Our Plan to Save the Ranch

ranch and cow

Don’t worry. We’re not hysterical like you North Americans.

We had arrived at the security gate at Salta Airport on our trip back from the ranch to Buenos Aires, with an onward ticket to Paris, France.

In our hands was a bottle of our own wine — the new reserva that we had kept in a barrel for a year before bottling. We had forgotten to put it in our checked luggage.

‘Go ahead. You can take it on board. As far as I know, no one has ever blown up a plane with a bottle of Malbec.’

It was in stark contrast to the hysteria rampant these days in North America.

For example, pusillanimous Americans are fearful that 10-year-old Girl Scouts or 90-year-old nuns pose a danger to air travel.

Jihadi terrorists, Iran, Russia, North Korea, Civil War monuments, kneeling NFL players, gluten, climate change, inequality, the Devil…you name it — all are said to threaten the empire.

Bull Viagra

We made a rushed visit to Argentina.

We have two properties there. They almost touch each other, but it takes two hours to drive around the mountain to get from one to the other.

One, the ranch we’ve owned for more than 10 years…the other, a farm we just bought. The purpose of the latter is to make sense of the former.

On its own, we realised, the ranch can’t work. There is too little water…so the cows are too thin.

It’s not just that,’ explained our foreman, Gustavo.

We have 450 cows. But only 200 calves. It’s because the bulls are not doing their job. They are too big, too heavy; they spend so much energy just trying to survive up here that they don’t get the cows pregnant.

Is there some bull Viagra we could give them?’ we wondered.

The problem is supposed to be solved by the new farm. There, we will produce thousands of round hay bales — rollos. We’ll truck some of them up to the ranch to feed the bulls and cows. Better fed animals shouldn’t need Viagra. They should produce more calves.

The basic economics of a ranch are simple. You produce beef and sell it by the pound. The more pounds you can sell, the more you make.

But you have costs — vaccinations, labour, taxes, fuel. On our ranch, the costs are high — because we are so remote. And the cows are thin — because we have so little water.

The cows are like a factory’s machines. They produce the calves that we sell. The fertility rate is roughly a measure of the productivity of the operation.

Our fertility rate is about the lowest in the whole Cow Kingdom.

This year, we will sell about 200 animals — mostly calves.

We will have an average weight of about 270 pounds. Each pound will bring us about $1.40. Total revenue: $75,600 (270 x 200 x 1.40).

Unfortunately, our costs are about twice as much. We have six cowboys on the payroll, along with trucks, tractors…etc.

Obviously, this is not a way to make money. At best, once the new farm is fully functioning, we hope to double our sales and break even.

Fanning the flames

In the world of money and politics, on the other hand, you need a psychiatrist or a lunatic to understand what is going on.

It is a world full of hysteria and delusion. Sometimes hysteria just happens; often, people make it happen.

Today, central banks, the mainstream media, the feds, and crony Deep State industries have raked the coals and fanned the flames.

Why?

It pays.

Over the last 17 years, central banks have pumped about $20 trillion worth of financial Viagra into the system. That’s the amount of additional ‘assets’ (bonds mainly, but also stocks) they’ve acquired with money that never previously existed.

All that extra money provided ‘The Swamp’ with the funding it wanted. The ‘security’ industry, headquartered in Northern Virginia, for example, flourished.

Writing at TomDispatch.com, American military expert William Hartung reports:

The numbers are staggering. In fiscal year 2016, the Pentagon issued $304 billion in contract awards to corporations – nearly half of the department’s $600 billion-plus budget for that year. And keep in mind that not all contractors are created equal.

According to the Federal Procurement Data System’s top 100 contractors report for 2016, the biggest beneficiaries by a country mile were Lockheed Martin ($36.2 billion), Boeing ($24.3 billion), Raytheon ($12.8 billion), General Dynamics ($12.7 billion), and Northrop Grumman ($10.7 billion). Together, these five firms gobbled up nearly $100 billion of your tax dollars, about one-third of all the Pentagon’s contract awards in 2016.

And remember: The Pentagon buys more than just weapons. Health care companies like Humana ($3.6 billion), United Health Group ($2.9 billion), and Health Net ($2.6 billion) cash in as well, and they’re joined by, among others, pharmaceutical companies like McKesson ($2.7 billion) and universities deeply involved in military-industrial complex research like MIT ($1 billion) and Johns Hopkins ($902 million).

The easy money was available; the cronies took it.

Hysterical men with guns

Hartung reports that, since 2009, the ‘security’ industry spent some $1 billion urging the feds to spend more and more money…often employing as many as 1,000 lobbyists.

But the military needed enemies, too, to help justify spending 1,100% more than its most plausible potential adversary — Russia — and infinitely more than its ‘terrorist’ enemies in the Mideast.

To paraphrase former Secretary of State Madeleine Albright, if you have all that firepower…you gotta find someone to shoot.

And even with all the provocation, funding, and entrapment given to them by the feds, ‘terrorists’ just weren’t getting much traction.

After all, in Las Vegas recently, one Anglo-Saxon former US federal government employee bumped off more people in the Christian Homeland than all the Muslim terrorists put together in the last 10 years.

The failure of these ‘terrorists’ to produce a credible enemy — seems to have led the security industry to reach further for ‘enemies’.

Now, Iran is an enemy…even though Iran hasn’t invaded anybody since the Battle of the Eurymedon in 466 BC.

So is North Korea, even though the nation has zero ability to inflict harm on the US. And of course, Russia is an enemy too, for reasons that have never been clarified.

In our last book — Hormegeddon — we modestly noticed that almost everything is subject to the law of declining marginal utility.

A little bit of defence spending may be necessary. But keep adding to it and the results turn sharply negative.

You don’t become safer as you buy more weapons and fatten contractors’ bonuses. Instead, you become less safe, as your ‘security’ spending encourages military adventurism and meddling by hysterical men with guns in their hands.

Then you become the bully you were trying to protect yourself from…

Regards,

Bill Bonner,

For Markets & Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities.

Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and MoneyDice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010. 

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