Talk to a Taxi driver in Latin America....and get a political science lesson.....

When Empires Change Hands
Bill Bonner

Reckoning from Buenos Aires, Argentina...

We got back to Buenos Aires last night. When we got into a cab, we found the driver curious and loquacious.

“You have an accent. Are you French?”

“No...but it’s a good guess. I’ve lived in France for the last 15 years.”

“Oh...I studied French for years. I was the best in my class. But I forgot it.

“My mother was an English teacher. But that was in the ’60s. You know, we’ve had two wars with the English. So, I didn’t want to study English. I decided to study French. And then I forgot it.

“I’m glad you’re not English.”

“No, I’m not English. My family is actually Irish. So, the English are our common enemies. Actually, they’re the common enemies of the French too. But at least in my family we’ve decided to let bygones be bygones.”

“You’re very generous. But we Argentines don’t forget. We hate the English. And the Chileans. And the Americans. And the Albanians, of course. Everybody hates the Albanians. Even the Albanians. It’s the only thing they’re right about.”

“Why the Americans?”

“Because they helped the English in the war.”

“You mean, the Falklands war?”

“Wait a minute. Whose side are you on? I mean the war of the Malvinas...

“We hate the Americans also because they are trying to push everyone around. They’re too big for their britches. But that’s how it works, I guess. I read Arnold Toynbee’s history. Every country tries to push its neighbors around when it can. There will always be a dominant country. And that dominant country will always fall. No country remains dominant forever. They get bigger and bigger. They take over more and more. Then, they go too far. And then they fall and another country takes the dominant position.

“It looks to me as though the US is about to fall. It is pushing too hard and in too many directions. Besides Americans are deep in debt. They can’t afford all they are trying to do. They have soldiers in almost every country in the world. Or, that’s what it seems like. It must cost a fortune. And the US doesn’t have any money.

“Down here we don’t have any money either. But we don’t spend any. No one will lend to us. Because if they lend to us they know we won’t pay it back. We made that pretty clear. So they don’t lend. And we don’t spend. It’s a happy balance. We’re poor. But we look poor. And when you live like a poor person you don’t have to worry about losing your money and ending up poor. You’re already poor.

“Of course, Christina [Kirschner, president of Argentina] tells us that we’re all going to be rich. She says the Argentine economy is working so well that it should be a model for the rest of the world. Maybe she’s right. It’s a model of a bad economy. Completely screwed up by the politicians.

“You know I couldn’t even buy a set of tires for my cab. They didn’t have them. Because they couldn’t import them. Christina owns a tire company. So she didn’t want any competition. She blocked the others from importing tires.

“At least we know our economy is screwed up. The Americans don’t know it. They owe everybody else money. We don’t owe much money. We don’t even mortgage our houses. They want 20% on a house mortgage here. It’s crazy. Better to pay in cash.

“But Americans can get a mortgage for what, 5%? So they borrow a lot. And when you borrow a lot you have less than nothing, if you follow me. I mean, if you don’t borrow anything at least you’re at zero. But the Americans are below zero. Am I right?

“China has the money. And China is smart. And there are a lot of Chinese. So I figure it’s just a matter of time before China replaces the US as the dominant power.

“The trouble is, if you read history you see that these transitions aren’t easy. There is usually a war. The dominant power doesn’t give up without a fight.

“By the way, that’s what WWI and WWII were all about. Germany and England fighting for the dominant position. And you know how many people died? Sixty million. Unbelievable.

“Each time there’s a fight for the top position, in history, the death toll goes up. And when war between China and America breaks out...there could be a billion casualties. I’m not kidding. I hope not. But you have to be realistic.”