Let’s go back to January 1, 2015 together, shall we?
Julie and I are big on goals. But for some reason, when it came time to write down our goals on paper so that those who read it can run I was caught short. Normally I just write a list of things I think we should budget for and get done in the calendar year. But this year I decided I didn’t want to make a shopping list. I wanted to do stuff. On that list was one very challenging item.
Read a book each week.
Look. That doesn’t sound like a big deal. My two oldest children read a book a day or more. But they don’t have jobs.
Start and finish a book within a week…and do that every week.
Some books…well, with some books that’s just fine. There is nothing to chew on, you just gulp and swallow. Some books though, some books give you too much to think about. I recently read Malabar Farm in a week…and that was a disservice to Louis Bromfield. His book isn’t meant to be read quickly. His book is meant to be savored. I think Mr. Bromfield wanted his readers to read a few pages each morning with coffee, then lay the book aside and think about how to apply what you read. And I don’t think that’s an extension of his ego, I think the book is worthy of that level of reflection.
I made that same mistake again this week.
I was chatting with my father a few weeks ago about a book I had heard about but hadn’t read by Jim Rogers titled Adventure Capitalist. In short, a billionaire investor drove a car around the world and kept a journal of his observations. Sounded cool enough. Dad bought a used copy and got through it in a week, strongly suggesting that I read it as well.
Have you met my father? Dad worked at a mine my entire childhood. In 16 years he took, I believe, one sick day. Somehow he also found time for college classes on philosophy and community theater and home remodeling projects and playing catch and going fishing with me…in spite of the fact that he worked swing shift…his sleep pattern changed every two weeks. Ugh. SO dad, apparently, is the kind of person who can just get things done.
I am not.
I sat down with Jim Rogers several times throughout the week to discuss his world travels but I couldn’t finish the conversation. He kept saying things that I couldn’t digest. Things I needed to think about. The writing style is approachable. I didn’t need to deconstruct his sentences to find meaning. But I could only read so much in one sitting. Let me give you an example from page 8. He has decided to have a custom-built Mercedes to drive around the world by merging two different models, a 4WD chassis mounted to a convertable top.
Even in the absence of a warranty, I knew, I would find Mercedes service everywhere in the world. Even in the developing world one is never far from a dealership; every dictator and mafioso in the world drives a Mercedes. Even in countries with no roads to speak of, Mercedes service is available…
OK. I’m going to stop mid-sentence here. The author has identified a pattern and is seeking to leverage it to his advantage. He could go around the world in a Toyota. Sure. But he has decided to go with a Mercedes. Why? I dunno. Cause he’s a billionaire and he wants to have the top down while driving in comfort and style. But he is, at least, practical. If he needs a mechanic, he believes he can find one anywhere in the world if he drives a Mercedes.
Then he goes into why he thinks that is. You should be sitting down.
…Mercedes service is available – often to the exclusion of things like food – thanks to all the US foreign aid, the International Monetary Fund and the World Bank money being shipped in. It is no secret that this money is aimed at nourishing only those corrupt enough to get their hands on it, while at the same time fattening bureaucrats on both sides of the transaction who diligently work the trough. And none of them is driving a Chevy.
I knew much of this from my last trip. The upcoming trip, especially as it took us through Africa, would be an eye-opening education in to the workings of the latest foreign aid scam: the nongovernmental organization, or NGO. As an American taxpayer I would be amazed to discover that a lot of the money we send to these countries goes to support Mercedes and BMW dealers and various Swiss bankers.
So. Yup. That just happened.
I don’t feel that the paragraphs above are the kind of material you just read and move on. You have to stop. I stopped. I read it to Julie. I read it to Mike, my boss. I read it to John at work. I spent a lot of time thinking about it. First, make sure you can get your things repaired. Good lesson. Second, actions – even well-intentioned ones – may have unexpected consequences. Is he right? Is there too much obfuscation? I’m happy to share with those in need…but am I actually meeting needs? That money they take out of my paycheck before I even have a chance to say, “no, thanks – not that I have the option of saying “no, thanks” – ends up going through a number of hands, each taking their cut before heading off to its final destination. What percentage of dollars involved actually accomplish their mission? Our author suggests a great number of them successfully filter their way to German car manufacturers. I guess that’s mission accomplished.
That’s just on page 8. Later he gets through China and into Korea and, later, Japan. He talks at length about protectionism and how damaging it is to the economy. As an example, he discusses the lack of real free trade between the US and Canada at the time…in spite of Free Trade agreements…by pointing out the absurdity of tariffs on tomatoes imported from Canada. If a farmer anywhere in Canada can produce a tomato cheaper than a farmer in America…well, maybe they should. Henry Hazlitt talks about this quite a bit in Economics in One Lesson. (If you haven’t read that book…well, you should.) Keeping tomato prices artificially high benefits American producers but hurts EVERYBODY WHO WANTS TO EAT A TOMATO!
Same thing happening at the time in Korea and Japan. Let’s say you are a Korean Billionaire and want to drive a Toyota. Can’t. Let’s say you want a Sony phone. Can’t. Hafta buy a Samsung. Why? Cause it’s good for our domestic producers. Sure, it’s bad for everybody else in the whole world but we have to protect our own manufacturing. And we are so bad at producing stuff nobody would buy it if the government didn’t force people to.
Sigh.
Have you ever driven through Indiana, Illinois and Iowa in the summer? Have you ever wondered how much of that corn would be there if your tax dollars weren’t being used to grow it? How many John Deere dealerships exist as a result of government action? What is that costing the world? What would be growing there if we were free to pursue our own interests and weren’t growing corn? Would there be endless fields of hemp? But it goes beyond that. We have policies in place to keep interests rates low so prices will be higher. Yeah. So buying a farm is almost impossible. And that’s good for the economy somehow. Who needs new farmers anyway? They’ll probably want to do something crazy and not plant endless seas of corn. What would we do then? How would we pay for a Mercedes without our government contract to ship corn to Africa?
So you see, this was a difficult book for me to finish. I tried. I really tried.
But beyond the time spent reflecting on his words I had a difficult week. I am staring at some major changes at work and I’m afraid it wore on me all week long.
So this week I didn’t meet my goal of reading a book in its entirety. I am still averaging more than a book a week on the year but the average wasn’t the goal. I wanted to finish a book each week.
I’ll continue chipping away at the book over the next week or so. I hope it shows that I’m having a lot of fun reading it and hope that counts as a recommendation.
Please comment below to let me know what you are reading and feel free to offer additional recommendations.
Click here to see all entries in my reading journal.
Chism Heritage Farm 
I did not read a thing this week beyond the Capital Press…our spring weather is a month ahead and work outside beckons every hour.
Yeah. Work outside. And all kinds of work inside. And more work too. Happy Spring.
It seems that good weather moves us outside. I just slogged along with “The King of California.” Water has been a big topic here and most of CA. In making the Central CA lake bottom able to grow things, water was shifted and corralled. It has been nice to be reminded of the water manipulations that made the western Central Valley profitable to some.
But that is similar to what you wrote about and makes me think of your book this week. The connections may sometimes be small, but it seems that the same forces driving aid to corrupt officials in Africa, or bureaucrats in Washington pushing John Deere tractors, or the water wars of the west. I was fascinated by the paragraph you shared not because of the connections so much, but because it showed me how much I’ve stuck my head in the sand. Why do I do that?
The book was published in 2004. Have you seen any of his predictions that came true? Or events that happened in 2008 and seem to be happening again?
Your Mercedes tale reminds me of another reason a Mercedes is desired in Africa. http://www.amazon.com/Mercedes-Not-Sale-Ouagadougou-Auto-Misadventure/dp/0767928695
This book is about the trade in older Mercedes C-130’s and Toyota Corrollas that are driven from Europe and sold to locals in Africa. Those two models are desired because that are sturdy and can be repaired by any shade tree mechanic. Most of our family read it at the same time the boys were learning to drive via a Corolla.
Clarification, I don’t think he’s making a whole lot of predictions. He does predict that China has every possibility of rising to the top in the next century. He believes Europe and Japan have major demographic issues but other than that this is a book of observations. He kind of records his impressions and reflections as he drives around the globe. And it’s not a straight path.
Predictions was my word. I read the Amazon review and they listed some his conclusions. I inferred he was guessing what the future held and it being 10 years later I’m curious what he thought.
Most of the books in my pile are picture books, same issue as Matron – spring has sprung up here. I’m almost done reading the words part of the Dust Bowl book I commented about a couple of weeks ago, I’ve got three cookbooks home right now – one has recipes I might actually copy to use later – Brown Eggs and Jam Jars. She’s a food writer in Quebec, raising a family on a large suburban lot, doing the self sufficiency thing in a Martha sort of way. I liked it, and kudos to my cousin Kim (of the marshmallows) for putting me onto this one. I’m reading a tried and true historical romance at bed time – Georgette Heyer’s “An Unknown Ajax”. She is probably THE best historical fiction writer out there outside of Patrick O’Brian. In my opinion of course. She’s Jane Austen in plain English. I’ve read all of the romances, and don’t like her mysteries. This one is a re-read.
Your book. You’re on a certain streak in thinking, seems to me. Your post a week or so ago about interventionism kind of fits with what you’re thinking about here too. Here’s my uninformed two cents worth (and we don’t have pennies anymore up here, so maybe you’re stuck with a whole nickel’s worth)…I’m not sure the global economy and free trade are doing us any good as a world. I’ve read Thomas Friedman and Bill McKibben on this topic, quite a few years ago now, and they have opposing viewpoints that brought me to one place – uncertainty. I’m more or less a supporter of tariffs and protectionism. I think one of the reason’s the world is as messed up as it is, is because of trade. I think if we were forced to buy local, prices would come down. What would that do to people like you and me with our premium chicken? Dunno. Maybe feed costs would come down too. Maybe there’d be a feed shortage. On the other hand, I wouldn’t want to be without the global economy – I like coffee and chocolate for example, and I drive a Toyota. I think it’s pretty stupid of Canada to be wanting to exploit oil resources to the max right now to fuel China, when they could be holding them as reserves for a future shortage. We’ve missed that boat anyhow, and I’m not sure it’s a bad thing. See? I’m a muddy thinker on this topic, and if you could tap into our dinner conversations, you wouldn’t hear my voice too often – the girls and my hubby are better informed than me, and talk this stuff quite a bit.
Were I to register a complaint about economics writers in general it would concern the certainty with which they present their material.
It is one thing to say, “Chris, you are going to die someday.” It is similarly useless to say, “Chris, something is going to happen on the 24th of March, 2015.” But no one would dare to say, “Chris, you are going to die on the 24th of March, 2015.” That intersection of time and event is too precise for prognostication. So they tend to be vague. Peter Schiff is absolutely right. Nothing lasts forever. But what do we do with that information? How do I act today? Well, you diversify your holdings, educate yourself on options, put money where it is most likely to grow. Wow. Thanks Pete. Sounds like the same good advice you can get anywhere. He leans toward gold. Others lean toward equities. Still others advise land or art or bonds…usually depending on what they sell.
Muddy thinking is necessary. These are murky waters. But the very best writers, I find, are at least honest enough to admit they have no idea what is going to happen next…then laugh at themselves as they attempt to point out interesting things along the way. Those are the authors I seek out.
The reason austrian economics is interesting to me is because it approaches the subject from the perspective of motivations and human behavior…not as a branch of mathematics. Do interest rates really have a direct causal relationship with employment levels? Does cheap money create opportunity? I really don’t think so. But our Federal Reserve has just that one tool…a hammer…and they are going to hammer away with it.
Will it work?
I dunno.
Can I do anything about it?
Not really. Just laugh and look at the interesting things along the way, making the best decisions I can as we go along.
Why are cattle prices so high? How much longer will that price be sustained? Should I sell my cattle now? Should I assume my land is at an unsustainable high price and sell now? Should I buy more? Should I sit on my hands?
Dunno.
I don’t know. I don’t know anything, really. Those things are in my sphere of concern but not in my sphere of control.
But I can laugh at my own ignorance as I grasp for some understanding.
I have found few authors who are humble enough to admit they don’t have the answers…but arrogant enough to bother writing a book about their own ignorance. That’s why I read Bill Bonner…lol.
I read people like Peter Schiff and get confused, worried, unsettled. What can I do, what can I do? I’ve found that if I use what I have or maybe buy something I need life is easier. If that tool isn’t being used, sell it. Sometimes I should have waited to sell it. I’ve had some nice or quirky guitars that I wasn’t using that I sold. They are now worth much, much more. I needed the money then; they were sold. I’ll never be considered an investment guru and that is fine.
I somewhat unfairly singled out Peter Schiff in the paragraph above. His advice is quite similar to a dozen or more other books I have read…and not wrong…maybe even timeless…but also not…um…timely. I suspect Howard Ruff kicked things off for us and we got a lot of mileage out of his book. Once you roll past the half bag of silver for every household member (…?) he did a great job of pointing out that unemployment lasts longer if you don’t have to buy food when you are unemployed. So we put away a little food. Then we bought a farm.
Confused, worried or unsettled? Break down the problem. What is more likely to happen? A broken leg or an alien invasion? Worry doesn’t help much in either case. Just dig in and solve the problems in order of probability…to the best of your ability. How long can you maintain your standard of living if you stop earning money today? You may find you either need to make an adjustment to your budget or to your lifestyle. Or not.
A year or two ago I read the book Early Retirement Extreme by Jacob Lund Fisker. We have now left the realm of investment books and, instead, have entered the realm of philosophy. He dares to ask why we feel more wealthy when we have an unused room with an unused couch or an unused car in a garage. Or why we feel more wealthy when we spend 45 minutes driving to work instead of spending 45 minutes cycling to work. Or why we work until we are 70. Or until we are 50. Or until we are 40. If this is your first introduction to his concepts, you’re welcome.
I just read his blog a bit. Yes, philosophy more than investment, but it was interesting. Reminded me of some minimalist blogs and books. Made me think and that is good.
Also, I have to add, I am in favor of allowing people to make deals with whoever they want to make deals with. Freedom. I don’t care which side of an invisible line you live on.