When they call, I give. And you know what? When I need something from them two years later, three years later, I call them, they are there for me. With Hillary Clinton, I said be at my wedding, and she came to my wedding.
– Donald Trump on why he gave more than $100,000 to the Clinton Foundation
GUALFIN, Argentina – We’re now in September – historically the worst month for stocks.
Financial markets have been in a slumber all summer. They should begin to wake up soon.
This month, there will be a G-20 meeting. There will be new jobs numbers (expected today). There will be announcements from major central banks. The first presidential debate is coming up.
No one will want to rock the boat. But boats rock anyway.
Investors, for example, may all rush to one side at once. The next thing you know… the boat is taking on water.
As for us, we’re bearish on the stock market… skittish on bonds… and peevish on the election. But we’re keeping an open mind and open eyes, wondering what will happen next.
There are really only two ways to get wealth and power: You can offer goods and services to others… at a profit. Or you can steal.
The voluntary exchange of goods and services for money has always been the honest and productive way of getting ahead. But for most of human history, there was not much opportunity for it.
People lived in small tribes with little commerce between them.
Anthropologists and archeologists believe that tribe members cooperated internally, but were often in a state of perpetual warfare with other groups.
The idea of a win-win trade was still inchoate. There were few ways to add to your wealth by providing better goods or new services to your neighbors.
Instead, it was a static society with virtually no economic surplus and dominated by “politics.” The only way to make a substantial increase in your wealth or power was to take it from someone else.
We don’t know much about the cultures and organizations that existed before history began to be recorded. But reading between the lines of pre-history, we see a world where killing someone from a different tribe, and taking his possessions, his women, and his territory, was probably regarded favorably.
In some primitive tribes, even today, a young man doesn’t achieve full manhood status until he has killed someone.
There was no such thing as “murder” where an outsider was concerned. The idea that you should “love thy neighbor” or that you should “do unto him as you would have him do unto you” did not yet exist.
And there was no “money.” This made it difficult to store wealth or to trade with people you didn’t know.
Civilization – with its rules against theft and murder, its money, its businesses and institutions – evolved slowly.
But the primitive instincts are still there. And they find expression, today, through government.
Only government (or quasi-government groups, such as the Mafia) still claims the right to kill people and take their property.
Generally, this right is restricted. Conditions apply. There may be a “due process” of law requirement, for example. Important elites – the aristocracy, the church, or the landowners – may have to be consulted. The U.S. used to require a declaration of war by Congress… and so forth.
But over time, people always find ways to harness the police power of government for their own purposes. They use it to get subsidies, special treatment, privileges… and rents!
They twist it around, too… so that it is no longer used to protect individuals’ property, but to take it away from them.
They are the “foxes,” as Italian economist Vilfredo Pareto called them – the smart people who figure out how to make the system pay.
How do they do it? Just read the quote from Mr. Trump above.
The temptation to “govern” is almost irresistible.
It is as though you had a gun and everyone was unarmed: Sooner or later, you’d want to pull the trigger.
Besides… gaining substantial wealth or power honestly is hard. You have to serve customers. You have to come up with something new. You have to work with others, put in long days, save your money, focus on the long term, and – importantly – get lucky.
No one knows which investment or innovation will succeed.
And if you are fortunate enough to gain wealth, along comes the future with its inevitable “creative destruction,” and there goes your fortune!
Better to turn to politics. If you can get the favor of government, you can shift money and power in your direction.
Then you can use it to try to prevent the future from happening.
Here in Gualfin, we have poor people who live in the mountains – mostly subsistence farmers who also get checks from the government.
We have a middle class, too – people who work for the ranch and get a salary.
And there is a very small class of rich people – your editor, the guy who was dim enough to buy the ranch imagining how happy everyone would be to see him try to improve it.
For the middle class, the route forward is simple. A day laborer hopes to get full-time employment. Then his earnings rise as he gains experience.
If he learns to drive the tractor or the backhoe, for example, he gets a pay increase. If he is ambitious, he can hope to become the capataz, the foreman, who gets a fairly modern house (by local standards) as well as greater pay.
But for the poor, there is no way to make headway. A young man not employed by the ranch typically leaves; there is nothing else for him to do.
Then he has to master the rigors of the modern workaday world… with its unfamiliar codes and daunting challenges.
So, when political activists come on the scene and get him to understand that he may be able to get ahead in a simpler, faster way, he is all ears.
He won’t have to learn new skills, they tell him. He won’t have to move to the city. He won’t have to provide goods or services to demanding customers. Instead, he will be able to live in a “traditional way” on land that belongs to his “tribe”…
…and he can count on the government to support him.
The originario hustle can be likened to the Black Lives Matter movement in the U.S.
Black Lives Matter demands reparations and free college educations for descendants of the slaves and a guaranteed income for everyone.
Originarios demand land and handouts for the descendants of the indigenous tribes. Both movements are fundamentally race-based, political, and larcenous… not voluntary, universal, and civilized.
“You are so naïve,” said an engineer who came to check on our grapes and oversee the pruning.
“You don’t really understand anything. This whole originario thing is a scam. They call themselves the ‘Diaguita Community,’ but no one knows if they have any real connection to the Diaguita people that once lived here.
“And they say they want to live in a traditional way on their land. But it’s nonsense. They want pickup trucks and television, just like everyone else.
“The originario thing is just a way for the organizers to get money. The local people are pawns. They don’t know what’s going on.
“You think you’re going to go to them and explain the situation. You think you can tell them why it is a bad idea… and why they would be better off in the modern economy.
“Well, of course they would be better off. If this succeeds, they’ll be condemned to live hard lives with just enough from the government to get by. The government will say they are living in a ‘traditional way,’ but you’ve seen what that means. No heat. No running water. No education. It’s terrible.”
Bone dry at Gualfin
“The best thing that could happen – for them – would be for you to go to the ringleaders and make a deal. You give them some money. And they back off.
“Look what happened at [a neighboring ranch that was seized by the government and given to the originarios]. It was all an inside deal.
“The originarios made noise. And the owner of the land had a good contact with the government. He was paid by the government for the land… far more than it was really worth.
“Everybody came out ahead, except the originarios. The politicians gave the land to the originarios and won some votes. The landowner got his money. But the originarios now live in a state of perpetual poverty. No one wants to invest in their community because they don’t respect property rights.
“Taxpayers got hosed, too… and they didn’t even know it.”
By Zach Scheidt, Editor, Income on Demand
Your future retirement benefits are at risk.
We all know that Social Security is broke and living on borrowed time
What’s less well known is that U.S. corporate pensions are also in danger.
They’re woefully underfunded and may have to cut payments to seniors to stay solvent.
It’s a sad truth, but there is no guarantee that your retirement benefits will continue to be paid.
Today’s chart shows the funding status of America’s largest pension plans. Any reading below 100% means that pensions don’t have enough money to meet their obligations to retirees.
And not only are U.S. corporations underfunding their pension plans, but also they’re also underpaying retirees!
According to Bloomberg, retirees are missing out on an estimated $8 billion in annual pension payments.
The article cites “job-hopping workers” and “spotty record keeping” as the culprits.
Are honest mistakes really to blame? Or are corporations purposely ripping off retirees?
I’ll leave you to decide…
Bottom line: Pension payments are at risk. And that’s a big problem if you’re counting on these payments to fund your retirement.
P.S. If you want to retire in comfort, you need a “Plan B.” Whether you’re saving for retirement or already retired, you need to take control of your retirement funds because you can no longer rely on your corporate pension, Social Security, or any other “promised” retirement plan.
Thankfully, there are still some great options available to you. And in my new presentation, I’ll show you how three random people in a bowling alley – none with any investing background – made supplemental retirement income in the stock market. Watch here now.
Bill Clinton Used Tax Dollars to Subsidize Foundation
Bill Clinton’s staff used a decades-old federal government program, originally created to keep former presidents out of the poorhouse, to subsidize his family’s foundation.
Why the Fed Must Kill the Dollar
The Fed’s reckless actions have completely doomed our financial system… And the only escape may be to trash the dollar. But that will have a major impact on gold.
The Unavoidable Costs of “Helicopter Money”
“Helicopter money" is central-bank speak for printing up cash and handing it out the population. It’s now being seriously considered as the next phase of central bank stimulus. But it’s no free lunch.
More great reader feedback today on yesterday’s Diary about how political corruption works in 21st century America.
Crime does pay for corrupt corporations in America. Your article is well written; it paints a picture as well as any great painter from the past. Thank you for sharing the staggering statistics and reflecting the corruption running rampant in America today. Hillary truly is Crooked.
– Bramble B.
Why would the rich fund Hillary, when she wants to go after them to pay for her social programs?
You gave a comprehensive answer. They know it won’t happen.
– Erich K.
Even the wilfully politically ignorant (a preponderance of the electorate) can smell the Clinton stench.
The question that is undoubtedly now percolating in their minds:
What laws can I get away with breaking too? Which is a prelude to anarchy.
– Charles M.
The ongoing “Originario War” at Gualfin and what Bill should do about it are also heavy on readers’ minds…
I think you should get out of there, Bill. Your life is worth much more than that ranch. Besides, I would miss your writing too much!
– Penny G.
It’s just a matter of time before you are seen as the problem. Write off your ranch, and GET OUT. Give it to your workers.
– Patricio E.
You write: "Nevertheless, it was to the government we turned to protect our ranch when the Originarios invaded. Cynical readers may detect a whiff of hypocrisy"
Of course, you must turn to the government for help. They are the ones who caused your problem. And they are the only ones allowed to use force and violence.
I hope the squatters similarly respect the prohibition against their using violence as you have.
– Samuel H.
The government can send out police or even the army, and drive the originarios away. But the Federales can’t stay forever. The originarios live nearby so they will be back.
Giving in, and handing over the ranch, would be an outrage. But as Bill previously pointed out, the property is not self-supporting. Although it may have a market value, there is apparently no market for it – especially as it is now under siege.
– Kent K.
What a surprise! Locals claiming ownership of land that not a penny of their money was ever invested in. (That is an assumption).
For all of us Americans that believe that moving to Central America, South America, or some other safe haven to avoid the chaos that many are predicting will strike the U.S., it’s a reminder that conflict, criminality, bullying do exist in all the alleged safe havens as well.
– Alan W.
The folks at Agora Financial say there’s a brand-new high-tech sector that will grow 32x over the next four months.