View from the International Man office, today.

Joel Bowman, writing today from La Condesa, Mexico City…

It’s Bread & Circus season here in Mexico. That means World Cup football (soccer) and presidential elections … just the things to distract the general population from all that really matters in this life.

(We refer, of course, to things like peace… freedom… civil liberties… al pastor tacos… et cetera… )

Alas, our amigos have not fared well in either arena of late, political nor sporting. Too bad. Given the horrible job this nation’s public relations team has done in the past few years, we thought the Mexicans deserved a bit of a break. And yet…

Over the weekend, voters inflicted upon themselves a populist, hard-left president in the bodily shape of Andrés Manuel López Obrador, or “Amlo” for short. Markets here sold off, but only by a little. Same for the Mexican peso. There’s plenty of ruin in a nation, as the saying goes.

Meanwhile, the local newspapers hailed Amlo’s victory as a “landslide,” which seems an appropriate enough analogy to us. Whether natural or man-made, disasters are a sad fact of life.

The president-elect, who spared the country his victory in both the 2006 and 2012 elections, ran his latest campaign on the promise to tackle what he cannily identified as the “evil of corruption.”

As far as we know, the campaign was not consciously satirical.

It is indeed a topsy-turvy world we live in, dear reader, where the task of cracking down on corruption is laid at the feet of the political class. What next? Drunks spearheading the temperance movement? Police speaking out against excessive use of force? TSA officers giving lectures about personal space?

Politics, as history has been at great pains to point out, is built on a foundation of corruption. The state is violence, both implied and enforced. A politician can no more stamp out corruption than he can make his own job obsolete.

Still, life goes on as usual … except, that is, for the Mexican football team. As the final votes were tallied Monday morning, as the concession speeches were prepared, Brazil drove home a second goal in the 88th minute, thereby ejecting the scrappy Mexicans from this year’s grandest circus event.

“Ay, ay, ay, ay,” as they say down here, “canta y no llores.” (Ay, ay, ay, ay. Sing and don’t cry.)

In today’s feature article, below the brief advertisement, your newly-appointed editor sat down with long time friend and now colleague, Doug Casey, to begin what we hope you will find to be an enjoyable, useful conversation. If you’d like to drop us a line—comments, complaints, grievances real and imagined—the gates of communication are open, here: CONTACT US

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Seeking Anarchy in South America

An Interview with Doug Casey and Joel Bowman

Joel Bowman: Before we get started today, I’d like to say thanks for inviting me onto the International Man team. I’ve long been a fan of your thinking, so it’s really a pleasure to be involved in this project with you.

Doug Casey: The feeling is mutual, Joel. I suspect we may be among a small number of genetic mutants that intuitively believe in a maximum of intellectual, social, and economic freedom. Hopefully that describes many of our readers as well.

Joel: Indeed. So the last time you and I shook hands was down in Punta del Este, in Uruguay, about a year ago. I recall having a conversation about where in the world a decent, morally sound individual might pass his days in peace, unfettered and unmolested by the local tin badge brigade of government busybodies.

Since then, I’ve moved from Buenos Aires to Mexico City and you’ve moved – at least part time – from the beach to a ranch a few miles in from the coast of Uruguay. Am I to take it that that’s your answer to the question? Is Uruguay your Shangri-La?

Doug: No. It’s not. In fact, there’s no one country that checks all the boxes. As for Uruguay, it’s a backward little socialist country. When I first went to Uruguay in 1980, I took a ferry across the Plate River from Buenos Aires. Incidentally, it was the first time I’d been to Argentina too. When I was in Argentina, I felt like I was stepping back into the 1950s. Then, when I went across the river to Uruguay, I felt like I was stepping back into the 1930s. And, it’s still in a time warp in many ways—although they’ve finally discarded the old bakelite rotary phones that you had to wait a year to have installed. They still charge gigantic taxes—often 100%—on cars. But most of them are no longer mobile museum pieces.

Uruguay was one of the first socialist countries in the world. It’s completely captured by labor unions, and it’s strangled by taxes—like a 22% VAT—bureaucracy, and regulations. It used to be called the Switzerland of Latin America, but now banking secrecy is totally dead here. The financial business used to be significant. But now it simply no longer exists.

Joel: Sounds like they killed the golden goose.…

Doug: Financial freedom has been in decline all over the world for decades. Uruguay was, typically, behind the times that way. But about ten years ago they elected a bunch of ex-student revolutionaries from the 1960’s, and they’re catching up with the socialists in Europe. In fact, they’re killing a lot of their golden geese. Being a financial haven and a tax haven was very good for the country; it brought in lots of badly needed foreign capital. But to show you how degraded the country has become, about five years ago they had a national plebiscite in which the voters decided to introduce an income tax. There was no income tax in Uruguay before then. Why did they do it? Because they were told only the rich people would pay, which gives you an insight into the average Uruguayan’s mentality. Well, we know what’s going to happen from here. It’ll keep creeping up until the state is extorting everyone. That’s how these things go. For instance, when the US got its income tax in 1913, the maximum bracket was 7%, and that only kicked in at the equivalent of about $15 million.

Of course, they only tax you on domestic income, which is one reason why it’s still a desirable place for an expat. But I certainly wouldn’t try to do any business here – it’s practically impossible to run a business in Uruguay, except perhaps in farming. But they’re working on destroying the farming industry, too … just as the government is working on destroying the real estate industry.

Real estate taxes are already quite high and there’s no longer much reason to have an apartment in Punta del Este. It used to be that Argentines, Brazilians, and other Latins would buy property here as a safe way to hide money abroad. But that game has come to an end with the elimination of financial privacy. Property prices are still high, but in a steady decline.

So what’s the attraction about Uruguay? It’s quiet, it’s peaceful. And, perhaps surprisingly, religion is barely an element in the culture. Along with Argentina, it’s the most culturally and demographically European country in the Western Hemisphere. There’s very little crime, and what crime there is tends to be non-violent.

Why do I spend time in Uruguay? Basically because it’s just across the river from Argentina, which is far more sophisticated, interesting and dynamic. As you know, it’s unwise to have all your eggs in any one South American basket. Or any one North American basket, for that matter.

Joel: As for the rest of that South American basket, is there any other place that appeals to you?

Doug: I’ve been to every country on the continent numerous times, including the three Guianas—although they’re actually best considered part of the Caribbean.

Well, let’s see… You simply have to rule out Bolivia, certainly with its current regime. It’s genuinely backward, and it’s becoming an epicenter of racial warfare between the Europeans and the indigenous peoples. After all, it’s only been 500 years since the Spanish conquered the Incas…

Paraguay is too isolated and the climate is beastly. Its endemic corruption is a double-edged sword—long story.

I rule out Chile because, while, along with Uruguay, it’s the least corrupt country in South America, it’s a very conservative society, and probably the most religious in the hemisphere. It’s basically a long, thin island, with the Andes on the east, the ocean on the west, and the desert to the north. It’s beautiful, yes. And since Pinochet it’s become quite economically and technologically advanced. But it’s very provincial, and the people love their military, the police, and the church.

Joel: So, you’re not a fan of the police state? But Doug, it’s soen vogue these days…

Doug: That seems to be the case in an increasing number of countries; I’m looking for a place moving in the opposite direction. But back to Latin America: Ecuador and Peru both suffer from simmering racial tensions, similar to Bolivia. We can forget about Venezuela until they get rid of Maduro—and even then they’re still going to have huge problems for a number of reasons. Colombia, their next door neighbor, is quite interesting, however. It still suffers from a bad reputation stemming from about 50 years of civil wars and drug wars, but it’s turned around. It’s a real possibility—and the cost of living is low.

I haven’t mentioned Brazil. Unfortunately for me, Brazil is Portuguese-speaking and, while I can get by well enough in Spanish, Portuguese is tough. But language is becoming less of a problem everywhere, with English as the world’s newlingua franca. I was in Sao Paulo last year to play in the Brazilian Series of Poker, and had no trouble. But Brazil has got a real crime problem, violent crime.

To me, the most desirable places to be are Argentina and Uruguay. I prefer Argentina in most ways, especially since the election of the Macri government a couple of years ago; there’s a chance he’ll even undo the bad effects of Peronism that have hobbled the place for the last 70 years. As for Uruguay the cost of living is quite high but, increasingly, you can get some bargains in real estate. That’s basically all they do here; sell real estate and export soybeans. And who knows? Maybe magic will happen, they’ll like what’s happening in Argentina, and elect a non-socialist government next time…

Joel: That reminds me of my own experience living in Buenos Aires. People who knew me would say, “Hey, you call yourself an anarcho-capitalist, and here you are living in a card-carrying Marxist nation-state,” Argentina being, at the time, under the iron-fist of the Kirchneristas.

Of course, there’s an enormous divide between the public and private spheres of any society and so, while the Argentine state was doing everything in its power to destroy value and crush innovation, the private citizens were among the warmest, most generous people I’ve met. My daily coexistence with them was pleasurable and harmonious. Plus, they harbor a healthy distrust for their government, unlike other places I’ve lived where the population kneels at the feet of their statist idols and worships at the altar of the civic religion.

Doug: That’s a very good point. And something else that speaks well for Argentina as opposed to Uruguay. The Argentines really don’t trust their police, their military, their politicians or the state in general. While the Uruguayans have a culture of thinking the state is their daddy. In addition to all that, it’s much easier to become an Argentine citizen than it is to become an Uruguayan citizen. It only takes two years of living there six months per year. In Uruguay it’s much more complicated. But they’re both good passports, with visa-free travel to around 145 countries.

There’s so much more to be said about all these countries in Latin America. I feel a bit chagrined summing them up in a few sentences each. But I’m sure we’ll go into a lot more detail in the future about the other 200 countries on this planet. And spot more than a few ways to profit from what’s going on…

Joel: I look forward to the conversation evolving over the coming weeks and months. Much to discuss. Thanks for taking the time today, Doug.

Doug: Good talking, Joel. ‘til next time.

Joel’s Note: One of the many pleasures in talking with Doug is that you know you can always count on a straight answer. No mealy-mouthed nonsense. No beating around the bush. And, certainly, no “political correctness.”

In life, as in investing, Doug has no problem going right to the heart of the matter. It’s no surprise, then, that in addition to being a true International Man, Doug also boasts one of the very best track records when it comes to investing. Whether it’s speculating on junior miners… getting out ahead of the pot bonanza, or making a mint on crypto currencies, Doug has been at the forefront of some of the biggest, most profitable trends in modern times.

If you’re interested in learning more about Doug’s no-nonsense approach to investing (and to life), we highly recommend you take a leaf out of his new book. In fact, you can grab a copy of one right here. It’s free when you sign up for a trial run of his best-selling investment newsletter. Check them both out, here.

From Abroad,