Below is an except from Doug Casey’s May 2016 Casey Report. Doug is an American investment advisor, author, and owner of a wine and residential sporting estate project called Estancia de Cafayate in Salta Province, Argentina. As a ranch owner myself in Argentina and after having spent a considerable amount of time there over the past year, both before and after Macri’s election, I think his assessment of Argentina’s economic future is spot on. We, at AG DTours, think the time to invest Argentine agriculture is now. Enjoy…especially his description of an asado; a truly unique experience.
“So, word got out here in Argentina that I was turning 70. And that meant a fiesta was in order. I hate celebrating my birthday, but it would be churlish to wave off people who like that sort of thing.
I was invited to a party put on by some of my neighbors. Vintners, horse breeders, ranchers, farmers, and the like. An interesting group. Rich, sophisticated, the local upper crust; I’d only met perhaps a third of them before that evening. It turns out that most of them get together weekly, at one estancia or another, and have an exotic asado party. I served as this week’s center of attention and entertainment.
It was different from similar parties I’ve been to in Buenos Aires (BA) in that everyone here was speaking Spanish, with a smattering of English. In BA, the conversation at a dinner table is typically multilingual—Spanish, English, French, German, and Italian can all be used.
People were patient with me, understanding that Americans generally lack linguistic sophistication. My French (now rusty and affreux) is still better than my Spanish, mainly because I went to school for a year in Switzerland. My German is even worse, even though the 500 basic English words are all German cognates.
Argentina, of all the countries in the world, most resembles ancient Rome. The whole country revolves around BA, the way the early Roman Empire revolved around Rome. Successful people all have a place in the capital, one in the country, and another on the ocean for when it’s hot in the summer. And they socialize like the Romans, with dinner parties that last well into the wee hours, as a matter of course. First, you’re served hors d’oeuvres and champagne. Then various sausages and warm meats. Then the main course and vegetables. Then pasta. Then fruit and a desert. You’re now halfway through. Next come the after-dinner drinks and cigars. Finally, coca leaves, which most everyone chews for the rest of the evening. And conversation for the whole six hours.
What did we talk about? Many things, of course, including the economy, the world situation, politics, and the recent Argentine and upcoming US elections. Everyone had heard it said that Hillary was going to be the next president. Nobody liked the idea, if only because Argentina has had uniformly disastrous experiences with populist female politicians. Peron’s first wife, the famous Evita, acted as a shadow president and, some would say, set the tone for the country’s long decline. Then came Peron’s second wife, Isabel, an Evita look-alike/act-alike, who was first his vice president then succeeded him as president after he died. Then came Cristina Kirchner, the wife of another president who died in office. Everyone (including myself ) was shocked, but extremely thankful, that Cristina’s surrogate was beaten by Mauricio Macri. Macri is hardly John Galt, but my guess is that the country will experience a boom in the next few years. Why? Agricultural products are at rock bottom after a long, deep bear market; tens of billions of additional money will flow into Argentina with higher agricultural prices. The new government has discarded agricultural export taxes ranging to 40% (before income and other taxes); as a result, production will likely go up 50%, bringing in many more billions. Some of the estimated $200 billion that Argentines have abroad is now likely to come back. And with the settlement with the holdouts from the government’s $100 billion default of 15 years ago, lots more money will flow into the country. A general deregulation of the economy, now in progress, will further increase prosperity. So, I told them, things were likely to get better in Argentina…”
AGD Consulting