Published June 29, 2012

The Grass Is Always Greener on the Other Side

Dear Reader,

I am writing you, briefly, during my trip to Argentina, followed by Paraguay. As is the case in much of the world, both countries are undergoing a certain amount of turmoil – the former because of a giant snowball of misguided policy decisions. As for the latter, the turmoil is the result of Congress having grown fed up with a big-talking socialist who has steadily tried his best, and with considerable success, to turn Paraguay into another Venezuela.

While I understand from acquaintances in Asunción that the new team is more business friendly than the old, one can never tell, but one can have hope. I'll see what I can see while there.

As for this week's missive, even though I had planned on letting our own Vedran Vuk run with it, I had a couple of experiences at a wedding last weekend in southern Vermont that I wanted to share.

In addition, just before wheels up, my friend and fellow La Estancia owner Pete Kofod sent over an article from a friend of his in Denmark that Pete helped edit. As I thought most of you would find it interesting, and because it is something of a follow-on from my article last week, "Marx Madness," I am including it here as well.

First, however, to my wedding tales.

You Can't Eat Gold

A former partner of mine got married over the weekend to a former lover from his youth. Separated by tides of life that kept them apart for a couple of decades, against all odds their paths once again crossed, resulting in a beautiful ceremony that took place, most dramatically, in a tent in the middle of a raging storm.

The less sentimental among you will be pleased to know that I'm not planning on waxing lyrically about love and marriage and all that. Instead, I'll share a couple of stories from the wedding, as they seemed particularly revealing to me, and maybe to you too.

The first was a conversation with a mutual friend of the groom whom I hadn't seen in a number of years. I had heard he'd moved on from a previous sales job in the ski business to a position as a broker at a major brokerage house, but we hadn't had more than a passing conversation until we washed up next to each other at the wedding.

Since he knows I am involved in the research business, he steered the conversation toward investment markets, giving me an opening to do a little on-the-ground research. Specifically, I asked him if he or his clients were invested in gold or gold stocks. "Nope," he said with a cheerful broker's smile, adding, "You can't eat gold."

"Err, excuse me, can you repeat that?" I said (or words to that effect).

 "You know, like something of value, like vegetables – you can't eat gold," he explained somewhat haltingly.

"Ah, you must have heard Buffett's quote about gold not being a productive asset," I said aloud while thinking maybe he hadn't paid very close attention when his branch manager had been trying to brief him on how to answer clients looking to buy gold.

"Do you know the history of Buffett's anti-gold stance?" I asked.

Blank but friendly stare.

"Well, as I figure it," I continued, "Buffett's mentor was Benjamin Graham, who only really advocated two asset classes during his career: stocks and bonds. The idea being that depending on relative valuations, a portfolio should be allocated between stocks and bonds in varying percentages."

"Uh-huh," he said, his handsome smile failing to mask that he had only the vaguest idea what I was talking about.

"In any event, the reason that Graham – who had a huge affect on how Wall Street views portfolio allocation – never bothered with gold was because throughout virtually his entire career, it was illegal to own."

"Gold was illegal to own?"

"Yep, Roosevelt banned it, which was why Graham never included it in his allocations. But since gold has again been legal to own, there have been two distinct periods when gold was the far better asset class than either stocks or bonds. We are currently in just such a period, which is why the performance of gold has completely trashed even that of Buffett over the last decade."

"Get out of town! It's outperformed Buffett? Really?"


"Well, that may be, but I always tell my customers, you can't eat gold, and you can't go wrong with a dividend-paying stock."

Seeing that further discourse on the topic was going to be unproductive, the talk quickly turned to the weather and then I drifted away.

Now don't get me wrong, this is an entirely nice young fellow. But that he has been working for a major brokerage house – actually advising his clients on where to put their money – for over eight years now and clearly didn't know a thing about gold or, as far as I could tell, any aspect of investing other than parroting the stock touts his brokerage firm gives him, was big- time eye-opening.

Is gold in a bubble? Hardly. But I'll sure know when it is – and that will be when this fellow calls me up to ask for a hot tip.

The mainstream media continue to bash gold, warning that investors in the yellow metal are in danger of enduring a nasty correction. Yesterday, for example, CNBC ran an article titled "Is Gold on the Edge of a Violent Turndown?" in which Yoni Jacobs, chief investment strategist at Chart Prophet Capital, said gold could drop to $700 an ounce.

Central banks apparently disagree with this assessment, as they have increased their gold hoards by 400 metric tons in the 12 months through March 31, 2012, up from 156 tons during the prior year. We strongly believe investors should follow the lead of central banks, and to help those new to the gold market, we've created a free special report that reveals the three best ways to invest in gold.

Bar Fight

The second incident I wanted to share occurred immediately following the wedding reception when a group of us decided to stop for a nightcap at the small pub in our hotel.

Standing at the bar waiting for an audience with the sole barkeep, I was engaged in a conversation by a couple of middle-aged guys, about nothing much in particular. Quickly, however, we learned that they knew someone I know in my hometown.

Having discovered a mutual acquaintance, the conversation became even more chummy – until I mentioned, for reasons I don't recall, that this particular acquaintance and I got along even though we didn't always see eye to eye on the matter of government.

All I said, almost literally, was, "Yes, I tend to favor a smaller government, because in my observation it doesn't matter if the country is run by Republicans or Democrats. It is always poorly run, so it seems to me that the smaller a government is, the less damage it can do."

That single comment caused the same reaction as if I had tossed a bag of wasps at these guys. One second, comradely conversation, the next I was confronted by two snarling primates.


"Well, in the days before Medicare..."


"But you didn't give me a chance to answ..."


"Excuse me, but 'my' people haven't been anywhere near the government in forever. Maybe you misunderstand my posi..."


It was at this moment that my increasingly fine-tuned CP Alert went off like a klaxon in a leaking submarine. For those of you unfamiliar with the term, CP Alert stands for "Crappy People Alert." 

Lest you misunderstand, these were crappy people not because they clearly held views opposed to my own, but because they reacted so rabidly, allowing not even a scintilla of a reasonable exchange of views. In fact, all they wanted to do was, literally, yell at me.

Actually, it was worse than that.

Without the slightest exaggeration, I firmly believe that, if given the opportunity, these two individuals would have stripped me of every penny I have ever saved from a lifetime of hard work. Then they would have burned down my house and beaten me to death. Placing their attitude in a historical context, these were the very same types of people who donned the red caps and dragged out the guillotines in France circa 1792.

Now, there is one thing, and only one thing, to do when your CP Alert goes off, and that is to unhesitantly and immediately disengage.

"Sorry, guys, this conversation is not going anywhere good, so goodnight," I said abruptly, then returned to my table.

They shouted after me, one of them even attempting to get me to reengage by saying they would actually let me finish a sentence. I declined with a pleasant smile and a "No, thanks" and henceforth ignored them, and so they soon slipped out of the bar and out of my life, which is exactly what one wants to happen to crappy people.

I will tell you, however, that what I saw in their faces – sheer mindless hatred over the idea that government should shrink – made a deep impression on me. Even though they could have no idea who I am, or what I really believe, the pent-up anger they feel at the damaged economy and their hardened belief that it was due to the free market was visceral. And dangerous.

I have no idea what percentage of the population now harbors this level of antipathy and overt hostility, but I fear it will only grow over time as the economy worsens.

My dear business partner, Mr. Casey, has previously commented on the origins of the saying, "to cut anchor," but as it seems apropos, I will do so again here. Specifically, it refers to the order a ship's captain might issue, in the days of sailing ships, upon spotting a sudden and dangerous squall rushing down on them. If, in his estimation, there was insufficient time to pull up the anchor, the captain would order the anchor rope cut in order to run ahead of the storm and survive another day.

While each of us has to make their own plans, and one doesn't want to be paranoid about these things, my brief and very unpleasant encounter in that pub thoroughly confirmed my decision to build in La Estancia de Cafayate, far from the maddened crowd in the remote wine-growing region in the northwest of Argentina.

While the decision to spend an increasing amount of time there is largely due to my love of the incredible peace and beauty of the place, that it gives me the ability to quickly cut anchor should things become too stormy in home waters is massively appealing.

Speaking of Argentina

I am writing you from the lobby of the Hotel Legado Mitico in Salta City, Argentina, where we are staying a couple of days on house business before making the incredibly scenic drive to Cafayate.

Even though we are on the cusp of the Argentine winter, the sky is sunny and the temperatures are in the low 70s during the day and a refreshing 53 degrees at night.

Yesterday, in Buenos Aires, we ate at one of our favorite restaurants. The restaurant, though on the low end of pricey, was packed with the lunchtime crowd.

It never fails to impress me how different meals are in Argentina, and much of the world outside of the US, for that matter. While a restaurant in the US is typically fairly staid, with people quietly conversing or, increasingly, not conversing at all but rather sitting at the same table checking emails on portable electronic devices, in Argentina a meal is like a celebration, with people talking passionately about topics they care about, laughing loudly and otherwise enjoying the experience and each other's company.

Even so, there is something in the proverbial air in Buenos Aires – a detectable energy that something big is about to happen. Specifically, that the erratic government of Cristina Kirchner may be about to fall. Everyone we spoke with commented on her failings, and insane flailings, as she tries to cling to power.

One friend, a saintly young woman, said it well when she said, "The government, this country, is living a fantasy. Nothing is real. Cristina says inflation is 9%, but it's 30%. They say the dollar exchange rate is 4.5, but it is really closer to 7. Her government says everything is well, but everyone knows it isn't. It's all a fantasy, but it can't last."

As we went about our business, we encountered two medium-sized but peaceful protests surging through the streets. Then, as we headed toward the airport for our flight to Salta, we passed a convoy of large trucks headed side by side into the city for a massive blockade of the city's main plaza on Wednesday, June 27. It was hard not to be impressed at the slowly moving wall of trucks snaking for as far as the eye could see.

So, not only has Kirchner angered the middle and upper classes of the country, she has now angered the lower classes as represented by the powerful truckers' union.

With the recent example of Paraguay's turfing its leftist leader (we're headed there next week) to inform them, I think that there is a good chance Kirchner could be forced out before the end of her term, though no one I talked to has any idea who will replace her: her vice president is currently up to his neck in corruption charges.

Unfortunately, while one likes to hope for the best, I doubt whoever follows her will be any better – but it would be hard for them to be any worse.

Meanwhile, as hoped, prices for those of us whose savings are not denominated in pesos are going down, and fairly significantly... provided you don't go through official channels for your currency exchange. Which, as far as I can tell, no one does. In fact, the typical conversation now goes something like, "I got 5.8 for my dollars today." – "Oh, yeah, I got 6." – "Really? What's the name of your money guy?"

As I have said before, humans share certain traits with rats – none more noticeable than our adaptability. No matter what a government may concoct, we humans will find a way to get around it. And when the government's actions make the getting-around-things too difficult, we will either slip on to the next departing ship or bare our teeth and make them regret it.

I think Cristina is about to see a lot of teeth.

And with that, I will sign off for the week by turning the edition over to Pete Kofod who arranged and helped edit this article from a friend in the socialist paradise of Denmark. It feels to me like an important piece, well worth passing along. Feel free to do it as well.


The Grass Is Always Greener on the Other Side

By Jan Gindrup

Introduction by Pete Kofod:

As some readers may know, I was raised in Denmark for the better part of my childhood before moving to Brazil and eventually the United States. Not surprisingly, I am often confronted by big-government apologists that herald Scandinavia as living proof that socialism does indeed work. While I know that the facts on the ground do not match the myth, I am not immersed in Danish culture, and as such do not have extensive empirical evidence to draw upon when refuting the position.

When I wrote The Rise of the Praetorian Class, I was overwhelmed by the kind feedback I received from the readers of the Casey Daily Dispatch. One email I received was from Jan Gindrup in Denmark. We continued to converse via email, and I encouraged him to join us for the Harvest Festival at La Estancia de Cafayate, where I met him and his wonderful wife. During our stay in Cafayate, the Gindrups became good friends. The stories he told me about current affairs in Denmark were quite astonishing and far from the idyllic image portrayed in mass media, particularly in the arena of universal healthcare. I felt very strongly that his story needed to be shared and encouraged him to start writing about it.

As you will see, in Denmark it is culturally frowned upon to call out the deficiencies of the state. As such, Jan represents the rare brave soul willing to call matters as he sees them. Jan's style of writing is a freeform narrative that is emotionally compelling. You will feel like you are having lunch with him in Cafayate as he tells you the story others are not willing to tell. It is therefore with much pleasure that I introduce Jan to Casey Daily Dispatch readers.

Have you ever thought of life being better somewhere else?

It is often said that the grass is greener on the other side. Could it be that sometimes one's own grass just has grown so high that one can't judge the conditions over there?

We all know the Middle East is in terrible shape and that they don't enjoy "the blessings of democracy," so of course we have to "improve their circumstances," even if it means slapping them silly in the process.

On the other hand, most people, especially Americans, know that Denmark is home to the happiest people in the world and that it is a wonderful fairytale country with peace and the best social welfare system ever. The movie Hans Christian Andersen with Danny Kaye probably reinforced that impression. Never mind that no one knows where Denmark is.

Well, here's a chance to hear from the happiest people on earth and their wonderful little country.

First, let's look at parts of Danish history that we Danes gladly share with pride:

Denmark used to be a warrior nation. During the Viking Age (approx. 800-1200 AD), we beat the living daylights out of everybody and ruled from Moscow to America and from the North Pole to Constantinople. In the 16th century, after fighting mostly each other for a while, we built larger ships, acquired cannons and beat everybody again.

We fought the Swedes, the Brits and the Germans. We colonized parts of India and Africa, and owned Iceland, Greenland and the Virgin Islands. We had plantations, freed the slaves, and made and sold a lot of rum.

Now some parts of Danish history that we are less proud of:

We caught and transported many slaves – slaves that served as the backbone of the plantations in the Caribbean. In 1801 and 1807, the British attacked Copenhagen, sank and stole our navy, and burned down most of the city.

In 1864 we fought the Germans, were beaten yet again, lost a part of our territory, and since then we have been very tame and have developed a habit of being very faithful to authority and compliant to bullies. This was sadly the case with the German invasion during World War II, where the Danish government tacitly cooperated with the Nazis and condemned partisan freedom fighters, who were labeled "terrorists."

In 1917, we sold the Virgin Islands to the United States for $25 million; in the '70s, our government gave the oil-drilling rights to Maersk Shipping, a trade that made the firm and family very wealthy. Many left-wing politicians cooperated with the Warsaw Pact without consequence, and in 1972 the politicians got us into the European Union, which has bureaucratically evolved into the United States of Europe.

Back in the '50s and '60s, Denmark was still a sleepy little farm country. Mothers were housewives, and everybody was slim and fit. Frogs, lizards, storks and grasshoppers were abundant, and generally life was pastoral and idyllic. The king would wave from his balcony, everybody knew everybody, and the policeman even stopped the traffic for passing ducks.

The sun was always shining and all was good… or at least, that is what we remember.

As Danes, we have always believed in our hearts that we are better than the rest of the world. We know that there is no other country like Denmark. A funny Danish song says, "In all other countries, they live in caves and fight all day. Darn, we have never been like that!" We trust our politicians, believing that they are honest and represent the people. We have a democracy and a Constitution. We have many political parties; heck, even the communists are Danes.

We are all friends.

Danes truly believe that no harm can ever come to or change Denmark. We know that everybody in the whole wide world loves us and that that, among other things, is due to us helping the Jews escape from Denmark during WW II.

Many Danes don't want to go on vacation – even to Poland, a southern neighbor, or many other countries – because they know that the people there are of a lower social standing and will steal their money and cars.

Until the Berlin Wall came down, the Soviet Union was "the beast in the East," and we were scared to death of the threat of a nuclear war. Later, during travels to the Baltic countries, I learned that they had exactly the same fear of us coming to "take them."

Before my travels to Eastern Europe, many Danes told me that I would face former communist mafia everywhere and that I would be kidnapped and robbed. Stunningly, I managed to visit the Baltics without incident. I have never felt so safe as I did in the Baltic states. As an interesting aside, I also later learned that they have a far superior fleet of cars.

The United States is, in the mind of many Danes, also a dangerous place to go. America's ills range from rampant daily shootings in the streets to a superficial, consumer-driven culture devoid of any redeeming traits.

Danes skiing in Austria or France have chosen to fly home with injuries, operating under the belief that "down there," they don't have the knowledge or education to provide proper medical treatment. This is despite the fact that they are used to dealing with plenty of snow, big mountains and therefore thousands of ski injuries. Denmark, on the other hand, has neither mountains nor significant snowfall. Though it can get quite cold in the winter, we rarely see snow for long, and when we do, it is mostly brown, sloppy mush.

Many Danes wouldn't dream of emigrating, because they know that no country has an educational system like Denmark, and we don't want our kids growing up ignorant and brainwashed, like they do in other places. A professor at the Danish Polytechnic University was quoted as saying, "Well, maybe they educate one million engineers in India, but they are nowhere near our level!"

Whenever we hear of a successful endeavor from abroad, we are always ready to look knowingly at each other and say, "Yes, but it's not like the Danish (fill in the blank)!"

And that's the image we like to portray.

How Do You Keep People Happy?

How do you keep a population happy? You do it the same way that you keep a dog happy. You provide basic necessities, education, a justice system and entertainment to keep people from spending too much time thinking, in order to keep them from looking outside the fence for new masters. In time, people will start telling each other that they are happy. The North Koreans are probably told the same story.

I guess it all comes down to how you define happiness; if happiness means not starving and not wanting to worry about anything besides the weather, then Danes can be considered happy. But so could many cultures – at much lower costs, I suspect.

What we can readily do without shame is happily brag about being the most taxed and perhaps also most regulated country in the world.

It has jokingly been said that North Korea and Cuba envy Denmark for being the only place where socialism has been successfully implanted without anybody noticing. Let me correct that to mean implementing a form of "fascist, socialistic, bureaucratic capitalism," defined as a society controlled by technocrats where almost all wealth is collected and distributed by the state from the regulated "free" market. In all fairness, this is accomplished without the boots and guns. After all, you don't need guns when you have groomed a compliant population and implemented rules, laws and punishments for everything that is a conceivable part of daily life – all implemented "for your own good."

Compared to the Third World, Denmark seems rich, but no more than any other Western country. In my childhood in the '60s and '70s, it was a luxury for people to own a TV or a car – and by car I mean a small one, like a Ford Cortina or a VW Beetle. We got dishwashers in the '70s, and electric car windows were not common before the late '90s. Today it is still only luxury cars and cabs that have automatic transmission. In other words, not much progress there. Today I know that the USA was far ahead of Europe in all these matters, as some of these items were already on the market in the '40s.

Danes my age were taught, growing up, that they are the freest people on earth. Our school, health care, political, tax and social systems were second to none. All envied us, and therefore we viewed other nations as third-world countries, a prevailing belief to this very day. Some of these beliefs might have been fairly accurate in the past when our parents – the "grasshopper generation," so called because they took everything and left nothing – enjoyed full employment and ample tax deductions, making it a great time to expand consumption and lifestyle. Furthermore, the double-digit inflation made it an ideal time to buy houses as one's debt burden in real terms was shrinking every year.

We became accustomed to a plethora of state benefits ranging from Medicare to art. Social welfare has been a boon for a large segment of the population. In fact, a few years ago it was normal that after ten years on welfare, people were automatically transferred to a permanent disabled pension at a young age. We have experienced massive immigration by people from the Middle East during the last thirty years, something that has dramatically changed the fabric of our society.

Then there is the "Jante Law," the perfect tool to keep people in line. In Denmark we have been raised with a perverse Danish mentality, brilliantly captured by the writer Aksel Sandemose in his 1933 book A Fugitive Crosses His Tracks. In the book, the lead character is mistreated by the citizens of Jante, a fictional yet representative town in Denmark.

From this book came the 10 commandments, known as the Jante Law, which was meant to serve as a sarcastic constitution emblematic of the Danish culture:

The Jante Law says:

1. Don't think you are anything special.
2. Don't think you are as good as us.
3. Don't think you are smarter than us.
4. Don't convince yourself that you are better than us.
5. Don't think you know more than us.
6. Don't think you are more important than us.
7. Don't think you are good at anything.
8. Don't laugh at us.
9. Don't think anyone cares about you.
10. Don't think you can teach us anything.

The last, and punishment, law:
11. Don't think that there aren't a few things we know about you.

Hans Christian Andersen captured the same sentiment in his novel The Water Drop, in which small amoebas would tear the arms off anyone being different from the rest (a reflection of the Danish society).

The message is basically, "Don't stand out!"

A very famous and popular Danish song says, "Don't fly higher than your wings can carry, it serves you better to stay on the ground" – so much for supporting and developing the individual spirit.

Sad to say, despite the sarcasm, it holds some truth. In Denmark, you get along easiest if you avoid making waves. Don't try to be smaller, bigger, smarter, prettier, richer, poorer, have a bigger car or house, discuss anything controversial, etc. If you do, you need to have very special social skills, meaning that you'd better be quiet and humble about it. Americans are not; and that's why we view them with skepticism and call them superficial.

Aksel Sandemose, the author of the Jante Laws, later "fled" to Norway, where he joined the Norwegian resistance.

By the way, I have no idea how researchers reached the conclusion that Danes are the "happiest people in the world" – neither I nor anyone I know was asked. But since it is published in a major scientific survey carried out by Leicester University in England, it must be true.

There Ain't No Such Thing as a Free Lunch

Yes, it true: all Danes enjoy six weeks of paid vacation and, for the time being, paid retirement pension. But these benefits are slowly vanishing.

Today we are paying the price, but like the frog in the boiling water, we haven't noticed, and we love to tell everybody else that it's just a nice warm bath.

I spoke with a young Danish welfare recipient who was very angry at the government because it hadn't given him a job. I felt a bit offended and went into a diatribe about personal responsibility, taking self-ownership, etc.

He listened and then stated, "The system we have in Denmark is a totally socialistic system. The state takes everything we earn and decides everything. So, as I see it, the state has also taken over the responsibility to find me a job!" Perversely, it was hard to disagree with his argument.

The Danish system is very expensive. It has turned into a juggernaut and taken on a life of its own. It has grown like a cancer. Every little office, school, education and sport facility, every public department, military, police department or agency fights to get its piece of the cake and to make its budget grow bigger every year.

To finance this overwhelming and still growing public sector, the Danish government keeps inventing new taxes with more and more creative names, like "amenity value tax." The creative Danish tax system – or "how to tax the same service more than once without people noticing" – is big business. It all started with Medicare.

While taxes have been raised time and again, wages have not changed much, except for management salaries. Politicians are very eager to work in Brussels (in the EU), partly because they know the member states are dying and the real power is in the EU, and partly because the salary is tax-free. Our schools and hospitals are old and worn down, our senior care is terrible and money is draining out of every hole in the state.

We have roughly 5.5 million inhabitants, including citizens and noncitizen residents. The Danish workforce consists of 3 million people, of which 1 million are public employees. That means that 2 million people in the private sector support 3.5 million other people with their taxes, plus their own use of the public sector.

We have been hammered with the "fact" that the only way forward is education, education, education; the higher, the better. It is a brilliant plan, keeping people in school where they can be told "the truth." Later, most of the graduates of higher education go to work in the public sector. Even a job as a police officer requires a bachelor's degree. It's not normal thinking to become an entrepreneur and start up your own business. If you do, a lot of the time is spent trying to find loopholes in the tax laws or fighting your way through both Danish and EU regulations. In typical Danish manner, the state is now fighting this by creating a full university degree in entrepreneurship! What a great way to start tunnel vision.

Around 1900, we had 200,000 small farms (76 % of Denmark's area), so everybody could, if they so wished, buy fresh eggs and potatoes from the farmers. Now we have around 10,000 left due to the EU, because the biggest farms get the most subsidies, which in turn buy out the smaller ones.

I would encourage readers to follow Nigel Farage, a Euro-skeptic from the United Kingdom. His brave work in exposing the failures of the European Union, both monetary and otherwise, has made him the lone light in a very dark place.

One example of how the state gets money is by raising taxes on real estate lots. I own an empty half-acre lot in the middle of nowhere, for which I used to pay $180 a year in "dirt tax" (tax for owning the land). I then had the lot subdivided into three lots, each about one-sixth of an acre – still empty land, no rights, utilities nor other improvements. For this, I am now paying $1,250 per lot, or $3,750 per year. This amounts to a tax hike of approximately 2,100 %! When I complained, I received a letter informing me that I could expect an answer in eighteen months. I am still waiting.

The state decides every year what your house and lot is worth. It's usually not far from the market value. First we pay "lot-due tax." In our case, it runs around $7,000 a year. On top of that, we pay something called "rental-value tax of your own property." The state thinks that as a homeowner, you are better off than a person who rents his home. Therefore, it decided that homeowners should pay rent to the state for living in their own home. This also goes if you own a home outside of Denmark. As the name was too obvious, it was changed to "real-estate value tax." It is 1% of the assessed value of the house below $542,850, plus 3% of what's above. Based on home prices in Denmark, this adds up to a significant sum in short order. Every year we get a valuation on our house, which the government uses to tax the owner.

Almost every rule implemented, almost all due to climate, safety or similar odds and ends, costs extra in some form.

Contrary to common belief worldwide, our hospitals are not impressive. A few years ago, I cut an artery in one arm and, knowing that the ambulance doesn't always come when called, I rushed in myself. It's not unusual to get an answering machine, to be asked to call another number or to wait for a very long time for the ambulance.

At the hospital, I was met by Dr. Muhammad, the doctor in charge of the emergency room. His Danish was so bad that no one understood him, nor did he understand us. After pulling my artery for 20 minutes with forceps (yes, it hurts, in case you are wondering) and not listening to my or the nurses' requests for anesthesia, he decided to call a Danish doctor. The Danish doctor's first question upon arrival was why I wasn't sedated. He was also curious as why Dr. Muhammad hadn't seen fit to wear gloves. After "treating" me, Dr. Muhammad spent 20 minutes trying to reset a young carpenter's dislocated shoulder. While he was unable to reset the shoulder, he was successful in getting the poor man to cry like a baby. After that fiasco, he left the room burping loudly.

As we left, an old, senile man was walking around confused in the hallway, wearing nothing more than underwear and wetting himself. My wife told this to seven nurses in the intake office, only to be asked if she couldn't take care of the old man!

Next day, I called the hospital to report my experience with its emergency room. I was informed the hospital had already placed Dr. Muhammad on probation. Nevertheless, he was left in charge of a large emergency room.

This may sound like a rare experience, but unfortunately, no – I could go on. In "the best country in the world," 5,000 people die and 100,000 are injured from medical malpractice every year. One out of four hospitalized in Denmark picks up a new disease during hospitalization.

We are the world's top user of "happy pills" and alcohol. Our youth are among the heaviest drinkers. We have 500,000 (10 % of the population) alcoholics, and we are seeing more kids developing ADHD and eating disorders.

Couples in old-age homes risk separation to different retirement homes after 50 years of marriage. It is considered normal to offer old people a bath every seven to ten days, and it is right now being discussed to take away their daily lemonade from them.

We hardly ever see a police car in the streets anymore, except for the many speed traps that bring more money to the state. This is hardly efficient use of our workforce, considering it takes four years of education to become a police officer. Police officers have become a de facto collection muscle for the IRS. I just received a $270 fine for talking on a cellphone while driving.

While we have virtually no corruption in the police force – something that we should be grateful for and proud of – we also have a force blindly loyal to any orders from the system.

We have both public and private parking attendants everywhere, writing tickets for US$125, which is a lot of money, considering that you pay 50% tax first. The town hall of Copenhagen alone writes $18 million worth of parking tickets every year.

We never see our paycheck, as it goes through a public account called "Easy-ID." This means that anything you owe the public is automatically withheld from your account before you get it.

If you pull out more than $1,780 from your own bank account, the teller may ask you why, and if not satisfied, the bank clerk will report you to the Danish IRS; the same goes for any "suspicious" activities in your account. Should you get the stupid notion of opening a bank account outside Denmark, don't use a credit card. If a person residing in Denmark takes out money from a foreign account, it is reported to the IRS.

In one way or another, more than 90% of our wages goes back to the state in some form, but it is never enough. As our politicians are keen to say, "Either lose your standard of living or pay more tax." As elsewhere, never is a word uttered on saving. Predictably, there seems to be no end to public extravagance. The latest news is that local municipalities over the last five years have built 54 cultural centers. Not one cost below $8.9 million, and one of them ended up running $125 million. These boondoggles end up running in the billions of dollars. These "prestige" projects invariably experience significant cost overruns and end up costing a fortune to maintain.

For over two hundred years a "cooperative association," similar to a credit union or a mutual insurance firm, issued loans to homeowners so that everybody could afford a home. About ten years ago, the association's board turned the association into a company and sold it to the largest bank in Denmark without asking the "shareholders," which are also the mortgage holders. The proceeds, which should have been issued as dividends to the owners, were placed in a trust, which is now run by "friends of friends in high places," distributing money to various cultural events and programs. It's called the biggest fraud in Denmark. Nobody knows or cares.

So while we may not have obvious corruption in the traditional sense in Denmark, job perks and benefits from "good old boy" network access are the standard.

Steaks cost up to US$70 per kilo, a bottle of liquor runs over $26, plus there's a 25% VAT on everything. There is a 180% tax on cars, which of course also is reflected in equally expensive insurance rates. We have a graduated registration tax scheme on cars. Normal vehicles have white plates and are subject to a 180% sales tax; yellow plates are two-seated, company-cargo cars, where the backseats are permanently removed and which are in turn subject to less tax; and yellow/white for cargo cars with VAT paid and thus allowed to be used privately. If you drive a white-plated company car, you are heavily taxed if using it privately. This does not apply for cars driven by chauffeurs, as they are tax-free. All ministers have chauffeurs.

Almost all transactions in Denmark have numerous hidden taxes. To give an example, let me try to analyze an electricity bill for you. We pay around $0.35 per kilowatt-hour (kWh), which is about $1,400 a year for a normal home. The basic price is roughly $0.078 per kWh, but after adding energy tax, appendix tax, distribution tax, energy saving (CO2) tax, public duties, transport of electricity, actual consumption and subscription, and 25% VAT, we end up with $0.35!

Gasoline is now at US$9.60 per gallon and still rising. By far the largest part of that price is tax.

And it's like that with almost everything in Denmark.

A Toyota Hilux pickup, which is similar to a Tacoma but has only four cylinders, is a two-seated car on yellow plates. You have the option not to pay VAT, but then you can't drive it privately. If you do and get caught, you have to pay full (white-plate) registration and a fine of the same amount. This Hilux, incidentally, costs $1,600 a year in road taxes.

A guy just got caught in a Ferrari on temporary plates. He was charged for private driving and got a combined ticket and registration tax for $1,070,000 PLUS six months in jail. It's considered tax evasion, and tax evasion is punished more severely here than violence. In normal law, the police have to prove you guilty. With the IRS, you have to prove your innocence. The IRS can conduct a search on your private property without a warrant.

A recent legislative proposal is that the buyer of a service from a craftsman can be held responsible if the craftsman fails to pay tax. That means that the buyer has to make sure that the service provider pays the tax!

For the sake of illustration, the latest survey of estimated prices for craftsmen in Denmark shows that companies charge the following hourly rates:

Carpenters and bricklayers$90
Floor Sander$63

To compare, a policeman or nurse makes roughly $33 an hour – before taxes.

It will be illegal to pay a craftsman in cash on transactions exceeding US$1,780. Transactions exceeding that have to be done through bank transfer, so the Revenue Ministry can track in detail what you do with your money.

You are not allowed to carry more than $13,600 on you (included valuables) anywhere in Europe, unless you have declared them to the authorities.

By now you get the picture of what it takes to run a "paradise."

This paradise I have described isn't that peaceful, by the way. The Danish Hells Angels is the most violent chapter, punished for the most serious crimes. We have stabbings, robberies and shootings in the streets like all other cities. But like you, we don't notice it.

Danish people think they are free capitalists, but the truth is that we are a heavily regulated, bureaucratic, technocratic, fascist, socialist society. Sadly, the United States is rapidly joining us in the global group of nanny states.

But don't worry if you feel like your country is heading the same way, your personal freedom slipping away, your rights disappearing and your money being taken. You hardly notice it, and slowly, day by day, you will become accustomed to it.

Perhaps I am wrong, but since we never protest, we must like being kept.

Did I forget to mention laws regarding weapons in Denmark? You are not allowed to buy guns unless you are a registered hunter or member of a shooting club. No mace, spray, Tasers, etc. Only folding knives are permitted, and the blade can be no longer than three inches.

You want to defend yourself? Fill in a form and get in line at the nearest police station!

Jan Gindrup received his bachelor's degree in trade and shipping. He spent the next 21 years serving as a police officer in Denmark. After retiring from the police force, Jan served as a security consultant to a large Danish energy company. He is currently in construction and real estate.

Jan is one of the very few Danes who espouse a libertarian philosophy, a position that frequently places him at odds with friends and colleagues. He is an avid reader of Doug Casey as well as other like-minded writers. He is convinced that the world's major economies are only beginning to enter the Greater Depression and that they are headed for a long Kondratieff winter.

Jan has been a contrarian his whole life, eschewing mainstream opinion. He lives according to Descartes' principle of Methodic Doubt.

Friday Funnies

The Old Woman's Traffic Stop

Older Woman: "Is there a problem, Officer?"

Traffic Cop: "Yes ma'am, I'm afraid you were speeding."

Older Woman: "Oh, I see."

Traffic Cop: "Can I see your license, please?"

Older Woman: "Well, I would give it to you, but I don't have one."

Traffic Cop: "Don't have one?"

Older Woman: "No. I lost it four years ago for drunk driving."

Traffic Cop: "I see... Can I see your vehicle registration papers, please?"

Older Woman: "I can't do that."

Traffic Cop: "Why not?"

Older Woman: "I stole this car."

Traffic Cop: "Stole it?"

Older Woman: "Yes, and I killed and hacked up the owner."

Traffic Cop: "You what!?"

Older Woman: "His body parts are in plastic bags in the trunk if you want to see."

The traffic cop looks at the woman and slowly backs away to his car while calling for backup. Within minutes, five police cars circle the car. A senior officer slowly approaches the car, clasping his half-drawn gun.

Officer 2: "Ma'am, could you step out of your vehicle, please!"

The woman steps out of her vehicle.

Older woman: "Is there a problem, sir?"

Officer 2: "My colleague here tells me that you have stolen this car and murdered the owner."

Older Woman: "Murdered the owner? Are you serious?"

Officer 2: "Yes, could you please open the trunk of your car, please."

The woman opens the trunk, revealing nothing but an empty trunk.

Officer 2: "Is this your car, ma'am?"

Older Woman: "Yes, here are the registration papers."

The traffic cop is quite stunned.

Officer 2: "My colleague claims that you do not have a driving license."

The woman digs into her handbag and pulls out a clutch purse and hands it to the officer.

The officer examines the license quizzically.

Officer 2: "Thank you, ma'am, but I am puzzled, as I was told by my officer here that you didn't have a license, that you stole this car, and that you murdered and hacked up the owner!"

Older Woman: "Bet the lying bastard told you I was speeding, too."

Jury Duty

During a New Jersey jury selection, the judge is picking a jury for a drug distribution case. He starts by asking, "Is there anyone here that can't participate in this particular case?"

A lady in the back of the jury selection pool raises her hand and says, "Judge, I can't be on this jury because of my occupation."

The judge inquires, "Madame, what is it that you do?

"The lady answer, "Your honor, I'm a soothsayer."

The judge responds, "Alright, so exactly how does that prevent you from sitting on this jury?"

The lady explains, "I already know how the case is going to turn out."

That's It for Today

David again. As an afterthought to Jan Gindrup's fascinating article on Denmark, I'd like to stress again how amazing our dear readers are. It's one of the things I appreciate most about our Casey Summits: whenever I attend, I meet people like Jan – which is to say, like-minded investors with well-thought-out opinions.

As Doug Casey and I have said about phyles in the past, today – and in the future – it is becoming increasingly critical, not to mention therapeutic, to find groups of "intellectual kin" whose members can support and inspire each other.

As Jan noted of the situation in Denmark, the power of conformity can be overwhelming, and it's not easy to swim against the stream, as we contrarians are wont to do. My personal experience after attending a Casey Summit is that I always come away feeling a bit lighter, even though the topics we've talked about may have been on the heavy side – from the ongoing global financial crisis to the regulations governments invent to put a stranglehold on investors.

Investing is not the straight and narrow path it used to be – today it's just as important to keep a close eye on Washington's moves as on those of the market. But there's always a silver lining, as you will see at our upcoming Summit, aptly named "Navigating the Politicized Economy," held on September 7-9, 2012, at the beautiful Park Hyatt Aviara Resort in Carlsbad, CA.

By the way, if you sign up today, you can still get our traditional Early-Bird price, a substantial savings off our regular Summit fee. You can learn more here.

I hope to see you there! Thank you for subscribing and for reading Casey Daily Dispatch.

David Galland
Managing Director
Casey Research