 |
Last month, I told you about the rampant inflation, corruption and turmoil I experienced growing up in Brazil and how our leaders, President Trump included, need to learn those lessons of history. (Part 1 of this series.)
Then, I showed you how, after returning to the United States, my family helped President Eisenhower win a major battle against inflation (Part 2), another important lesson.
Today, I pick up the story in Piracicaba, Brazil, August 1969. That’s where Elisabeth and I got married and when I took her back to the States with me to enroll as a freshman at New York University. I was also going to NYU, wrapping up my senior year.
The one course we took together, Latin American Politics, was taught by Kalman H. Silvert, a leading proponent of democracy in the Americas. In early May 1970, however, the semester was abruptly canceled in a wave of student protests that followed the Kent State tragedy, where four students were killed. So, Silvert invited the class for an informal discussion at his apartment overlooking Washington Square.
As he closed his windows to muffle the din of protestors, he introduced the topic — The Latin Americanization of U.S. Politics. In other words, the question of the day was, “Could the same social and political ills that afflict countries in Central and South America someday spread to the United States?”
Some students argued it was already happening, that democracy in America was already collapsing. I argued that it was not. “What you’re seeing in the U.S. now,” I said, “is mostly a reaction to the Vietnam war. Despite the temporary turmoil, our democracy is still alive and well.”
Our classmates rolled their eyes and pushed back. I escalated. “Most people in this room,” I declared, “have never lived in Latin America. You have no clue about the painful civil strife or about life under the brutal fist of military dictators. None of that is likely to happen in the United States, certainly not in this century,” I concluded. They shrugged and shook their heads.
After class, though, a senior by the name of David pulled me aside. He was planning to hitchhike down the Pan-American Highway through Mexico and Central America and eventually to the Brazilian Amazon. He wanted some quiet time with me to get my advice. So Elisabeth and I invited him for dinner, and I gave him tips on how to travel safely — “always ask for rides in rest areas where you can first meet the people” … “never travel by night” … “beware of guerrillas” … and more. I then helped him map out an itinerary, including the addresses of some of our friends and family he could stay with along the way.
Throughout dinner, Elisabeth said little but listened intently. Then, as soon as David was out the door, she surprised me with an unexpected outburst of homesickness. “That’s not fair!” she exclaimed. “How come he can go to Brazil, but I can’t?”
I recited my usual reasons — “Pan Am’s roundtrip tickets that cost at least $1,000 per person (over $6,000 in 2017 dollars), big tuition bills on the way to pay for grad school, plus …”
“The heck with that,” she interrupted. “I’m talking about doing what he’s going to do. We don’t fly — we walk! I want to go home to see my family. If you’re too chicken, I’ll go by myself!”
Despite the obvious risks, I obviously had no choice. I won’t dwell on all the details contained in my trip diary, but I will share some highlights that can provide valuable lessons for investors and for world leaders, including President Trump.
Corruption in Mexico
 |
| Elisabeth with Gilberto’s family in Mexico City, July 7, 1970 |
Our first long stop-over was in Mexico City, where we were promptly “adopted” by our friend, Gilberto, his parents, sisters, and aunts. They lived in an old but large villa on Calzada de Guadalupe, not far from the heart of the city. What’s most relevant to our story now, though, is the corrosive corruption that permeated Mexican society even back then. Gilberto told me all about it, and his single best example was none other than himself.
“My father got me a cushy office job at the government-owned electric utility. But what’s so difficult for most people to understand,” he added with a wry smile of sarcasm, “is how truly difficult my job is. Each and every day, I must forever strive to find exactly the right way to do nothing.”
What followed was a narrated pantomime that would have made Mexican comedy star Cantinflas green with envy. Gilberto hobbled along like Charlie Chaplin and clocked in like a robot. His eyes darted from left to right as he read the daily newspaper from front to back, in a routine that invoked Jerry Lewis’ typewriter skit. Then his head shifted from right to left as he read the paper all over again from back to front. When done, he spouted weird words of wisdom learned from the gossip page, soccer scores, and obituaries. He strolled, jumped and crawled back and forth from an imaginary water cooler. Finally, he closed by clocking out with great bravado and fanfare.
“This is my life,” he concluded in a rare moment devoid of comedy. He hastened to add, however, that it was the same for a vast army of government bureaucrats and political appointees. “While the government pays us well to do absolutely nothing, it absolutely can’t afford to repair roads. It can’t protect highways from thousands of robberies every week. It can’t provide basic services like water and sewage in the countryside. There’s just one wonderful thing about this which you must never forget,” he said as the smile returned.
“What’s that?” I queried.
“Things are so bad now, they couldn’t possibly get any worse.”
A few days later, those were also his parting words, and for the rest of our voyage, they rang in my ears like a bad echo from Voltaire’s Candide.
|
“K-Wave” to crush Wall Street … 50% crash predicted. Get the full story now. |
| Internal Sponsorship |
Back in 1710, German philosopher Gottfried Leibniz coined the phrase “Die beste aller möglichen Welten,” the best of all possible worlds, establishing himself as the paramount optimist of his time. Then, a half-century later, Voltaire countered with witty satire, narrating the travels and adventures of the fictional character, Candide, who stumbled through the horrors of 18th century Europe. After each encounter with the victims of disasters, Candide’s faithful companion, Dr. Pangloss, tirelessly quoted Leibniz by providing the parting words: Despite all the horrors, it was still, indeed, “the best of all possible worlds.”
Now, Gilberto had given us the Cantinflas version of Pangloss, a parody of a parody. However, we soon encountered real-life examples during our own Candide-like escapade down the Pan-American highway.
Guerrillas and Contra-Guerrillas
 |
| Ralph Nodarse, driving us from Oaxaca to Tapachula, Mexico, July 19, 1970. |
We got a ride in a Plymouth Barracuda with a youngish man by the name of Ralph Nodarse, on his way to San Pedro Sula, Honduras. “Don’t be afraid of our friend, Black,” he said, gesturing to a giant German Shepherd in the back seat, as we squeezed into the passenger seat.
“What’s with the big hole?” I asked, pointing to a huge dangling tear in the lining of the car’s ceiling.
“Oh. That’s a long story,” he replied. “I’ll tell you more about it once we’re on the road.”
As we soon learned, Black had the equivalent of a Ph.D. from many weeks in an advanced canine-training program. “Whenever I stop somewhere, Black stays in the car,” Ralph explained. “Even if a stranger approaches, he never barks; he’s trained to crouch in silence. As the intruder opens the car door and begins to search for something of value, he knows to wait in the darkness until the head is within inches of his jaws. The ceiling is just collateral damage. The trails of blood leading away from the car — that’s the evidence, right Blackie?”
When I first asked Ralph his profession, he simply said he was a Miami U. grad in education. But about an hour later, as Elisabeth and I cuddled more closely in the tight passenger seat and began to doze off, the car suddenly swerved out of control. Some strange combination of unrepaired potholes and water had suddenly taken over. Thanks to Ralph’s quick reaction, we didn’t all die that night; and having survived that moment together, the trust factor between us grew.
Ralph added key details to his life story, again starting with Black. The training he had talked about earlier was under a CIA K-9 program. Ralph’s profession was indeed education, but not in an ordinary school. His courses were for anti-guerrilla special forces in the Honduran army. “There’s a war going on here,” he said. “And most people in the States don’t have a clue what it’s all about.”
I tested out Gilberto’s Panglossian comment: “So bad it couldn’t possibly get any worse, eh?” Ralph shook his head in vehement disagreement. Then, after a long moment of silence, he invited us to help keep him awake as he drove through the night, sustained only by a six-pack of Coca-Cola. But it was way past my bedtime. So Elisabeth and I decided to quit for the night. We got off at a service station just outside of Tapachula, in Mexico’s southernmost state of Chiapas.
At the time, Chiapas was the victim of mass migration into the area, food shortages and poverty, but no one expected any big troubles. What they didn’t know about was the infectious social diseases that would show their first symptoms after a 20-year incubation period. That’s when a Chiapas man calling himself “Subcomandante Marcos” organized a leftist guerrilla gang in the nearby town of San Cristóbal and the surrounding jungle areas: the Zapatista Army of National Liberation. And on January 1, 1994, coincidentally the same day that the infamous NAFTA treaty went into effect, they occupied seven towns in the state. It was just the first salvo of a long, bloody civil war that forever changed Mexican history.
On July 19, 1970, though, all Elisabeth and I knew was that Tapachula, Chiapas, was the last large city before the border with Guatemala and a good place to get some Zs. So while Ralph was filling his tank, we met Nonbert de Montety and Dominique de Cornulien, two French college students on their way to scenic Lake Atitlán in Guatemala. They told us their ride, with an older couple in a VW bug, was headed into town, which is where we wanted to go. We told them our guy was driving through to Guatemala, which is where they wanted to go. So, we arranged to switch rides and were soon off in different directions.
A few days later, we ran into Nonbert and Dominique again in Panajachel, on the shores of Lake Atitlán. “You’re damn lucky we switched rides back in Mexico,” said Nonbert, “because just past the border, we had to undergo a very unexpected and scary inspection.”
“You mean the Guatemalan border authorities?” I asked.
“Heck no! What scared us to death was the inspection by the guerrillas. They had set up a roadblock right in the middle of the highway. They were stopping everyone, acting like they were the only true authorities. Our driver, the one you got us the ride with — well, we thought he was American. And we knew the guerrillas hate Americans. That’s why we were so scared. To our surprise, instead of freaking out, the man just played it cool, chatting with the guerrillas in Spanish like they were old buddies. When they asked for his passport, we practically pissed in our pants, but nothing happened. He whipped out a Honduran passport. Later, he told us we were lucky we had French passports because one of their tactics was to take Americans hostage.”
|
The DATE Gold Could Soar to $5,000 You won’t hear about it from the media. But a major global organization is preparing to make a critical announcement this December. One that could ignite a $3 TRILLION buying spree… and shake markets to their core. There’s one simple move to take if you want to be on the winning side of this wealth transfer. |
| External Sponsorship |
Nonbert paused and looked me over again. “You speak French, but you’re American, right? So if you hadn’t gotten off in Tapachula, right about now, you’d probably be praying your folks can afford the ransom. Or you’d be dead meat.”
We talked about how, in many ways, these convulsions were fueled by the same economic and social forces I told you about recently regarding Brazil: Excess government debt, inflation, widening rich-poor disparities, extreme political polarization between right and left, radicalization of protest groups, and ultimately, armed guerrilla movements.
“But at least we can be thankful for one thing, right?” I said. “Things are so bad now, it couldn’t possibly get any worse.” Everyone nodded in tentative agreement. As I crawled into my sleeping bag, I felt maybe the concept might finally be getting some traction.
However, a few months later, in November of that same year, Guatemala’s military dictator, Carlos Arana, imposed a state of siege on the entire country, followed by heightened counterinsurgency measures. And from that point forward, the war escalated by leaps and bounds for another 26 years.
In fact, it was the government of Guatemala which became the first in Latin America to engage in widespread use of forced “disappearances” and mass extrajudicial killings. Then, just as some of the government’s opponents thought that was “so bad it couldn’t possibly get any worse,” the government then embarked on wholesale slaughter of all the “opposition,” which, in practice, included entire native and peasant villages. An estimated 45,000 died.
A couple hundred miles later, halfway over the Peace River bridge, as Elisabeth and I crossed the border into El Salvador, I figured maybe I should try a different mantra: “The situation in this country is so bad, no other country could possibly be worse.”
As soon as we arrived at the capital, San Salvador, I figured now, maybe, I had a workable hypothesis. The city was the jewel of Central America, oozing with signs of prosperity and wealth. Modern skyscrapers soared over high-speed avenues. Metrocentro, soon to become the largest commercial complex in Central America, was just established.
We stayed at a frat house, where the students said they were starting a movement, which, they guaranteed would be purely nonviolent. Unfortunately, though, after their peaceful protests were rebuffed violently, they joined the Farabundo Marti National Liberation Front (FMLN), an umbrella group uniting five separate left-wing guerrilla organizations in El Salvador. The tipping point came on October 15, 1979 — a military coup d’état, followed by the killing of anti-coup street protesters, and a gruesome civil war bigger and bloodier than Guatemala’s.
As I said, in Guatemala, the estimated death toll was about 45,000 spread out over 39 years. In El Salvador, a country one-fifth the size, it was about 70,000 in 12 years. Hence, in each year of the civil war and in each square mile of the country, the chances of getting killed in the violence was 26-times greater in El Salvador than in Guatemala.
Elections and Revolutions
 |
| Martin with pilots on Chilean Air Force flight to Santiago, August 7, 1970. |
All these events were still on their way; and so were we, as our travels progressed smoothly through Honduras, Nicaragua, Costa Rica and finally Kobe Air Force Base in Panama City.
There, we got a ride with the Chilean Air Force, transporting the family of the minister of defense. The cargo hold was packed with camping and hiking gear — tents, sleeping bags, knapsacks, air mattresses, cast-iron cookware, Coleman grills, coolers and more. And when they couldn’t cram everything into the hold, they had ripped out half the seats in the passenger cabin to make room for more. All thanks to the taxpayers of the Republic of Chile! Certainly, we thought, this kind of government corruption with impunity was so bad, things in Chile couldn’t possibly get any worse. But they did.
We arrived in Santiago during an intense, infectious, euphoric election campaign for president, with most of the fervor for socialist candidate Salvador Allende. Less than one month later, on September 4, Allende won, and the country literally exploded with radical reform. The economy grew by 12%. And Allende’s supporters declared Chile “a socialist miracle.”
Trouble is, it didn’t last very long. Allende was blamed for inflation exceeding 800% per year, and soon found himself in the crosshairs of a violent military coup, held hostage in the Presidential Palace, surrounded by the army, bombed by the same Air Force that had given us the ride. To avoid capture, Allende pulled out an AK-47 assault rifle and shot himself in the head. And for the next 17 years, a military junta under General Augusto Pinochet ruled Chile with an iron fist, jailing, torturing and executing Chilean citizens by the thousands.
Fortunately for us, long before these crises, we had left Chile far behind. We had crossed the Andes in the caboose of a cargo train, zoomed through the Argentinian pampas with a race-car driver, and crossed the Rio de La Plata on a hydrofoil. Now, finally, I thought, we’ll have some quiet time in one small republic, known as the “Switzerland of the Southern Hemisphere” — Uruguay.
It was said that Uruguay had a large middle class, a stable government, and a long history of peace. True? Yes. But not when we arrived on August 16, 1970! Just 17 days earlier, on July 31, urban guerrillas had kidnapped an American citizen. The guerrillas were the increasingly active Tupamaros, and the kidnapping victim was Daniel Mitrione, an Italian-born American CIA agent. To enable the police to conduct a nationwide, door-to-door search for Mitrione’s captors, the government had declared a state of siege, virtually shutting down the entire country — offices and schools, closed; highways, barricaded; checkpoints everywhere. Later, it was discovered that Mitrione had already been killed by the guerrillas six days before we arrived. But at the time, the authorities thought he was still being held hostage, pending messy negotiations for his ransom and release.
“Not exactly the best of all countries,” I whispered in Elisabeth’s ear. “Maybe not even qualified for the so-bad-it-couldn’t-get-any-worse category!”
Old Lessons to Be Learned Anew
In the late 20th century, Third World governments routinely overspent and overborrowed, accumulating massive, unpayable debts. To help finance the deficits and maintain unsustainable growth rates, their central banks printed equally massive amounts of paper money, injecting one part of it into the bloodstream of the economy, stuffing the other part into their own pockets.
Soon it became clear that a disproportionate share of the benefits flowed into the hands of those who were already disproportionately wealthy: Propertied elites, big landowners and corrupt government officials. Average citizens, meanwhile, confronted a Faustian choice — either the relatively safe life of permanent poverty or the high-risk life of crime, revolution, guerrilla warfare and worse. Result: Most either earned very little or risked losing almost everything.
For these and other fiscal/monetary sins, Latin America’s policymakers were privately scolded by the world’s leading finance ministers and central bankers. They were publicly humiliated at International Monetary Fund conferences. And they were routinely ridiculed in official white papers. It’s “a wild debauchery of monetary and fiscal policy,” declared some of the most respected academic voices.
Ironically, however, in the early 21st century, this wild party scene moved North. Now it was First World governments that routinely overspent and overborrowed, accumulating massive, unpayable debts. And, even more ironically, it was the two largest economies on Earth, the United States of America and Japan, that led the way; that had the largest federal deficits, the biggest public debt and financed them with the most massive amounts of paper money.
Again, a disproportionate share of the benefits flowed into the hands of those who were already disproportionately wealthy: Big banks, hedge fund managers, and wealthy speculators. Again, the average citizen, investor or saver was stuck with a Faustian choice — either near-zero yield or near-fatal investment risk. And as before, most earned very little or risked losing almost everything.
In Latin America of the late 20th century, the consequence was income inequality, political polarization, revolutionary movements, and ultimately, civil wars. In the world of the 21st century, the consequence is income inequality, political polarization, terrorist movements and possibly worse.
The differences are also clear: In the 21st century, government overspending and overborrowing wasn’t just the staple diet of wayward Third World countries. It was the meat and potatoes of the world’s most advanced industrial countries as well.
In the 21st century, the money printing madness is not limited to a few hundred billion in cruzeiros or pesos. It is over $8 trillion in U.S. dollars, euros and yen. (See The Eight-Trillion-Dollar Trap.”)
And in the 21st century, the ideology of revolution isn’t Marxism or Leninism. It is Jihad, bloodier, more desperate and potentially more devastating.
As it turned out, even the most extreme and violent conflicts Latin America ever experienced during the late 20th century could not qualify for Gilberto’s “so-bad-it-can’t-get-worse” mantra. Sure, the authorities in Brazil, Chile, Argentina and other countries ran giant budget deficits and financed them with paper money. But today, the world’s dominant economic powers make those fiscal sinners look like fiscal saints by comparison.
More adventures to come.
Good luck and God bless!
Martin
P.S. Do not miss the World Premiere of “The Secret of the ‘Bucket Boy’ Who Made a Billion Bucks in 7 Days.” In this short video, you’ll discover the best-kept secret of the greatest investor America has ever seen: Raining money: How a poor farm boy made $50 million in ten minutes … $1 billion in a single week … and became America’s richest man before his 40th birthday. Cracking Wall Street’s secret code: His astonishing “Pivotal Point” trading secret and how it instantly tells you when a stock (or even the entire market) is about to sink or soar. The ultimate retirement miracle: How the Pivotal Point could help you turn $10,000 into $700,000 … or $100,000 into more than $7 million for retirement. “The ‘Bucket Boy’ Who Made a Billion Bucks in 7 Days” is the one documentary film you cannot afford to miss in 2017. CLICK THIS LINK immediately to watch it for FREE.
Dr. Weiss founded Weiss Research in 1971 and has dedicated his entire career to helping millions of average investors find truly safe havens and investments. He is Chairman of the Weiss Group, which includes Weiss Research and Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recession and Depression.
{ 27 comments }
I AGREE WITH EVERYTHING YOU SAID.I ALWAYS FELT BATISTA WAS BAD FOR CUBA. THEN THINGS IN CUBA COULD NOT EVER GET WORSE, THEN CAME CASTRO.
Funny how you failed to mention the CIA sponsorship of the overthrow and death of Salvador Allende in Chile. Your somewhat “sanitized” version of Latin American history (including corporate America’s direct involvement in and support of the corrupt economic and political forces prevalent at the time, and earlier, which greatly exacerbated and even hastened the leftist revolts you describe) comes off to me as a somewhat myopic and naive version of the actual facts. You are of course correct to note the excesses and corruption of the various Latin American puppet regimes, funded both overtly and covertly by various developed nations and international monetary entities, but you do the overall history a disservice by failing to recognize or discuss the direct causal relationship between those realities and the fact that our own U.S government was a consistent central player and aggravating presence, adding to the mayhem, training and lending personnel and material support in the pursuit of systematic torture, murder, and general skulduggery. Small wonder, then, that the very inequalities and injustices you cite in Latin America are now (finally) becoming recognized as thriving in our own country and elsewhere in the developed economies of the world. After all, it is they who exported the means and tools of economic and political repression, not the other way around.
if you were not big or smart enough to fix brazil or any other country, why do you think you have a chance in America where the prople came here legally and created this with hard work, eduacation, and many paid with their lives. you will get much more of a punishment on this attempted free loading
You and I share some things incommon. I was born in 1946,in Brazil, to german jewish parents. My father was a german soldier in WW1became a Banker, and went to Brazil because of WW2. I decided to study Finance and business at Columbia University,after getting an engineering degree at Escola Politecnica USP.
Eventually from Banco Itau, I moved to the US with Dow Chemical and after a few years in Europe and Asia, returned to the US.
Seeing what money printing and corruption did in Latin America, I was always expecting in the back of my mind the world order to collapse from the disease (print print print) that has infected the rest of the world. Yes, there were a few major crisis- dollar, oil, banks and countries – but the real big one so far never happened, always being postponed.
I am visiting Brazil and on one hand I am impressed
by the new buildings, shopping centers, full restaurants, pre carnaval street dancing, I am also shocked by the amount of homeless people sleeping under the bridges. It is not new, it is more of the same. Some peole think we have seen the worst and we are bottoming. How will it end?
The new leadership in the US has not impressed me so far. Too much racism, demagogy, promises of lower tax rates but probably more then offset by less deductions and fancy names for import taxes. More important: improvised and erratic behaviour and arrogance. We need a maestro and an orchestra, not just a maestro without a coordinated bunch of players.
My Elizabeth and I now live in Bal Hatbour, 2 kids and 4 grand daughters live in Manhattan,
Nationalism is spreading, are we back in the 30’s (?) since human nature does not seem to change.
I follow your thoughts with interest and fully aware that it is very difficult to get it right all the time, but keep trying! Thanks.
what a fascinating life you have lived, as a subscriber to a few of your services I benefit from your experience, thanks
American government corruption is growing swiftly. It is the “swamp” which Trump beguilingly campaigned against. Like the Latin-American “reformers”, however, he is likely to be caught up in the corruption himself. Thus the swamp critters are the ultimate winners, and the citizenry will become not just losers, but victims. It began with all the regulations imposed during the Civil War, eased briefly, then grew again during World War I, and Prohibition, and grew more under every administration since. The swamp critters are those who see how to profit from that mass of laws, rules and regulations. Trump is a good example of one, himself. They are now in charge, and things can only get worse for most of us.
You’ll notice that, right from the beginning, Trump imposed more rules, which aroused growing opposition. He will use that opposition to grow government even more – which will arouse even more opposition, and more rules. Unlike the American Revolution, which resulted in minimal government and regulation – at first – the coming revolution will just be more of the same ol’, same ol’.
if you look closely burton youll notice trump has been undoing the regulations created by obama he is trying to stimulate this economy he is triyng to rid the u.s. of its government bureaucracy that has stiffled the economy under liberal administrations
and i suppose u think the clintons would have been better for you and your type of america
No, Hilary would have given us war with Russia, at the least. Donald might also give us such war – maybe with China, too.
Martin, I am fairly certain that the tide of history is ebbing for America. I hate saying that.
But, like your story of the corruption in Latin America, North America has become no less corrupt. The result seems inevitably to end in revolution, death, and despair. I really wish I could somehow turn that tide.
Since I know I cannot turn the tide, I have decided that my only hope is to charge my own course. I must realize that our government is corrupt and is headed for insolvency and that I must seek ways to protect my meager wealth and insure my family’s safety.
To that end I will follow your advice outlined in your most recent book, The Ultimate Money Guide for Bubbles, Busts, Recesssion and Depression. I am not sure that this will save us when there is blood in the streets. But perhaps it will, at least, give us a chance to survive the coming chaos of financial dissolution that corruption has wrought.
I really hope your plans given in the book work.
I am betting our future on you and your knowledge and experience.
Aloha,
Tom Beach in Hawaii
And so in the 1960’s and ’70’s our communists in gov’t rewrote our laws so the felons can use their choice. Are they more willing to risk maybe 5- 10 years in prison or no punishment at all, depending how badly they want to get rid of their victim.
Criminal case in Midwest City, OK Oklahoma City Matthew Jacob Probst case number
CF-2001-1648 murdered our daughter Nov 16,2000 spent 3? months in jail. Still free as a bird . Announced to 2 adult sisters he could take a life and not be convicted. Same as O J
Simpson and others including Hillary Carl Helmle
Another common denominator is these are Catholic countries. This has been in the back of my mind, and I thought it is just a coincidence, as many Western European related countries are Roman Catholic countries, as when the Roman Empire ended, many countries under its rule became Roman Catholics during the Roman rule, with the main exception being England, which later when English King Henry VIII decided he needed to remarry to father sons, he had to break off into a separate church, as the Catholic Church did not allow him devoicing his wife, specially when his wife was a princess of a strong Catholic country.
World War 1 and 2 were started between two Catholic countries. The PIIGS countries, excepting Greece are Catholic countries. The US, which is about 22% Catholic, started Reagenomics that pampered the rich and super-rich with super low taxes. Big tax-cuts-for-the-rich (aka Supply Side Economics, Reagenomics, Trickle-Down Economic, and Voodo Economics) started the huge runaway deficits of the US Federal Government, when the rich increasingly paid less taxes, causing the Federal Government to gather less and less tax revenue. This is a kind of welfare-for-the-rich, when the rich people get pamper with free riches, and with less responsibilities to contribute to the country.
Of course, many if not most, if not all countries Catholic or not seem to pamper the rich and super-rich with these welfare-for-the-rich largest. Since the super-rich can use their wealth to buy power, they take over the governments of their countries to pamper themselves with riches of their countries.
In the US, it was estimated that somewhat before the year 2000, the 1% own about 25% of the national wealth. Now, it is estimated that the 1% own up to 50% of the nation’s wealth. This is a doubling in about 20 years, so that the rate of doubling is about 4% growth. At this rate of growth, in the next twenty years, the 1% will double their ownership from 50% to 100%. In another words, in a single generation, the 1% may own the whole country. Since ownership is a zero-sum-game, in that what the 1% own, the rest of the 99% do not own, in the next generation, the 99% may come to own 0%. When the 99% own absolutely zero wealth of the country, the 99% may not even own the shirts on their backs! This is what the math implies what may happen that the mass of 99% may not even own anything like what is like in some banana countries, or like in Sherwood Forest in merry old England, where people having nothing had to forage in Sherwood Forest, and mug any well off people traveling through the forest.
The banks give middle-class saves less than a quarter percent interest earnings to the bank savings account, while the banks are allow to charge more than 15% interest rate again middle-class credit card loans, up to 25% on credit card cash advance loans, 6% to 12% on student loans, 4% on mortgage loans, while the banks only give no more than 0.25 percent to the middle-class savers. These are bank profit mark up rates of 6,000% (15/.25×100), 10,000% (25/.25×100), 2,400% (6/.25×100), 4,800% (12/.25×100), 1,600% (4/.25×100) obscene profit markups by the banks. No wonder the middle-class is being decimated. There’s going to be a lot of new bananas everyday. Sherwood Forest USA is growing everyday if the banks are not reign in on their obscene markups.
Ric, what do Catholic nations have to do with what is happening with anything else? Don’t let personal bias blind you. It as if you’re looking at a piece of a puzzle and declaring that you’re looking at the whole picture. True most countries pamper to the rich, but world wide throughout history that has been the case. Catholic or not, the rich have always ruled over the rest. They have access to better educational, military, religious, cultural, and political training.
A lot, now that you made me think more deeply about it. The Roman Catholic Church is the biggest, and single most globally influential church in the world. While there are several religions with more people, as a single-church entity, it is the biggest, and it has the most global reach, and global influence. As such, it has have major influence in the course of the world, including the economy and political nature of the world. The world we have today is to a significant extent formed by the influences of this Church; although others are also significant factors of course. For example, The Catholic Church was extremely anti-Soviet-Communist during the Cold War, and it actively worked hard to destroy Soviet Communism using its large influence, and large following, which succeeded during President Reagan’s administration. With that, in the US, President Reagan, and his Reaganomics gained high esteem. Supply-Side Economics (also known as Trickle-Down Economics, as Tax-Cuts-for-the Rich with Ultra Deregulation, and as Voodo Economics,) deficit funded military spending, conservatism, and globalism took off with the winning of the Cold War, that have a large impact on today’s US economy with high US Federal Government deficits.
For example, after Columbus discovered America under the Spanish flag (as Columbus was Italian,) Spain and the Catholic Church were active in settling South and Central America, while the English were active in North America. This over time presented a kind of somewhat scientific laboratory “controlled experiment” of different religious influence. It is somewhat like a scientific “controlled” experimentation, or A-B tests of audio speakers like the virtual A-B test of trading effects by using Commodore Perry forcing Japan to open up to trade. “A” is what the world looks like without Perry. “B” is what the world looks like with Perry. This sort of A-B-testing minimizes personal bias.
In “A” without Perry, Japan remains isolated and none industrialized. It did not need oil and large amounts of natural resources to fuel its industry, so that it did not need to invade other countries, and to attack Pearl Harbor, which forced the US into WW2, and forced the US to develop atomic reactors and weapons. Without the US developing reactors, Fukushima will not have reactors, that were old obsoleted designs that were still running past their design lives to save money so as to compete in a capitalistic private sector market in order to be competitive in a capitalistic system fostered on Japan as it adopted to Western economics. Cutting corners, and saving money by extended the life of an obsoleted design without modern computer “expert-system” computer intelligence control panels, the operators of the plant made gross errors during the tsunami crises, that allow the reactor fuel core to melt down, that now will pollute the whole Pacific Ocean.
A none personal bias virtual A-B-test for the Americas may be setup as (A) The English settled in South and Central America, and (B) The Spanish and Portuguese settled there, as the case in reality.
(A) The Catholic Church was not there. (B) The Catholic Church was influential there, as is the case.
Personally, although I am not Catholic, I have great respect and liking for it, as in the past, my father was for a time hired by a Catholic College as an economics professor, and he had a good time there.
Martin…..You’ve led a very interesting life. Thanks for sharing.
Well thought out and written. But does this line of though lead the USA DOWN the path like Greece or Italy or even the UK hopefully sans riots etc?
ELIZABETH MUST BE ONE INCREDIBLE LADY TO HAVE MADE THAT TRIP TO BRAZIL. I WOULD LIKE TO HAVE HER FOR A FRIEND. SHE ROCKS.
I often wondered why only the civil war was taught ad nauseam. If we had learned the rest of history most of us might have been able to see the coming storm, but alas, that did not happen. The world gets scarier by the day, and the resistance by the Democratic party to the current administration is despicable. It indicates the Democratic party doesn’t give a hoot about our country or it’s people. All they are interested in is pushing their agenda and obstructing Trump’s administration. Where do we go from here? Is this the end of our country as we know it?
Martin, I love the personal stories of your life.
One thing I can not make sense of though is this, “And in the 21st century, the ideology of revolution isn’t Marxism or Leninism. It is Jihad, bloodier, more desperate and potentially more devastating.”
I don’t follow the logic here. Above you talk about what is essentially a rich man’s problem, that is where to safely invest extra money, and then you throw in “Jihad”. Jihad, as far as I know is a religious issue, not economic. The idea, as you know I’m sure, is to eek out vengeance for perceived wrongs against others of the same religion. Logical is that Jihad will happen regardless of the state of the economy etc. Did I misunderstand your writing?
Politics and religion are basically two versions of the same thing, and they are always intertwined. During the Middle ages of western Europe, Islam arose and spread through southern Asia and North Africa. Islamic scholars made great advances in science and mathematics, drawing well ahead of their European brethren. Then sectarian differences arose amongst Muslims, and destroyed much of what had been gained. The eventual result is what we see in Muslim nations now. They hate one another even more than they hate “infidels”.
Martin is right,jihad is also an economic ideology. One of the greatest attractions for all whom embrace it is the belief that they all will recieve in paradise a life far better and richer than that which they have now. In this paradigm, jihad is an economic revolution.
GOOD POINT> HE always does this, as soon as he admits some shortcoming in US, he immediately skirts off into something (mostly unrelated) that is worse. He is biased and possibly doesn’t know it himself.
Fascinating. The United States as current world power, probably in decline. Yet there are several really strong suits left.
1) having the reserve currency, dollar, so devaluation in dollar decreases debt proportionaltly, for every other country, devaluation, increases debt. Thank Bretton Woods, 1948.
2) Women have strongest rights, freedoms, on earth, so the real workforce and brain power is doubled.
3) Rule of law, despite all this talk of corruption, this is, hands down, the most transparent , legal country on earth, may be ever. One’s property rights are sacrosanct. Maybe excepting eminent domain.
4) Huge middle class, with preservation of the myth of social mobility.
4)Most of all the retention of Democracy, and ability to replace leaders peacefully.
5) The Fed yes the much maligned but serious, efforts of true geniuses and patriots, including Alan Greenspan, Ben Bernanke, Janet Yellen, who for little pay, try their earnest, endure the most egregious criticism, while steering us through ever changing mine fields. I truly recommend that each of you take a free subscription to the journal of your regional branch of the federal reserve. The articles are superbly written, for the lay public and will not fail to impress you with the serious and practical scholarship of these people who have to make impossible choices with incomplete data/ Truly no one should critisize them without seeing what they have to work on. Sadly i fear most of us will just continue to opine using loose ideas from TV or talk show hosts.
6) Consumerism, as the largest most voracious consumers on the planet, by far, our power as a market is astonishing. It is something that Trump seems to understand.
No question that US/CIA subterfuge in Africa(Patrice Lumomobo execution), South America(Allendes death), propping up th shah of iran ,and more are a terrible burden. Based in the “he may be a son of a bitch , but at least he is our son of a bitch”. philosophy. It has made us hated, out of proportion, throughout the world.
And one wonders whether the truly inexplicable opiod epidemic, and wealth gap are not”chickens coming home to roost”.
But the greatest risk, beyond a doubt, are forgetting that this great, fragile experiment depends on maintaining these poorly understood, nor recognized strengths.
As an example, after the crash of 2007/8 i commented in a group that we had just gone through the worst crisis since the cuban missile crisis. A colleague disputed that statement, and i completely understood his point of view, for he could not grasp that his and all our well being depended on a world banking system that rests on very fragile premises. The world wide depression, started with not realizing that crisses are not always self correcting. Yet we still hear arguments against the Keynsian interventions, of FDR, or of the treasury and Fed, in the latest crisis. Perhaps it is inevitable that we will one day grasp the third rail of irresponsible, ill informed demagogues, just like in latin america, and reap the consequences.
Devaluation INCREASES debt in any currency. If you owe money, but earn less, you will have more trouble paying it off.
The interesting thing missing from this story is the support that United States gave to all of these brutal regimes. Just one meager example is Pinochet. The United States actively supported the overthrow of Allende’s regime, allowing for Pinochet to act with brutality. I saw comments about Batista; does anyone care to remind yourselves that he was installed and supported by the US after “freeing” the Cubans in the end of the Spanish-American War (which is interestingly enough not what Cubans referred to it as).
Rather curious to leave out such a glaring reality. Where does this shining city on the hill factor into the equation considering we have always supported and often installed tyrants and dictators? What are the lessons to learn?
Please stop using the word “Democracy” when referring to the type of government that we have in the USA. We are not a “Democracy” ; we are a “Republic”! There is a vast difference between the two , and you know it, or you should know it!