France: A contrarian bet? - The Daily Reckoning

France: A contrarian bet?

Jun 26, 2015

- By Bill Bonner

Bill Bonner
Paris, France

Dear Diary,

Dow down 75 yesterday. Gold going nowhere.



We were down in the metro last night...about midnight. At the Ecole Militaire station.

All of a sudden, we heard screaming. Girls. Shrieking more than screaming. Not in trouble. But not laughing either.

It has been a long day with considerable excitement. Taxis were on strike. They are trying to protect their turf. We don't know the details, but when we arrived at Montparnasse station in the morning, there was no taxi waiting. Out on the streets were men with egg cartons. When they saw a strikebreaker or a Uber car, they pelted it with eggs - or worse.

One Uber - said to be carrying an American couple with a small child - was struck by a rock, its windshield shattered. Others were roughly handled by mobs of striking taxi drivers.

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"Over there!" one of the mob shouted as we left the station.

A group of them headed off to do their mischief as we dragged our bags down the hill to the metro. As we were doing so, the mob had formed into a demonstration, with red UGT banner and the familiar chant of the Parisian demonstrators. They headed up the street towards the train station, perhaps 500 of them, accompanied by a few police cars.

"There is something so unbelievably old-fashioned about it," said a neighbor. "It brings back memories of the '60s, when the workers still had some bargaining power. Now, it just makes us nostalgic."

The effect of the strike, as with the last taxi strike when we were here, was to undermine the tax drivers even more. We got an Uber to take us to the airport this morning.

"France is dead," said a young woman we know. We have heard this from so many people, we're beginning to think it can't be true. Maybe it is time to buy France, not sell it short. Maybe people are beginning to give up on the economic model of the last 30 years.

We say this after noticing an article in a major magazine. In apparent desperation, the writers asked: "And if we gave free enterprise a try?"

Meanwhile, almost everyone you talk to says France is in deep trouble.

"It is impossible to work," says a gardener we know. "I'm 62. I like working. I want to work. But the way the system operates, anything I earn now goes into [France's Social Security system]. I don't get a penny."

"Why not just work for cash," we suggested, drawing on our experience as a scofflaw in Argentina. "It's not allowed. I would pay a fine...about 5,000 euros. And the person who gives me the money would pay a fine of 35,000. And could go to jail."

"How would anyone know?"

"Are you kidding? This is France. A neighbor would denounce me. He'd see me happily working. He would say I was taking a job away from someone else."

Young people with education and/or ambition are leaving. London, by population, is the 4th largest French city in the world.

"It's terrible," added another friend. "I need to put in a new septic tank. I was just going to get an old friend to put it in. But now they don't have septic systems. They have 'micro- water treatment stations.' Of course, they look for all the world like old-fashioned septic systems, but they cost a lot more and you need to get engineers to draw up plans, and you have to have them approved, which means inspectors have to come out. And you wait and wait for them, because, of course, they're on vacation.

"We could easily get the work done, but if a nosey neighbor or inspector sees us doing it, without all the paperwork, it will be a disaster."

We gave some advice: 'do it at night.'

"In France, only half the population works," concluded our friend. "The other half tries to stop them."

With so many people trying to keep anything from happening, it's no wonder many things don't get done. Rat control is apparently one of them. Down the hall trotted a big, gray rat.

"It's Francois Hollande," shouted one of the girls. Everyone laughed.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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