The Contrarian

“In the investment markets, what everyone knows is usually not worth knowing.”

Why do Poor Nations Stay Poor?

Venezuela has the third largest oil reserves in the world. It is also one of the poorest countries as people are literally starving to death.

Nigeria is one of the largest oil producers in the world. It earned some US$484 billion from oil in the last 10 years. Yet it has just been ranked “the poorest country” in the world, leaping above India. (That probably doesn’t count small countries like Haiti.)

The Brookings Institution estimated that the number of people living in extreme poverty in Nigeria had grown to 87 million people, versus 73 million in India.

What do these countries have in common? Extreme levels of corruption in the government. Our observations over the decades have shown that poverty and corruption are highly correlated. That’s why foreign aid never works. It is sent to the country and immediately relayed to the Swiss bank accounts of the ruling family.

Why should Americans care about this? Because corruption in Washington over the past 20 years has gone to an extreme. It is not just billions of dollars, but TRILLIONS. The Pentagon says $21 TRILLION cannot be accounted for over the past several decades. Most people are not aware of it because of our media. The investigative reporter no longer exists.

Corruption means that there are two sets of laws: those for common people, where a minor infraction like being caught possessing marijuana gets you 10 years in prison, while the elite can loot the government of hundreds of billions, and the investigative agencies say, “we don’t have enough evidence” or “we can’t prove there was intent.”

When true Americans are subject to governmental harassment and then told they are breaking the law, there is nothing that separates the US from the most corrupt countries of the world. And that stops business expansions unless the business is part of the “old boys club.”

Read the books by Schweizer, especially the latest, “Secret Empires.” You will be shocked. His previous book was “Clinton Cash.”

You can read more of our current analysis and forecasts on the global stock markets, bond markets, and global economies in our award-winning WELLINGTON LETTER, now in its 41st year.

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