Reckoning from Gualfin, Argentina…
We spent a busy day at the ranch. Cows had gotten into the alfalfa. They needed to be herded back into the open pasture. Then, we went over to where we’re building a little ‘bodegita’… a place to spend the night after a long horseback ride… a place to relax for the weekend…
…far from the hustle and bustle of normal life.
In fact, it’s so far there’s no electricity… no telephone… no TV… no cellphone… no nothing. Not even a plane overhead.
Which is great for relaxing… You take a book. A candle. A bottle of wine. A bit of cheese. Some dried fruit. Everything is made on the farm. Which makes it all charming. And interesting. You watch the sun setting on the mountain. You read. You drink wine. You fall asleep.
Ricardo came up from the house yesterday. He had worked side by side with us when we built the bodegita. He doubted that we knew what we were doing – putting up vaulted ceilings and a cupola made of adobe brick – and he was right. We didn’t know what we were doing. It was an experiment. We went to visit it yesterday. So far, so good.
Ricardo’s daughter has a rare form of epilepsy; it seems to have gotten worse. She had such a bad seizure last week that she almost bit her lip off. He goes down to the city (a dusty little crossroads, really, an hour away) once a week to get medicine. But the girl needs it twice a day. Each dose costs 50 pesos.
We know how much Ricardo makes. Because he’s on our payroll. His daily pay is 121 pesos. And he only gets it the days he works. So, he has to use every penny he earns in order to keep the girl medicated.
“I thought the government provided medicine,” we said to the farm manager.
“It is supposed to. But it doesn’t have any medicine. So he has to buy it in the pharmacy.”
Ricardo doesn’t ask for help. But he needs it. That’s a big part of the reason we keep losing money… to keep the farm going and keep Ricardo working. Otherwise, there’s no work in this valley. He’d have to leave his little ‘arrienda’ and move down to the city.
Whether that is good or bad, we don’t know. But we’re ‘investing’ in the farm to keep it in business… to keep Ricardo and seven others gainfully employed… and we’re hoping that it will become self-sufficient before we become broke.
“We’ll talk to a doctor in the city,” we told him. “Maybe he can get the medicine cheaper.”
We had sent the backhoe ahead with instructions to begin clearing an area in front of the little casa (the bodegita) so we could plant a garden. It’s early spring here. The days are warm. The nights are cool. It’s time to plant. And at our age, we don’t want to miss a single growing season. So, we packed some fruit trees and some bushes on the pickup… and headed off.
Oh… wait… we’re supposed to be writing about money. What’s the money angle?
Okay, you want to talk about money? Well, here’s the latest news:
Manufacturing is up in the US.
It’s down globally.
Worldwide, trade is slowing, says the Wall Street Journal. Which is a bad thing. People get richer when they trade with each other. Tariffs… and ‘self-sufficiency’… always make people poorer. Adam Smith explained that 250 years ago.
And here’s a little item: there are more jobless Europeans than ever recorded. 18 million of them.
But let’s get back to the farm. And here’s the money angle: we bought this place as an investment! Prices were low in Argentina, following the crisis of ’01 -’02. Especially up in this forgotten corner of the country. The ranch was priced at about $4 an acre.
“What do we have to lose?” we said to our old friend Rick Rule, who came to visit.
“About $4 an acre,” was his reply.
He was off by about $10. As time goes by, the losses mount up. It’s an operating farm, with salaries to pay… tractors to fix… reservoirs to dig. It all costs money. You can tell yourself you’re ‘investing’. You can even do some calculations to show when you’ll break even.
And maybe it will work out eventually. But the old-timers… the landowners who’ve been here for generations… and the professional farmers know better. They roll their eyes and look at you with a mixture of contempt and pity.
One crop is destroyed by bees. Another by drought. You have cattle, but they have nothing to eat. “Sand-fed beef,” you call it. People laugh. “Low in cholesterol. Low in fat. Very low in fat.”
And so, you look ahead to next year. You invest more in a bigger reservoir and more insecticides against the bees. And you diversify. Here, in addition to the grapes and the cattle, we’re planting quinoa, capers and walnuts.
“Let’s try a few things… maybe we can make something work,” we said to the farm manager. “If these nuts produce the way they’re supposed to, we’ll break even by 2017.”
But so what if we lose money? That is just the nature of the world. Nobody keeps money. It circulates. From the person who earned it to the government… and to the zombies. Or to the fellow who sells fancy watches, expensive clothes or cheap vacations. Money moves around. Always has. All you can do is to try to push a little of it in the direction you want it to go.
for The Daily Reckoning Australia
From the Archives…
28-09-2012 – Greg Canavan
Banks versus the Farms
27-09-2012 – Greg Canavan
A Familiar Sequence: Print, Spend, Crash
26-09-2012 – Bill Bonner
The Hamburglar’s Budget
25-09-2012 – Dan Denning
The Cheeseburger Police
24-09-2012 – Dan Denning