MOLINOS, ARGENTINA – “Never interrupt an enemy when he is making a mistake,” said Napoleon.
In the 1970s, two of America’s biggest rivals were making big mistakes. Russia had been operating a centrally planned economy since the 1920s. China took up central planning after World War II.
Communist central planning was a curse to those who had to live with it. But it was a blessing to those who didn’t. It eliminated competition. Without the price signals coming from honest money and honest markets, the planners were in the dark.
But rather than appreciate their good fortune, U.S. meddlers couldn’t stop themselves. They interfered, spending trillions of dollars over a 40-year period fighting an enemy that was already in the process of destroying itself.
Travel Update
And now, it’s the U.S. that is making the big mistake. Its leaders seem so eager to cripple its rival that they’re ready to pluck out their own eyes if it would force China to wear reading glasses.
This might be a good time to visit Argentina. You can learn a lot more from an economy in crisis than from one where everything appears to be hunky-dory.
The inflation rate here is 42%. That alone is worth seeing firsthand. The experience may come in handy later on at home.
When prices are moving so rapidly, people can’t keep up. In dollars, the half-hour cab ride to the airport this morning, for example, cost only about $5. A nice dinner for two last night, with wine, was only $20.
“You better move fast,” said our farm manager. “This will only last a few more months. Then, local prices will catch up.”
As near as we can tell, Argentine president Mauricio Macri is doing a decent job. But he came into office after years of financial chicanery, overspending, and mismanagement by previous administrations. Now, the mischief needs to be cleared away before growth can begin again.
So in addition to the inflation, the economy is in a deep recession. Sellers are becoming desperate.
