French Fraud

POITOU, FRANCE – “Which is worse? America or France?” The question must be put in context. We were invited to dinner with local farmers last night. Jean-Yves and Arlette live in a modest house in the nearby town – an efficient and cozy place built about 25 years ago. They’ve added a solarium to the back, where we had dinner.

 

FAF – French-American Friendship. These days it’s a “which is worse” competition… [PT]

 

Arlette operates a dairy farm left to her by her parents. Jean-Yves runs a cattle and cereal farm that was in his family. A son and his wife moved into the farmhouse in Jean-Yves’ place. Anticipating retirement, he and his wife moved into town.

You have Trump. But we have Macron,” Jean-Yves said. On balance, France probably comes out ahead on that score. Macron is young, smart, and good-looking.

Yes, but he is a fraud,” Jean-Yves continued. “He claims he will change things. But he is mainstream. Besides, I don’t think he can change things even if he wanted to.

Over the years, we’ve commented on many public figures here at the Diary. We can’t remember one we didn’t consider a fraud in some way. And so far, we don’t think we were wrong about any of them.

French President Emmanuel Macron is hardly an outsider or a rebel. He is a graduate of France’s elite École Nationale d’Administration. And he was finance minister under the previous president. So entrenched and unyielding is the French bureaucracy – France’s Deep State – that it would take a real firecracker to change it. Mr. Macron is not that kind of a guy.

 

The French Macronite. G.W. Bush said it first by the way: “We know that human beings and fish can co-exist peacefully.” Thanks to Macron we now know why: they’re practically brothers and sisters. And don’t forget the trees, with their deep roots. Just don’t cross the French bureaucracy or try to actually do something useful, like working. They’re going to punish you, whether you’re a brother, a sister, or a fish with aspirations to the universal. Your best option is probably to try and become part of that which escapes them… unless you like nightmares of course. [PT]

 

I wanted to get someone to work on the gardens,” Elizabeth explained.

So I called a guy who has a lawn maintenance company. He said he would cut the grass. But he won’t cut down the trees because that would have to be subcontracted, and that would put his revenues over the allowable level.

You mean he’s not allowed to make more money?

That’s right. If he makes more than a certain amount, he’s required to reorganize his business… and apparently, that’s a nightmare. There must be people in Paris who are spending their time thinking of ways to make it difficult for people to do business.

Nightmare?” Jean-Yves interjected.

Farming is a nightmare in France. We work seven days a week… because we can’t get anyone to help. Or more specifically, we don’t dare get anyone to help. Because if we hire someone, it’s almost impossible to fire him.

It’s worse than that,” Arlette added.

Farming is so hard… with so many directives from the government – from bureaucrats who’ve never actually seen a cow – that young people don’t want to do it. I don’t blame them. I know what’s going to happen.

 

Typical sleep period of a French farmer’s wife, captured by John Henry Fuseli back in 1781. Plus ça change…  According to a Wikipedia entry, scientific research helpfully suggests that “nightmares may have many causes”. The French bureaucracy is apparently one of them. [PT]

 

This Too Shall Pass

In France, half the people work hard; the other half try to stop them. But the typical French family is more prudent than its American counterpart. It’s seen governments come and go.

The Third Republic fell in 1940. The Fourth Republic fell in 1958. The Fifth Republic will probably fall in the coming financial crisis. French currencies come and go, too.

When we first visited, many years ago, it had only recently replaced the old franc with the new franc – worth 100 old francs. “That loaf of bread will be 500 francs,” a baker might tell you. Then, in 2000, the French ditched the franc for the euro.

 

There is one thing French governments have been really good at ever since the French Revolution: utterly destroying the value of the currency in the shortest time possible. They may be complete bunglers otherwise, but they are definitely world class experts  with respect to this particular task. There were occasional attempts to become responsible by anchoring the franc to gold, but these periods obviously didn’t last very long. Nowadays investors can no longer make small fortunes out of big ones by investing in the French franc, but Mario Draghi’s ECB is eagerly trying to recreate this excellent opportunity by running its printing presses with the utmost alacrity. [PT] – click to enlarge.

 

The French know something Americans don’t: This too shall pass. It has made them cautious. Consumption, especially the conspicuous kind, is not as appreciated here as in the United States. There are fewer malls. Fewer ways to spend money. And less credit.

The government is about as insolvent in France as in the U.S. But the average family carries less debt. France also has another big advantage. It may have a large and costly welfare state, but it has only a small warfare state. The French military still meddles overseas, but on a small scale.

 

French government debt as a percentage of GDP is actually slightly below the US public debt-to-GDP ratio. It is light years from the 60% ratio stipulated by the Maastricht treaty though and its magnitude is probably already beyond the point of no return by now, as long term economic growth typically collapses once the debtberg becomes this large. Besides, the French economy has been regulated and taxed to death anyway. [PT] – click to enlarge.

 

The scale of America’s meddling, on the other hand, is colossal. The annual cost of its wars, military spending, foreign aid, and various security agencies and initiatives is almost $1 trillion… and rising.

Here’s President Trump explaining recently to evangelical media mogul Pat Robertson why Vladimir Putin was more likely to favor Hillary Clinton over him in the 2016 election:

 

“It’s something that you don’t like talking about, but again we are the most powerful country in the world, and we are getting more and more powerful because I’m a big military person.”

 

Big Military Person, Field Marshal Donald Trump and the US debtberg side by side. This is not a combination that inspires much confidence (mind, we are still glad that war harpy Hillary was deflected by the deplorable voter horde). [PT] – click to enlarge.

 

Win-Lose Spending

Any military spending you don’t need to defend the country is wasted… at best. Since the U.S. faces no serious enemies, most of its empire budget contributes nothing to either prosperity or security.

It is win-lose spending – from the pockets of the plain people to the pockets of the rich and powerful. Perhaps the Deep State insiders are grateful; perhaps not. It is a shame the president doesn’t read history. At least then he’d put an ironic fillip on the “big military person” phrase.

He would know that every “big military person” in the past – from Bonaparte to Tojo – was either an embarrassment to his country or a disaster… and often both. Excess military spending almost always leads to adventurism, war, and catastrophe.

France… the U.S. Which is worse? It is hard to say.

 

Charts by: Wikipedia, tradingeconomics, St. Louis Fed

 

Chart and image captions by PT

 

The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

One Response to “Which Is Worse? America or France?”

  • Bam_Man:

    At least the French have a culture, an appreciation of art, literature, food and fine wine.
    The typical American is an obese, ill-dressed, drug-addled, grotesquely-tatooed ignoramus.
    I will take France any day and will be there on holiday in less than two months time.

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • Yanking the Bank of Japan’s Chain
      Mathematical Certainties Based on the simple reflection that arithmetic is more than just an abstraction, we offer a modest observation.  The social safety nets of industrialized economies, including the United States, have frayed at the edges.  Soon the safety net’s fabric will snap. This recognition is not an opinion.  Rather, it’s a matter of basic arithmetic.  The economy cannot sustain the government obligations that have been piled up upon it over the last 70...
  • Prepare for Another Market Face Pounding
      “Better than Goldilocks” “Markets make opinions,” goes the old Wall Street adage.  Indeed, this sounds like a nifty thing to say.  But what does it really mean?   The bears discover Mrs. Locks in their bed and it seems they are less than happy. [PT]   Perhaps this means that after a long period of rising stocks prices otherwise intelligent people conceive of clever explanations for why the good times will carry on.  Moreover, if the market goes up for...
  • What Went Wrong With the 21st Century?
      Fools and Rascals   And it’s time, time, time And it’s time, time, time It’s time, time, time that you love And it’s time, time, time… - Tom  Waits   Tom Waits rasps about time   POITOU, FRANCE – “So how much did you make last night?” “We made about $15,000,” came the reply from our eldest son, a keen cryptocurrency investor. “Bitcoin briefly pierced the $3,500 mark – an all-time high. The market cap of the...
  • The Future of the Third World
      Decolonization The British Empire was the largest in history. At the end of World War II Britain had to start pulling out from its colonies. A major part of the reason was, ironically, the economic prosperity that had come through industrialization, massive improvements in transportation, and the advent of telecommunications, ethnic and religious respect, freedom of speech, and other liberties offered by the empire.   The colors represent the colonies of various nations...
  • Bitcoin Forked – Precious Metals Supply and Demand Report
      A Fork in the Cryptographic Road So bitcoin forked. You did not know this. Well, if you’re saving in gold perhaps not. If you’re betting in the crypto-coin casino, you knew it, bet on it, and now we assume are happily diving into your greater quantity of dollars after the fork.   Bitcoin, daily – adding the current price of BCH (the new type of Bitcoin all holders of BTC can claim at a 1:1 ratio), the gain since the “fork” amounts to roughly $1,000 at the time we...
  • Seasonality: Will Patterns that Worked in the Past Also Work in the Future?
      Historians of the Future Every investor makes trading decisions based on what happened in the past – there is no other way. What really interests us is the future though. After all, what happens in the future ultimately determines investment success.   When in doubt, you can always try to reach the pasture...  In Human Action, Ludwig von Mises described stock market speculators as akin to “historians of the future”. This is without a doubt the most trenchant definition of...
  • Czar vs. Pope
      Vladimir the Great Sums Up Pope Francis the Fake Vladimir Putin has once again demonstrated why he is the most perceptive, farsighted, and for a politician, the most honest world leader to come around in quite a while.  If it had not been for his patient and wise statesmanship, the world may have already been embroiled in an all-encompassing global conflagration with the possibility of thermonuclear destruction.   Vladimir Putin is sizing up Pope Francis with his “good...
  • Bitcoin Has No Yield, but Gold Does – Precious Metals Supply and Demand Report
      Bitcoin and Credit Transactions Last week, we said:   It is commonly accepted to say the dollar is “printed”, but we can see from this line of thinking it is really borrowed. There is a real borrower on the other side of the transaction, and that borrower has powerful motivations to keep paying to service the debt. Bitcoin has no backing. Bitcoin is created out of thin air, the way people say of the dollar. The quantity of bitcoins created may be strictly limited by...
  • Is Historically Low Volatility About to Expand?
      Suspicion Asleep You have probably noticed it already: stock market volatility has recently all but disappeared. This raises an important question for every investor: Has the market established a permanent plateau of low volatility, or is the current period of low volatility just the calm before the storm?   All quiet on the VIX front... what can possibly happen? [PT] - click to enlarge.   When such questions regarding future market trends arise, it is often...
  • Why There Will Be No 11th Hour Debt Ceiling Deal
      Milestones in the Pursuit of Insolvency A new milestone on the American populaces’ collective pursuit of insolvency was reached this week. According to a report published on Tuesday by the Federal Reserve Bank of New York, total U.S. household debt jumped to a new record high of $12.84 trillion during the second quarter. This included an increase of $552 billion from a year ago.   US consumer debt is making new all time highs – while this post GFC surge is actually...
  • Will They Haul Off Trump’s Statue, Too?
      Confused by Shadows POITOU, FRANCE – This week, we are talking about theperishable nature of gods. Yesterday, the city fathers of our hometown of Baltimore let it be known that it was time to toss out the old deities.   The Robert E. Lee and Thomas. J. “Stonewall” Jackson Monument in Baltimore, which the mayor inter alia wants to remove. Suddenly it has become fashionable to erase the memory of an important part of US history all over the country. By experience, this...
  • Bad Ideas About Money and Bitcoin
      How We Got Used to Fiat Money Most false or irrational ideas about money are not new. For example, take the idea that government can just fix the price of one monetary asset against another. Some people think that we can have a gold standard by such a decree today. This idea goes back at least as far as the Coinage Act of 1792, when the government fixed 371.25 grains of silver to the same value as 24.75 grains of gold, or a ratio of 15 to 1. This caused problems because the market...

Support Acting Man

j9TJzzN

Austrian Theory and Investment

Own physical gold and silver outside a bank

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com