Gualfin (“End of the Road”), Argentina
Our last day at the ranch was happy and sad.
Life up here toughens you up. At least, that’s what we’ve been saying.
It is a hard life in many ways. There are no 7-Elevens. No supermarkets. No doctors. No drugstores. We cannot call for a pizza delivery when we get hungry.
We cannot call anyone – we have no phone!
The temperature now falls below zero degrees Celsius at night; water pipes freeze up. We have no central heating. And no heating at all in most of the house.
The preferred means of locomotion up here is a horse or a mule.
Wednesday’s expedition – to visit some of the farmers up in the valley – took seven hours of riding over rocky trails and mountain passes.
We were not just riding for pleasure. We were trying to head off a revolution.
“This is not the first time this has happened. The government sends agents up into the mountains. They talk all kinds of nonsense,” said Jorge, our ranch foreman.
“They tell the local people that they have special rights because they are ‘indigenous people.’ Then they stop paying us rent.”
The last time it happened – about 20 years ago – the landowner had the government on his side. He brought in the police. The troublemakers were thrown off the property.
Now, the government is against us. And it’s not so easy.
The rent is so little – one scrawny, unsalable, inedible cow for every 20 in their herd – it is hardly worth the effort to collect.
But it is the principle of the thing. If the tenants don’t pay, they will claim they don’t have to pay… and if they don’t have to pay, the land will be theirs.
So, we rode up… counting on good humor and good sense to bring around the revolutionaries.
After all, they pay practically nothing in rent, they pay no property taxes, they pay nothing for water, and we bear the expense of keeping up the road and the farm. We also give them breeding bulls and rams so they can improve their stock.
Alas, the only revolutionary we could find was one woman – Maria “La Gorda” (literally, Maria “The Fat One”).
She was nice enough, but cunning and noncommittal. She would not pay her rent. But she asked for a scholarship for her son and a new house!
We are developing mental calluses to match our physical ones. The local people ask for things; we are learning to say no.
We are toughened up in other ways, too.
We clip the cows’ ears and put a hot branding iron on their flanks without thinking much about it. The dust blows hard; the sun beats down; the cold nights stiffen us up like the frost on the sagebrush.
But yesterday, we melted like ice cream…
Yesterday was Elizabeth’s last English class. The girls sat down at the table and prepared cards for her… and some for Don Bill too.
Three months ago, they were timid – frightened to say a word in Spanish, let alone in English. Now, they all yelled, “Hi, Don Bill!” and ran around the courtyard.
“I never expected this,” said Elizabeth. “I started teaching one girl, Fatima, because she wanted to speak to her aunt in New York. Then the others just kept coming. I didn’t do anything special, but the girls seemed to come alive.”
But Elizabeth did do something special…
“Come on, girls,” we heard her say. “We are going to say the days of the week and the months of the year… and then I’m going to show you how to make a chocolate cake!”
Elizabeth teaches them songs and nursery rhymes, tells them stories, and shows them how to do things.
She has had boxes of books shipped from Buenos Aires and lent them out to girls who have scarcely ever seen anything but school workbooks.
“They are used to hard living. But they are not at all hardened by it. I’m not just talking about not having running water or heat. Most of these girls don’t have fathers either. Or they don’t know who their fathers are.
“Family life around here can be fluid and precarious. But the girls are very innocent,” Elizabeth concluded.
“They are not jaded, or spoiled, or blasé. They don’t expect much. And when I tell them stories or read to them in English, they really seem to be delighted.
“They especially love the books. All the books. Some are too young for them. Some are too old. I even got Little Women in Spanish. But they love them all.
“So I set up a library in the house where they can come and get books. And I have another box of them coming up from Buenos Aires next week.”
The girls all made cards for Elizabeth.
“I will miss you!” said one.
“Have a good time in America,” wished another.
“We love you,” said another.
There were elaborate cards – some big, some small – with cut-out hearts… taped-on flowers… cutouts and pockets.
We worked in our office while the commotion outside increased. We had just come upon a fascinating study showing the costs of regulations imposed by Washington on the U.S. economy.
According to economists John Dawson and John Seater, over the last roughly half-century, the effect of government regulation on U.S. economic growth has been “negative and substantial.”
[F]ederal regulations added over the past 50 years have reduced real output growth by about two percentage points on average over the period 1949-2005.
That reduction in the growth rate has led to an accumulated reduction in GDP of about $38.8 trillion as of the end of 2011. That is, GDP at the end of 2011 would have been $53.9 trillion instead of $15.1 trillion if regulation had remained at its 1949 level.
This is yet another way we – the boomer generation – have stolen from our children. Had we left well enough alone, our children might have three times the job opportunities and three times the income.
We have been studying the ways old people – no older than your editor – have engineered a huge transfer of wealth from the future to the present.
We were wondering how it was possible to take real wealth from the future when a small face appeared at the window. It was little Mili – seven years old.
She came in with a big smile, turned up her cheek for a kiss, then took Don Bill by the hand and led him outside where the girls were dancing around.
Don Bill took a photo of the girls, put the camera down, and headed back to his office. As he went, Mili ran behind him, grabbed his hand, and gave him a card.
She had taken the petals from a red flower and pasted them on a piece of paper. On it she had written (we have taken liberties with the translation):
I write you this letter. I give you a couplet.
From the top of mountain
came down a little bug
It tumbled down a rocky cliff
And got a little hug
I love you much, Don Bill.
A Rebound in Commodities
|by Chris Hunter, Editor-in-Chief, Bonner & Partners|
Commodities are recovering…
The Thomson Reuters/CoreCommodity Index tracks the prices of 19 of the most commonly traded commodities.
The index has fallen 38% from its 2011 peak, marking a vicious and painful bear market for commodities investors.
But as you can see below, the index bottomed in March. And since then, it has been making a series of higher lows and higher highs – a classic bullish trading pattern.
Investors buy commodities when expectations of higher economic growth – and the higher inflation that tends to go with it – are rising.
It’s too early to tell whether this recovery will stick. But along with the rise in key bond yields, it signals that an inflation surprise may not be far off.
P.S. For more expert opinion on what’s next for commodities, make sure to sign up to the free e-letter from our friends at Sprott Global Resource Investments,Sprott’s Thoughts.
It’s edited by Bill’s son Henry. And it regularly features exclusive interviews with resource investing legend Rick Rule and the rest of the Sprott team. Sign up, for FREE, here.