BALTIMORE, Maryland – An alarming email came on Tuesday from our ranch in Argentina:
“Bad things going on… We thought we had the originarios problem settled. Not at all. They just invaded the ranch.”
A Revolution Going On
To bring new readers fully into the picture, Northwest Argentina, where we have our ranch, has a revolution going on.
Some of the indigenous people – that is, people with Native American blood – believe they have a claim on the land, simply because their ancestors once lived on it.
You can see easily what a slippery claim this is. Most of the people in the area have ancestors who may or may not once have lived on our ranch. Nobody knows.
Which of them should have title to which land? And wouldn’t the same principle apply to all the land of Argentina… and America, too? Are there no Native Americans with an ancestral claim to Manhattan?
Yes, the history books say the island was purchased for $24 dollars’ worth of geegaws.
“We were cheated,” the redskins could say.
And what about the rest of us? We had ancestors, too. Where did they live? What rights do we have?
As a matter of law, it has been settled for 400 years: The Spanish stole the Chalcachi Valley fair and square. Since then, land has changed hands in the customary way – by voluntary purchase and sale. That is a system that is not likely to change.
But… the report from the ranch continued:
Santos [an activist for the rights of the indigenous peoples of the area… or a dangerous revolutionary… depending on how you look at it] showed the people in the valley a document that he claimed gave the originarios the title to the farm.
He told them that if they were indigenous to the valley, they should be the owners. Naturally, about a dozen people – all of them from the four families who live up in the mountains and always give us trouble – declared that they were originarios.
Then, when we tried to take our cattle up to our pasture, they blocked the road… they said the farm belonged to them.
But don’t worry. We called the police. They came. They’re here now. Lots of them. It’s tense. But there’s no violence. At least, so far.
Foxes and Feds
On Thursday, our lawyer contacted the authorities in the capital. He got the Minister for Human Rights and the person in charge of “Indigenous Affairs” to agree to go up to the ranch.
They are supposed to meet with the revolutionaries and explain that Santos doesn’t have any authority with the government and that his claims are completely bogus.
Meanwhile, the lawyer filed civil charges against the ringleaders in local court, claiming that they were unlawful trespassers who were interfering with our property rights.
But wait… not everyone is sympathetic to the plight of landlords. One reader writes:
There is a statement that, to me, is hypocritical. You state, “But the top 5% – where the foxes are – gained income. Their wages are up more than 50% over the same time. Why? Because they take more and more money from the rest of us.” Mr. Bonner, what do you mean by “us”? You are a very wealthy man (I admire and respect that). I have seen this in your other essays. You like to think of yourself as “one of the guys.” Perhaps in some ways you are. But don’t forget that you are wealthier than 99% of your reading audience. So when you say “they take more and more money from us,” it is disingenuous to act like those rich people are sticking it to you. You are part of that group that is taking more and more money from the rest of us.
Now hold on. If it is a crime to be in the top 5% of income, we plead guilty. Throw the book at us.
But we don’t think it is wrong to make money. We don’t think it is wrong to own property. We don’t think it is wrong to try to increase the world’s real wealth – and our own – by playful acts of reckless capitalism.
On the other hand, we do think it is wrong to take money or property from other people without their permission. That’s what the foxes do. That’s what the feds do. And that’s what the revolutionaries are trying to do to us in Argentina.
Fortunately, the foxes that were supporting the revolutionaries (with taxpayer money) were just booted out of office in Argentina. And now, we seem to have the law on our side.
Still, the war goes on… Which way will it go? How will it turn out? We don’t know.
But we know which side we’re on… the side of law and order… of European-style property rights…
We’re on the side of the landlords!
By Chris Mayer, Chief Investment Strategist,
Bonner Private Portfolio
It’s very hard to go bankrupt if you don’t have any debt.– Peter Lynch
Lynch says this was a lesson he learned early… and for some people, it might be a breakthrough.
I learned it early, too. I remember when I was in my 20s and just starting to have success as an investor. I liked a company called Loewen Group. It operated funeral homes and cemeteries. I thought it was a great bargain. I was dead wrong.
Loewen Group had a lot of debt (and other problems). It soon went bankrupt.
I’ll never forget it. That’s one reason I have a test for financial strength in my “CODE” investment system. (CODE stands for Cheap, Owner-operated, [easy-to-understand] Disclosures, and Excellent financial condition.) I prefer low levels of debt, or no debt at all.
For those who don’t pay attention to debt, the market offers fresh lessons every month.
Energy companies borrowed heavily as oil prices soared in the 2000s. But with the drop in oil prices, many of these companies can never pay these loans back.
The number of public company bankruptcies jumped 46% from 2014 (54) to 2015 (79), primarily due to the surge in energy company filings.
Here is a list of the 12 public companies that have gone bankrupt in April 2016. That brings the total for 2016 up to 39.
On March 31, I flagged six energy companies to avoid. As you can see in the table above, one of those companies, Energy 21 (EXXI), has since collapsed… losing 80% of its value.
We are now in the late stages of a long bull market that began in 2009. That means the debt test is more important than ever. At some point, the market will turn over – and when it does, a strong balance sheet will be critical. And not just for energy companies.
So please, check those balance sheets. Stay away from any company laden with debt.
Editor’s Note: Chris is one of the best stock pickers in the business. Anyone who followed his advice from 2004 to 2014 earned an astonishing 380% return… beating the market nearly 3 to 1.
As many of you know, Bill has been impressed by Chris’ results. So much so, he’s set aside $5 million of his family trust’s money to invest in Chris’s recommendations.
Chris will reveal his next stock pick on June 1. And you can buy it even before Bill does. Click here to learn how.
Negative Rates Will Make Gold and Silver Bugs Rich
With the threat of continued low interest rates – or even negative interest rates – one analyst explains why he’s convinced gold and silver could move significantly higher from here.
Trump Causing Anxiety in Asia
Jia Qingguo, a foreign affairs advisor to China’s government, said Trump sounds like an “isolationist” who doesn’t want the U.S. to become too active overseas. And this could give China greater influence across Asia.
Unintended Consequences of Monetary Policy
We’ve been telling you how the Fed’s easy money policies will cause deflation. Now others are getting on board. This article tells you how low interest rates will bring on a 1930s-style depression.
Today in Mailbag… an important question.
What does “Deep State” mean in the article below?— Dianne B.
For a simple explanation, David Talbot said the following in his book The Devil’s Chessboard: Allen Dulles, the CIA, and the Rise of America’s Secret Government:
[The deep state] is essentially an alternative network of power that runs the country no matter who is in the White House.
But Bill gave a much more detailed and illustrative description in the November 2015 issue of The Bill Bonner Letter – “How Deep Is the State? Deeper than you think; Darker than you imagined” (paid up subscribers can catch up here):
When people think of the Deep State, they are generally referring to the permanent government run as a collusion between the elite of corporate America and the national security industry. They think of the “military industrial complex” that General Eisenhower said we “must guard against,” in his farewell address of 1961.
In Eisenhower’s era, power and money were separate. The cronies and the capitalists worked in different cities for different goals. Now, they worship the same gods and are united in the service of a single master: the Deep State.
But the Deep State is not all of us. It is only some of us. And some who are not us at all. It is a curious group; some of its main components are not even American citizens. A foreign government, Israel, occupies a dominant position in the Deep State.
Through its billionaire political donors – Haim Saban, Paul Singer, and Sheldon Adelson… and its lobbyists at AIPAC and other well-funded organizations – it exerts more influence on U.S. foreign policy than 200 million voters.
Many international corporations, global organizations, and supra-government agencies are also part of the Deep State. And overseas banks, with foreign owners, are major beneficiaries.
Together, they – along with domestic favored industries, the bureaucracy itself, special interests, and cronies of various stripes and persuasions – run the U.S. government and control the police, the armed forces, the financial industry, the medical industry, the education industry, and other major parts of the economy.
In Case You Missed It…
Doug Casey just released his shocking forecast for America…
He says in late 2016, the worst financial depression in history will hit… wiping out the savings of unprepared investors.
But for those who see the writing on the wall now, it presents a rare opportunity… a chance to make thousands while this crisis transpires.