Hey, Mr Bernanke, don't put away that QE... not yet! Besides, it's such a nice scam; you don't want to give it up.
This could be thethird year in a row.
Winter looked good. Spring started well.
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Then, things begin to fall apart.
Happened in 2010. Again in 2011.
And now this...
First, Europe can't seem to keep a fix fixed. Spain, Greece, Ireland, Italy, France, they're like crooked politicians.
Remember how to tell an honest politician from a crooked one? An honest politician is one you can trust. When the fix is in, he stays fixed. But a crooked politician? He can be bought too. But you never know if he'll stay bought.
The fix is in on all Europe's economies. And not for the first time. Every other time the fix has come un-fixed. And then, here we are again, wondering if they'll stay fixed.
Spain was able to borrow money last week. But investors seemed to want more safety. They bought more US and German bonds, with the US ten-year note falling to 1.96%. The yield on Germany's ten-year note, meanwhile, hit an all-time low. In Europe and America yields could be dropping to Japanese levels.
Their economies could be headed towards Japan too. Up, then down. Down, then up, basically getting nowhere.
Same story in the US.
News from the US last week showed the job situation darkening. Here's the Reuters report: "The number of Americans claiming unemployment benefits for the first time fell only slightly last week, suggesting that job growth in April will not improve much after March's disappointing performance..."
Then, from the housing front, came more disappointment: "The National Association of Realtors said on Thursday that existing home sales slipped 2.6 percent to an annual rate of 4.48 million units last month."
But what's this? Afterfive years, the price of a house is going up... or at least that's what Reuters tells us, based on a NAR report:
Nationwide, the median price for a home resale rose to $163,800 in March, up 2.5 percent from a year earlier. Distressed sales accounted for 29% of re-sales, down from 34% in February, the NAR said.
We just bought a house in Baltimore. We were, frankly, surprised by how the seller dug in his heels. Of course, we offered less than half what he wanted. Still, we thought he'd be happy to take what he could get. After all, the house had been on the market fortwo years. And there couldn't be many buyers for the type of house he was offering.
Still, he held out and he was right. There are plenty of houses for sale in Baltimore. But there aren't many that are right down the street from the office. So, after months of back-and-forth we ended up much closer to his initial ask than to our initial bid.
The thing is this house is in the upper range of houses in the Baltimore-Washington area. Buyers of this sort of property are not the people who suffer from QE, bail-outs, and deficits. On the contrary, they're the ones who benefit from them!
The feds borrow and print trillions worth. What happens to the money? They lend it to the big banks and spend much of it around the Washington beltway. Asset prices rise, including prices for expensive houses. The effect, if not the intention, of modern countercyclical stimulus efforts is to transfer trillions of dollars' worth of the wealth of the middle classes to rich, privileged zombies.
And more thoughts on our trip to Argentina, from Elizabeth...
Gustavo discovered the petroglyphs while walking with his grandfather as a young boy, and later when taking his own children on Sunday expeditions on the mountain slopes overlooking his family's arriendo. He offered to show them to me and one day last week, we set off on horseback.
Gustavo took the nice-mannered criollo (a native Argentinian horse) and I rode one of the horses we are trying out a strong and stocky dark bay. He's young and energetic, not entirely convinced that the aids are there to help him. It seemed like a good way to find out if he was up to the challenge of scrambling up and down rough and rocky mountain slopes.
We rode the easy way to the Compuel road; I prefer it to the shortcut up the mountain and through the high pass behind our house. That way is all perpendicular drops and ascents. Breathtaking. The views are probably magnificent but as my mental forces are fully absorbed in negotiating the path, I haven't been able to appreciate them. Instead, we went out of our entrance, through the alles of yellowing cottonwoods, across the little stream that swells into a pool as it crosses the road from the reservoir near the house to water the big meadow below.
We passed the chapel and the school, and started following the road. It starts off through the gentle green meadows blooming with yellow daisies and rich blue sage, and goes past a few scattered houses. These are all made of adobe with barro or mud roofs; doors are made of cactus wood lashed together with strips of goat leather. A scattering of pink and mauve cosmos flowers; perhaps a sharply pink rose, and brightly colored laundry hanging on the line. Dogs poke their noses out of doors and lounge in the dirt under the shade of a twisted algarroba tree. Victorina, Jose, and Hugo, who use these houses, all have young children and live in them during the school season.
We kept on climbing until we were on the road that clings to the side of the mountain. We had a few tense moments, when dogs accompanying Maria Luisa, a woman who lives with her four sons in one of the mountain farms, frightened the criollo and he wheeled. The road is too narrow for emotional incidents! It is being rebuilt at the moment, because the heavy rains washed down boulders and mud. But the roadbed itself is in surprisingly good condition. As it winds around, you can look back and see that the bed, which projects out from the mountainside, has been built up from below with carefully placed stones.
Gustavo's arriendo is the last in a series of farmsteads that follow the river Barranca as it tumbles down from the heights from Compuel. The vast campo of Gualfin, where our cattle graze, is at the foot of this river. As it approaches the valley, the river levels out. Centuries of sedimentary deposits in this area near the campo have created a rich alluvial soil in pockets large enough for subsistence farming.
The first of the pockets of land is a long wide band along the river, which used by the finca for maintaining the bulls over the winter.The next is used by Javier, whose house is perched on a high rocky ledge overlooking the valley, and has no fields around it. Next up is the land farmed by Jos, one of the masons on the casita project. Then there is Hugo's arriendo, then Natalio's, then Pedro's and finally the arriendo where Gustavo lives with his wife and three children, his mother and her sister Clara, and his 86-year-old grandfather. It was an hour's ride just to get to the house.
We cut through Gustavo's fields and crossed the acequia where he gets his water for his house and fields. This is the same acequia that eventually brings water to our house and the fields around it. We waded the horses through the boulder-strewn river flowing next to the acequia, and crossed another field.
Then we started climbing in earnest. Gustavo is an observant person who makes an interesting guide. He would seemingly be immune to the beauty of the landscape in which he has spent his entire life, but he takes pleasure in pointing out both grand perspectives and minute details the panorama of the valley, the pungent fragrance of a particular kind of wild pink sage, the subtle touches of pink and violet in a white butterfly's wing.
The first rock he showed me is a big flat piece of stone sheared off from a boulder. The shape of a huge rounded shield, it is carved with an intricate series of rounded channels, as if someone were making a map of a water system. One channel ended in three prongs, like a bird's claw.
We climbed higher and came to a place Gustavo called a cimento. A cimento is a structure of stone, a wall of a terrace or corral, or of a house as Gustavo put it, where the stones have been purposely placed rather than pushed together by water. There were the remains of a wall on a level piece of ground where the surface was fine soft sand. Gustavo leaned down and picked up two pieces of broken pottery made of red clay one was striped orange and dark brown and the other had part of a complex design, curved lines, dots and squares, in black and cream. The latter was a piece of the neck of a jar.
"Augustina loves to find pieces of pottery and has made a big collection," he told me. Augustina is his youngest child, who is four. We had passed her along the road, set atop a burro, as she and her mother Gabriela were walking to the little school. Gustavo's next child is a six-year-old boy called Augustin. The 5th-century Saint Augustine, he of the City of God, is the patron saint of the priestly order that tends to Gualfin.
The next rock Gustavo showed me was about the same large size, and it was also carved with channels. The channels went around the perimeter of the rock, and inside it were carvings of men. They were abstract figures holding weapons. One had a little pompom on his head; perhaps it represented an Inca hat. The Inca subjugated the Gualfin Indians in the 15th century, making them pay tribute to their empire. Two hundred years later, after bitter and protracted fighting, the Spanish destroyed the Gualfin tribe for good.
We climbed even farther up the mountainside and came to a very large petroglyph of a man on the face of a sheer rock cliff, overlooking the valley and the mountains across. He was similar to the man on the boulder, a linear bullet-shape, with arms and legs, large round eyes and a straight bar of a mouth. He holds a knife in his left hand, and a clearly drawn arrow or spearhead is shown near his right hip. Someone had come along later, it seems, and scratched a bandoleer across his chest and a bow-tie where his neck would be!
The most spectacular petroglyphs awaited us on another fold of the mountainside. We rode over a precarious path to get under them and then hiked on foot up to where a huge cardon cactus, perhaps 200 years old, sheltered a sheer rock face. The petroglyphs were carved on two walls of rock that come together like pages of a slightly open book.
Here are line drawings of what seemed to be a puma, snakes, llamas, and a vizcacha, a small mammal about the size of a groundhog that we have seen in Compuel. Curiously, I couldn't see any shape that resembled a bird. There are also figures of men, but in a different style than those of the other petroglyphs. They are graceful abstract line drawings, giving the idea of movement rather than static menace. One of them is holding what looks like a shepherd's crook, though it might be a hunter's bow.
There are other petroglyphs at Gualfin: more channels, these in the shape of a river system or a many-fingered hand, and an abstract animal shape are at the Quebracha de Compuel. Another group are found on the same kind of intersecting faces of sheer rock as those above, on the way to Pucarilla. These seem to be a jumble of animal images a spotted one that might be a puma, llamas and others, as well as geometrical figures such as spirals and squares.
Who drew these things? When? What happened to the people who made them? No one knows
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