From David Galland in Casey's Daily Dispatch:

One of the many highlights of the [grand opening of Argentina development La Estancia de Cafayate] was a half-day seminar at the small but perfectly adequate Municipal Auditorium in Cafayate.

The speakers included Bill Bonner of Daily Reckoning fame; Rick Rule, one of the world's most successful resource investors; Porter Stansberry, president of the firm that carries his name, and of course our own Doug Casey.

While all of the presentations were excellent, I found Bill Bonner's especially cohesive and worthwhile. His theme could be summed up as "The Story," his key point being that investors, on the whole, like a good story. And, on coming to believe that story, will act on it. Of late, Bill pointed out, the story is that the economy was in a crisis, the government stepped up to the plate with huge stimulus spending, and that, as a result, a recovery is now firmly under way.

Looking under the hood, however, a somewhat different reality emerges. Namely, that the level of government spending is both unprecedented and unsustainable. Thus, "the story" is nothing but a fiction that must come to a very bad end.

I couldn't agree more. For a sense of the thing, just glance one more time at the deficits the government itself is projecting.

 

Now, don't just look at that chart think about it.

The levels of deficit spending are not just off the map, they are off the planet. And you know as well as I, as dire as that level of spending is, it is very likely understated. That's because it fails to take into account a multitude of off-balance-sheet obligations.

And because the projections assume very low levels of inflation, which is to say no significant increase in interest rates i.e., no significant increase in the cost to the government of carrying all its many debts.

Can a nation really buy itself a recovery by borrowing trillions upon trillions? No way. And that's the real story.

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