to the regular annual flu.
We have already seen that the initial forecasts of more than 2 million deaths are complete nonsense. When the president ordered the economy to shut down, he claimed that if we didn’t take this step of cowering in our homes, then millions would die. “People will be dropping dead on the subway,” Trump claimed, as though Ebola was on the loose.
All BS. This virus is definitely dangerous to the old and the sick. To a nonevent… just like any other flu season.
Continued Next Month….