“Viva The Chainsaw!”
Argentina's government gets the chop,
while the American Dream soars out of reach...
by Bill Bonner
Baltimore, Maryland - "The most exciting thing in the world of money and politics, right now, is the remarkable story of Javier Milei in Argentina. He brandished a chainsaw at campaign events, pledging to use it on the government. Now, against all odds, he is El Presidente…and he’s cutting the deadwood. All over the world people are wondering: shouldn’t we try this at home? We have two of our Bonner Private Research team on the scene to bring us the straight skinny – one in Buenos Aires and the other in Cafayate. Here’s the ‘Chainsaw Report” from Joel Bowman In the Paris of South America:
"Within the first 48 hours in office, Sr. Milei has...
Cut the number of "under secretaries" from 182 to 140.
Cut the number of secretaries [department chiefs] from 106 to 54.
Cut the number of ministries from 18 to 9.
He's also cut all superfluous ministerial expenses (staff cell phones, drivers, travel accounts, etc.) Currently, all people hired by the outgoing president (Alberto) across all divisions of the government are under review. The presidential spokesperson reiterated that "the national spending cuts have just begun." Also in the news, perhaps unrelated, a fire has broken out in the building next to the Ministry of Labor with reports there was an explosion. Some are speculating they're "burning documents."
Yesterday, more wood chips flew. Bloomberg: "Argentina’s Milei Devalues Peso by 54% in First Batch of Shock Measures." Government to introduce crawling peg that weakens 2% per month. Milei to slash subsidies and social security payments The newly inaugurated administration weakened the official exchange rate to 800 pesos per dollar, Economy Minister Luis Caputo said in a televised address after the close of local markets on Tuesday. It was 366.5 per dollar before the address.
Milei needs to move fast. Argentina has run out of money. And the parasites, powers-that-be, and elite know-it-alls around the world are doing everything they can to stop him. Because he is a real reformer, not a fake. Milei is no ‘right-winger’…no ‘Trump clone.’ He’s something else altogether; he’s actually trying to reduce the power of a bankrupt government. Is it possible? With so many powerful special interests against him? We will see.
The American Dream - In the meantime, the Biden Team goes in the other direction, and wonders why Americans don’t appreciate it. CBS news: The "American Dream" costs far more than most people will earn over their lifetime. The "American Dream" costs about $3.4 million to achieve over the course of a lifetime, from getting married to saving for retirement, according to a recent analysis from financial site Investopedia.
Meanwhile, median lifetime earnings for the typical U.S. worker stand at $1.7 million, earlier research from the Georgetown University has found. Another analysis, from USA Today, found that funding the American Dream costs about $130,000 a year for a family of four. Median household income stands at about $74,450, according to the Census Bureau.
‘What went wrong?’ is the question we’ve been asking. How come the richest people in the world, in what should have been the richest period in their history – 1980-2020 – made so little progress…and actually slipped backward by most measures?
In our businesses and our private lives, pruning goes on all the time. Businesses go belly up. Investments fail. People are fired. Wives file for divorce. Customers go over to the competitor. People die. The sound of chainsaws is never far away. Like cutting off the ‘suckers’ on a fruit tree, unnecessary or unproductive limbs are lopped off.
In a sense, the whole idea behind Fed policies of the last 20+ years was to keep the chainsaws off the job. The dead wood was propped up by ultra-low interest rates; bad ideas were financed with below-inflation loans; no-hope ‘investments’ drew in billions in EZ money. There was no discipline…no corrections. With phony prices, often there was no way to tell what was a good use of money and what wasn’t.
One Nation, Under Debt - The most telling artifact of the period, 1980-2020, is the nation’s $34 trillion in debt. Each dollar is a mark of shame. Baby boomers wanted ‘something for nothing.’ They got it by leaving their sons and daughters the bill; giving them nothing for something. Younger generations will pay, probably for their entire lives…and probably in the form of financial chaos and higher prices, for goods and services delivered to their elders.
How was it possible, they might wonder, that people so rich – the richest people ever in the history of the world – couldn’t pay their own way? Were they so strapped for cash that they had to put the costs for their wars and jackass programs onto their children? Did they think that their own plans…goals…and Christmas lists were so important that other people – even those who hadn’t been born yet – should pay for them? And that their children would have no spending plans of their own? What the US needs is a good Husqvarna too. More to come…"
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