POITOU, FRANCE – “Which is worse? America or France?”

The question must be put in context.

We were invited to dinner with local farmers last night. Jean-Yves and Arlette live in a modest house in the nearby town – an efficient and cozy place built about 25 years ago.

They’ve added a solarium to the back, where we had dinner.

Arlette operates a dairy farm left to her by her parents. Jean-Yves runs a cattle and cereal farm that was in his family. A son and his wife moved into the farmhouse in Jean-Yves’ place. Anticipating retirement, he and his wife moved into town.

French Fraud

“You have Trump. But we have Macron,” Jean-Yves said.

On balance, France probably comes out ahead on that score. Macron is young, smart, and good-looking.

“Yes, but he is a fraud,” Jean-Yves continued. “He claims he will change things. But he is mainstream. Besides, I don’t think he can change things even if he wanted to.”

Over the years, we’ve commented on many public figures here at the Diary. We can’t remember one we didn’t consider a fraud in some way.

And so far, we don’t think we were wrong about any of them.

French President Emmanuel Macron is hardly an outsider or a rebel. He is a graduate of France’s elite École Nationale d’Administration. And he was finance minister under the previous president.

So entrenched and unyielding is the French bureaucracy – France’s Deep State – that it would take a real firecracker to change it. Mr. Macron is not that kind of a guy.

“I wanted to get someone to work on the gardens,” Elizabeth explained.

“So I called a guy who has a lawn maintenance company. He said he would cut the grass. But he won’t cut down the trees because that would have to be subcontracted, and that would put his revenues over the allowable level.”

“You mean he’s not allowed to make more money?”

“That’s right. If he makes more than a certain amount, he’s required to reorganize his business… and apparently, that’s a nightmare. There must be people in Paris who are spending their time thinking of ways to make it difficult for people to do business.”

“Nightmare?” Jean-Yves interjected.

“Farming is a nightmare in France. We work seven days a week… because we can’t get anyone to help. Or more specifically, we don’t dare get anyone to help. Because if we hire someone, it’s almost impossible to fire him.”

“It’s worse than that,” Arlette added.

“Farming is so hard… with so many directives from the government – from bureaucrats who’ve never actually seen a cow – that young people don’t want to do it. I don’t blame them. I know what’s going to happen.”

This Too Shall Pass

In France, half the people work hard; the other half try to stop them.

But the typical French family is more prudent than its American counterpart. It’s seen governments come and go.

The Third Republic fell in 1940. The Fourth Republic fell in 1958. The Fifth Republic will probably fall in the coming financial crisis.

French currencies come and go, too.

When we first visited, many years ago, it had only recently replaced the old franc with the new franc – worth 100 old francs. “That loaf of bread will be 500 francs,” a baker might tell you.

Then, in 2000, the French ditched the franc for the euro.

The French know something Americans don’t: This too shall pass. It has made them cautious. Consumption, especially the conspicuous kind, is not as appreciated here as in the United States. There are fewer malls. Fewer ways to spend money. And less credit.

The government is about as insolvent in France as in the U.S. But the average family carries less debt.

France also has another big advantage. It may have a large and costly welfare state, but it has only a small warfare state. The French military still meddles overseas, but on a small scale.

The scale of America’s meddling, on the other hand, is colossal. The annual cost of its wars, military spending, foreign aid, and various security agencies and initiatives is almost $1 trillion… and rising.

Here’s President Trump explaining yesterday to evangelical media mogul Pat Robertson why Vladimir Putin was more likely to favor Hillary Clinton over him in the 2016 election:

It’s something that you don’t like talking about, but again we are the most powerful country in the world, and we are getting more and more powerful because I’m a big military person.

Win-Lose Spending

Any military spending you don’t need to defend the country is wasted… at best.

Since the U.S. faces no serious enemies, most of its empire budget contributes nothing to either prosperity or security.

It is win-lose spending – from the pockets of the plain people to the pockets of the rich and powerful. Perhaps the Deep State insiders are grateful; perhaps not.

It is a shame the president doesn’t read history. At least then he’d put an ironic fillip on the “big military person” phrase.

He would know that every “big military person” in the past – from Bonaparte to Tojo – was either an embarrassment to his country or a disaster… and often both.

Excess military spending almost always leads to adventurism, war, and catastrophe.

France… the U.S. Which is worse?

It is hard to say.





Market Insight: Gold Slides Against Stocks


Chris Lowe

The last five years have not been kind to gold investors…

That’s the message from today’s chart.

It looks at the price of gold relative to the Dow Jones Industrial Average – an index of 30 of the largest stocks in America.

When the line on the chart is rising, gold is becoming more valuable relative to the Dow. When it’s falling, gold is becoming cheaper in relative terms.

As you can see, for the past five years, the clear trend has been down.

In fact, the gold-to-Dow ratio has more than halved over that period.

In other words, gold hasn’t been this cheap relative to stocks in five years.

Chris Lowe

Featured Reads

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The Death of Big Oil
India and France recently announced their plans to ban diesel- and gasoline-powered cars in the next few decades. As countries move away from fossil fuels, are oil producers doomed?


In response to yesterday’s Diary, readers consider what’s truly dividing America…

When you make the statement “Every student of Economics 101 learns that markets work better than central planning” and use this trivial idea to make your point, you dilute the wisdom you normally exhibit. As any modern economist knows, both markets and central planning are required and are used. The flaw occurs when the mix is distorted by excessive self-interest of a few powerful individuals.

Right now the self-interest of the few in the US is distorting the economy experienced by the rest of the population. So we try to shake up the system by electing Trump, who unfortunately is corrupt, ignorant, and very likely irrational. As a result, the mess grows. The fight is not between liberals and conservatives or elites and the rest of the country, but between ignorance and self-interest.

The adults need to find a solution that can be implemented for the sake of our country because the present path is leading to disaster, as you clearly describe.

– Edmund S.

Sorry to say but the “The Donald” is a combination of arrogance and ignorance. He wants to take down the media because they might show what a financial and political failure he really is. Why won’t he release any of his financial data? That is because it would show what a failure he really is.

He ran a campaign of putting down other people and no real ideas or plans. What is the difference in campaign approach between how Hitler and he got elected? Not much. He demonized some minority groups, put down competitors with bullying and then made wild promises like draining the swamp, which he is ignorant about and won’t learn about.

– Paul L.

Meanwhile, one reader has a question about life in retirement…

I am a 66-year-old retiree with a not-so-substantial retirement account. I am able to live on my Social Security but don’t want to lose the $ in this account. What are your recommendations? Leave it where it is? Invest it elsewhere? I just don’t know what to do. Thank you.

– Paula E.

Editor’s Note: Unfortunately, we are not allowed to give personal investment advice. But we understand that navigating retirement is difficult. Our friends at the Palm Beach Research Group recently put together a special online presentation with Ted Benna – whom Forbes and Barron’s have called the “father of the 401(k)” – to help readers find a way to manage their wealth in retirement. Watch it here.

In Case You Missed It…

Will you be attending this free cryptocurrency training seminar?

Last April, our colleague Teeka Tiwari held a training seminar for new cryptocurrency investors. Since then, Teeka’s cryptocurrency recommendations have soared. The interest in this area is so overwhelming, Teeka decided to relaunch his free training seminar for anybody who might have missed it.

Get the full details for this free event right here.