Bitcoins – Coins For the Cryptocracy

People all over the political spectrum are pushing bitcoins again.

I explained earlier why I felt you should avoid them. When I did, I withheld any reasoning except the most logical and self-evident.

Short version:

You can accomplish everything that bitcoins can achieve with good old cash. And you don’t need electricity, internet, computers, devices, and security software when you use cash.

Second, if governments hate cash for its secrecy, why are they ignoring or pushing cryptocurrencies, which are supposedly even more secretive?

Makes no sense, does it?

The problem with bitcoins is they provide a solution for what isn’t a problem.

Secrecy isn’t a problem.

Secrecy can be achieved as is, if you set your mind on it.

The real problem is that every increase in secrecy augments the power of the cryptocracy – the unholy alliance of the spy agencies, criminals, and criminal financial cartels.

These are the forces that actually control our lives.

The criminal ruling class loves bitcoin because they know they have the power to exploit it fully. The ordinary chump just thinks he does.

As for Satoshi Nakamto, there’s no such person. It’s a made-up name, even though it has a meaning. A sinister one that gives the game away.

Don’t let clever people fool you into thinking it’s a real person.

They are probably being compensated for saying so.

Remember, practically every political site of any size on the web is in bed with intelligence. When they are not, they get pruned regularly.

Just see what happened to me here.

Bitcoin comes out of Israeli cryptographic research. The details I don’t know, but that’s generally accurate.

It’s not about saving anyone. It’s about enacting the kabbalist’s vision on earth.

That vision demands that the Anglo-Judaic Western powers rule the world through decentralized systems.

Those who are pushing bitcoin are on board that agenda.

I am too busy recovering from the latest body-blow from the cryptocracy to spell it out better just now.

But I will get to it.

If you want to gamble, go ahead.

But if you adopt bitcoins because you think your life will become opaque to the powers-that-be, you might want to rethink that.

The only way to hide anything done on your computer is to turn it off, smash the hard drive into metal dust, and throw it into a nuclear waste site.

But even then, there are still the servers and the other fellows’ computers.

Not to mention advances in technology or mathematics that will turn bitcoins invulnerability into mush.
















25 Reasons To Be Glad To Be In America


Right now, in this country, even with all its problems,

1. You can buy a condo on a lake for under $15,000.

2. You can buy a house in a good neighborhood that needs a little work for $25,000. You can buy a trailer for under $1000.

3. You can sell unskilled or semi-skilled labor for $12-$20 an hour.

4. You can pay little or no taxes on a wage of under $35,000, if you go into business for yourself, know how to structure it, and are the head of a household with children.

5. You can earn a money-making qualification online for less than $1000, and you can get the money for it, if you don’t have it. You can pay it back on time after your graduate. You can learn how to fix anything in your house that doesn’t need a license, by watching a You-Tube video.  You can learn any language online, for free. You can learn to play a musical instrument for free, and you can record and play your own tapes for free.

6. You can fly to a foreign country and back for under $100, if you know where to look and when.

7. You can buy a fresh loaf of bread, a big bag of crackers, a big bottle of shampoo/detergent, a box of pasta, each for $1.

8. If you bought items in bulk and with coupons, you could even get them for less. And if you cooked your own food and kept it very basic, you could feed yourself for under $50/mth.  Even less, if you fish or have a little garden.

9. You can get a gym membership for $10/mth. You can create a home gym for under $10.

10. Most of the people who were foreclosed on didn’t have much money in their homes. Those that did have the means to sue, a legal system they can use without putting up a dime, and a free PR machine on the web with tools like blogger and wordpress.

11. You can rent a room in any city for $250/mth or even less, if you do some chores. You can live for free if you do housework, or can take care of older folks.  You can rent a trailer for a month for under $300.

12. You can buy a computer for under $200, brand new. Second-hand computers that are functional can be bought for under $100. You can use a computer for free for an hour or more in any library.

13. You can get access to sophisticated hospitals and treatment for an insurance payment of about $100/mth. It’s not full coverage, but it will cover your for emergencies. You can get an alternative consultation for $50. A bottle of vitamins is less than $8. You can buy herbal remedies for even less. You can get excellent health advice free on dozens of internet sites. You can learn yoga online without paying a dime.

14. You can buy a functioning car for under $500.

15. You can borrow money at under 5% for most things and you can structure and restructure your finance in dozens of creative ways to save you money

16. You can buy a stock for $7.

17. You can educate yourself completely free at a good public library, available in any town.

18. You can read practically any classic book in the world on the net, for free.

19. You can make your own movies or documentaries for next to nothing on You-tube.

20. If you have a brilliant idea, you can get someone somewhere interested enough to pay you to develop it.

21. You can work at home and make $15,000/yr with minimal skills, if you don’t mind clerical work.

22.  If you are out of luck, you can get meals and a place to sleep for free, for at least a week, in almost any city in the country. You can buy a presentable work outfit at a thrift store for under $5.

23. Almost anywhere you can find a church or a shelter to feed you and help you find a job, even if you just came out of prison.

24. You can phone anywhere in the US for free on a computer. You can get a basic internet line for $20/mth. Or you can get free wi-fi at dozens of cafes and libraries in any city. You can sit in them and enjoy their facilities, their electricity, and AC and heat for free, day after day, and no one will question you.

25. You can go to sleep every night in peace and quiet, with no airplanes and bombers flying overhead. You breathe clean air. The phone and internet work well almost all the time. The buses run on time. The trains run on time. Taxis are cheap in most cities. So are buses. You can travel anywhere in the country by bus.

World Gold Council, Rothschild-backed Fund Buy Stakes In BullionVault

London’s BullionVault, an Agora friend and possible partner/affiliate, and,  so far as I know, a very reputable firm has recently announced that the World Gold Council and Augmentum Capital (backed by Jacob Rothschild’s RIT Capital) has bought stakes in it, in return for a 12.5 million P. investment. I must say I’m not too happy about the news and may look into James Turk’s Gold Money as an alternative. The World Gold Council has been an integral part of the gold-suppression scheme that is at the heart of the financialization of the economy from 1970 onward. (Full disclosure: I have an account at BV). Continue reading

Fannie CEO Raines’ Emissions Patent Would Make Millions From Cap-n-Trade

From Jerome Corsi, World Net Daily, June 18, 2010:

“Former Clinton and Obama budget adviser Franklin Raines owns a key carbon-emissions patent he developed as CEO of the government-sponsored mortgage giant Fannie Mae, positioning him and his partners to make millions of dollars if it is used in any carbon-capping scheme implemented by the Obama administration. Continue reading

John Hussman: Not Concerned About Inflation

John Hussman:

“The bottom line is that we can expect real wages to stagnate for several years, as a predictable reflection of slack capacity in the labor market. While credit concerns will be helpful in augmenting the demand for U.S. government liabilities as a default-(food poisoning)-free alternative to other assets, there is a continued prospect for significant price inflation beginning in the second half of this decade. With the ECB surrendering monetary discipline for the sake of short-term expedience, that prospect has become even more hostile. Continue reading

Airline Prices Could Go Up 25% Says Industry Spokesman

Airline prices are set to rise this summer, says an industry spokesman:

“Airline capacity and routes flown are still down compared to recent years,” said Mark Koehler, Priceline’s senior vice president, Air. in a statement.

“We haven’t experienced the widespread, aggressive airfare sales seen a year ago. In general, travelers will find that summer airfares could be as much as 25% more expensive than last year, on average, and that’s before factoring in extra fees for baggage, pillows, food and such. Travelers who want to save on air travel will need to plan ahead, be flexible and try different approaches to booking their trips,” he said.

Airlines have started to see increased traffic as travelers returned after cutting back during the recession. The International Air Transport Association recently cut its full-year loss forecast for the airline industry by half to $2.8 billion.

Shares of airlines stocks jumped this morning.”

So, for anyone planning to become a stateless globe-trotter – and we’re all for it if your wallet can take it – here’s another monkey-wrench tossed into your plans.

Not only are fees and security at airports increasing, as I’ve blogged before, but prices and services on airlines are going up too. They even have a lavatory fee coming up at budget airline Ryanair. And they’re thinking of reducing the number of lavatories to make room for more seats.

Personally, I don’t think budget airlines – unless you fly often – are much of a saver. I’d rather pay $100 more and feel free to carry as much luggage as I want, get fed regularly with something other than $5 bags of pretzels, and have wait-staff paid enough not to glower at you.

Not long before you’ll be asked to bring your own seats or stand all the way….

What David Einhorn’s Holding

From Market Folly comes a break down of controversial hedge-fund manager David Einhorn’s portfolio:

Top 15 holdings by percentage of assets reported on his 13F filing

Pfizer (PFE): 7.64%
CareFusion (CFN): 7.32%
Cardinal Health (CAH): 6.86%
Teradata (TDC): 6.56%
URS (URS): 5.78%
Gold Miners ETF (GDX): 5.58%
Wyeth (WYE): 5.35%
Einstein Noah Restaurant (BAGL): 4.97%
EMC (EMC): 4.75%
Aspen Insurance (AHL): 4.22%
Travelers (TRV): 4.04%
Microsoft (MSFT): 3.39%
Everest Re (RE): 3.22%
McDermott (MDR): 3.17%
MI Developments (MIM): 2.93%

This doesn’t include:

1. Cash
2. Short postitions
3. Non-US equities

Other things to note:

1. Health care holdings, CAH and HNT, both got larger allocations (friend and colleague, Dan Loeb also added HNT to Third Point’s portfolio) and a new position was opened in CFN (CareFusion). Taken together with the fact that the largest holding for both Einhorn and Loeb is PFE (Pfizer), this makes medicine/health their biggest play.

2. Einhorn sold out of energy and upped his stake in MSFT (microsoft) a lot.

3. Besides GDX, Einhorn is also in physical gold, which is one of his largest holdings. It’s invisible in the list above, because it’s not disclosed in 13F filings.

4. Short the rating agencies, credit-sensitive financial institutions and REIT’s with cap rates of 6% and dividend yields of under 5%.

5. Greenlight, like Steve Cohen’s SAC and Soros, is also jumping into the anti-Euro trade, reports silobreaker, citing the Wall Street Journal.

As for Greenlight’s past performance, here’s a chart in percentage terms of Greenlights performance, from Gurufocus:

YR        GL(%)   S&P     Excess Gain

2009     32.1    26.5.    5.6

2008    -17.6   -37      19.4

2007    5.9      5.61      0.3

2006    24.4    15.79    8.6

2005    14.2    4.91      9.3

2004    5.2      12        -6.8

What’s interesting in this chart is Einhorn’s bad showing in 2004 and 2007, years in which most people did well, or at least, stayed out of trouble, since the market was still receiving the benefit of Federal “juicing.” Also notable is  2008, when, had it not been for the controversial and possibly criminal Lehman raid, Einhorn would’ve been even worse off. He would probably have been as much down as the S&P.

Finally, without the johnny-come-lately piling onto gold, last year, 2009, wouldn’t have been a good year for Einhorn, either.

Maverick Managers Say Short the S&P, Bonds, and Goldman

A Barron´s interview with Bearing Asset Management´s Kevin Duffy and Bill Laggner, via Lew Rockwell:

“Do you see the S&P 500 retesting its lows of this year?

Duffy: It’s difficult to know. It depends on how much money gets printed. In real terms, can we get cut in half from here? We think so. S&P earnings are distorted because of accounting changes for banks and brokers; if banks were marked to market, S&P earnings next year could fall to $45 a share. Bullish sentiment is rivaling the 2007 top, and volatility has fallen dramatically. We like the VXX, an exchange-traded note that’s based on S&P 500 short-term volatility as measured by the VIX index. It’s down 67% this year, and fits into the whole idea that complacency is very high. Continue reading

China Warns of Gold Bubble

The Telegraph reports that China warns of a gold bubble:

“Experts say that China is putting a floor under the gold price but does not chase rallies once they are under way.

There is also a double-edged twist to news that Barrick Gold, the world’s biggest gold mining company, has closed the final 3m ounces of its notorious hedge book ahead of schedule. While the move is a bet that prices will continue to rise, it also means that Barrick has been a big buyer of gold lately. These purchases have now stopped. One of the key drivers behind the spike this autumn has been removed.”

This article is one of the few out there that takes into account the time lag between an announcement and an action. Many of the events that reporters tout as proof that the gold price will spike much higher right way are actually events that have taken place in the past – for eg., purchases at lower prices – or are hedges that have a more complex function than the usual retail investor has in mind, with the siren call of “gold´s going to the moon, jump in now or you´ve lost it forever” sounding in his ears.

Take trader  John Paulson´gold purchase.  It took place in January, apparently. And remember that it was a position taken by his hedge-fund, with his clients money. Paulson gets his fee no matter how that trade turns out long term, and if his fee is a percentage of the assets under management, a purchase when the price is high is better than one at rock bottom, even if his clients´profits are not maximized that way. (sorry: thoughtless blunder there)

Notice finally that Paulson´s own fortune is in gold to a much lesser extent – only about $250 million of his reported $6 billion net worth. That comes to about 4% of his assets….(Correction: that´s 6.8 billion and less than 4%)

Not an earth shaking proportion by any means.

So, what gives?

China Beware: Gold Price Skating on Thin Data (Update)

Update (November 14, 2009)

This isn’t an update so much as an additional note on the Van Eeden excerpt below.

*Van Eeden has a good track record, but he’s also a disbeliever in any CB or Fed conspiracy to intervene in the markets. Since that intervention is not conspiracy but fairly well-documented, I’m less confident of his opinion.

*Faber, on the other hand, seems to have his ear much closer to the ground.
For instance, he called the RBI one of the best banks in the world on November 6 (see my blog post).

That was just before the Indian bank’s gold purchase. Now, doesn’t it look as if he knew something was coming up? Either that, or he is doing some clever PR for the IMF.

*Faber’s recently (Nov 11) called $1000 the floor for the gold price and has said that it won’t be breached to the downside again.

[However, just a few days ago, on November 6th, he also said gold could drop to $800. I don’t know how to explain this sudden change. It wasn’t the IMF gold sale to the RBI, because that was completed in mid-October and went public on November 3, before both of Faber’s comments].

*Faber argues for much higher inflation than Van Eeden…who doesn’t believe we have inflation..yet.

Now, Faber’s analysis might be overblown, but his conclusion could still be right. Since he’s based in Asia, he could be privy to information that American money managers might miss.

Conclusion: while Faber’s analysis doesn’t seem as sound to me as Van Eeden’s, Faber might just end up being right because he’s factored in market manipulation.

*In response to a reader comment below:- I know Eric Janszen has also called for very high inflation in the 4th Q, which would indicate a high gold price.


From Paul van Eeden:

“The Chinese Communist Party apparently learned from America that debt financed consumption was not a sustainable economic model. Their solution, it seems, is even more absurd: debt financed production in the absence of demand…..

Earlier we reached the conclusion that interest rates could potentially start increasing and cause the US dollar exchange rate to strengthen, which, in turn, would cause the gold price to fall. We can now add that the massive inflation of China’s money supply can cause the renminbi to collapse and send another currency crises rippling through financial markets. A collapse of the Chinese renminbi could also result in a stronger dollar and lower gold price…….

What would happen if China were the epicenter of an economic collapse? What happens when the gold and commodity bulls realize China cannot continue to consume at an even greater pace than it had been when the world was buying its goods, but, instead, now has to work down the excess inventory it built up? It would be a good bet that the US dollar would rally and the gold price would fall.

Given that the gold price is trading at a 25% premium to its fair value and that we can imagine several scenarios whereby the US dollar could rally and the gold price could fall, it seems to me that betting on a higher gold price right now is merely a bet on the Greater Fool Theory.”

Insights From the Bears

I had a conversation recently with some insiders in the financial industry, of a rather bearish persuasion. So bearish that they’re interested in leaving the United States.

Which is how I’ve felt for about five-six years.

The conversation yielded interesting tidbits.  Some of them confirm my own thinking; others contradict it. The contradictory parts interested me the most, of course. I tend to pay more attention to people who think differently from me than to people who agree, perhaps because of some diffidence about my own judgment….Unfortunately, my own instincts have turned out to be more accurate than I’ve been able to believe.

Anyway, here’s what I came away with from what I consider honest and reliable professional money managers:

1. China is overvalued greatly. By around 50%-60% or more (not the first time I’ve heard this, of course).

2. Jim Rogers knows commodities, but doesn’t know gold as well (this was new to me).

3. Marc Faber has one of the best reputations as an investor among insiders (well-known to me). His newsletter is worth the money.

(Full disclosure: I don’t subscribe to Mr. Faber’s newsletter, work for him or receive any kind of compensation for this statement. I’m passing it along as well-founded opinion that might help readers struggling to find reliable guidance in the welter of news….)

4. Gold bars sold by some firms have tungsten underneath, so be careful from whom you buy. James Turk is a reliable person to buy gold from. (Full disclosure: I don’t use Mr. Turk’s services nor have I been paid by anyone to make this assertion).

6. A lotof Several money-managers think there may be no gold at Fort Knox – or very little – not just confirmed “conspiracists” – among whom I am proud to number myself. (Correction, Nov. 13: “No gold” doesn’t have to mean the absence of physical gold. Gold could be present physically, but it could owed to other entities, like a house that is technically in your name, but is really owned by all your creditors).

7. Rogers was more the driving force behind Quantum’s success than Soros.

8. There will be no secession. Americans aren’t up to it. The cognitive dissonance between perceived reality and “real” reality is too great for most people to grasp the extent of the corruption in the system. Any hope of rebellion rests with “red-necks” (apologies for using a racist term – I  use it ironically here), not with yuppies.

9.  The Indian market is riddled with fraud and hype. Jim Rogers thinks the Indian market is a scam. (I wouldn’t use that harsh a word, but I worry about hype and corruption in it too).

10. Brazil’s Fortaleza area, which has been attracting a lot of investor interest, has great beaches and weather…as well as slums, crime, and deadbeats of all kinds. Recommended for investing, not for living.

11. Argentine property laws are not as safe as US property laws (despite Kelo) – at least, at the level where it concerns the ordinary joe. Aggressive, organized squatting is a problem in rural areas.

12. The ongoing investigation of insider trading (eg., Galleon) is not just a one-day wonder, but might bite harder than expected.

No More Muddle-Through Economy

“I firmly believe we will see a double-dip recession within another 18 months (at the most). Stock markets drop on average about 40% in a recession. Adjust your portfolios accordingly.”

— John Mauldin, Thoughts from the Front Line (

My Comment:

I find it pretty interesting that John Mauldin, who’s always argued that we’d “muddle through”  somehow (, has now changed his position in view of the facts (an admirable quality). In the latest edition of his very popular and always informative newsletter, Thoughts from the Front Line, he argues that things are much worse than he’d ever anticipated.

I find it even more interesting that Mauldin will be down in Uruguay, speaking to various groups and that he has a partner based in Uruguay. He writes:

“I will be going to South America at the end of next week, to Buenos Aires, Montevideo, Sao Paulo and Rio. I will be speaking in those cities and traveling with my new Latin American partner, Enrique Fynn of Fynn Capital (based in Uruguay).”

He’s not the only one. I’ve noted a number of libertarian (and other) financial advisors down here. A sign of the times.

Central America Musings…

A number of people have written me and asked my opinion about different parts of the Americas as possible destinations.  So here’s a brief precis of some of my thinking on the subject:

Before I came down here, I went through a lot of research on the different Central American countries and on Mexico too.

Mexico was my prefered expat location, because I’m deeply interested in the Mayans. I love Mexican food, the architecture, the people, the crafts, and the weather. It was always my first choice. But the drug wars and the accompanying violence scared me off. Then too, land is not cheap in Mexico, except in the Yucatan, and the Yucatan has problems. Some areas look like they might have water problems, and other areas are targets for hurricanes. Then there’s the weather – humid and very hot. But the primary problem for me was corruption. I hear everyone has to be paid off and that police can be untrustworthy. Crime is said to be high.  And then the Mexican economy is very tied up with the US economy. So, reluctantly, I looked elsewhere.

In Central America, the only country I really thought long about was Panama. But there again, there were problems. The weather is very humid and hot. Panama City is overcrowded and expensive – more expensive than many parts of the US. I liked the mixed culture, the entrepreneurial energy and the fact that it’s become a hub of financial services and banking. But that has its draw backs too. It’s also attracting attention from the US authorities who are concerned about off-shore havens. Also, land isn’t cheap and what there is of it is attracting the developer crowd – which I tend to avoid. Nothing turns me off more than condo complexes going up, Starbucks everywhere you look. For that, you can go to Miami. It’s probably cheaper now. So no to Panama.

The Honduras struck me as too poor a country. Extremes of wealth, especially in a small country, are a bad sign.  How long will the place go without a revolution of some kind, I asked myself. And how long before US business or government interests start fiddling around. And sure enough, there’s been a coup.

The rain forests of Guatemala sounded..and looked..beautiful. But clearing rain forest isn’t exactly the easiest or the wisest thing to do. Guatemala also has a reputation for corrupt and cruel police. Real estate prices in the capital city were high. I nixed it too.

Nicaragua was cheaper. But also poor and unstable. No foreigner would  make it a permanent base, unless they liked living dangerously. It’s the kind of place where a certain sort of person from Norte America hides out…keeps a low profile.. or swindles the next fool who comes along..none of which interests me. And it’s too close to other hot spots for comfort.

And so it’s turned out….the Honduras coup seems to be spilling over into Nicaragua (see below).

Belize has its problems with hurricanes and it’s not cheap, except in the more remote areas. It also doesn’t have much to offer in the way of infrastructure and business.  But again, the main problem, as for the other Central American countries, was that it looked like the back yard of the US, vulnerable to interference, to a spill over of the drug wars, and to increased surveillance.

That’s why I decided to go further south, despite the expense, and despite the feeling that overwhelms you every so often in a foreign country – what the heck am I doing here? But I was asking that in the US anyway

And in the US, I understand everything’s that being said….which tends to upset me, as you can guess from my fiery boycott-the-US post (it’s preceded by the word “IF”).

Here, I don’t understand most of what’s said. Ergo – peace of mind…

Some news on the spill over from the Honduras:

 “Mónica Zalaquett, director of the Center for Prevention of Violence, says the problem in Honduras has become a “political instrument” in Nicaragua, used by both the Sandinistas and the opposition to promote their own agendas..

….On Aug. 4, a group of four Nicaraguan opposition lawmakers who tried to travel to the Honduran border to express their discomfort with what they called Zelaya’s two-week “occupation” of northern Nicaragua were turned back 12 miles before the town of Ocotal. Sandinista and Zelaya supporters blocked their caravan on the highway and attacked their vehicles with sticks and rocks…”

 I feel vindicated in my research…I usually do. My problem isn’t sound investment decisions. I make good choices. My problem is I’m too cautious and tend to wait a bit too long.  I don’t lose, but I sometimes miss out – which some people would say is the same thing.

I don’t see it like that though, because you have to take into account your risk appetite and tolerance for stress. If you live your life pretty much on your own terms, answer to no one, can walk away from unpleasant people and things, and spend all your time in your own company and not in the company of annoying people, you are way ahead of 99% of the world.

And the other 1% is probably broke.

Which means that if you’re not broke, then you are better off than practically everyone. 

I’m not broke.


World Bank’s IFC Suspends Investment in Agrofuels in Indonesia

From The Third World Institute’s Choike program, here’s a recent report that World Bank and International Finance Corporation (IFC) head Robert Zoellick has agreed to suspend World Bank/IFC financing of the agrofuel sector (oil palm, in this case) in Indonesia, in response to activists’ concerns about environmental degradation and social troubles:

“In response to an appeal by a global coalition of NGOs, IFC / World Bank President Robert Zoellick has agreed to suspend IFC funding of the oil palm sector pending the development of a revised strategy for dealing with the troubled sector.

The response follows a highly critical audit by the IFC’s independent ‘complaints advisory ombudsman’ which had shown that, as claimed by the NGOs, IFC funding of the Wilmar Group had violated the IFC’s own procedures, and commercial concerns had been allowed to override the IFC’s environmental and social standards.”

My Comment:

The IFC is an arm of the World Bank group and is based in Washington, DC. It differs from the World Bank in being entirely private and for-profit and in not being backed by sovereign (i.e. government) guarantees. It’s focus is on investment in the private sector in emerging markets.

This will be a big blow to top agro-fuels producer Singapore-based Wilmar International, whose business activities in Sumatra and Kalimantan have provoked complaints from some 19 environmental groups, plantation small holders, and indigenous people’s organizations:

“IFC’s ombudsman had conducted an audit following the NGO complaints and found that IFC funding of Wilmar International, listed on the Singapore Stock Exchange, had violated IFC’s procedures and commercial concerns had been allowed to override IFC environmental and social standards.

The ombudsman’s report was released earlier this month and focused on four financing arrangements made by the IFC between 2003 and 2008 in favor of Wilmar International, which runs more than 200,000 hectares of palm oil plantations in Indonesia and Malaysia.

IFC had earlier agreed to provide the company with US$33.3 million in investment guarantees and $17.5 million in loans over five year.” (Jakarta Post, Sept 14, 09)

Wilmar is also the supplier of cheap palm kernel that’s used to feed cows by New Zealand dairy giant Fonterra. Fonterra uses 1/4 of the world’s palm kernel – a trade that has drawn fire from NZ environmental groups, which  call it a national scandal that a company in a country known for its environmental quality should be doing business with a corporation they describe as destroying Malaysian and Indonesia rain-forest at unsustainable rates.

Argentina Farmland Troubles

Here’s a clip from early in the year that might interest libertarians who’ve been looking outside the US for farmland, in anticipation of any further worsening of the economy.
The video depicts the effects of drought in Santa Fe province….and makes a rather vague (and likely, insubstantial) reference to global warming.

But there are many other problems in Argentina besides drought – bad government policies, problems with squatters, the depletion of the soil from soy monoculture, the influx of genetically modified foods, and the relatively high prices of land in recent years.

And now there’s also increasing social unrest.

I was talking to some American friends who live in one of the north-eastern provinces, Misiones. They liked where they were, but there were certainly problems. Foreigners couldn’t own the land outright, since it was on the border. And the little enclave of immigrants didn’t always get on with other foreigners. On the good side, they thought the land itself was a natural paradise….

Libertarian Living: Argentina, Chile, and Uruguay as Libertarian Destinations“

I promised some of you a few tips about countries you might be considering fleeing to.

Here’s a quick guide to how three of them might work for runaway libertarians:

1. Cheap Living:

Forget what you’re reading about Chile being expensive and Uruguay being cheap. It all depends on where and how you’re living and what you’re doing. Comparing capitals, Santiago has more and cheaper living options than Montevideo. So does Buenos Aires. But you can find cheaper living in a smaller town in Uruguay. On the other hand, in smaller towns, don’t expect to find the variety of accommodation you find in a city like Buenos Aires. You may not find youth hostels, camping, budget hotels, or house-shares. In general, the more of an international crowd a place draws, the more and better your options.

If you are planning to live off the earth, farmland is relatively cheap and high-quality in all three countries, with Brazil and Uruguay being the cheapest. Soil quality is high in all these southern countries.

For organic growing, Chile and Uruguay are the places to go..

2. Eating/Shopping

But rent is not the only consideration. What about food and clothes?

Uruguay isn’t as cheap as Argentina, especially with the Uruguayan peso so much stronger than the Argentine peso.

Brazil is also more expensive.

In general, you’re wise to buy whole food in the markets and leave international brands alone in the supermarket aisles. Eating out is still cheap in Argentina, but less so elsewhere.

Again, you can always find a deal if you look. Brazil has the most variety. I had an all-you-can-eat meal in the border town of Chuuy, where the variety and quality of the asado was far superior to anything I’d eaten in Argentina.

Clothes tend to be relatively expensive, but again, if you look around, you can find places where there are sales, just as you have them in the US. A recent find, a jacket for about $4.

Electronic items like computers are more expensive. Make sure to buy the correct equipment for electronic appliances. Ask at a web forum before you visit.

3. Investment: Buying an apartment in Santiago, Buenos Aires, or Montevideo requires a lot of thinking right now. It all depends on whether you are buying it to live here or as an investment.

Prices are high in Buenos Aires, but evidence of the global crisis is everywhere, and the expectation is that prices will come down soon – perhaps sharply.

Santiago realtors are expecting a 15-20% drop in the next 6 months.

In Montevideo, the general feeling is that any price-drop in the other markets won’t be felt as sharply there. But everyone knows that even in Montevideo, prices have climbed as much as 30% in good areas, as rich Argentines move their money out of Argentina and put it into the stabler Uruguay economy.

That’s true not only of apartments but of land as well, although that’s a topic that would take too long a post to do justice to.

In general, don’t let anyone rush you into buying. Nothing is ever the dead certainty it’s made out to be, and getting in and out of a real estate transaction has costs. None of the property here is very liquid at all, in my opinion.

Also, don’t forget that old houses require constant maintenance and that if local currencies strengthen against the dollar, your labor costs for maintenance or renovation may end up being higher than your budget. Same goes for labor costs for management. You really might be better off buying a condo in Miami, no matter what Faber or Rogers thinks, if economic reasons are your only ones for living abroad.

Right now, you can find a waterfront apartment in Florida for a lower price than a comparable one in Uruguay. So if cheaper living is your only criterion, you might want to chew on that.

4. Privacy:

Uruguay is no longer on the black-list for tax havens, which is a good thing. On the other hand, it’s been a bit too compliant with US demands for transparency. Chile is a morass of bureaucracy, but predictable. Argentina is the least reliable, as far as banking goes.

This might not be something libertarians are going to like to hear. But the chances are that these societies too are going to be moving toward greater control. This is more true of Argentina than of Uruguay in my opinion.

5. Business Culture:

Chile gets top marks for a culture that is business positive, for those libertarians hoping to start a new life here. With English widely-spoken, low corruption and good property laws, it’s the best place to build a business. But watch out for a cultural problem – Americans I meet seem to find Chileans rude.

Brazil and Colombia (of which I know nothing else) are also good places for starting a business. Uruguay has some problems in this respect. It doesn’t have as much of a market or a business culture and the market also relies too much on foreigners. You’d have to know exactly how to work that. As Brazil, Argentina, and Chile go, so goes Uruguay. On the other hand, Uruguay seems to be the most accessible and easy-going culture of the three.

Businessmen I met uniformly thought Argentina was a terrible place to do business – and some even called it the most corrupt country in South America, much to my surprise. Portenos (those who live in Buenos Aires) were singled out for blame – although for myself, I had nothing but a positive experience of them. People in the provinces were said to be more honest.

But then, I wasn’t doing business, I was trying to find out more about Monsanto….and in my off-time, figuring out salsa. People saw me as an Indian, assured me they loved India, and spent their time complaining about America to me, as though I wasn’t from there. So much for the liberal view of citizenship as purely political and cultural….

Brazil gets good marks, but with plenty of warnings about corruption and street crime…
I found the Brazilians I met more politically aware than the others., for what that’s worth. A lot of fans of Chomsky and much discussion of 9-11.

So there you have it…a quick guide to selecting what you can do where..
In three important countries very far south of the border..

Record Prices for Rarities at Auction Sales

High prices at auctions are an indication that investors are avidly interested in high quality tangible assets which will hold onto their value and are ready to pay extraordinary prices for them even in this market. Two illustrations from the auctions houses:

In Namure in southern Belgium, on Sunday, demand for Tintin, the cartoon reporter, broke national and world sales records, AFP reports. Five hand-drawn pages by Herge raised 1, 172,000 euros (1.57 million dollars) a world record for Herge as well as a national record for cartoon strips books. Buyers came from all over Europe, the United States, Lebanon and China.

Meanwhile, Reuters reports that at Sotheby’s semi-annual sale at Geneva, a virgin blue diamond straight from South Africa, weighing 7.03 carats, sold to any anonymous buyer on May 12, Tuesday, for a record 10.5 million Swiss francs ($9.49 million), including commission, the highest price paid per carat for any gemstone at auction and a new world record price for blue diamonds. The sale price without commission, a record, was $1,349,752, Sotheby’s said.