Exit Left, Pursued by a Puma
Tuesday, 11/24/2020 09:01
If only it could chase away the record deficit too...
A RECORD monthly deficit...a procession for Santa Rita...a cowboy gets thrown from a mule...we are stalked by a puma...and go dancing with the stars...
writes Bill Bonner in his Diary of a Rogue Economist.
First, the feds are running deeper and deeper into the red. Here's the Associated Press:
"The Treasury Department reported Thursday that the federal government ran up a record October deficit of $284.1 billion, double the red ink of the same month a year ago, as revenues declined while spending to deal with the impact of the coronavirus soared."The October deficit was double the $134.5 billion deficit logged in October 2019. It smashed the previous October record of a $176 billion deficit set in 2009, when the government was spending heavily to lift the country out of a deep recession caused by the 2008 financial crisis."
But this is just the beginning. Mr.Biden says he doesn't want to be "crucified on a small cross." So he's pushing for a big one.
The last mega-giveaway proposed by the Democrats was the Heroes Act, costing $3.4 trillion.
That will be just a "starting point," say the Democrats. The Hill reports:
"Senate Minority Leader Charles Schumer (D-N.Y.) and Speaker Nancy Pelosi (D-Calif.) on Thursday morning said the Health and Economic Recovery Omnibus Emergency Solutions (Heroes) Act passed by House Democrats in May should be the "starting point" for negotiations with Senate Republicans and the White House on a new round of coronavirus relief legislation."
Meanwhile, Senator Warren is pushing the new team to forgive student debt...And Dr.Osterholm, an advisor to Joe Biden, is calling for a nationwide lockdown.
But we will let that news ferment for a minute...as we tell you more about what has been going on here in Argentina's .
Santa Rita is the patron saint of the valley farm. As longtime Diary sufferers know, we have been "locked down" here in Argentina for nine months. We split our time between our farm in the Calchaquí Valley and our Gualfin ranch high up in the mountains behind it.
The ranch and the farm function as a single economic unit. The cows spend half the year at the ranch. Then, when the grass gives out in the winter, they make the annual migration up over a mountain pass and down to the valley below.
The two properties are not far apart – as the crow flies. But we are not crows. So we can't fly over the range of mountains that separates the two. The drive, from ranch to farm, takes two hours.
Typically, we spend the week at the farm, working in our office...or on our little chapel...
Then, on the weekends, we go up to the ranch, where we've been cutting down dead trees and planting live ones.
Or we attack or retreat – depending on which way the battle is going – in our war with the originarios, who have claimed the upper part of the ranch.
Last weekend, though, we stayed at the farm.
Once a year, Santa Rita is taken out of the church on the other side of the river, carried on the shoulders of the faithful, and taken on a tour of the property, where she is asked to bless the crops, the tractors, the water, and the local people.
It was still dark on Sunday morning when we heard the drumbeat approaching. The group of about 30 people had already crossed the river and were en route to our house.
We went out to join the procession, removing our hat and crossing ourselves before the image of Santa Rita.
The group paused to wait for us. Then, it began again...like penitentes without whips...up the road, through the outer gates, and then along the fence towards our farthest fields.
A series of chants was led by the foreman, Antonio – a tall man, but with a weak voice.
"Santa Rita, bless these fields...bless our crops...keep us healthy...and help us find your favor, in this life...and in the next."
Some of the chants were sung, others merely recited. The older people in the group seemed to know the lyrics as well as the melody.
Once we arrived at the most distant field – a 70-acre patch of alfalfa – the group turned down a footpath...and walked through the blue-flowering alfalfa, continuing its chants.
"Ave Maria...full of grace, the Lord is with thee. Blessed art thou among women, and blessed is the fruit of thy womb, Jesus. Holy Mary, Mother of God, pray for us sinners, now and in the hour of our death. Amen."
We trudged along, while the first rays of the sun lit up the dust.
Everything is in bloom this time of year. The alfalfa, oats, weeds of all sorts...the algarrobo and molle trees...each with its own fragrance.
About an hour later, we arrived back at the house. We gave our thanks to the sharecroppers, employees, and families – trying to remember who was who – Hypolo, Frederico, Angela, Anna, Anselmo, Erasmus, Javier...brothers, sisters, cousins, uncles...all friendly, wishing us buen viaje in advance of our departure next week.
"We want to especially thank the Señora for all her help teaching the children of the village during this pandemic," said Antonio, speaking for the group.
Finally, the drumbeat started up again, and they continued their procession whence they came...while we went and fixed our breakfasts.
On Monday morning, we hastened to the clinic in Molinos. One of our cowboys had been thrown from a mule. He had hit his head on a rock and was seeing double.
Samuel, a solidly built man about 40 years old, one of our best ranch hands, lay on a cot...with a neck brace and an IV drip.
"How are you? What happened?"
"We were down by the angosto (the narrow defile where the river cuts through the mountains on its way to the sea). I was on that new mule. He's a good mule. But he's not from here.
"All of a sudden, he saw a guanaco. I guess he'd never seen one before. He panicked and threw me over his head.
"Normally, I would break my fall with my arms. But it happened too fast. My head hit the rock. I was knocked out. I was lucky Natalio was with me. He got me up and back to the house. Then, they brought me here.
"I don't have any broken bones. But I feel a little sick...And when I look up at the light," Samuel pointed to the naked light bulb above his bed, "I see two of them. And my head hurts. It's okay though."
It did not sound okay to us. We talked to the doctor in charge, the same pleasant woman who put us under quarantine when we arrived in the valley nine months ago.
She said she would like to send Samuel to the city so he could be checked out by modern equipment. But with the coronavirus on the loose, there were no available beds.
"Besides, we don't want him to get the virus."
To us, the virus seemed less of an immediate threat than the risk of a blood clot. After further discussion, it was agreed that Samuel would be taken to the hospital in Salta "as soon as possible."
Samuel waited, bored. On Thursday morning, an ambulance came to take him to the capital city, Salta.
"But my double vision has gone away," he reported cheerfully.
"Gracias a Dios."
Then, on Wednesday, as improbable as it sounds, the village dance group came to pay a visit and put on a show in front of the house. They did so partly to say goodbye to us...and partly to prepare for a competition.
Finally, yesterday evening, we took a stroll. Typically, we go up through an arroyo behind the house and then follow a burro path, chosen at random.
There are burros all over the hills and a web of trails, criss-crossing each other...some leading up into the mountains...some leading across to a neighboring farm.
The burros prefer to travel along the crest of the hills, probably so they can see predators at a distance and make a quick getaway.
We follow the paths for half an hour or so...going along one way or another. Often, we do not pay much attention, as we are lost in thought, looking down at the stoney ground while heading higher and higher into the hills.
Then, when the light fades, we raise our head and look around. We get our bearings and head back down to the house.
There is no chance of getting lost because the mountains are always in view, like lighthouses on the coast. But we are often mixed up amid the myriad trails...and can spend a long time following paths that don't lead us where we intended to go.
Such was the case last night. We were thinking about the K-shaped recovery...and how it had so favored Wall Street and the upper 10% of the population, while leaving the rest more behind than ever...
...how federal "stimulus" only stimulates asset prices...while the real economy sinks into a prolonged, perhaps inescapable, depression...
...and how it was possible that smart people – almost all of them – believe they can replace the real earnings and real wealth created by a real economy...with the feds' fake money?
How is it that smart people – many with a PhD in economics – are able to believe such fantastic things, despite overwhelming historical evidence, as well as plain common sense, to the contrary?
Larry Summers, former Secretary of the Treasury and former head of Harvard, took the time to dash off a note to the incoming administration, warning that:
"...interest rates at the lower bound despite very large budget deficits indicate that the world's macroeconomic challenge is the effective absorption and deployment of private saving in a world of depleted private investment opportunity."Whether or not you accept the concept of secular stagnation, super low real interest rates indicate an incipient excess supply of saving. This is the ultimate cause of excess leverage, asset bubbles, sluggish growth, and insufficient inflation."
While this must make Mr.Summers feel smart...and make him much admired by people who think smart people say things like this...
...it is little more than the rantings of a self-important imbecile.
How the gods must laugh. Mr.Summers thinks he knows what the world needs!
The "world" could care less about a "macroeconomic challenge". And even less still about what Mr.Summers thinks it is.
And in any case, it has never had any trouble absorbing or deploying private savings. Private investment opportunities are never depleted; they are what they are. People do with their own money as they please. It's none of his business.
And too much savings is not the cause of bubbles or slow growth. That cause, Mr.Summers could discover by looking in the mirror.
The meddlers – with their phony money, their artificially low interest rates, their bailouts, and their delusion that they, rather than the savers themselves, should decide what they can do with it – are the ones who are slowing, distorting, and perverting the real economy.
As for inflation...how would Mr.Summers know how much is enough? What kind of voodoo is this? The whole idea is bonkers...or just plain stupid.
But then, how comes it to be that Mr.Summers – who walks on two legs and wears no feathers or face paint – believes these things?
We will save our hypothesis for another day.
Thus engaged in reverie, bent over as we marched uphill, our hands clasped behind our back, we were suddenly startled awake.
We had come upon a herd of about eight burros – six adults and two very little ones...They were some distance ahead, and dashed off rapidly when they saw us, up and over a hill and then down into the brush on the other side.
Like deer in Maryland, the burros are a nuisance. We have put up wire fences all around the farm to keep them out...and we close the gates every night.
But the colts are very cute...While the adults are gray, the colts are fuzzy, with black wool, more like a child's stuffed animal than a wild beast.
"We found one of them that had been abandoned by its mother," commented a neighbor. "We took it to the house and treated it like a pet. It played with the dogs; it thought it was a dog.
"But it was never completely housebroken. And when it got bigger, we had to put it out in the field."
We were admiring the cute little animals as they jumped over bushes and rocks...almost in a panic...when something caught our eye to the right, slightly behind us.
It was just a flash of color between the trees and bushes, brown like the surrounding hills...low, but moving.
That was what the burros were afraid of. Not us. A puma. He had been stalking the burros. Or us.
Mountain lions and pumas are the burros' only enemies. They pick off the old and the young...those too weak to defend themselves. Up in the mountains, they kill a fair number of calves, sheep, goats, and llama.
But they never attack people, unless they have young with them...or feel cornered.
Still, we didn't want to go down in history as the first gringo taken by a puma.
We picked up a rock. Then we tossed it aside as too light and picked up another. Most likely, we could send him running by throwing stones at him.
Or, if he was going to attack us, we'd probably be able to nail him with a good blow to the head.
But what if we missed?
We decided to withdraw, edging off to the left and down the hill, away from the burros and the puma. In a clearing, we stopped to look back.
After standing still for a minute, again, we saw a glimpse of something moving. But we could tell neither the velocity nor the direction.
It was getting darker. We decided not to worry about it.
We had the federal budget deficit to think about!
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