Is too much of a good thing bad? - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 18 September 2014
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Salta, Argentina

We are traveling today. No time or place to catch up on the financial markets. All we know is that the Dow closed at a new record. Gold lost $13.

So we will tell you a bit of what went on at the ranch in Salta Province, Argentina...

It's a beautiful spot, in a harsh and majestic sort of way. In early spring, it is windy, cold and very dry. The cattle are getting thin. But the grapes, irrigated from a small stream, are beginning to put out leaves.

"We'll feed the cows what is left of the hay and the alfalfa in the fields. It should last until the rains begin in December," Jorge, the capataz [the foreman] explained.

"What if it doesn't rain," we asked.

"That happened in the late '90s," Jorge continued. "It didn't rain all year."

"What happened to the cattle?"

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"We sold a few. But everybody was trying to get rid of cattle. Most of them died. We had 3,000 when the drought began. We had only a few hundred when it was over."

In addition to the calamities imposed by nature, there are those imposed by man. Most countries operate with more-or-less sensible policies, most of the time...with a Hormegeddon disaster (caused by misguided public policy on a grand scale) only rarely. Argentina seems to prefer a rolling Hormegeddon, with the economy always either going into a disaster or coming out of one. But we'll come back to that tomorrow.

    Yesterday at 7 am an ambulance arrived, just as the sun rose over the pass at the foot of Mt. Colorado. What was it doing here? We went out to enquire.

    "A woman in Compuel is giving birth," Jorge explained. "Apparently, she's having some trouble."

    "Who is it?"

    "One of the Chailes."

    "But how are these guys getting to Compuel?"

    "They've asked if they can borrow three horses."

    "Sure...of course..."

    Yesterday, Marta [our cook and housekeeper] asked leave to accompany the local Virgin on a procession up into the mountains. Maria, Jorge's wife, had already taken the pilgrimage from Gualfin to Salta, a six-day, 12 hours per day, walk, in celebration of the Fiesta de la Virgen del Milagro. She and Marta prepared empanadas in the morning. We ate with Jorge and Maria, in their little kitchen.

    Jorge told the story of the previous owner, Senor Asevedra:

    "He was not from here. He was from Buenos Aires. So, the local people called this the 'farm of the Portenos [people from Buenos Aires].' But he came up here, before there was even a road -- this was in the 1940s - and brought his family.

    "There was no school. He had two children. So, he arranged to bring in a teacher and set up a classroom.. Then he invited the local people to send their children too. Of course, none of them had ever set foot in a school. And there was no school building and nowhere for the children to stay. So the children hiked hours in the morning and again in the evening to get back and forth to the school. Classes took place from 11 in the morning to 3 in the afternoon, so as to allow the children enough time to get there and back.

    "There wasn't any way to feed the children either. So they arranged for each child to get a cup of milk with dulce de leche in it. That was all. The children would gather in that little adobe house in front of the main house...the one the peones use now...for their milk. Then, they would go back to the house where Javier lives now...that was where they had their classes.

    "That was where I went to school too in the 1950s and 1960s. Maria came in 1970. By then the school had been taken over by the government. But it was still in Javier's house."

    "What happened to Asevedra," we asked.

    "Oh...that was the funny part," said Jorge with a broad smile. "Francisco Rodo's grandfather came here to buy a cow. He asked Asevedra if he ever thought of selling the place. 'No...are you kidding...' said Asevedra. 'I could never sell this place. This is paradise. I love it. My family loves it. We are at home here forever.'

    "Gualfin had many more people then than it does now. There were about 70 families living here. So, it was more important, politically. And Senor Asevedra took it in his head that he would enter local politics, using Gualfin as his base. So he put his name on the ballot to become a local deputy. And he made great fanfare of his intention to rise to the top of local politics.

    "When election day came, he gathered all the people of Gualfin -- remember, there was no road back then -- and they all went down, on horses, on mules, on foot, in a big procession -- to the polling house down the valley at Amaicha. And then, when the election was closed, they opened the ballot box and counted the votes. Senor Asevedra got only one vote -- his own.

    "Well, that was it. He told the local people that he wanted nothing more to do with them...or with Gualfin. He said he was going to sell it. Well, you can imagine that there wasn't much of a market for such a distant, isolated ranch. So he called Senor Rodo on the telephone. And he said...'You want it? It's yours. You can pay me when you have the money. I'm leaving.'

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

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