Wednesday, December 30, 2009

Jews for the Preservation of Firearms Ownership

Ferfal

There is a very strident pro-2nd amendment organization based in the US called Jews for the Preservation of Firearms Ownership (JPFO). I recognize that most American Jews are screaming liberals, but one of the problems with stereotypes - sometimes they are dead ass wrong.

JPFO's pro-gun stand is profound, absolute and dare I say radical. They denounce the anti-gun polices of Jewish politicians like Sen.Barney Frank and Sen.Charles Schumer comparing these Jewish politicians to Adolph Hitler. Wow! These JPFO folk are really something out of the ordinary.

Occasionally they have articles on other items, and today they had a short article on Argentina - would be interested in your comments.

http://www.jpfo.org/articles-assd/argentina.htm

Don't Cry For Me, America

smalline

In the early 20th century, Argentina was one of the richest countries in the world. While Great Britain's maritime power and its far-flung empire had propelled it to a dominant position among the world's industrialized nations, only the United States challenged Argentina for the position of the world's second-most powerful economy.

It was blessed with abundant agriculture, vast swaths of rich farmland laced with navigable rivers and an accessible port system. Its level of industrialization was higher than many European countries: railroads, automobiles and telephones were commonplace.

In 1916, a new president was elected. Hipólito Irigoyen had formed a party called The Radicals under the banner of "fundamental change" with an appeal to the middle class.

Among Irigoyen's changes: mandatory pension insurance, mandatory health insurance, and support for low-income housing construction to stimulate the economy. Put simply, the state assumed economic control of a vast swath of the country's operations and began assessing new payroll taxes to fund its efforts.

With an increasing flow of funds into these entitlement programs, the government's payouts soon became overly generous. Before long its outlays surpassed the value of the taxpayers' contributions. Put simply, it quickly became under-funded, much like the United States' Social Security and Medicare programs.

The death knell for the Argentine economy, however, came with the election of Juan Perón. Perón had a fascist and corporatist upbringing; he and his charismatic wife aimed their populist rhetoric at the nation's rich.

This targeted group "swiftly expanded to cover most of the propertied middle classes, who became an enemy to be defeated and humiliated."

Under Perón, the size of government bureaucracies exploded through massive programs of social spending and by encouraging the growth of labor unions.

High taxes and economic mismanagement took their inevitable toll even after Perón had been driven from office. But his populist rhetoric and "contempt for economic realities" lived on. Argentina's federal government continued to spend far beyond its means.

Hyperinflation exploded in 1989, the final stage of a process characterized by "industrial protectionism, redistribution of income based on increased wages, and growing state intervention in the economy."

The Argentinean government's practice of printing money to pay off its public debts had crushed the economy. Inflation hit 3000%, reminiscent of the Weimar Republic. Food riots were rampant; stores were looted; the country descended into chaos.

And by 1994, Argentina's public pensions - the equivalent of Social Security - had imploded. The payroll tax had increased from 5% to 26%, but it wasn't enough. In addition, Argentina had implemented a value-added tax (VAT), new income taxes, a personal tax on wealth, and additional revenues based upon the sale of public enterprises. These crushed the private sector, further damaging the economy.

A government controlled "privatization" effort to rescue seniors' pensions was attempted. But, by 2001, those funds had also been raided by the government, the monies replaced by Argentina's defaulted government bonds.

By 2002, ".government fiscal irresponsibility. induced a national economic crisis as severe as America's Great Depression."
smalline

In 1902 Argentina was one of the world's richest countries. Little more than a hundred years later, it is poverty-stricken, struggling to meet its debt obligations amidst a drought.
We've seen this movie before. The Democrats' populist plans can't possibly work, because government bankrupts everything it touches. History teaches us that ObamaCare and unfunded entitlement programs will be utter, complete disasters.
Today's Democrats are guilty of more than stupidity; they are enslaving future generations to poverty and misery. And they will be long gone when it all implodes. They will be as cold and dead as Juan Perón when the piper must ultimately be paid.
References: A tear for Argentina's pension funds; Inflation in Argentina; The United States of Argentina.



Hi, Yes, I knew about JPFO, thanks for sharing.

FerFAL

2 comments:

Patrick said...

I think there's a reasonable probability that the same will happen to the US, except it will play out differently. Instead of 3rd world inflation the USA can export its debt and so the US version is banks borrowing money at 0% interest to lend to the government at a higher yield. In order for the scheme to collapse you will first probably need to see widespread default and currency devaluation in Asia and Europe, not to mention EMs, though my money is (or rather, will be) on Canada, Brazil and Australia doing "less bad" and coming out of this the most fundamentally intact.

I generally recommend that investors wanting to get their mone in a defensive posture should get into Eurodollar deposits and then as the dollar strengthens start exchanging those deposits into a basket of Austrialian Dollars, Canadian Dollars, Realis, maybe some Renminbi, maybe some Francs and Krona and Euros. Holding a few ounces of physical gold as an insurance policy, outside of a bank's safety deposit box, is another good idea, as is investing considerable sums in vault receipts of physical gold. If you're working with a significant sum, your vault receipts should be for "allocated" metal, where the gold is kept in a separate box and thus somewhat protected from default.

Capital controls, a bank "holiday", and then currency devaluation as a covert default on US Treasuries is a scenario people should be protecting themselves against. I think we have a lot of collapse outside the US before the way is cleared for this to happen, I imagine it will come suddenly, supposedly unforseen, when the dollar and T-bonds are in a moment of strength and much of the US investing public and perhaps foreign investors are scared into them.

Anonymous said...

I love your blog, I only wish more Americans would read it, because you show how we are using Argentina as a model, a playbook, to bad times ahead. I wonder what country the elite will flee to once they finish fleecing America.