All Saints' Day

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

"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.

Farmers who raise livestock, on the other hand, 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%.


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 a corpse 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, on 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. (But who knows…maybe you’ll be able to order flowers via Internet…and maybe the screen will prompt you to think about certain aspects of the deceased. And maybe will be a big hit as an IPO, giving people a way to celebrate the ancient holiday without ever leaving their day-trading terminals.)

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 the political process, where genuinely revolutionary parties have been replaced by a token opposition and emasculated rebels.

We have often noted how 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…stocks rise…and the spirits of Liberty remain in the grave…pumpkins are the business to be in.

Your editor,
Bill Bonner

October 31, 2003 — France

Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of the Wall Street Journal best-seller: "Financial Reckoning Day: Surviving The Soft Depression of The 21st Century" (John Wiley & Sons).

Deception. This morning, we were served a morsel of enticement for breakfast here at the W Hotel on Poydras Street in New Orleans. We took breakfast in the room. And there, sitting on the tray, was a curious little espresso cup filled to the brim with un-ground coffee beans. A little sign planted in the beans read: "What we see depends mainly on what we look for."

GDP numbers were released yesterday. And the financial media gasped.

Our own Christoph Amberger, writing in his daily missive 24/7 e-profits dispatch, writes: "What a turn of events! So much for the ‘Bush Depression’ and the pious myth that the Prez has ‘wrecked the economy.’ "U.S. economic growth for Q3 2003 came in at a fantastic clip of 7.2%, which makes it the fastest growth since the Gipper was in office…

"Equipped with new houses whose windowless fourth exterior wall indicates that there’s nothing behind it but closet and storage space, the American consumer increased spending at a 6.6% growth. The last time that happened was in the third quarter of 1997."

Of course, as Frédéric Bastiat pointed out over 200 years ago, in economics as in life, there is the seen…and the unseen. And it is often the unseen that matters. Few headlines take note of two shady-but-significant contributors to GDP – government and defense spending. Likewise, few remember to mention that consumer spending – which accounts for 70% of all U.S. economic activity – only grows as high as the tide of the greatest credit flood in history can lift it.

"Pivotal events in history come very infrequently," writes Chuck Cohen today, at the Man Ray table of le Metropole Café. "Many of us have never seen one. On the whole, our world in the past 30 years or so has been smoothly and uneventfully chugging along. The debt level has been climbing and climbing. The derivative complex has gotten more and more out of hand. And yet a surreal complacency has set in as if this is going to go on forever. But get ready, all is about to change.

"World events, especially in the economic plane, are about to explode onto our history books."

Of course, if you took the GDP numbers at face value, or let the financial media decipher their meaning for you…you wouldn’t have any idea.

Mundus vult decipi, ergo decipiatur…goes a Latin proverb.

The world wants to be deceived…

So let it be deceived.

Here’s Eric with more detail on the deception…


Eric Fry, in another as-yet-unknown location, somewhere in New Orleans…

– The stock market fought its way to a split decision yesterday, as the Dow gained 12 points to 9,787 and the Nasdaq slipped 4 points to 1,933. Earlier in the trading session, stocks had jumped to much higher levels, as if celebrating the news that the U.S. economy boomed in the third quarter.

– According to the government’s statisticians, U.S. GDP advanced at a breathtaking 7.2% annual rate last quarter. Does anyone really believe this number? If the economy is growing at such a rapid clip, why are so many Americans filing unemployment claims, and why are so many companies struggling to generate profit growth?

– On the other hand, the restaurants, bars and casinos down here in New Orleans aren’t lacking for customers…Yes, it’s true, on Tuesday morning, your New York editor sprung from his usual perch on Wall Street and headed south to the "Big Easy" for the New Orleans Investment Conference. Yesterday he addressed the conference-goers on three separate occasions, dispensing the same sort of dubious wisdom that he dispenses regularly in the Daily Reckoning.

– He predicted that the dollar would be "the first – or second – best short sale in the U.S. financial markets," and suggested, therefore, that "gold may be a good thing to own."

– Later in the day, he urged investors to continue scouting for opportunities to invest in China, and suggested some specific investment ideas. He also predicted that the U.S. financial sector is close to a peak, and that financial stocks are better sold than bought. But we have shared these thoughts with the Daily Reckoning faithful on many occasions.

– Later that afternoon, your New York editor was privileged to listen to Jimmy Rogers address the conference. The well- traveled "Investment Biker" provided a stream of fascinating insights from his three-year, 152,000-mile trip around the globe.

– "We ate everything," he told the conference-goers. "And I can tell you that grilled grasshoppers aren’t so bad, provided you mix ’em with grilled termites."

– During the question-and-answer session, Rogers was asked to share his favorite investment destinations or investment themes. He replied: "China is becoming the greatest country of the 21st century. They call themselves communists, but they’re more capitalistic than you or I…They save and invest 35% of their income."

– Rogers says that he owns a few Chinese stocks, as well as the Chinese Yuan. But he suggests that one off the best ways to "play China" is to invest in commodities.

– "The Chinese aren’t going to buy light bulbs from the rest of the world," Rogers says. "But they’re going to buy commodities. They have to buy commodities because they do not have enough of their own to keep pace with domestic demand."

– "Commodities are in a bull market," says Rogers. "The bear market ended in the late 1990s, and the bull market will probably last for another 8 to 12 years."

– Rogers’ second investment theme is the U.S. dollar. "I’m pessimistic about the dollar," he says. "The Federal Reserve has as its official policy the debasement of the U.S. dollar. They’ve got the printing presses and they promise to use them…So if I could tell you only one thing, it would be to get out of the U.S. dollar."

– Rogers’ third investment theme is really an amalgamation of the first two. He favors investments in resource-based economies like Canada’s. Not only would their economies benefit from a commodity bull market, but their currencies would also continue appreciating against the U.S. dollar.

– Rogers is not only putting his money where his mouth is, he is also putting his family’s future where his mouth is. He is actively preparing his 5-month old daughter for the world that he anticipates…Says the proud papa: "My 5- month old daughter has a U.S. passport, a Swiss bank account and a Chinese nanny…

– "Learn Chinese," Rogers concluded. "This economy will be the greatest growth story of the 21st century." ————

Addison Wiggin, back at the W on Poydras…

*** Continuing our theme: "This is a book about deception," begins a review of Financial Reckoning Day from our friend David Brown, editor of Common Sense, a thrice weekly missive from United States Term Limits (USTL). "No, it’s not about career politicians – although we do get a chapter on four-term Federal Reserve Chairman Alan Greenspan, yet to be termed out of the economy-czar post he has held since 1987.

*** Which reminds me. We’ve hit #7 on the New York Times best-seller list. The NY Times only print the top 5 in the paper. So we’d like to make a special appeal to all willing and able Financial Reckoning Day brigade members…

We’ve had brigadiers requesting copies for the local library. That’s good. Several have preferred the ‘covert ops’ method – going in to local stores and rescuing the books from the lower, dusty reaches of the business/investment sections. That’s good, too. Others have simply raised a stink when they don’t see the book in the store at all. This is, of course, good, too. But try to raise a polite stink.

Go on…it is only a point of pride for your authors/editors…but, think about it, wouldn’t you like to see our little offering take down the likes of Dr. Phil? Or wrestle with that smarmy South Beach Diet? Sure you would…what fun. Tell your friends they can help a good cause and still get a discount of 35%.

*** We’re back in New Orleans. We love this city. The history alone strikes a certain fancy with us. Founded by none other than the Mississippi Scheme’s John Law, New Orleans was meant to be the ‘Paris of the New World’; the main trading port for all the riches Law’s Compagnie des Indes would pilfer from the Mississippi territory. The city was also the destination for the hoards of beggars, pickpockets and thieves Law rounded up in Paris when the shares in his company began to collapse. He sent the ne’er- do-wells to the New World, under the pretense that they would be working the mines in what is present day Louisiana. Investors in the company’s shares knew the jig was up when the same beggars and thieves began showing their faces in the same dark alleys of old Paris…

Today, of course, New Orleans – particularly the French Quarter – is no place for a mine. In fact, the quarter is 8 feet below sea level. If the levée were ever to break, the bars and restaurants would be inundated faster than an investor suffering hyperinflation of the currency his assets are parked in.

*** In the year 2000, just after the Nasdaq crashed, we recall there were barely 200 people in attendance at the New Orleans conference. This year attendance is in excess of 1,000. If history holds true, the tidal wave of interest is only just beginning. Back in the late 70s and early 80s, when gold was trading in the $700-$800 range, attendance was closer to 5,000. They held parades down Canal Street to kick things off. Wonder Woman rode an elephant in one of them.

Although the excitement level this year isn’t yet at that stage, Brian Lundin, the conference organizer (and editor of the Gold Letter) and his crew are to be commended. They – like gold itself – have stayed the course. Here’s to their ship coming in.