GUALFIN, ARGENTINA – “Watch out, Bill. The originarios almost killed someone up the valley,” our lawyer warned us.
“He’s still in a coma.”
The latest news isn’t very encouraging.
The originario problem was supposed to have calmed down.
Last year, they invaded our ranch and blocked the roads. We called the police, who came and cleared them out. Then, a judge ordered them to back off.
That’s where it stood for nine months.
When the populist government in Buenos Aires was thrown out at the end of 2015, we thought the originarios would give up.
They lost their financial support. The local activist – who had been visiting our farm regularly and inciting insurrection – stopped coming.
Apparently, he was out of funds.
But then, as though in desperation, a new wave of violence and absurdity began. We’ll finish this story in just a moment… First, let’s put it in perspective:
There are a lot of ways to steal. Computer hackers and holdup men operate privately and illegally.
The police get on the case. But The Washington Post reports that the cops steal more property than the burglars:
[B]oil down all the numbers and caveats above and you arrive at a simple fact: In the United States, in 2014, more cash and property transferred hands via civil asset forfeiture than via burglary.
Robbers only took about $4 billion. The sticky-fingered police took $5 billion, with no due process… and no charges filed.
Typically, with civil asset forfeiture, the police stop someone for a traffic violation. They find some cash in the car. They take the money and use it to put a jacuzzi in the police station… or to beef up their pension funds.
A well-financed victim with a clean police record will hire a lawyer and eventually get the money back… maybe.
But often, the amount is too small to justify the cost of recovery. And many times, victims fear the police and are afraid to contest the matter.
Government is meant to protect us from thieves. But the $5 billion taken by the police is peanuts compared to what the government takes from the tax system.
This year, it’s expected to haul in some $3.5 trillion in stolen goods.
The common myth is that this money is used to “run the government.” But it’s not true.
A little, teeny bit of the money is used for genuinely useful government activities such as national defense. But most of it is merely transferred from the outsiders to the insiders… from the makers to the takers… and from the losers to the winners.
“Taxes are the price we pay for civilized society,” said Oliver Wendell Holmes. What was he thinking?
Civilization is based on win-win, voluntary exchanges and consensual relationships. It is courtship, not rape.
Taxes are a residual form of slavery. People have no choice. They feel the lash on their backs. They bend over… pulling their plows… toting their bales… and lifting their burdens… for the benefit of someone else.
Yes, of course the thieves say, “It is for your own good.” But they would, wouldn’t they?
But let us turn back to the larceny going on right here in our own backyard…
On Sunday, we saddled up two horses and rode through the pass that separates our ranch from our neighbors.
The ride through the canyon takes a few hours… but it is breathtaking.
We trotted along in shallow water, admiring the huge rocks sculpted by wind and water.
On the other side, there was an abandoned vineyard… and some fields that seem to have been neglected altogether.
But we eventually came to a larger river… with green pastures on the other side.
That land has been in the same family for more than 100 years.
It was bought by an enterprising fellow who made his living trading skins and mules in Chile, on the other side of the Andes.
The trek was almost unbelievably difficult. It passed through some of the highest and least hospitable land on Earth. But somehow, he made a profit and used the money to buy the farm – about 30,000 acres… with maybe only 200 acres usable for agriculture.
He has long since died. Now his grandchildren own the land.
One of them, a granddaughter, sold her interest to her brothers. But then she announced that she was an originario – the people pretending to have “indigenous rights” and claiming almost all the big farms in the Calchaquí Valley. As such, she said she should own the whole place!
When the Inca invaded the area in the 1400s, they seized the land and turned the locals – called the Diaguita – into slave laborers (“taxpayers,” in modern parlance).
What happened to them after is unknown. But the language disappeared even before the Spanish arrived.
Then the conquistadors conquered the Inca Empire. They spent more than 100 years mopping up local resistance. And the Spanish crown gave land grants to its captains and cronies.
One of them got much of this section of the Calchaquí Valley. It passed from one owner to the next, by voluntary transactions, for the last 300 years, down to your humble editor.
Over the years, groups of local “Indians” staged uprisings. None successfully. Most were put down in bloody reprisals.
But now, a law enacted in faraway Buenos Aires has created a new crisis.
The law gives “indigenous people” the right to claim the land where they have lived according to their “traditional ways.”
Trouble is, who’s to say who is “indigenous” and who lives “traditionally”? Is a guy with a pickup truck living traditionally?
No trace of the language or culture of the Diaguita remains, say the experts. But now people declare themselves “Diaguita” and claim land that belongs to someone else.
In one case, the local “Diaguita” wanted the house of a small electrical contractor.
They moved in and said they weren’t leaving unless ordered to do so by the courts.
Here, as in the U.S., courts can move slowly… especially when they are dealing with an issue as vague and mushy as “indigenous land titles.”
In fact, the poor man had to live with these intruders for more than a year until a court finally tossed them out.
Fuzzy laws produce fuzzy outcomes. People see an opening for mischief.
In the northern part of the valley, a local “indigenous person… a Diaguita” has proclaimed himself “chief” of the tribe. It didn’t seem to matter that his mother was German… or that his father, who may or may not have roots in the area, refused to recognize him.
Across the mountains in front of our house, a friend has a small farm. She and her husband are from Switzerland. They were enchanted by the people, the place, and the project – a biodynamic vineyard.
She uses no chemicals. She does almost all the work herself… by hand… or with a workhorse. She has one employee, who helps her and looks out after the place when she is gone. He lives in a house on the property.
Well, she apparently had a falling out with her employee. We don’t know what was said or why.
But the employee had an ace up his sleeve. He said he was an originario and that the place should belong to him. If she didn’t like it, she could leave!
There seems to be no end to it. All a person has to do is declare himself an originario – with no evidence and no proof necessary – and he can set himself up as the owner of your land.
Then, depending on the politics of the situation, you may be able to hold on to it… or maybe not.
We’re taking no chances. We’re claiming originario status for ourselves.
By Jeff Brown, Editor, Exponential Tech Investor
Editor’s Note: On Monday, Bill reported that he was the victim of cybercrime. So today, we asked our resident tech expert, Jeff Brown, to share his insight into the world of cybercrime and cybersecurity.
During the first three months of this year, I attended seven conferences and several other tech-related events.
One of them was the RSA Conference.
It’s the major cryptography and cybersecurity conference of the tech industry. It has become absolutely massive (43,000 visitors).
The company that put on the conference, RSA Security, created and successfully deployed public key cryptography. That’s the underlying technology that allows people to send encrypted messages back and forth.
The conference was a great place for industry meetings, but many of the presentations are highly “scrubbed.” Companies are not as open and forward-looking as they used to be.
The big boys like Microsoft and HP had almost nothing interesting to say. Their presentations were so generic and fluffy. I almost fell asleep.
But there was one aspect of the Microsoft presentation that caught my attention…
Last year, businesses lost $1 trillion to cybercrime. And that number is expected to grow to $3 trillion by 2020.
Cyberattacks on major companies have been in the news in recent years. Cybercriminals attacked health insurance company Anthem (ANTM) in 2015. Tens of millions of customer accounts were compromised. Yahoo (YHOO) was the victim of a number of cyberattacks in 2016. Yahoo was forced to renegotiate its merger with Verizon as a result, losing $350 million in the process.
Large cybersecurity firms can’t keep up with the surge in cybercrime. Their product development is just too slow. And even if a firm could put in place all the safeguards necessary to keep networks and data safe, the defenses would be so burdensome that the organization wouldn’t be able to function.
You can see the scale of cyberattacks for yourself by looking at this interactive map.
The majority of cyberattacks originate in three countries. You probably won’t be surprised to learn that the first two are China and Russia. But it may shock you to know that the U.S. is the third. The U.S. is also the largest target for cyberattacks, as it is the most lucrative for cybercriminals.
Most attacks happen between 9 a.m. and 5 p.m. local times. That’s right: Criminal organizations and government-sponsored hackers tend to work day jobs.
The bottom line is that the market simply doesn’t understand how severe these threats are.
The cybersecurity market is undervalued right now. Enterprises are too complacent. I believe that we will see a large, very public, expensive, and painful cyberattack this year that will reignite the cybersecurity industry.
— Jeff Brown
Editor’s Note: We are currently looking for a talented market analyst to help Jeff research and share cutting-edge tech developments with his readers. Do you have what it takes to join our team? Learn more about this opportunity here.
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In response to yesterday’s Diary, “‘The Donald’ at Bat,” readers weigh in on Trump’s tax reform plans.
If The Donald figures out he’s not the elephant in the room anymore, things may go much better for him. That’s probably not in his self-glorified DNA. He’s got his own party to answer to now, for starters. I suspect the markets will dive if his tax cuts don’t go through by around June.
– M. Connelly
You must have learned how to use a hammer early in life because you continue to hit the nail on the head almost every time. The government has worked on the allocation appropriations plan for far too many years. Revenues come into the “money pot” at the U.S. Treasury.
However, revenues for the coming budget year are “estimated” to be received and we all know about government estimates. The allocations to pay the bills are based on assumed income and if those estimates aren’t right, they can print more money to fill the gaps or raise the debt ceiling.
What a hell of a way to run a railroad!
– J. Burnette
We are living in the best of times and the worst of times. We tend to believe that we elect people who will look out for our good, which is never the case. Bill Bonner and others try to help people save themselves from the coming disaster. Living in California, I feel we are the epicenter of what is coming.
– D. E.
Meanwhile, one reader writes in with praise for Bill’s own simplified tax plan.
I always enjoy your articles, especially the ones about your ranch in Argentina and the family (I am an old farm boy). I liked your simplified tax plan. Reminded me of when I worked and lived in Singapore. They collected your income information from your employer and you added any other income by April 15. There was no tax taken out of your pay by the employer. Sometime before Jan 1 you received a notice how much you owed and had six months to pay it.
As you said, imagine how many businesses and accountants would go out of business. Talk about efficiency. One time I came back to the U.S. for 2 months. 24 hours after I entered the country, I had a notice in my office that said I owed several thousand dollars in back taxes. Fortunately, it was a mistake, but I was impressed how quick they found me.
– J. Smith.
Recently, our colleague Teeka Tiwari released one of his popular 3-Minute Market Minder videos.
These videos are useful, and brief, updates on developments you won’t hear from Bloomberg or read in The Wall Street Journal.
Today, Teeka shares an important insight into an emerging technology that is revolutionizing how business is done. Watch it for yourself here.