"High Stakes Monopoly"
by Bill Bonner
Rancho Santana, Nicaragua - "The local news comes in whispers. “You wouldn’t believe the panic that has gone on here. They’re running scared. And I don’t blame them.” Our old friend was being cautiously optimistic. In the wake of Maduro’s kidnapping, much of Latin America is either rejoicing...or going into hiding.
Here in Nicaragua, the regime led by Danny Ortega and his wife must be particularly nervous. No country was closer to Cuba and Venezuela than Nicaragua. “Rumors are flying all over the place,” continued our friend. “Some say the Ortegas have activated their revolutionary, Sandinista-era cells. Nobody dares to say anything out loud, because anyone might be a member of a cell, reporting to the Ortegas who said what to whom...and who might be an enemy. Danny Ortega is 80 years old...and they say he’s sick. It’s his wife who actually runs things. But, there’s going to be a change. Nobody believes the family dynasty can hold onto power - at least not in the present form - for much longer.”
This could be good news. Or bad news. Most people would say that a change in government in Nicaragua couldn’t be bad. But that’s what they thought in Russia in 1917. And France in 1787. And America in 2024. Here at Bonner Private Research we maintain our sunny disposition by realizing that however bad things are they can always get worse. In the US, worse is where we think things are headed. But not necessarily here in Central America.
We’re down on the ‘Nicaraguan Riviera’ enjoying sunlight and beaches...fresh fruit and AC...and the happy status of marginal people everywhere. We sit on our porch and hear the waves crashing onto the long beach down below. A housemaid brings us a cup of coffee. A dictator in Managua? An autocrat? A big man? Not our problem!
Last week, out for a swim, we stepped on a string ray. It was very painful. “Did you go to the clinic?” asked a friend. “Nah, we went to the source of all knowledge - the internet - and asked it what to do. It said to put the foot in hot water. So, we sat on the edge of the tub with our foot in the water. Within seconds, the pain went away. As soon as we took it out of the hot water, however, the pain came back. We checked the internet again. It said to leave it there for an hour. So, we did. Then, it was completely cured.”
Apart from that, our visit to Nicaragua has been completely agreeable. And yet...here’s the message from the US State Department: "Reconsider travel to Nicaragua due to arbitrary enforcement of laws, the risk of wrongful detention, and limited healthcare availability. Exercise increased caution in Nicaragua due to crime."
Crime? Nicaragua has about six homicides per 100,000 people per year. In Baltimore, meanwhile, the mayor is celebrating a 50% drop in murder rates. But last year there were still four times as many homicides as Nicaragua. The US as a whole has a higher murder rate than Nicaragua too - at 10 per 100,000.
According to the locals, there are no gangs in Nicaragua...and no drugs. They are probably exaggerating, but one of the few advantages of a dictatorship is, generally, less free-lance crime. Dictatorship or Democracy, the feds aim for a monopoly on the use of force. Dictators dispense with the ‘rules based’ procedures – such as ‘due process of law’ - that protect criminals...political rivals...or people they don’t like. The result? A tighter monopoly on violence.
But dictators can lose control too. The Tren de Aragua gang is very active in Venezuela, apparently. It grew out of the crackdown on crime that put a large number of low-lifes in Venezuelan prisons. There, they formed alliances and traded skills, and built the gang that is so powerful today. In effect, the prisons turned into crime universities. And now the government must share its bully power with them.
Nicaragua doesn’t have that problem - yet. But a change of command is always dangerous. One of the charms of democracy is that its elections and succession rules avoid murderous power struggles. But once the rules go out the window, violence tends to come in the front door.
The revolution began in France in 1789 and lasted until the Coup de 18 Brumaire in 1799. There was the storming of the Bastille, the Great Fear, the Commune, the Jacobins, Monarchists, Reactionaries, Constitutionalists, Girondins, Montagnards, uprisings in Bordeaux, Lyon, Toulon, Marseilles, and Caen, and the Reign of Terror. There were also price controls, fake money and 3,500% inflation.
The civil war in Russia lasted five years following the abdication of the Tsar in 1917. Roughly 10 million people died - mostly civilians - until the ‘whites’ finally gave up in Vladivostok. They tried price controls and fake money too...one English pound was worth 45 rubles in 1917; by 1923, it was worth more than 5 million of them.
And here’s how the Ottoman Empire, 1566, avoided a power struggle. JSTOR Daily: When Mehmed III was crowned, he called his nineteen brothers into the throne room. They had nothing to fear, he told them, for he had only brought them there to be circumcised. In the next room, the assassins were waiting. One by one, the princes trouped in. One by one, they were throttled with a silken bowstring. The youngest was only eleven. Mehmed III didn’t stop at killing his living brothers. He also executed 15 women pregnant with his father’s unborn children. He thus consolidated his authority through bloodshed by killing the competition.
With luck, the transition, when it comes, will be peaceful in Nicaragua...and in the US. Our old friend leans forward. “They saw how easy it was to take out the Maduros,” he whispers. “And they don’t want to end up in a New York prison. I think they’re secretly negotiating with the CIA already.” More to come..."
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