Reporting from Santiago, Chile
Several hundred miles east of Kinshasa in the Democratic Republic of Congo, the mighty Kasai river forms the boundary between two little known tribes of central Africa– the Bushong and the Lele.
Ostensibly there should be scant difference between the two; they’re separated only by a river, and they share a common language, art, and ancestry.
Yet their economic differences between are vast. As anthropologist Mary Douglas put it, “The Lele are poor, while the Bushong are rich… Everything that the Lele have or can do, the Bushong have more and can do better.”
We’ve seen these differences before– East vs West Germany. North vs. South Korea. Similar people, different ideals. On one side, economic freedom flourishes. On the other, it’s central planning and totalitarian control.
South America is becoming a similar case study, with the Andes forming a sort of “Golden Curtain” separating two clear sides.
On this side, the Chilean economy is thriving. The peso is strong. Corruption is low. Economic freedom is high. And their standard of living is rising.
On the other side of the Andes, President Cristina Fernandez has a stranglehold over what’s left of the Argentine economy. Inflation is rampant, corruption is incorrigible, and freedom is waning.
We’ve talked about this before; a month ago, I was in Buenos Aires on the day that Fernandez announced a ban on coupon-style advertising, just days after she imposed a price freeze at grocery stores around the country.
Price controls, media controls… they’re all part of the same tired playbook that morally bankrupt politicians in financially bankrupt countries have routinely fallen back on for centuries.
Fernandez’s most insidious move has been to FORCE Argentines to hold the rapidly depreciating Argentine peso. She has restricted her people from changing pesos into other currencies, including gold, as well as created obstacles to move funds abroad.
Many Argentines have reached their breaking points and are doing something about it. We’re seeing this first hand by the steady stream of Argentine citizens lining up at the immigration office in Santiago seeking residency.
My friend Sir Charles at PricedinGold.com wrote me this morning from Argentina’s Salta province (near Doug Casey’s lovely property in Cafayate) and told me that TEA Turismo, a local tour operator and rental car agency there has started accepting BITCOINS.
If you’re not familiar, bitcoins are digital currency units that are not controlled by any government. Bitcoins can be exchanged for goods, services, and other currencies, privately and anonymously.
For obvious reasons, Bitcoins are becoming increasingly popular in Argentina as people seek any means necessary to survive the economic destruction.
Needless to say, it would have been a hell of a lot easier to take these steps BEFORE it all hit the fan… not after.
This is an important lesson for the rest of us. There are consequences to printing money with wanton abandon. There are consequences to reaching an unsustainable debt situation. And, when the writing is on the wall, there are consequences when you delay taking action to protect yourself.
Diversifying income, assets, and personal interests abroad is a critical aspect of this. International diversification is something that the wealthy have been doing for centuries. But with so much modern technology at our disposal, these options are now available to ANYONE.
At least, while the window of opportunity is still open.