“100 years of failure cannot be undone in one day, but one day begins and today is that day.”
— Javier Mieli
December 11, 2024— Javier Mieli’s approach to reform in Argentina is exactly the vibe that Donald Trumps need to bring to Washington D.C.
While we don’t see the President-Elect wielding a chainsaw outright to cut through regulations – that’s something Kentucky Senator Rand Paul has already done – the actual regulatory cuts themselves are crucial. Not just for Trump’s second term to be a success, but for the country to veer away from a crisis. And avert a century of long, slow depression.
We know what the end of that road looks like. At the turn of the 20th Century there was a popular saying “As rich as an Argentine,” used describe one’s new found prosperity. After a 100 years of socialist decay and centralized government bureaucracy Argentina plummeted to a gutted wreck, politically, economically and culturally.
We republished Argentine president Javier Milei’s address to the World Economic Forum last January in our 2024 Election Wealth Survival Guide special report, available to paid-up Grey Swan Investemnt Fraternity Members. In that report, Mieli documents the sordid history of Argentina.
We also refer from time to time to our friend Joel Bowan’s “The Greatest Political Experiment of Our Age.”
To what end?
America’s path is currently mirroring that of Argentina in 2002. Except the U.S. is a bit too big for an IMF bailout. And by shrinking the size of government aggressively, the course correction could avoid many Grey Swan events related to a debt default.
It’s going to take a lot more than a government agency on efficiency with no legal teeth.
The alternative? Keeping inflation higher for longer. Today’s CPI read, while in-line with expectations, indicates that we may still yet see a resurgence of inflation in 2025. That’s just one reason why we expect the current end-year market rally to get a bit more unwieldy as the calendar turns.
After a quick wipe, today, we re-insert the dipstick to take a measuer on Argentina’s big swing back from the financial abyss. We turn to Dominic Frisby whom just returned. And stay tuned afterwards as we take a quick look at the curious case Luigi Mangione, yet another with a Smalltimore twist. ~ Enjoy, Addison
The Chainsaw and the Swamp: A Tale of Two Economies
Dominic Frisby, The Flying Frisby
Here is the world I think we are heading into over the next couple of years.
On one side of the Atlantic, we have Argentina and its new president, Javier Milei, taking a chainsaw to the state in every conceivable way. I was there last month and I fell head over heels in love with the place. Every day it seems another state body is having its budget cut.
It’s like everything I argued for all those years ago in Life After the State – Why We Don’t Need Government is suddenly happening in the real world, and it is wonderful.
The result of all this is an economic boom that is starting to take everyone’s breath away – even free market acolytes are surprised.
You must invest in Argentina. You must have a position. What is happening there is equivalent to Eastern Europe after the fall of Communism, China at the turn of the 21st century, or the UK and US at the beginning of the Reagan-Thatcher era.
With libertarianism being the dominant belief system of the Internet, and Milei, the poster boy for anarcho-capitalism, an internet sensation, you can rest assured that Argentina’s success story is not going to be kept a secret. The Internet is going to let everyone know about it.
Then to the north, we have the USA. Who was the first foreign leader to be invited to meet President-elect Donald Trump? You betcha. It was Javier Milei. That tells us where things are going.
We have passionate libertarians Elon Musk and Vivek Ramaswamy taking the knife to government and the deep state – I cannot emphasise enough how gripping a belief system libertarianism is once it takes hold – look what it’s done to me – and it has clearly taken hold of these two.
We also have a Trump administration that is much more organised and wiser than the previous incarnation, as well as more state shrinking. It knows who its enemies are and it seems ready for them.
The US may be “minarchist-light” compared to Argentina, but even so, an economic boom is coming to this most entrepreneurial of countries. A lot of people are going make a lot of money.
So you must also have a position in the US. It is already the world’s biggest economy. How much is it going to grow with so many bureaucratic barriers of state removed?
The Stagnant Side of the Street
Then we turn to the other side of the Atlantic. “The stagnant side of the street” to misquote the song.
Here in the UK, we have gone the other way. We are increasing taxes. We are increasing state spending. We are growing government, and, in doing so, creating more barriers to innovation, invention, and entrepreneurship. Most of Western Europe is the same. These are countries run by blobs, by regulators and planners for regulators and planners, by technocrats who know better than you.
Here’s an example of the government helping. On 6 October 2020, when the FCA announced it was clamping down, bitcoin was $10,000. Today it’s $97,500. I make that $87,500 per coin of gain that the UK citizen has been protected from. Great job guys. The UK was once at the vanguard of this breakthrough technology. Satoshi used English spelling, he quoted the Times. He may well have been British. Now we are bringing up the rear.
It is just so much harder and more expensive to do anything entrepreneurial in the UK, whether it’s setting up a business in the first place, hiring, the taxes you have to pay, the cost of regulation and compliance, or the exorbitant cost of housing and property, which drains capital that could be better invested elsewhere.
Prime Minister Keir Starmer is currently in the Gulf trying, as he says, to secure investment for the UK. “This government will build on partnerships that drive our mission to kickstart economic growth and put money back in working people’s pockets,” he said yesterday. It’s obvious that he thinks economic growth comes from government rather than the private sector. He actually thinks government spending is going to help. He does not realize because spending inevitably leads to higher taxes, and taxes stifle growth.
I bet if you listed ten businesses and said which of these are wealth-creating and which are just wealth-extracting, he would not know the difference: it is not a thought process his mind would ever entertain. Yet the difference between the two is everything. Subsidised green energy is wealth extracting, compliance is wealth extracting, manufacturing (as long as it’s not wind farms) and tech are mostly wealth creating. One builds wealth that did not previously exist – everybody wins – making stuff, growing stuff – the other is zero sum: it extracts wealth that already exists and sends it somewhere else – only the extractor and the recipient win. The guy who built the wealth in the first place loses.
The most basic rule of taxation – you really should read Daylight Robbery – is that higher taxes and higher tax rates do not lead to greater government revenue. This administration does not get that most basic concept, which has existed for as long as there have been taxes (ie all of civilization). How can they be so stupid I’ve no idea, but they lead us.
To invest in the UK is to invest in stagnation and regulation. That is not proper investment or wealth creation.
The rest of Western Europe is no better.
In addition, we are experiencing colossal levels of discontent, unprecedented migration, two-tiered justice, two-tiered welfare, rising crime, the disappearance of previously high-trust societies, and rising social tension.
But thanks to the Internet, the stupidities of UK and European policies will continue to be laid bare to all. No amount of censorship is going to hide it. In any case, X has already killed censorship. Other platforms must now stop censoring, if they want to stay relevant. On the Internet people gravitate where speech is free-est.
Meanwhile, such is the nature of memes, people are going to relentlessly take the piss, especially from the other side of the pond. Comedy is a powerful tool. Day after day, the meme-makers, led by Elon Musk himself, are going to expose Keir Starmer and his deluded team, never mind the EU and other technocrats, for the fools they are.
The exposure the Internet brings will cause this technocratic left to backpedal a little – Starmer, as we saw from his 19th relaunch speech last week, has already started – though it will not be anywhere near enough. We need our own Javier Milei.
But it is all is only going to exacerbate the current trend: long America, short the UK and Europe. ~ Dominic Frisby, The Flying Frisby
Regards,
Addison Wiggin,
Grey Swan
P.S. One government clusterf*ck we all have to contend with is the healthcare industry.
We covered it at length as Obamacare was making its way through the backrooms of the Cannon Building on the backside of the nation’s capitol.
In an effort to include coverage of pre-existing conditions in the bill, the Obama administration and the bill’s sponsors in the House effectively turned the legislation over to lobbyists from the health care industry.
The resulting system is destined, and by come critics’ point of view “designed”, to fail. Luigi Mangione’s murder of United Healthcare CEO Brian Thompson, the story already raging with conspiracy theories on social media, opens another sordid chapter in the epic drama.
Some see him as a folk hero, someone who had to step up to expose a broken system. That’s part of the “manifesto” that he was carrying when arrested in Pennsylvania.
The core of his note, as first posted by independent journalist Ken Klippenstein when the mainstream media withheld it, reads as follows:
I do apologize for any strife of traumas but it had to be done. Frankly, these parasites simply had it coming. A reminder: the US has the #1 most expensive healthcare system in the world, yet we rank roughly #42 in life expectancy. United is the [unreadable] largest company in the US by market cap, behind only Apple, Google, Walmart. It has grown and grown, but as our life expectancy? No the reality is, these [unreadable] have simply gotten too powerful, and they continue to abuse our country for immense profit because the American public has allowed them to get away with it. Obviously the problem is more complex, but I do not have space, and frankly I do not pretend to be the most qualified person to lay out the full argument.
For the full text of Mangione’s “manifesto” and the inevitable spin, we refer you to Alex Berenson’s post here. You can find the debate among his readers in the comments section below his paid post on Substack.
We know the Mangione family. Our son attended Gilman just a few years behind Luigi and his now-infamous Valedictorian speech. Our sons trained with the clubs and trainers the Mangiones, at times, dominated. Like many others who knew him at that time, Luigi was bright, fun, and popular. He was good at soccer.
If you’re interested in an honest review of Mangione’s online presence, we refer you to River Page, who wrote in this morning’s Free Press. Luigi is not a left-wing crusader, as many posts quickly dismiss him as.
Share your thoughts on healthcare reform, government reform, or Javieir Mieli’s chainsaw approach here: addison@greyswanfraternity.com
