"Dry Land"
In the US, the Swamp has spread from under 10%
of the US economy in 1930 to close to 50% today.
As the Swamp expands, less and less dry land is left for private life.
by Bill Bonner
Poitou, France - "We are watching events in Argentina. Like a political prisoner in a dark cell, we listen to the explosions and hope the revolution goes our way. An old friend, Rob Marstrand, lives in Buenos Aires. He’s been paying attention too... and betting heavily on Javier Milei’s success at rocking the boat.
He reports that the legislature (or, the ‘rats’ nest’ as Milei calls it) was given a huge reform package, designed to reduce the reach of the Argentine feds. After weeks of trimming... massaging... and horse trading, the measure reached the Senate. And there, it was debated from 10 a.m. until early in the morning the next day.
While this was going on, mobs formed in the streets and set cars on fire... including one with a reporter in it. Rob reports: ‘It was a tawdry spectacle, but a reminder of a universal truth. Members of the militant and petulant hard left don't sit quietly when they don't get their own way. They go out and break things.’ Finally, the vote was taken. It was dead even. So, the Vice President, Victoria Villarruel, who presides over the Senate, cast the deciding vote... and the measure passed.
Was it all that Milei wanted? Was it ‘mission accomplished?’ No, of course not. But it was a giant step forward. Rob reports: "It's a good start. And if economic growth starts to rebound in the coming months, and ordinary people start to feel the benefits fairly soon, and hopes of a better future become embedded, then the country has a real chance of creating a virtuous circle of economic success.
I remain mildly optimistic, which is a big change from the deep pessimism I felt last year, as the country barrelled towards hyperinflation. But I recognize that there's still plenty that could go wrong. The crucial thing is that Milei's reforms start to bear economic fruit before the struggling populace loses patience. But even getting inflation down to normal levels will be a big win, to allow average wages to catch up with prices, and no longer fall behind every month."
Fruit? Here comes a juicy peach. Bloomberg: "Argentina monthly inflation slows to lowest level since 2022." "Consumer prices rose 4.2 percent last month, less than economists estimates for five percent and the lowest level since January 2022. Monthly inflation in Argentina slowed to its lowest level in May since early 2022, capping the fifth straight cooler print under President Javier Milei as market doubts linger that the trend can be sustained."
While far from a definitive victory, a slower pace of price increases marks another positive development for Milei... after the majority of his economic reforms passed through the Senate... in a pivotal vote.
All over the world, dreamers and schemers turn their lonely eyes to the pampas. Nation states have become larger, more ambitious, more controlling, and more and more powerful. Taxes, debt, inflation, regulations, rules — the thicket of restrictions and permissions gets denser and denser. In the US, the Swamp has spread from under 10% of the US economy in 1930 to close to 50% today. As the Swamp expands, less and less dry land is left for private life. Argentina is the only country on earth making a serious drainage effort.
Deng Xiaoping approved the ‘capitalist road’ in 1979... and then, Mikhail Gorbachev liberated Eastern Europe in 1991. Milei aims to lead the first and only peaceful, intentional liberation since the fall of the Berlin Wall. If he succeeds, it not only points the way to more successful turnarounds - maybe even in the US - but also to enormous potential profits. Big money was made in both Chinese stocks... and in Eastern European stocks.
After 1999, the Warsaw stock market rose eight times. The Shanghai index, meanwhile, rose from only 128 in 1991 to almost 6,000 in 2007... now back down to 3,000. And Argentina’s Merval Index is already up a stunning 47% year-to-date. Stay tuned."
No comments:
Post a Comment