Twenty Inches of Topsoil

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Our daughter sent the news up from South America.

That wasteland that we bought down there has turned into a treasure. Here’s the story from the local paper:

“Gualfin” is our place, the desolate mountain farm we bought twenty years ago, when prices were so low, we couldn’t resist. Since then, prices have stayed low. But now we have found El Dorado in our lonesome patch.

Gold, copper, lithium…this ‘worthless’ land has everything…

And nothing.

“Bill, don’t buy a yacht yet,” cautioned our lawyer. “This is Argentina. The property owner only has the rights to the first 50 centimeters (about 20 inches) of dirt. All the mineral rights belong to the government.

“And the government has the right to give a mining concession to your land whether you want it or not.

“Besides, what they are really looking for is lithium. The rest is probably not worth mining. Your place is too far and too inaccessible. So, unless the deposits are really good, no one is going to bother.

“The exploration company is digging down now to see if the lithium salts are worth a major mining investment.”

Bummer!

In three sentences, we had gone from being a rich mine owner back to being a poor scribbler. And now we will have huge trucks and excavators interrupting our views.

Meanwhile, we keep our eye on Argentina, partly because we have our daughter there…and partly because Argentina is running one of the most fascinating experiments in world history.

Democracy favors the blowhard, the con man and the big spender. Especially the large democracy. People cannot know their leaders personally…and they do not have the time or the experience to evaluate policies intelligently. All they have to go on are soundbites, concocted ‘narratives’ and promises.

The press, too, advertises itself as a watchdog. But it is really more of a lapdog, yapping only to fend off critics. In its simpleminded universe, there are problems…and there are solutions. Most of what it calls ‘news’ merely repeats the press releases when the ‘solutions’ are announced…and then, when the program fails, it barely mentions it.

Most elected governments spend too much, borrow too much, and then ‘print’ too much money. The result is inflation and insolvency, often garnished by war.

Argentina served up the full menu for decades. But along came Javier Milei with the radical idea that a government should be limited and spend no more than it collects in taxes. As far as we know, nothing like it has been attempted in modern times…perhaps with the exception of Roger Douglas’s more modest program in 1980s New Zealand, which ended with mixed reviews.

Instead, democratic governments normally just get larger, more inept and more corrupt – until war, revolution, or economic catastrophe intervene.

So, how’s it going on the pampas? So far, so good…

Inflation is still going down, the BA Times:

Inflation in Buenos Aires City slowed to 1.7% in August

Price hikes in the capital slowed for the first time in two months

The boom continues, too, with the best auto sales in twenty-five years. And Argentina is expected to have the highest economic growth rate in Latin America next year.

But as in New Zealand, the results are not always immediate or easy to spot. While the inflation rate goes down, prices are still going up…albeit at a much slower rate. The problem, during this transition period, is that they are going up faster than wages.

People who are used to a crooked system need time to adjust to a straight one. Milei eliminated the government’s deficits. That meant cutting back on its outlays. But a lot of voters in the poorer barrios relied on subsidies for their daily bread. Consumption in some neighborhoods is actually going down as wages fail to keep up with price increases.

While the public still seems willing to give Milei’s reforms time to work their magic, political pressure is growing. That may be why Milei has pulled the Falklands out of the drawer. The public is patient. But patience is a wasting asset. Patriotic claptrap has a longer shelf life. Milei may be hoping it will give him more time for his reforms to work. France 24:

Argentina’s Milei escalates Falklands dispute in sovereignty push against Britain

Daily Digest:

Milei exploits Trump’s thirst for revenge as he rekindles claim on Falklands

“Your country was not there to help me,” said Trump to Britain, referring to the UK’s reluctance to join his blockade of Iran’s blockade, following the US bombing of Iran and the killing of its leader. Trump says the US will ‘reconsider’ its support for Britain’s claim to the islands.

What happens next?

We’ll wait for the news. And we’ll continue to enjoy our twenty inches of topsoil; it’s all we’ve got.

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