Will the US Economy Ever Again See Full Employment?
By Bill Bonner
10/12/10 Buenos Aires, Argentina – How are things on the pampas?
Tolerably fair, it appears…
We just got here. Too soon to rush to judgment. From what we can tell, though, the poor Argentines seem to be shooting themselves in the foot…and the leg…and everywhere else. They’re going to be taking out buckshot for years…
It should be a great time for the pampas. They have some of the richest, flattest, best-watered farmland in the world. Farm prices are high. Other prices are fairly low.
But leave it to the politicians to mess things up. Argentine beef – which ought to be the country’s most prized export – is losing market share, especially to the Uruguayans. How come? Because the Argentines taxed beef exports in order to keep prices low at home. You see, the gauchos can manage an economy too!
What was the result? Farmers switched from raising cattle to raising soybeans. And wouldn’t you know it, then, they had a disastrous drought.