“Thank God for Argentina,” said our old friend Doug Casey last night.

On Friday, the U.S. stock market lost another 127 points. Almost all the news is bad. Consumers are slowing down their spending – retail stocks are down about 40% from their high. Even Wal-Mart – where people go when they don’t want to spend much money – is down about 20%.

U.S. factories – those that are left – are going quiet too. Word came out last week that factory output slipped 6% in the third quarter; it’s biggest drop in 17 years.

On Sunday, we went to church here in Buenos Aires to the sound of bagpipes. A church around the corner from our apartment has services in English. Out front was a bagpiper in full dress uniform of the Scottish Highlanders. What was he doing there? We don’t know. We continued on down the street to another church.

“Render unto Caesar that which is Caesar’s,” was the key line in yesterday’s service. Our Spanish is poor. But we’d heard the story before, so we knew the plot. The feds of the Roman Era in the Levant tried to lay a trap for Jesus. They figured he was a rebel...a malcontent...a troublemaker. If they could get him to say that a man shouldn’t pay his taxes, they would be able to put the cuffs on him and make him to do the perp walk. But Jesus was too smart for them. Instead of falling into the trap, he gave them a sly comeback: Tossing them a coin with the emperor’s mug on it, he said the famous line. What did it mean? No one quite knew.

But Caesar’s money was what the Caesars made of it. They clipped the gold and silver coins...then debased them with other metals. And when people tried to give them back to Caesar in payment of taxes – at face value – at least at one point, the imperial tax collectors refused to take them! They wanted better money.

“Empires built on debt start to crumble,” is another weekend headline from the New York Times . The Roman Empire over-reached...and over-spent...and began to crumble shortly after Jesus died. Now, another empire seems to have over-done it...but more about that below...

Argentina is full of surprises. One big surprise is that the land of the pampas has mostly resisted the worldwide financial inferno. On the weekend, the Financial Times gave out the news that:

“US faces worst recession in 26 years.”

Europe has a major slowdown in front of it too. And Asia – well, if stock prices are predictive of economic trouble, Asia is going to see the biggest slump of all.

“What a week!” quips Dan Amoss. “Of course, you could say this about each of the past four weeks. The credit markets are flashing early signs of calming down, so hopefully the stock market can get back to the business of valuing companies, rather than remaining a source of cash to stuff under the mattress.”

Tomorrow, you can download Dan’s 20-minute webinar that will explain exactly how to protect yourself from the turmoil in the markets – and even how to profit. The video is downloadable on Tuesday at noon, but you can sign up for it right now. Learn more about this exciting opportunity here .

But Argentina? The country seems to have been spared. It is blessed by its own mismanagement...saved by its own incompetence.

Incompetence...sloth...and mediocrity are greatly underrated, in our opinion. “For the race is not always to the swift, nor the battle to the strong,” it says in the Bible. Right. Sometimes the race goeth to the guy with the sprained ankle...and the battle is won by the pacifists!

Of course, when the going is good, the good get going fast.

But now the going isn’t so good and the folks went so fast wish they hadn’t gone at all. If Lehman hadn’t been so quick to take advantage of the credit bubble in other words, it might still be in business.

What brought this thought to mind was airplane reading. We picked up a book in the Madrid airport – a biography of Heinz Guderian. Does the name ring a bell, dear reader? It should. Because if Heinz Guderian’s tanks had not raced so fast across Poland in the spring of 1939, Adolph Hitler might not have been encouraged to invade France. And then, if Guderian’s new invention – the Blitzkrieg – had not been such a success in France, Hitler might have put his map of Russia back in the drawer, made peace with England and WWII as we know it wouldn’t have happened.

But in the early days of WWII the battle went to the swift! And Heinz Guderian was one of a handful of military men – a group that included Charles de Gaulle and George F. Patton – who were beginning to understand that the world had changed. In Lincoln’s war against the southern states, Stonewall Jackson first announced the key insight: the attacker always lost. A soldier had little chance of getting across open ground when determined defenders stood on the other side. The invention of the machine gun seemed to make that insight obvious to everyone – though generals in WWI forgot the lesson with astonishing regularity...and at an appalling cost.

Tanks changed everything. Suddenly, the advantage shifted to the attacker. Heinz Guderian, with his tank divisions, could sweep through northern France so fast that the French commanders didn’t know what was happening. They couldn’t organize a defense; by the time they set up a defensive line, Guderian was already on the other side of it. Even though the French had more tanks than the Germans, they had no plans for a defense against Blitzkrieg; it was the first time they had seen it.

If Guderian had been a bumbler or a fool, the whole thing might have turned out better. Instead, the Germans were cursed by their own success.

When the Nazi regime fell, the Perons gave out passports to allow many top officials to escape to the pampas. But by the look of things down here, the Nazi fugitives must have neglected to pack their organizational genius. Argentina bumbles along. Even in the midst of the biggest boom in farm prices in 30 years, Argentina still couldn’t seem to make a profit. The country is rich in farmland. It is rich in minerals. It has one of the world’s largest underground lakes. But by the time the Argentines got ready to take advantage of high prices – the boom was over.

“Yes, I like it down here,” said Doug. “This is about the only place in the world where prices haven’t come down. Because they never went up. Argentina is mostly unaffected by the credit crisis, because it never had any credit. Even the government. You’d have to be crazy to lend money to Argentina.”

*** Nobel prize winning economist Paul Krugman is, of course, a Keynesian. All economists – or practically all – are now Keynesians. So are all government officials. “We’re all Keynesians now,” announced Richard Nixon in the ’70s.

That is, they all believe that government has to manage the economy – in a macro-economic way.

The theory is simple: when private industry and private consumers drop the ball...the government should pick it up and run with it.

And so the feds are out on the field:

At the Treasury, the boys from Government Sachs are all suited up...shooting some hoops with their pals from Wall Street. Got some investments that went bad? Bring ’em over! The Paulson crew has $700 billion to work with. If you’re a major bank or financial institution, and you don’t mind playing ball with the Paulson team, you could score some real money.

And over at the Fed, Ben Bernanke is hoping to kick a field goal. He’s still got 150 basis points to go in this game. Then, the key Fed rate will be zero. He’ll use every one of those points, we guess. And he’ll continue lending money to whomever will take it. Want to see an ugly bank balance sheet? Just look at the Fed. The bank – a private bank, by the way – is selling off its safe U.S. government securities in order to take on board the kind of ‘assets’ that smell like a teenager’s gym locker.

And that still leaves the “fiscal stimulus.” Yes, dear reader, get ready for it. Big spending projects. Paul Krugman is using his new stature to tell politicians what they want to hear most. This is not the time to be timid about spending money. Keynesian economics requires Congress to run big deficits – to make up for the spending that consumers and business have more sense than to do. ‘It’s the responsible thing for government to do,” he will say. ‘And don’t worry about the deficit. We’ll take care of that later. America is such a big, dynamic, flexible economy...we’ll figure out how to deal with the deficit after this crisis is over.’

The Washington Post is now talking openly about something that would have seemed impossibly scary and absurd a few years ago – a $1 trillion deficit.

It’s coming, dear reader. It’s coming.

Yes, the feds are setting a different kind of trap for modern Americans. Watch out for Caesar’s money!

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.