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How the U.S. Government Destroyed the American Economy

Politics / US Economy May 02, 2013 - 09:36 AM GMT

By: Bill_Bonner


US stocks are turning down this morning, following news that private-sector job growth in the US slowed the most in seven months.

We've already recommended you exit US stocks and buy gold on the dips.

Nothing has changed our view... So we'll get back to where we left off yesterday – making camp for the night after a long horse trek into the distant reaches of our remote Argentine ranch...

The night was cold. The floor was hard.

There were three of us in a tiny room of a small, bare stone house – our accommodation for the night. Elizabeth and I together on one side. On the other was our friend Sophie, a young French woman who was eager to make the trip with us.

Sophie is a model, actress and swimming teacher. She had no practice on horseback before arriving at the ranch two weeks ago. But she is young and athletic... and seemed to catch on fast.

In the night, the only sound heard was the gentle breathing of the two women. Snug in their sleeping bags, they didn't move...

But each time I started to doze off, I woke up gasping for oxygen. The air was too thin.

In the daytime, I had no problem. But my nighttime breathing rhythm, which I had adapted to cope with being 9,000 feet above sea level, was not quite enough for 10,000 feet.

Also, the inflatable mattress we had pumped up before going to bed had deflated during the night. We turned in at about 9:30 p.m. By about 3 a.m. I felt the hard stones pressing into my back. But it was too cold to get out of bed to inflate the mattresses again.

At about 6:30 a.m., the light coming through the holes in the roof and the cracks in the door changed color. No longer was it just the white light of the moon. It began to have a yellowish... then reddish... hue.

Out of our sleeping bags, it was freezing cold. There was frost on the ground and ice on the shallow lakes in the valley.

Jorge, who runs our ranch, and who slept in the room next door, made a fire in the "kitchen" and put water in the hanging can above it to make morning tea.

We pushed out the little air left in our mattresses and rolled up our sleeping bags while Jorge saddled up the horses. Then, trembling in the cold morning air, we stood by the kitchen door and drank our tea.

Sophie wore a poncho. On her head, she had wrapped a scarf, giving her a strange and exotic Berber look. Her mother's family is Algerian... and for the first time, we saw the North African in her face.

"That's a nice style for you," we told her.

"Style? I don't care about style. I'm just trying to keep warm."

A Treacherous Trail

We were eager to mount up – hoping that some heat might rise from the horses. But by that time, the sun was breaching the top of the mountains to the east of the valley. Within minutes, we felt it on our faces and on our backs. The sun, which we ducked and dodged in the middle of the day, was a welcome visitor in the morning.

We set out. Elizabeth, Sophie and I were mounted on horses – mixtures of Spanish and criollo – and Jorge on a mule, pulling another mule packed with our supplies behind him. We headed east across the rivers and lakes of the valley floor to a quebrada – a break – in the mountains that surround Compuel.

Turning to look back, the moon was still out over the gray-brown mountains to the west. The cattle watched us go. Ducks rose from the marshes and flew away from us. The horses bounced their way toward the quebrada, eager to get back to their corrals.

But the going was a lot harder than the coming. The pass between the mountains was scarcely more than 30 feet wide. The river was swift and full of huge boulders. The only way forward was up the mountain along a track worn over centuries. We had been on this trail for only a few minutes when we began to realize what a difficult route we had taken.

"I haven't been over this trail in 10 years," Jorge told us.

Even in the best of times, the trail was treacherous. High above the river, on the side of the mountain, the horses' hooves slipped and slid on the granite rocks.

Our lead horse fell hard while trying to jump down from one rock to another. We dismounted... leading the horses, rather than trying to ride them. This left us all scrambling over the rocks, trying to make progress over what appeared to be an increasingly impassable and dangerous path.

Jorge was worried. He said nothing, but we could see it in his face. Frequently, he got off his mule to help encourage a reluctant horse down from the rocks... to cinch up the saddles... or to just check on us.

He had led us into a tough spot. Not only was the trail more difficult than he remembered, but much of it was missing. We would head in one direction... and the trail, such as it was, would disappear. The horses would have to turn around on the narrow ledge and backtrack.

More than one time, it looked as if there were no going forward or backward. The horses, bruised and scratched... with bleeding hooves and cactus needles sticking their legs... had to be coaxed and threatened to make them continue.

But it was not only the horses who suffered. Dismounting, we lost our footing and fell down the hill, hitting a hip on a granite boulder. Our elbows bled. Our hip was painful... but only when we walked. We got back on the horse and let him do the walking.

When the ride began, we felt the sting of the thorn bushes. But after an hour or two, we scarcely noticed them. We rode right through them; only potentially lethal dangers concerned us now. We kept an eye on Sophie. It was easy to get hurt.

Amid the Ruins

After two or three hours, we had worked our way down to a slightly lower level. On the right and left – on the mountains on both sides of the river – we noticed rectangular stone walls... hundreds of them.

"The Incas lived here," Jorge explained. "You can see their aqueduct high on the mountain. They used it to water all these fields."

"Incas" is the word used by the locals for all the peoples of the area before the Spanish arrived. Archeologists say the Inca had outposts here. But this was the southern edge of the Inca Empire. And the local people – known as Diaguitas – were in these valleys thousands of years before the Incan conquest in the 13th or 14th centuries.

Whoever was responsible for it, their system of irrigation was much more extensive than it is today. The ranch still uses many of the same trails and irrigation ditches that the Diaguitas developed long before the Spanish arrived, but they are lower down and less technologically impressive. The abandoned aqueducts we were looking at would require far more maintenance, labor and engineering know-how than we would attempt today.

And why did they bother? Why not do their farming lower down in the valley, where we still farm today?

No one knows.

We came to an abandoned homestead.

"This is a place that used to be lived in... but a long time ago. When I was a boy, there was someone here. But it hasn't been farmed since."

There were the remains of a stone farmhouse, like the one in which we had just spent the night. Several other buildings... including a beehive-shaped oven... were still intact, but without roofs. Pottery fragments were everywhere. So too were the terraces built by the Indians long ago.

"What happened? How come this was abandoned?" we asked.

"Probably, we had a couple of dry years. The people here probably moved down to a lower level. This is just too high. Too dry. And that's why this path is not used anymore. It used to be used all the time. People in Pucarilla had cattle in Compuel. They traded their onions and corn for goats and wool. Believe it or not, there was a lot of traffic here... on foot and on mules."

The Death of an Ancient Culture

Jorge got a smile on his face.

"But that was a few years ago. Things are changing. People today don't want to work as hard as they did long ago. Life up here is hard. Now, they can just go to Molinos or Cafayate. They can get money from the government for not working and sit in their houses and watch television.

"Two of the worst things to happen to our area are electricity and those family assistance payments. The government came in and put in solar power in all these rural houses.

"We don't get television reception up here, but the gente buy DVD players so they can watch movies and TV shows. Then they see a different way of living. They want different things. They don't want to spend their lives cut off from this life they see on television.

"The government also gives out money to people who don't work – particularly to unmarried women with children. So now they don't want to do the hard work they used to do.

"It's a lot of work to keep goats or llama or cattle up in the mountains. You have to take care of them every day or the puma will eat them. And then you have to milk the goats and make cheese... and turn the wool into threads so you can knit sweaters. And people up here in the mountains used to grow all their own food or trade their animals for it.

"But I'm afraid all that is going to be a thing of the past soon. You know, if you look at the way I lived as a child... and the way most of the gente still live... it's not much different from the way our ancestors lived thousands of years ago. We raised animals. We grew crops. We lived on what we produce ourselves. And we watered our fields using the same aqueducts... and we get around on the same paths... as our ancestors did.

"Now that life is starting to disappear. Natalio, Nolberto and Pedro – who work for us – they're all about my age. They're used to working hard. They grew up like I did. They can't imagine not working hard.

"But their children are different. They watch television. They don't want to stay here and work hard. That's why I've got Christian... and Pablo working for me and not Alejo and Bartolomo. Christian and Pablo come from families high up in the mountains. They still know how to work. Christian's family lives at Atacamara... it's at 13,000 feet. Life there is very tough.

"Bartolomo left for Cordoba. I don't know where Alejo is. They know they can go to the city and get jobs. Or collect money from the government. And maybe get a truck, rather than riding on a mule. They know they don't have to work so hard. They can work eight hours a day... and then watch television. Or not work at all.

"Electricity and welfare payments are ruining this country.

"This life... the life in these mountains as it has been for maybe thousands of years... is now disappearing. In a few years, I reckon only a few old people will remember how to make raw wool into a poncho... or how to collect herbs in the mountains to make tea... or how to make their own cheese and mill their own grains.

"You know what gualfin really means? It means the 'end of the road' or the 'place at the end.' That's where we are. The end of the road. I'm 62. In a few years, I'll retire. So will Nolberto, Natalio and Pedro. Then a new generation will take over. It will be very different."

Bill Bonner
Bill Bonner is a New York Times bestselling author and founder of Agora, one of the largest independent financial publishers in the world. If you would like to read more of Bill’s essays, sign-up for his free daily e-letter at Bill Bonner’s Diary of a Rogue Economist.

    © 2013 Copyright The Daily Reckoning, Bill Bonner - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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