Hello from Sunny Santiago de Chile,
I've been in Santiago all week and I continue to be impressed by the economy here. This place is absolutely booming. And, it's not a mostly fictitious boom like in the United Soviet States of America engineered by bearded, grand central planner, Ben Bernanke. Here, they do unfortunately have a central bank, but it is quite a bit better than the likes of the Federal Reserve. The Chicago school of economics and the theory of monetarism is followed here… which is much better than the Keynesian economy destroying style… but not as good as the Austrian school. But, if it was an Austrian school engendered central bank then it wouldn't be a central bank at all because the Austrians have long since figured out that central planning of the most important tool in an economy – the money and the price of money (interest rates) – is disastrous to an economy.
Here in Chile they are monetarists and they do still print money. But at least they semi-honestly track the true amount of inflation and allow the people in the country to adjust automatically to it using the Unidad de Fomento (UF). The UF is a Unit of account that is used in Chile and the exchange rate between the UF and the Chilean peso is now constantly adjusted to inflation so that the value of the Unidad de Fomento remains constant on a daily basis during low inflation.
According to Wikipedia:
[The Unidad de Fomento] was created on January 20, 1968, for use in determining principal (monetary item) and interest (constant real value non-monetary item) in international secured loans (monetary items) for development, subject to revaluation according to the variations of inflation. Afterwards it was extended to all types of bank loans (monetary items), private or special financing (monetary items), purchases (trade debtors/trade creditors being constant real value non-monetary items) or investments on installments, contracts (constant real value non-monetary items), and some special situations. Also it is used in legal standards such as the par value of stock/capitalization (constant real value non-monetary items) of companies, fines (payables being constant real value non-monetary items), etc.
At the same time, much contrary to the US and Europe, the Chilean government continues to record budget surpluses. While we dislike government at its base and consider all involuntary taxes (which all taxes are… otherwise it wouldn't be a tax) to be theft, the results in the area of a central bank that is honest and restrictive about inflation and a government that is not spending more than they extort are incredibly exciting. The streets of Santiago are teeming with a very upscale, modern, productive class and glass and steel skyscrapers are sprouting like freedom weeds.
Forget what you've been told about South America when it comes to Chile (at least in Santiago and all along the corridor to Vina del Mar – where Galt's Gulch is located). The only noticable difference between here and Singapore nowadays is just the color of the skin of the average person on the street.
Santiago and Singapore actually have a lot more in common… and depending on your preferences, you may like or dislike it. Unlike most of latin America, Chile is more like Singapore in style. The people are more reserved, conservative (not in the political sense) and less likely to be out partying until all hours. In fact, while the streets are completely full of business people during the day almost everyone is home in bed by around 10pm. But, that too is slowly changing. There is so much wealth being generated here that there is a new generation of younger, well off people who can be found dancing into the night at places like where I was last night at Las Urracas.
UNTIL NEXT TIME
For that reason I must keep this short and run. But, let's see, I write a financial newsletter exposing government and central banking crimes. I help slaves escape from their oppressive slave owners at TDV Passports. I have begun a community with a main focus of developing Ayn Rand's vision of Galt's Gulch and attracting the productive people in the West to flee outside their own tax farm. And I have just announced an ATM that all but sidesteps the current financial and monetary order.
And now I am heading into Mordor to speak to the masses via the mainstream media.
If you don't hear from me next weekend, you'll probably know why.
Until next week, likely coming to you live from beautiful Guantanamo Bay. To your freedom!