A Christmas Letter

A Boxing Day DR Classique, first published three years ago today.

We enjoyed a very quiet, and unseasonably warm, Christmas here in Poitou. The festivities began with a party for the English speakers in the area. We invited the five or six families we know – English, South African, Scottish – and, of course, our own American bunch. Among them was a doctor and her husband…and a farmer whose wife is named Looney. I am not making this up – just reporting it to you. Looney is an avid horsewoman, like my wife, Elizabeth. Eventually, every serious rider is kicked in the head, trampled, or thrown from his horse onto his head. So, I assume that the name is descriptive…or perhaps predictive.

Kurt, meanwhile, does underwater construction work. It is a difficult career, but he seems to enjoy it. He is leaving today for 6 weeks in Iraq – where I presume he is working on oil equipment. Richard manages a local Bed-and-Breakfast, frequented by English tourists. And Kim is restoring a château in an even more remote little hamlet.

Of course, there is no reason why you should be interested in our Christmas – especially since nothing out of the ordinary happened. But the Daily Reckoning is a free service, and I feel entitled to bore you from time to time. Plus, it is the day after Christmas and I am not ready to address trivial matters.

The purpose of our get-together at the house was to sing Christmas carols in English. Caroling has been a family tradition for many years – it is something we miss out here in the French countryside.

Christmas Carols: A Defeat for Gentrification

The tradition began in Baltimore more than 15 years ago. We lived in a formerly Jewish neighborhood of elegant houses built in the last century. But the Jews had moved out…all that is left is the synagogue on Eutaw Street – which is still in use. By the time we arrived, in the mid-80s, it looked as though the area might be ready for an urban renaissance. So we bought a house for $27,000 – and joined a small group of white homesteaders in a predominately black ghetto.

It was an uphill battle, and ultimately, a complete defeat for the forces of gentrification. But it had its comic moments. Among them was our futile attempt to bring American bourgeois culture to the ghetto. One effort was the annual caroling – in which a little band of earnest homeowners would parade up and down the inner city sidewalks singing Christmas carols.

The spectacle was almost as foreign and absurd to the local drug dealers and welfare addicts as if aliens had landed in front of the corner liquor store. But at least one woman tried to make sense of it:

"What’s this?" she asked the carolers, rolling one white tradition in with another, "Chantikah?"

After giving up on the city, we moved out to the country, near Annapolis. There, our caroling took on a new dimension. Along with other members of the church group, we would drive around to `shut-ins.’ It was fun for the carolers, but the shut-ins were – in some cases – so tightly shut-in, and deaf to boot, that they didn’t hear a note or a word…and actually slept right through the whole show while we shivered in their front yards.

Christmas Carols: Poitou

But here we were on this Christmas Eve, drawn up around the fire…a small outpost of Anglo-Saxon Christendom in remote Poitou.

Elizabeth had made fruitcake, cookies and homemade eggnog – to which we added rum or whiskey depending upon our tastes. The eggnog was so frothy that by the time we began singing, we all had traces of white mustaches. Now, it turned out that while we all knew the same carols, the English had different melodies. That is the way with the English…they can never quite get in tune with the rest of the English-speaking world. But it didn’t seem to matter anyway. After a few rounds of eggnog, we were surprised at how good we sounded.

The party ended in the early evening. But there was more singing ahead. Elizabeth, Maria and I rushed over to the church – where we had been welcomed into the choir in the spirit with which a fat girl might be invited to enter a beauty pageant…it is always nice to have someone around to whom you can feel superior.

The little church at Bourg Archambault was packed on Christmas eve. We were late getting there, but fortunately Pierre had saved a seat for me and had begun to worry that I wouldn’t show up. We are the only two basso profundo voices in the choir. We don’t sing very well, but when we feel sure of ourselves we really belt it out and chuckle to ourselves after the fact. But we drown out the rest of the choir on these occasions…and Pierre’s two daughters – Anne Sophie and Elisabeth – turn around and frown at us. My own daughter, meanwhile, took a seat on the other side of the church. At 14, she fears embarrassment more than death. And I’m afraid I give her plenty of cause for mortification.

But Anne Sophie and Elisabeth are both in their early 20s – and beautifully turned out. Pierre seems to find it a pleasure to catch their eyes, as I do – even if it is to draw a look of disapproval.

Then, after church – at about 11pm – we returned home and gathered around the fire again, partly for intimacy…but largely just for heat. The fireplace is the only source of heat out in that wing of the of the house. The children were soon sent off to bed so that Mr. And Mrs. Santa could fill the stockings hung by the chimney with care…and finish wrapping a few presents. Actually, Mrs. Santa did the work…while Mr. Santa helped himself to what remained of the eggnog and put on a CD of holiday music.

And so, our Christmas eve came to a close much as it began…with carols. I dozed in my chair in front of the fire…perhaps dreaming of the Depression of 2001…as Tammy Wynnette sang ‘Silent Night’.

In the holiday spirit,

Bill Bonner

December 26, 2003

The rest of the world somehow knows.

They know it is all a fraud. The recovery….the consumer economy…the Bubble Reloaded…something tells them that it is not going to turn out the way people think.

And so, day after day, they sell the dollar. Every U.S. company…and every U.S. asset…every paycheck…and every bottle of booze is calibrated in dollars. Selling the dollar takes them all down a notch. And people scarcely notice. At least, not at first.

The dollar is the ‘Way Out’ for everyone – or so it appears.

President Bush could do the honest and honorable thing. He could go on national TV and explain to voters that the nation is spending more than it can afford. "We’re all going to have to cut back," he could say. "And we’re setting the example here in Washington by cutting Federal spending by 15% next year…

"Plus, I’m sorry to have to tell you this, but we’re going to have to raise taxes, too. Otherwise, we’re just getting ourselves further into a hole that our children and grandchildren will have to deal with."

You have not yet heard George W. Bush say such a thing?

Well, have you heard Alan Greenspan tell Congress that he has "reluctantly decided to raise interest rates in order to reduce consumer spending, lower debt levels, and protect the dollar?" You haven’t?

No, and you’re not likely to. Voters want lies, not the truth. They want to believe that they can continue to borrow, spend, and eat all they want without any ill effects. They know they cannot eat all they want; they see the results for themselves. But economics is confusing. If Alan Greenspan says the economy is in great shape, who are we to argue with him? If George W. Bush says the nation is better off with a $500 billion deficit, how could we know any better?

Bush supporters point out that the extra spending was made necessary by the War on Terror. But more than half the additional slop has gone directly into the usual domestic trough.

The president must know as well as everyone else that someone, somewhere, somehow will have to make up these deficits. Just so long as it’s not his problem, now! And Alan Greenspan knows perfectly well that someday this whole consumer debt/paper money economy will blow sky high. He just wants to be sure it’s not while he’s on the job…or not in any way that people notice.

The charming thing about the dollar is that it can fall…and the voters don’t seem to mind. In fact, they rather like it. For while all America’s assets have dollar signs in front of them…so do America’s debts. A 50% decline in the greenback, for example, wipes out more than $4 trillion worth of foreigners’ claims on U.S. assets…while Americans think they are still whole!

Voilà! There goes a big slice of America’s debt problem…stuffed down the gullet of foreigners. What an elegant solution! What a delightful outcome! The foreigners don’t vote. They can’t even complain – for it’s clearly their own damned fault. Fed governor Ben Bernanke said right out loud that we would destroy the dollar rather than allow the consumer economy to slow down. We reported it right here in the Daily Reckoning. Weren’t they paying attention?

But wait. Is it really that simple? That easy? The foreigners are wising up already. Day by day, the value of everything American goes down – its houses, its stocks and bonds, its hourly earnings and dividends. How can Americans continue living in the style to which they have become accustomed? Without foreign lending…where will they get the money? Where will the federal government get the wherewithal to continue squandering cash at the present rate? How will consumers go further into debt when no one will lend them money? What will the consumer’s house be worth when neither he nor many of his neighbors can afford to make the monthly payments?"

We cannot wait to turn the page and find out.

All the markets of Christendom were closed yesterday in celebration of the birth of the Prince of Peace…but here at Ouzilly, there’s nothing much to report. Your editor is still suffering from some ailment, which he believes is a form of pneumonia. He cuts this letter a little short so he can go over to visit the local doctor…

…"Wow," he says 20 minutes later. "That was such a pleasant health care experience, I think I’ll get sick more often."

In the space of 20 minutes, your editor drove into the village, appeared before the doctor, was examined and prescribed…walked next door to the pharmacy…got 4 different medicines…then stopped at the bakery on the way out of town to get bread…and returned home. He waited nowhere. And the whole thing cost less than 50 euros – including the bread.

Doctor Resner looked like he had just come in from treating a cow. He was dressed in a sweatshirt and chewing gum. It was hard to believe he was a doctor at all. But there on his wall was a certificate to prove that he was at least a graduate of the Poitiers medical school.

Nor were there any clerks, assistants, nurses or other professionals in attendance. The man was on his own and ready for lunch.

"What’s the matter," he wanted to know. We explained that we thought we had a touch of pneumonia. He wasted no time asking about medical history, drugs, health problems, insurance or anything else. Instead, he got right down to business:

"Ah, no problem. Let’s have a look at you."

We sat down on the examining table in a his dingy, depressing office. The table was just like those you see in America, with the paper rolled out on top, except for one detail…the paper looked as though it hadn’t been changed in weeks. It was creased, wrinkled and not particularly clean.

He listened our lungs…then checked our blood pressure. Finding nothing of interest, he went immediately to his desk and wrote out a prescription.

"How much do I owe you?"


We gave him 2 10-euro notes, said ‘merci’ and left.

The Daily Reckoning