So, word got out here in Argentina that I was turning 70. And that meant a fiesta was in order. I hate celebrating my birthday, but it would be churlish to wave off people who like that sort of thing.
I was invited to a party put on by some of my neighbors. Vintners, horse breeders, ranchers, farmers, and the like. An interesting group. Rich, sophisticated, the local upper crust; I’d only met perhaps a third of them before that evening. It turns out that most of them get together weekly, at one estancia or another, and have an exotic asado cum drinking party. I served as this week’s center of attention and entertainment.
It was different from similar parties I’ve been to in Buenos Aires in that everyone here was speaking Spanish, with a smattering of English. In BA, the conversation at a dinner table is typically multilingual—Spanish, English, French, German, and Italian can all be used.
People were patient with me, understanding that Americans, among their other faults, generally lack linguistic sophistication. My French (now rusty and affreux) is still better than my Spanish, mainly because I went to school for a year in Switzerland. My German is even worse, even though the 500 basic English words are all German cognates.
I’ve always envied Sir Richard Burton, who, it was said, could speak 10 languages fluently and 15 more reasonably well. But that is now, I suppose, a quaint 19th century skill. Soon, your smartphone will give you simultaneous translations in a hundred tongues.
Anyway, back to the party. Argentina, of all the countries in the world, most resembles ancient Rome. The whole country revolves around BA, the way the early Roman Empire revolved around Rome. Successful people all have a place in the capital, one in the country, and another on the ocean for when it’s hot in the summer. And they socialize like the Romans, with dinner parties that last well into the wee hours, as a matter of course. First, you’re served hors d’oeuvres and champagne. Then various sausages and warm meats. Then the main course and vegetables. Then pasta. Then fruit and a desert. You’re now halfway through. Next come the after-dinner drinks and cigars. Finally, coca leaves, which most everyone chews for the rest of the evening; they’re a delightful digestif. And conversation for the whole six hours.
What did we talk about? Many things, of course, including the economy, the world situation, politics, and the recent Argentine and upcoming U.S. elections. And, for exotica, my recent (a couple weeks before) visit to Zimbabwe.
Everyone had heard it said that Hillary was going to be the next president. Nobody liked the idea, if only because Argentina has had uniformly disastrous experiences with populist female politicians.
Peron’s first wife, the famous Evita, acted as a shadow president and set the tone for the country’s long decline. Then came Peron’s second wife, Isabel, an Evita look-alike/act-alike, who was first his vice president then succeeded him as president after he died. Then came Cristina Kirchner, the wife of another president who died in office. Who supported Evita, Isabel, and Cristina? Exactly the same type of people who support Hillary in the U.S.—the 50% receiving state benefits, the envy-driven, the stupid, the naïve, the ignorant, and, of course, those members of the moneyed classes who use their political connections to steal massive quantities. Everyone (including myself) was shocked, but extremely thankful, that Cristina’s surrogate was beaten by Mauricio Macri.
Macri is hardly John Galt, but my guess is that the country will experience a boom in the next few years. Why? Agricultural products are at rock bottom after a long, deep bear market; tens of billions of additional money will flow into Argentina with higher ag prices. The new government has discarded agricultural export taxes ranging to 40% (before income and other taxes); as a result, production will likely go up 50%, bringing in many more billions. Some of the estimated $200 billion that Argentines have abroad is now likely to come back. And with the settlement with the holdouts from the government’s $100 billion default of 15 years ago, lots more money will flow into the country. A general deregulation of the economy, now in progress, will further increase prosperity.
So, I told them, things were likely to get better in Argentina while they would get worse in the U.S. They agreed, since everything they read and hear assures them that Hillary is certainly the next president. But I told them Trump would likely win in a landslide. They were shocked, since all the foreign media describe him as the devil incarnate. I assured them that he was the lesser of two evils. And then shocked them again by saying that since I don’t care to be complicit in a crime, I wasn’t voting.
Titillated by these outrageous views, they wanted to hear about my week in Zimbabwe. I told them I was there pursuing my longstanding hobby of trying to peacefully replace dysfunctional governments. Since I first hatched my unique approach to the task, I’ve taken a shot at about a dozen Third World backwaters. It started 35 years ago when I proposed to a certain small Caribbean island country that they issue “economic citizenships.” Then on to my first dictatorship run by a frightened sociopath. Then to a couple places in the Pacific. A military dictatorship in South America. A few trouble spots in Africa. Then an Islamic republic. Then Zimbabwe.
For your reference, a very brief summary of the plan I pitched to government leaders can be found here. There have been times I thought I was pretty close to making the sale. Including Zim this time. Since they totally destroyed their currency in 2009, they’ve only used foreign units—South African rand, Botswana pula, Zambian kwacha, euros, and, of course, dollars—to buy and sell. People prefer dollars, since they’re far more fungible than the other units.
But since the U.S. government has the country (or at least almost all of its leaders) on its naughty list, dollars are hard to come by. That’s especially true because Zim has huge balance-of-trade and balance-of-payments deficits. It has to import almost everything since the government has effectively destroyed all the domestic industry, including agriculture
I first went to Zim in the late ’70s, when it was Rhodesia and a full-blown civil war was raging. Which is, believe it or not, often the best time to visit a country. At least if you’re looking for either adventure or bargains. Boredom and high prices, their opposites, dominate all the popular places. I was there a couple of times when it was Rhodesia, once when it was Rhodesia-Zimbabwe, and several times since. Including at the very height of the famous runaway inflation in 2009. I still carry a 100 trillion dollar bill in my wallet as a conversation piece.
It’s signed by Gideon Gono, who was the chairman of their Reserve Bank at the time. You may be asking yourself: What kind of man could Mr. Gono be that he’d print a 100 trillion dollar bill? As it turned out, I spent a fair amount of time with Gideon, and not only is he highly intelligent, not only does he actually understand economics, but—and I kid you not—he quotes Ludwig von Mises and follows Austrian economics. And, when we had dinner at his house, he played a CD of Porter Stansberry speaking about money. Gideon is the personal banker and close personal friend of His Excellency the President Comrade Robert Mugabe.
Unfortunately, I never met with the Big Man himself for reasons that remain a bit unclear. The 93-year-old may have been in Singapore for medical consultations, and that would be considered a state secret. But I had excellent meetings with all of his ministers who have anything to do with economics, finance, or trade. They were all very receptive to my radical plan. It was a bit of a “Twilight Zone” experience to get that kind of reception in a central African country on the cusp of a real disaster.
Why do I say that? Because the government is totally and absolutely out of money. They don’t have a national currency and don’t have enough foreign paper (rand, pula, dollars, etc.) to pay even teachers or nurses. Or, much more important, the 40,000-man army. Any government that doesn’t pay the army is asking for trouble, especially in Africa. I probably should have gone out of my way to meet some generals.
Instead, I wasted a morning with a current co-chair of the Reserve Bank and a bunch of her “economists”—so called because they all had degrees from prestigious universities. It was the only place me and my radical plan got a cold reception. The reason is that they’ve just come out with a new currency, in effect a bond, which they promise to redeem in U.S. dollars at some future date. It will, of course, reach its intrinsic value of zero in short order.
In any event, my Argentine dinner companions were entertained with the goings on of a country that they’d only vaguely heard about. And ears perked up when I mentioned that while I was in Zim, there was a polo tournament (Argentina being the world’s polo capital, one of the reasons I moved there) outside Harare with eight teams—which means 32 players and somewhere between 120 and 200 horses. It’s amazing to think this is happening while about 80% of the country’s 12 million people are on the ragged edge of starvation. But that’s par for the course in a centrally planned, hyperinflationary economy. Argentines understand that perfectly.
And Americans will get some firsthand reality on it, too, over the next few years, I promise.
Editor’s Note: As Doug said, Zimbabwe’s economy is a mess. The country is on the brink. It’s a genuine crisis. But it’s also a genuine opportunity as Doug and Nick Giambruno found from their recent trip. They put together a video that shows what they found. Click here to watch it now.