04/13/10 Buenos Aires, Argentina – “I came here because I felt that my children would have a better future here than in Britain,” said a colleague at lunch yesterday.
“It’s very hard to live well in Britain; the country is too crowded. And things are too expensive. If you want a decent house at a decent price, you have to go way out of London. Even then, they’re not easy to find. And then, you spend half your life traveling back and forth to work.
“But there’s something else. I think Britain’s glory days are past. The economy might grow in absolute terms. I hope so. But it is unlikely to grow as fast as Argentina or Brazil or any one of dozens of overseas economies.
“That’s true for America too. I don’t think the US is finished, by any means. But if you want to give your children the best combination of lifestyle and economic opportunity, there are better places to live.”
Few people would bet on Argentina’s financial future. The country is a serial inflator…prone to self-inflicted financial wounds. It has shot itself in the foot so often, it hardly has any feet left!
Most people would say that investing in Argentina is ‘too risky.’
But that just goes to show that people don’t understand risk. They look at the past and use it to measure the future. What they don’t realize is that risk in financial markets is not like rainfall or earthquakes.
Earthquakes are completely indifferent to what we think about them. But the financial markets are more sensitive than a poet. People who’ve lived through financial crises don’t want to see another one. Or, to put it more specifically, if you’ve just been through a bear market you’re not likely to pay too much for stocks. You’ll think it’s “too risky” to buy expensive stocks. So, stocks will not become expensive. The risk of another crash will be low.
Germans lived through a period of hyperinflation in the ’20s. To this day, they are deathly afraid of rising consumer prices.
People who are accustomed to stable prices…and a rising stock market…have a different attitude. Analysts look at their history and pronounce the market “safe.” But it’s actually very risky…because prices are high and investors are complacent.
The riskiest markets are probably those judged safest by the analysts. The safest are those thought to be risky.
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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S&P trailing p/e is just below the historic mean. We’ll overshoot, of course, as we challenge the 2007 highs. Then and only then, I might lighten up a bit. Until then, this market is still cheap and has a lot of room to run.
Well, yes and no. Argentina has shown itself time and again to be a perennial defaulter, it is a national hobby. Living there in the top socio-economic group would be great I’m sure, but I would still be careful about investing in it.
The UK and the US have been declining since the 70s economically, due to excessive global capacity, and their societies have been undermine by a political liberalism which is actually harmful during a period of economic decline.
Parts of Eastern Europe offer a better story than Argentina for my money, especially Croatia; and it’s only two hours on the plane from the UK.
Probably the best place to move to is China or India join the crowd. I just read that China realestate is so hot and it is not anywhere near a bubble. Go ahead invest in China and stab yourself and everyone in the US in the back with your greed and stupidity. God, we are dumb in this country.
Like .99 cents is so much lower than a $1.00. Pathetic.
The western countries’ economis are choking on their own fascism, how fitting.
Harry : who cares. Gold still beats you haha. Jealous ? Angry ? You should be
In fact, if BB truly believes in his own writings the best investments would be in the US as it clearly is done and finished (Zombie financing).
Maybe I’ll give it a try.
It is truly amazing to me how so many are swallowing this “recovery” message. Americans like Harry are eat up with the stupid and rightly so, the propaganda machine is the best in world history.
The American populace, as a whole, can be made to believe anything. Discernment has vanished and commonsense is something you read about in old papers and magazines of long ago……..I remember.
BILL! where are you!
It’s been almost a week since you posted.
I have separation anxiety.
Have you run off with one of those Argentinian beauties you mentioned?
Come on back. Now!
Shawn: He may not be back. Everything he’s been predicting has been completely wrong. Must be tough when the world is improving so rapidly around you, yet you choose to live in gloom. Oh well, one less doomer to spread ill-informed views.
Harry, speaking of ill-informed views…
Are you an immature investor who asks for crystal balls?
Bill reckons the world as he sees it, he tells us his reasons and grown-up investors decide to listen, or not, always at their own risk
And anyhow, the guy is also highly entertaining.
You can find information about visas for Argentina here: http://www.visasargentina.com.ar
You can also request information about investing in Argentina.
a snob and “noveau riche” who pretends to be “humble”.