All Hallow's Eve

Pumpkins, witches and cobwebs. With all the decor around Paris at the moment, you’d never know "Halloween" was once an unknown holiday…this essay was originally aired on Nov. 1, 1999, as "All Saints’ Day."

"Pumpkins. I’m going to plant pumpkins next year." Pierre has been raising beef – big, beautiful Limousin beef – and sheep for many years.

But the European Union is forcing down the subsidies for beef. And sheep are disappearing from the region altogether…there are no longer any subsidies available for sheep farmers. French farmers cannot compete with those in New Zealand and Australia. And wool prices are so low it no longer pays to shear the sheep.

Cereals, on the other hand, are heavily subsidized. The difference, Pierre explained, came about because the cereal growers could leave their farms in slack seasons and go to demonstrate in Brussels. Large groups of farmers always strike fear in what passes for the hearts of politicians, so the cereal farmers typically get half to two-thirds of their income from the subsidies…not from selling food.

Conversely, farmers who raise livestock cannot get away. They’re forced to stay on the farm day after day to take care of the animals. They pose less of a threat to the taxpayers’ purse.

Even with the subsidies still in place, raising cattle is not a way to get rich. Pierre has suggested that we put our farms together. Apparently, you need bigger and bigger holdings to make money. And he needs to build a big new barn to make the operation more efficient. The return on investment? About 2%.

Hmmm…

Halloween in France: Newly Imported from America

Maybe pumpkins are the answer. The big orange vegetables are new to France. So is Halloween. All Saints’ Day has been recognized and celebrated for many centuries. But Halloween is a new import from America, along with the whole shebang of decorations, customs and commercial opportunities that accompany it. Department store workers wore costumes in Paris last week – stimulating interest and sales, no doubt. Even out here in the middle of nowhere, Halloween is catching on.

Our children held the first Halloween party in this region three years ago. The invitees had barely heard the word at the time. The kids took a candlelight tour of our attic, with staged shows of various spook-house exhibits. In one room, however, we decided to surprise them. We lay on a bed…in a room with wallpaper peeling off the walls and creaking floorboards…and put a sheet over ourselves as though we were corpses waiting for an undertaker.

As the kids came in, we began making a low growling noise…and then sat up. The kids were so alarmed and shrieked so loud we were afraid someone would call the police. Then they flew down the circular steps so fast that their little bodies were still spinning like tops as they swirled out the front door and into the yard.

That was three years ago. Now Halloween decorations are in many stores, along with new things to buy and a new opportunity for secular celebration.

There is a world of difference between All Saints’ and Halloween. The spirits that one honors on All Saints’ were not, after all, all saints. They were real. They were spirits that might be honored…or feared. (Of course, if you don’t believe in the spirit world…you have no business celebrating All Saints’ anyway.)

Halloween in France: A Day for Reflection

But regardless of your views on the afterlife, All Saints’ requires at least some reflection…on the lives of our forebears, the challenges they faced and perhaps the lessons that could be learned from them. At the very least, you might stand before the grave of someone you knew…offer flowers…and spend a moment recalling the person.

This is not a ritual that lends itself to the Internet age.

Halloween, on the other hand, is an example of what Philippe Muray calls "Festivus." Muray has noticed the way in which the genuine, dark, primeval, wild and dangerous currents and undercurrents in society have been tamed…and transformed into harmless celebrations. This applies not merely to the shift from All Saints’ to Halloween, but also to the political process, where genuinely revolutionary parties have been replaced by a token opposition and emasculated rebels.

We have often noted how – in America – you cannot even say what you want about taxes anymore…without fear of criminal prosecution. Yet is there any real opposition – of a sort that might be described as dangerous to the government? No, we celebrate the First Amendment now; we do not practice it.

Likewise, America celebrates liberty. It is like Halloween…an empty expression…a hollow festival…something to feel good about. No reflection required. No risk, either. But what would the ghosts of Jefferson and Adams think of us?

Who cares? As the GDP increases…shares rise…and the spirits of liberty remain in the grave…pumpkins are the business to be in.

Regards,

Bill Bonner
The Daily Reckoning
October 29, 2004

Nobody knows anything.

Things have begun to happen…but even now, nobody knows why…or even what.

The stock market seems to be in a pre-election rally…one much needed by George Bush. Oil and other commodities dropped yesterday – also very welcome news to the Bush campaign.

But why? The government announced that oil inventories in the United States have risen. But why would that make a difference?

The dollar dropped as well – but who knows or cares about that? The yen is at a six-month high. The euro is pushing toward new highs practically every day.

But here’s the news that the American public really cares about:

"Real Estate Boom Continues," says TheStreet.com.

In England, where the worldwide property boom began, prices have already begun to go down. The BBC reports that house prices fell in October.

U.K. property prices ran well ahead of those in the United States. But does that mean that U.S. prices will follow Britain’s lead on the way down, too? Who knows?

So much to know…and so little time to know it. And then, can you really ever know anything? Everything that happens in markets seems to have so many conditions to precedent…so many "ifs" and "becauses" connected to it. Is there ever any way to isolate one cause, one single reason, and say, "That’s why!"?

We don’t think so.

There’s a boom in U.S. property because home loan rates are lower today than they were a year ago…and because the Chinese haven’t yet begun to export houses…and because the population is growing…and because people don’t trust stocks as much as they used to…and because Alan Greenspan cut rates 13 times in 18 months…and because the dollar is the world’s reserve currency…and because Richard Nixon cut the dollar loose from gold in 1971…and because Woodrow Wilson set up the Federal Reserve…and because Congress didn’t know what it was doing…and because Gen. von Kluck took a wrong turn at the Marne River…and because the Archduke Ferdinand’s driver lost his way…and because the United States is a big country…and because the Indians were defeated…and because the French were beaten by the English at Quebec…and because Christopher Columbus made a big mistake…and because industrial development began in Europe, rather than in Asia…and because the Crusades put Europeans in touch with Arab civilization, as well as reawakening interest in the classical civilizations of Greece and Rome…and because someone figured out how to power a boat using the wind…and because there were animals that could be domesticated…and because homo sapiens somehow triumphed over other species…and because the Earth is neither too hot nor too cold, permitting water to remain in its liquid state…and because the Big Bang didn’t blow us to smithereens!

There. That pretty well sums it up. Hope this helps, dear reader.

All we really know is that things follow patterns that can be studied… and anticipated. Rules. Essential truths, traditions and old wives’ tales: Busts follow booms. Thou shalt not kill. Buy low, sell high. Never give a sucker an even break. And there’s no such thing as a free lunch.

For many years now, Americans have gotten the equivalent of a four-course dinner – for nothing. First, their stocks rose far beyond the rate of inflation. When stocks went down in 2001-2002, Alan Greenspan showed up with the next course. Voila! Nobody ever made borrowing money more irresistible. This was followed by a housing boom. And then, those dear, dear foreigners came forward with loans – trillions of dollars worth of them. And the best thing – the piece de resistance – was they didn’t seem to care if they ever got paid back!

Maybe you can’t get something for nothing…but it will come as news to millions of Americans. Right now, they are pushing back from the table, lighting up a fine cigar and waiting for the election results. What a shame if the waiter should bring a bill. How it would spoil the whole party! [Ed. Note: You get what you pay for…and now the home loan-lending business is collapsing like a house of cards. Don’t get trapped underneath the rubble.

More news, from our friends at The Rude Awakening:

————–

Eric Fry, reporting from New York City…

Even in this "friendly" interest-rate environment, demand for home-loan refinancing is dwindling…get the whole scoop in today’s Rude Awakening.

————–

Bill Bonner, back in Ouzilly…

*** Today is the 75th anniversary of the Great Crash. On this day in 1929, the Roaring Twenties ended…as investors got the bill for the first great bubble era of the 20th century. Stocks fell 10%. As it turned out, this was only the first installment payment. The bills kept coming – thanks in large measure to disastrous measures undertaken by the Roosevelt administration – for the next 10 years. Stocks continued to go down. The nation went into the Great Depression…during which one in four people lost their jobs. And stocks did not recover until 1956.

Who knew anything then? Nobody.

*** "Oh did you see…over in La Trimouille…they’re building Russian dachas, I think that’s what they’re called, you know, those houses in the countryside that they made out of wood."

A lunch guest was describing a new development in the housing industry: imported houses. Russia, which has plenty of cheap trees and plenty of cheap workers, is manufacturing houses and shipping them into France. The places are said to be cute, warm…and, of course, cheap.

"I guess pretty soon the Chinese will be exporting houses to America," added our guest.

*** The future is unknowable. But so is the past. As we described above, there are an infinite number of complications. You can never "know" more than the bare essentials…and then, barely.

Still, people love to think they know something. So they invent myths of history that help them misunderstand both the past and the present…and usually lead them to make bad guesses about the future.

Thus Rod Martin has written a book praising Ronald Reagan for "saving the world" and guessing that George Bush will do the same. "Without Reagan," says Martin, "we might all be speaking Russian!"

Heh, heh. We have nothing against Russia. But we doubt that – in any reasonably imaginable circumstances – Americans could have all learned to speak Russian in a single generation.

"[Reagan’s] certainty that people everywhere yearned for freedom and that free markets could always outproduce centrally planned slavery drove his strategies where realpolitik could never go. He replaced both containment and détente with his ‘Reagan Doctrine,’ proclaiming America would actively roll back its foe by helping freedom fighters behind the Iron Curtain."

What made Reagan so sure that people everywhere yearn for freedom is a mystery; there is no evidence of such. Even Americans, who claim to love freedom as much as anyone, are much more interested in low home loan rates. They would scrap the entire Bill of Rights in less than 24 hours if it meant guaranteed 10% annual real estate gains.

"Realpolitik" was Kissinger’s approach to foreign policy. It began by taking people as you find them…whether they wanted Western-style "freedom" or not…and making the best of the situation. This meant generally trying to avoid conflict without surrendering strategic interests.

The neocons advising Reagan came up with a more daring doctrine. They wanted to get Kissinger out of the way and remake the world in their own image. Martin does not mention that among the "freedom fighters" that the United States decided to support was, notably, Osama bin Laden. The present "war on terror" was largely an invention of the neocons. They helped create the enemy…and then developed a war against him.

Martin continues:

"And free men everywhere, [Reagan] believed, would lay down arms, take up tools and build a new, peaceful, prosperous world for themselves and their posterity, given the chance."

Heh, heh.

What history do these neocons read? What air do they breathe? What bread do they eat? The bloodiest war in all history – World War I – was fought between people who were freer than you and I, dear reader. All the major combatants had some form of democracy…and all had lower tax rates, fewer regulations, smaller prison populations and more freedom than we presently enjoy in the U.S. of A.

Nobody knows anything. The neocons even less.