Over the weekend, we went to visit our new property. The house, which we are renovating, is on the far side of the river.
We’re just realizing what a challenge that poses.
In order to get over to see it, we have to borrow horses from our neighbor, saddle up, and ride across the river. Or we can walk over the rickety pedestrian bridge… and then hike the mile or so to the house.
Not very convenient if we have things to carry. And what if we invite someone for dinner?
“Yes… we’ll expect you for 7 p.m. Just get here an hour earlier so you can get across the river somehow and then dry your clothes.”
But that is a problem for the future. Besides, the river is usually easy to drive across. Only during a few months – December, January, February… and sometimes March – is it impassable.
On Saturday’s visit, we were on our horses when a bent figure came up to greet us from one of the mud houses near the river.
Young people in the area won’t say a word. With their cell phones, WhatsApp, mullets, and tattoos, they might as well be in Baltimore. But the old people still retain the courtesies and respect of an earlier time.
The old man approached. He took off his hat, looked up, and extended a hand.
He was nearly blind.
“Hola, viejo.” [old guy]
He introduced himself. A cousin of some of the people who work up at the ranch, he is in his 80s, with a bright face and a pleasant smile.
“He’s not blind,” explained one of the cousins at the ranch later. “He can see better than you and me. He’s a curador.”
“What’s a curador?”
“It’s somebody with the gift of healing. You put a candle in front of the Virgin Mary. And you stand between it and a piece of white paper.
“The curador looks at the paper and he can see what is wrong with you. He can see everything. Even all your sins.”
Yesterday, we described how the U.S. government has changed over the last three decades. Now, neither party is worried about deficits… or the U.S. federal debt, which hit a new milestone last week, at $21 trillion.
Instead, they are all onboard the Bankruptcy Express… Democrats, Republicans, Congress, bureaucrats, and cronies… with Mr. Donald J. Trump as Casey Jones himself… running wide open and stopping only to pile on more debt.
It’s already loaded with $230 trillion of debt from all over the world. And with the additions of 2017, U.S. government debt alone will tote to $40 trillion by 2028.
On board are most of the world’s central bankers, too. Bank of Japan governor Haruhiko Kuroda is in the passenger car. So is Europe’s Mario “Whatever It Takes” Draghi.
Also there, of course, is America’s new Fed chief, Jerome Powell. They all seem to be having a good time, ordering glasses of brandy at public expense.
Only the Germans decided to give this ride a pass. They still remember their last disastrous train wreck, when hyperinflation in the ‘20s destroyed the integrity of German society and its institutions.
What happened next was the worst period in German history since the invasion of the Huns. Tens of millions were killed, the economy was destroyed, and the Germans’ civilized reputation was stained forever.
Everybody knows you can’t keep borrowing forever. But everyone also believes that the conductors, engineers, and stokers in charge of this train will “do something” to prevent any serious accidents.
After all, they’re our elected officials… with their expert PhD appointees. They’re the brightest and the best… Well, aren’t they?
We tried to show yesterday that every government is eventually taken over by its insiders. Then, it becomes a government of the cronies, by the cronies, and for the cronies.
Of course, people don’t like to think so, because it sets in motion a whole backfield of vaguely seditious ideas. But we will pass over those issues in silence. Today, we want to focus on the money.
Not only is the government not working for the average citizen, neither is its money. The dollar is a fake currency, manipulated by the same insiders, more or less, who control the government.
In two moves – one in 1968 and the other in 1971 – the feds changed America’s money. It still looks the same. But instead of being backed, at a fixed rate, by gold… this new dollar is a “Federal Reserve Note.”
Real money, as people realized more than 2,000 years ago, must be limited. But this money is not.
When Alan Greenspan became Fed chairman in 1987, the bank owned all of $200 billion worth of bonds, which it had acquired over the preceding 74 years.
By the time Fed bond holdings reached their peak under Ben Bernanke, the bank had $4.5 trillion worth.
Where did it get the money to buy those bonds? Easy, peasy… it just created it out of thin air.
And that new money… along with trillions more being created by other banks… is what has made the elite so rich: They got the new money.
The Fed pumped the new money into Wall Street, not Main Street. People with Wall Street connections made money. Others did not.
As we saw on Monday, the working stiff’s main asset – his time – declined in value… while Wall Street’s assets – stocks and bonds – rose 10 times in real terms.
It’s hardly surprising that the elite are enjoying the ride.
And so far, why not? It’s been all downhill.
From 18% in 1980, the fed funds rate has gone down to 1.42% today. Carrying debt is no trouble when you can refinance it at lower rates.
But what happens when the downhill run turns into a gentle rise… and then a steep incline?
We will see.