SAN MARTIN, ARGENTINA – We spent the night at a hotel in the nearby village of Molinos and then drove back to see the new farm.
We hoped that our spirits might have revived after a good night’s sleep… or maybe some helpful leprechauns had put the place in order.
Nothing of the sort. It was still a pile of rubble.
“Why are we doing this?” Elizabeth wanted to know.
We had no good answer.
Javier, who operates the backhoe, was busy clearing in the new fields.
“How long do you think it will take?” we asked.
“Oh, I don’t know… ‘til I retire, probably…”
Javier laughed heartily. But our plan is to have the fields ready for planting in April.
We’ll plant oats… let them grow over the winter… and then plow them under and plant alfalfa in the spring. (The seasons are reversed; we’re in the southern hemisphere.)
Meanwhile, back at the ranch… there’s more trouble afoot.
We had heard that the originarios – locals claiming indigenous rights to land in this area – were building a house on our land, after we specifically told them not to.
So, we mounted up… and rode out – unarmed – to check.
Sure enough, excavation was already well advanced. Adobes were piled up. Even the roof beams were waiting.
This is a violation of a court order. But that doesn’t mean they can’t get away with it.
The local courts don’t like to come down too hard on the originarios; it leads to political trouble.
The originarios begin construction of a house on Bill’s land
“I’d like to bulldoze that foundation and take away those adobes,” said our lawyer.
“Otherwise, they’re going to keep at it. But that may lead to retaliation. After all, you’ve got a glass room in your house. Isn’t there some expression in English about people who live in glass houses?”
We will go to court again and try to get another order.
Back on our beat – money – we have no special insights and no new information.
The stock market goes up… and up… and up.
The Dow, the S&P 500, and the Nasdaq are all making record highs. And global stocks have never been more valuable.
Meanwhile, investor complacency, as measured by Wall Street’s “fear gauge,” the VIX, is at record lows.
Everyone knows stock prices must come down. But no one knows when… or even why.
Here at the Diary, we try to keep our feet on the ground. But we would need stilts to understand what is going on in today’s markets. Nothing is solid. Nothing is true. Nothing really makes sense.
Companies’ profits are fake. They goose them with accounting tricks.
The government’s statistics are fake, too – unemployment, inflation, GDP. If they were done properly (which our research team is in the process of doing), they would show that at least half the country has been in a depression for the entire 21st century.
Stock prices are fake – driven up by ultra-low interest rates… QE… and share buybacks.
And interest rates themselves are fake – the Fed has pushed them down to a 5,000-year low.
They no longer reflect how much capital (savings) is available relative to the demand for loans… and therefore how much credit should really cost.
And at the bottom of it, the money itself is fake.
We’ve gassed so much about this, we won’t bother you with more today.
But money is the tape measure for the carpenter economy.
If the tape stretches or shrinks… you end up with a house you wouldn’t want to live in, with crooked walls and doors askew.
More importantly, you end up with something that will fall on your head.
You understand this as well as we do. The trouble is, we don’t know when this monstrosity will collapse… or how.
And in the meantime…
The plumbers are putting in more and more pipe… the masons are laying up more blocks… the electricians are running cables and conduit all over the place… and the carpenters are making noise with their hammers.
In other words, real resources are going into a woebegone, money-losing, dead-end building project.
How long the hammering will go on, we don’t know. All we can say is that we don’t want to be in it when the earthquake comes.
BY CHRIS LOWE, EDITOR AT LARGE, Bonner & partners
Big news out of Japan…
The Nikkei 225 – the country’s equivalent of the Dow – just hit a 21-year high.
As you can see, the Nikkei just topped 21,000 points.
That’s the highest level since 1996.
– Chris Lowe
How to Bet on the Next Banking Crisis
It’s been nearly a decade since the financial crisis. But today, stocks are hovering near all-time highs as volatility plummets. And that’s got some wondering if another crash could be looming. Now, there’s a new way to profit when the next crisis hits.
In September, China announced that it would ban ICOs (initial coin offerings), a method of crowdfunding using cryptocurrencies. Bitcoin slumped to around $3,500 as a result. But now it’s back… and surging as high as $5,800.
Prepare for Cyberwar
Cybercriminals are gaining momentum. It’s estimated that the financial damage done by cyberattacks will triple by 2020. Bill’s chief technology analyst Jeff Brown shows how bad it could get, and what it means for the cybersecurity industry.
In the mailbag, conversation turns to President Trump…
I do not know whether to laugh or cry. As you clearly point out, Trump is as entertaining as the fool-jester he is. But he and his supporters are leading the economy over a cliff and perhaps into a world war. The stakes are huge while Trump entertains. What are we to do?
You and some other people want the swamp drained. How do you propose to do this without allowing the irrational people that elected Trump to have their way? The adults you identify as being the keepers of the swamp are all that is keeping the country from chaos. What happens when all of them are replaced by Trump supporters? Perhaps you will not find Trump so funny then.
– Edmund S.
Hmmmm, you’re a Trump mind reader then? You know his true intentions? Maybe you should do a roadshow of mind reading.
– Robert M.
Trump is no joke. He poses a great threat to this country and its allies. He should be removed, not just made the butt of jokes. There is something seriously wrong with him.
– Anne S.
I have read your articles for quite a while now. I have never met anybody that has so many demeaning things to say about President Trump. I don’t understand why you don’t run for the office of president yourself. You could save the world and say wonderful things about yourself.
– Don T.
Meanwhile, more readers weigh in on Bill’s most recent land purchase.
I enjoy your missives on “The Ranch,” but have decided that you, as a self-proclaimed one percenter, have more money than investment savvy when it comes to farms and ranches. Even with the volatile political situation with the locals (originarios), you went ahead and bought another ranch property in the area that purportedly will complement operations of the original ranch you own.
Why would you double down on your sorrowful ranch situation when you could find another foreign nation to purchase cheap and beautifully landscaped ranchland and avoid the hassle and risk of confiscation? Maybe Catalonia or Venezuela?
Best wishes on the South American ranching endeavor! Your Diary is a fun and often insightful read.
– Doug L.
It is interesting that you doubled down on your investment in Argentina. Do you think this is a good time to invest in Argentina? I noted it has had a healthy run this year.
– Webb G.
Thanks to the photographer for the pics of the newer, lower-altitude Gualfin. Reminds me of my grandparents’ stagecoach way station at Castle Rock, Colorado. Maybe you can outfit Gualfin with solar power. The new ones don’t even need the panels or batteries.
– Roy G.
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