Raphaël Lima | Paraguay’s Banking Scandal: What’s Really Going On?

Timothy Allen: Paraguay. I suppose I've got a lot of questions about this, Raphael. When all the problems started, I got a lot of Bitcoiner friends, obviously, and they all started going, hey, look, this is the beginning of the end. Look, it's happening in Paraguay. That was my first sort of like introduction to what was going on there. Then sort of over the next few days it seemed to be that the government or at least the central bank or Paraguay themselves seem to be dealing with dealing with it quite well it seemed to be anyway but you live there you're part of it you were on the you're on the ground so can you sort of just like start off by just describing what happened first I take it you were you were in the country when it first started.¶

Raphaël Lima: Yes, yes, yes. I live here since February. My Spanish is still not that good, but anyways. So what happened was that Monday to Tuesday last week, about 4 a.m., something like that, the central bank put out a notice that. They were intervening and closing down Ueno Bank, saying that they failed to meet security and reserve requirements and didn't clarify quite very much what exactly happened, but the fact is, effectively, the bank was broke. And everyone woke up to that news, which was quite a wake-up that day. And instantly, there was a lot of revolt because it was a bank, it was a very popular bank, because banking in Paraguay is, well, I think I would rather fall off of a cliff than doing the standard procedure to open a bank account here. And I've done it quite a few times. It's awful. And Ueno was very much easier. It was very modern bank. And since you could open accounts in your apps, that's the type of simple stuff. It's sort of a digital bank. So a lot of people had small accounts into it. And that's where the news came that it was the biggest bank in Paraguay. In terms of accounts open yes in terms of deposits nope we'll get there but. Everyone was naturally livid about it and quite immediately responses came out from the government the president of central bank resigned quite quickly and within probably 12 to 14 15 hours I'm gonna try to be precise on that because quite quickly everything happened. Within like 15 hours at most, arrest orders for everyone in the board of directors, CEO, vice, CEO, something like that, and the owner were issued in two or three hours. Maybe they had all surrendered. I think all but one had surrendered the police. They were everyone arrested. The resignation of the president of the central bank came a bit later, probably, I think maybe in the early hours of Wednesday, possibly. And the government, the president, or now the former president, were quite quick to say, well, there is a guarantee fund. There's a private guarantee fund. All banks have to pitch in, and it's managed by the government. It will cover the expenses, and by law, it has to cover expenses in 15 days. But we will pass legislation so that it covers all deposits immediately. So you don't have to wait for the 15 days to try to calm everyone down. Protests started on Tuesday, but mostly on Wednesday. They got bigger. But. They were mostly by left-wing people, which are less than 5% of the population of Paraguay, and they're not taken seriously. Everyone's like, that's not us. That's like those crazies over there. So by Wednesday you have the announcement of that, of the legislation, everything gets approved and sanctioned and published by Thursday evening, Thursday morning, actually. And by Thursday evening, the central bank starts to issue payments to the account holders. And at the same time, the scandal got up in politics all the way to the president because he was a business partner. He was a associate of the bank. He was a partner of the bank up until a stockholder of the bank, should I say, up until 2025. And he had very big connections to it. The former president of the central bank, his former job was at Ueno Bank. And the person who nominated him to be the president of the central bank was the former president of Santiago Peña. And he was friends with the people on the bank. He was quite close. Their images were quite close. And there was a very large amount of state money inside the bank. Namely, the largest account is the social security of Paraguay. Roughly nine percent of their money was at the bank which is was misconstrued by news as saying oh they're the money of the social security was at Ueno so everyone thinks it's like 100 it's not it's roughly nine percent I may get it wrong it's like 9.7 like something like that and social security has their money in very many things in Paraguay they spread it out. So it wasn't a complete scandal in that, but the fact is that Ueno was the largest share of all of them. Whereas if you think in deposits, Ueno was about the fifth bank in Paraguay. They had 3 million accounts, but in terms of money actually in there, they were in fifth place by quite a wide margin. So everyone started asking, why did you have so much money there? Why was it the largest account holder? And you had also very many other government things depositing money there. You had the finance ministry, you had the Itaipú dam, which is the hydro dam of Paraguay. It's huge. They had a lot of money there. And then came out the news that an employee on the central bank did warn the government about these reserve requirement problems quite some time ago. And Santiago Peña ordered him to be switched out to some other job. So that was, everyone's like, okay, now we're done. And there was a very much, very strong pressure from the opposition to impeach him. And at that point, he became undefensible. He was already in a very delicate situation because of all those connections. And then his own party got together, sat down and said, well, we're not standing up for him, you get out. And there was a big meeting in Thursday morning, Thursday afternoon, like early in the afternoon, probably like 1 p.m., 2 p.m. Loco. It was widely reported. And it was also widely reported that they had the votes to impeach him in the Senate. And the result of that meeting was likely something to the effect of they notified him that he would not be defended he would be impeached He then promptly resigned because in Paraguay if the president resigns he becomes a lifetime senator with immunity. But there a catch The House of Representatives has to accept his resignation. They did not, unanimously. Did not accept his renunciation, presented the impeachment articles, and Friday morning they accepted that in the lower chamber and on Friday evening he went to trial. He requested that to be delayed a little bit, but they didn't. And by the start of the night, I think 7 or maybe 8 pm, he was impeached legally, unanimously. And his arrest order was issued maybe 20 minutes later. And. So now he ended the week in jail basically so the banquet broke at 4 a.m tuesday and by 8 p.m 9 p.m friday the president was in jail and everyone in the bank was arrested and also the payments have already started by thursday the payments to account holders had already started so they had roughly 3.2 million account holders of which 1.3 had absolutely no money whatsoever in there I was one of them A lot of people opened accounts during the World Cup because, oh, they had this cool card with the team colours. It's like, oh, it's cool to have a card. Are you going to put money there? Meh. Because you could have a lot of perks. You could get a priority to buy tickets and shows. You could get cashbacks. So 1.3 million had no money whatsoever in there. And I think roughly 1.6, something like that, 1.5 million, something like that, had less than, that would be like a thousand reais, which would be 150, 180 pounds. Or like $200, less than $200 in the account. So it was like just change money. And so, and by today, so Tuesday, we're recording this, the new president has already announced that they have paid back 95% of account holders. And by the end of the day, it should go up to 98%, which is the full, which is the, the, everyone that was insured by deposit insurance. Only roughly two to four thousand accounts are not fully insured so they would go to the like bankruptcy procedures and everything and go fight it out so it was quite quick it was quite a quite a lightning strike in there and so that's roughly the timetable of everything that's happening and it was it was quite beautiful to see but well I yapped a lot so it's.¶

Timothy Allen: I mean it does sound pretty good. I mean the cynic in me says that they have sorted out all the small level depositors to keep people happy basically but correct me if I'm wrong rafael because this might just be the circles that I revolve in. But recently, Paraguay's made a real concerted effort to sort of attract like foreign investment, right? In the global scale, I've been hearing about Paraguay for a year and a bit or so. And then suddenly it becomes a meme and everyone's like, yeah, Paraguay, Paraguay, Paraguay, Paraguay. Is that true first? And secondly, if it is true, how does that all fit with this. And are people genuinely rocked by this or are outsiders like myself? I mean, I took a bit of a look, a deep dive into it. And yes, it does look like, from a PR perspective, at least, people are saying, yeah, this is great. That's what's coming from the sort of Central America, the sort of Latin American people, if you see what I mean. But what do you think for real? Firstly, is that true that there's this concerted effort to get people to come to Paraguay now by the government? And two, is this a serious thing or not?¶

Raphaël Lima: OK, so if it is a government effort, now, I don't have that level of government connections. But I do own a company that helps people to move to countries where you will pay less taxes and leave freely, which is called Settee. We have, I think, I think we crossed 4,000 clients over this last week, probably, because Lula got elected in Brazil and most of our public is Brazilian. So we had like thousands of people just kind of like we had four months worth of demand in like five days. But to say we've like moved thousands of people at this point and we've moved a lot to Paraguay. I live here. I'm in our office. There's a big house here in Villa Morra. And so we've done that. We've helped to raise attention about that, especially in Brazil. I'm probably the most connected person to the image of Paraguay in Brazil. It's us. It's our company. And it's very real because it's a very good option for many types of people in certain conditions. So it's not the perfect Disneyland. It's not. But for many people, it is a very good option. And the government has been quite friendly and quite quick in those efforts to bring money. Because quite a few years ago, Paraguay's economy was very connected to Brazil's economy. Which is, I mean, you're connected to other economies. But I mean, when you're like dependent on one that's not really good. So they're trying to diversify that. Santiago Peña and his government, in previous efforts, but especially Santiago, they did efforts to get friends in the world and get more money in to grow because they know they're very competitive country and there have been efforts they're really good and it's really worth it it's not for everyone of course it's a country in development. I mean you have problems if it rains quite strongly you're gonna have plenty in certain areas the streets are not really good and you don't want to be stopped by the traffic police that would be a very bad day for you. I mean, there are both issues, but in terms of the potential to grow and having a 95% plus right-wing conservative Catholic society, yeah, that's very attractive to certain types of people, right? If you like the heat. I mean, today's a very cool day. It's like 29 Celsius us outside and people were like praying the streets that thank you that this is not a hellishly hot day of November but I just of course but it is a very good country and there was a very and. There is still a very large effort to bring in investment just so you have an idea the gdp of the country is roughly 50 billion dollars and a about a month and so ago they announced they're going to have a $12 billion data center here. So, yeah, like 25% of the GDP in one data center. And you're getting a lot of investment coming in. We're doing that. We're bringing in, after Lula's re-election in Brazil, a few hundred companies to do business here and produce here, industrialize here and export and that type of stuff. So, yes, that is a good effort.¶

Timothy Allen: Has that been impacted?¶

Raphaël Lima: Eh. I mean, a lot of our clients were like, wait, what's going on? And then we explained the whole thing, like the first phase of what we talked about here. And. Everyone was like, oh, that's quite quick. I expected about nothing of that. I would expect absolutely nothing to happen and three random people going to jail because they signed the paper and that's it. And Ueno was not a systemically important bank. It was not an export-import bank. Some businesses, some commerce had their part of their funds there, so that's going to be a hassle. But I mean, the trust, the deposit guarantee goes up to roughly $38,000. And the minimum wage here is $500, just so you get like a comparison. So I mean unless your company had a hundred percent of your funds in one bank which is probably a mistake by your management to do so, that's kind of okay. Some investors were thinking, well, okay, so the president changed this. So what does he believe? Oh, the same thing as the other one. Oh, all right. So everyone just checked their things for like a few days and decided we're moving on. The dollar did rise on these last few days. A lot of people dollarized. A lot of people tried to protect themselves a little bit. But I mean, we were going out because like our team, most of our team is here for these weeks because we do a November thing with our company. We try to get everyone together because we're a digital company. So we were like going out almost every day. Bars were full, restaurants were full. It was a normal weekend. It was a normal day. Of course, if your money is there, it's not a good day for you. But it's not like when the financial crisis hit or when Greece, when the banks shut down, that wasn't that. And you see photos of people lining up on the banks. Yes, of course. Because what the government did was they said, well, we're going to pay you in other banks. Right so if you have an account in another bank we're gonna pay you there and if not then we'll just let you know so hey now you've got an account in this bank go get your money so yeah it was annoying to like get out and go into lines get your money yeah but but. I mean coming to the second question of like what was the perception well. I mean it's a Latin American country with a high perception of corruption and it's a very developing country still so naturally everyone one would expect absolutely nothing to happen. And we had a lot of the foreigners who were here, the Europeans especially, they were like, when Credit Suisse went haywire in bloody Switzerland, that didn't happen. No bankers got jailed in Switzerland. Nobody got jailed in Britain when the [unclear] happened. And you got the president behind literal bars in four days. They were like, oh, all right. I mean, obviously, that shouldn't have happened in the first place. But now that it did, that was quite fine. Everyone was positively surprised. So it's black clouds and silver linings.¶

Timothy Allen: Why is that then? I mean, you're absolutely right that there's been a number of banking crises in various countries. One of the few I can think of where actually someone went to jail was Iceland. Do you remember that one? I'm pretty sure. I'm pretty sure someone went to jail then. But other than that, you're absolutely right. Nobody ever pays the price for these kind of things. So why is it that Paraguay of all places, is it because it's a genuinely kind of, I don't know, honest group of people or is it something else? What's going on?¶

Raphaël Lima: Oh, there is that. They're very honest people. I mean, and you can see that in the smallest of things. Like I had to, like those chairs, these chairs are new. Like one had a defect. We had to go to the store and change it like a few hours ago. And we exchanged it for another chair because like the prices. And they had to give me back like six dollars something like that because the price differences between the chairs and so my wife was me with me she was like oh I want this decoration. And then they had to give me back like 80 cents of a dollar something like that and I was like no you don't need to just forget that and said no what what what what costs 80 cents so. They were like they got like this notepad and say you take that they wouldn't take my like 80 cents right now we're gonna give you something oh super cool and that's not like an isolated thing I'm just telling this story because this happens all the time. Some guy parked a convertible in front of my building for a whole day open like hatch fully open. You can't do that in london today. Can you like get a convertible like a Mercedes convertible badass like Bond car pull the hatch down park it somewhere in some neighborhood nothing happens. Is that london now can you do that no. I think that the whole car would be taken. In front of my house nothing happened nothing happened so they're they're very honest people it's very safe here too but. There is also something that they very profoundly and very deeply hate politicians like they do and even the people who like the Colorado party and who are members they still hate the shit out of them and it's like they're less worse than the others and I like this and that other guy and if they step one way outside the line I will set his house on fire. That is their mentality. And they're very civil about it. Because if you see the protests, if you see the videos of the protests, they're not breaking anything. They're not setting fire to stuff. They're just pissed off. And there was a politician here who's quite famous. He tried to show up in the protests like, I'm the alternative. And people just dragged him away. It's like, sod off. No, you're not. We hate him, but we also hate you. In very many different ways, but fuck off. So what was understood by the politicians was either we fix this or stuff's going to happen. And people were very civil about it. Nothing was looted. Nothing was broken. The streets were clean after the protests. It was amazing. But. Everyone was absolutely livid. And if they had done something else lighter than what they did, I mean, if you saw the World Cup and you saw how Paraguay stood up to France and Germany and fought it out up until the last second, I will tell you, that is the Paraguayan spirit. They're not going to let you go. So, yeah, that's that. They pay less, they pay half the taxes than a Brazilian pays, and they hate it like four times as much. I'm an NCAP. And when I explain libertarianism to them, they're like, yeah, that's just common sense. Government screws up for everything, and we shouldn't have them at all. They're like, I don't know. Is that a philosophy? Oh, all right.¶

Timothy Allen: Was was Peña the Santiago the president was he considered corrupt prior to this well did they did or is it just a general sentence yeah yeah what about in Paraguay. I mean. I mean you know arguably. There are some good ones out there somewhere but in Paraguay was he known for being a bit of a crook or or presumably we're we're all in agreement now he is a crook is that right it's not just circumstantial what's happened he's he's he's he's had his finger in a few pies he's he's been fight siphoning money out of the out of the bank by the looks of it as well in the form of loans to himself that he can't pay back various things I heard.¶

Raphaël Lima: Yeah there was things like they they did a raid in his house in San Bernardino which is like the nice light lake city close to here and his house was fully paid by loans from Ueno bank which. There is absolutely no way that he could pay them back, like honestly, with like his declared earnings. It's like, there's no way. And there were criticisms because like you asked me the first question, when did this begin? And I was tempted to say three years ago. And then just do the whole timeline. But Ueno was always a very politically connected bank, which is always suspicious. It's like, why do you have all these politicians close to you? It's like, you're a banker. But in Latin America, that's normal because that's Latin America. You just go like, ah, everyone's dirty. But yeah, that was questionable. Everyone knew that there was something iffy about it. But if you in Latin America 50 of everything is kind of iffy in some ways And sometimes like no they just friends because it a small country and everyone knows each other And sometimes, like, yeah, but that's kind of, I don't know. That's a normal thing. And except for his hardcore fan base, nobody would say that he's, like, squeaky clean. But nobody would say that about anyone in Paraguay. And if you come up and say, oh, no, this guy is absolutely squeaky clean, 90% of the population would just point at you and laugh and be like, that's not how stuff works. But that being said, nobody today thinks that he's clean. Like, even his, like, only some, like, diehard, hardcore fans are saying, yeah, but under his presidency, like, we grew a lot and crime fell and, like, wages went up. And. Everyone was like, yeah, and he should be 100% in jail. It's like, don't try that. So, yeah, there were criticisms of him. There is criticisms of his party, but that's just politics south of the Mexico border in the US. You're going to get that.¶

Timothy Allen: How come so many members of the public had accounts there? Is it true that this was the most subscribed to bank for sort of like the man on the street.¶

Raphaël Lima: Yeah.¶

Timothy Allen: How come? Because it's a new bank as well, right? It wasn't a world.¶

Raphaël Lima: 40% of Paraguayans don't have any bank accounts whatsoever.¶

Timothy Allen: And 40%?¶

Raphaël Lima: 40%. It's still like a very much unbanked country. And Ueno was a digital bank that was easy to use because the other banks here, they're just crap. Like it's just so annoying to deal with them. Like every time I have to handle them, I'm thinking like I might get deported today. This might be the day. They're just shit to deal with. So. They were easy. They were easy to get a bank account. They had only like one base, one office, but they had like small places where you could like get a card. And they did like good marketing. Like that's something that people are sad because they're like, but that was such a good bank to use. Like what the hell? I mean, they're crooked. There is screw them okay but like no can someone that copy that and do that but clean like please someone because you could get a card easily you could pay your bills easily you could you could save money easily you could like operate it easily they did good marketing they had like they sponsored the national team they had like the cool like team cards with the colours And by the way, Paraguayan nationalism, it's amazing. People just randomly put the flag up everywhere. Imagine Texas where people have the flag everywhere. It's like that. So it's super beautiful. Everyone wants the credit card with the Albirroja colours of the national team, especially after they classified for the knockout phase. Everyone's like, static. And. They were just very good at that that being said they had 3.2 million accounts 40 percent of those they had no money in because people were like oh so they're more handy to have because I can get the app and open the account. And then like transfer some money and I can buy the tickets for like the corn show that happened in may that I'm super on the way that I couldn't go and still mad about that and I can get like priority in the line so I can get the account for that and just pay it easily and the other places didn't. So a lot of people had accounts because of that. But 92% of account holders of those 3.2 million in the 6.57 million people country, they had less than $200 there. So it's just like your cheap change, like being small things, your restaurant bank. People didn't bank seriously there because businesses hear their moral fashion. So they would look at this and be like, I don't know about that. I'm going to go with the old bank where you have like personally and I prefer you that. So it was the largest bank accounts, but in terms of financial impact, eh.¶

Timothy Allen: Am I right in thinking that the reason it collapsed is because. They were lending out more than they had in reserves or there was there's a level at which they can't right okay yeah yeah. I mean which is which is pretty much the modus operandi of every bank now anyway I thought I thought you didn't need to hold any reserves anymore that that must be a what's happened to it.¶

Raphaël Lima: Now they do but sorry I'll cut you off on that. But what happened was the owner apparently was taking out a lot of loans to his own companies companies other companies of his same group and he exceeded the security margin of that by a lot. So essentially it was a bank to bank his own stuff. And when they went to check if the reserves actually added up and the contracts they didn't and they had spent a lot of money on on cashbacks because you could get like huge cashbacks here they spent a lot of lot of money in that, it's putting a lot of money in advertising and everything. And people were not putting money in back in the bank, not investing with it because it's starting to be a cultural thing here to save money in banks and fix deposits or bonds. They're still such a new industry. Companies didn't use to... You only have regularly issued bonds by companies. Every week, you have a new one for the last two, three years, possibly. So it's still very much a new thing. So. They were spending a lot of money, but. They were getting a lot of business back into it. Meanwhile, he was bankrolling every one of his other companies and stuff just didn't add up. So apparently, the last number I saw, I might be off by a little bit here, but apparently they only have roughly 30%, but that doesn't count the guarantee fund. So the guarantee fund insured 98%, and the rest of them is the funds of the bank, but also they're going to execute all the properties of the owner, the directors, everything. It's not going to add up. They're still going to get a haircut to something. If I had to guess right now, it would be something like 50%, something like that, but that's mostly state stuff.¶

Timothy Allen: And what's happened to the actual bank itself, as in the app? And are they going to bring it back or is that it?¶

Raphaël Lima: No, they won't. No. It's dead. Completely. It's dead completely. And in fact, their office, they had like a cool bent, kind of like parametric roof, you know, like wavy. People are like riding skates on it. Like people are riding bikes and skates on it. It's like it's a new like skate pit thing.¶

Timothy Allen: But you reckon that that's put a hole in the market now for an easy to use digital appy type bank then?¶

Raphaël Lima: Yeah. If someone wants to do it, there is a market. Probably someone already started thinking about it. But then you're going to have to explain, we're a digital fund, new bank, easy to use. And we're not going to calm down. It's like, we're not those guys. Probably you're going to have to wait. You know, it's kind of like when a very bad event happens in every comic out there, things. So I guess in like 18 months we can joke about it, but like not next week. You're just going to have to hold off a little bit.¶

Timothy Allen: And were there any, is there much integration with things like Bitcoin in Paraguay at all?¶

Raphaël Lima: Oh, no, no, there isn't.¶

Timothy Allen: Nothing at all?¶

Raphaël Lima: I'm not going to say like nothing at all, but it's hard to use. And 40% of the people are not even banked. And banks here, they're very concerned because. There are very many ways in which a bank or a bank manager, your personal account manager, can be legally and criminally responsible if your bank account is used for some sort of crime. So they're very careful. If I had a bank account here, which I don't, because they're like, oh, so you work for this foreign company bringing people in and you do all sorts of the company in the US, but you're Brazilian. Yeah, we don't want as a client, try the next one. They're like, that sounds too no. They're like that. So if you say, oh, I do Bitcoin, you're probably going to get your account closed on the spot. Probably on the spot. Some banks, if they know you, if you have other money, if you have like this history with them they're gonna ask for a lot of proof of funds like where did that come from and how where are your tax returns and if I had a bank account and I just like wired 10 15 000 to it it would lock and my manager would call me and be like yo are insane you're just like randomly putting 50k in the bank and like with no proof no warning. What the hell dude like they're they're like super sketchy. Paraguay is a very very bad bad country to to bank in it's just hellish and usually they have a I do everything on a on a crypto app and I just like swipe my card and there's a crypto app so like the only three things that I can pay with crypto apps here is my lights, my electric bill, my water bill and my medical insurance bill, which a friend of mine pays me and I pay him. So that's it. But. There are a lot of people here that like crypto. There are some crypto meetups, but it's hard to interact. And. There is a new crypto legislation here. After Paraguay got [unclear] was like three days later they issued something to the effect of if you handle over five thousand dollars in crypto per year you have to report to the government blah blah blah blah and. Everyone was correctly concerned of. I mean Paraguay is not the hugest thing in like information security and etc the odds of that leaking and me getting kidnapped they're relevant I don't want that so some people left because of that and we developed a solution where. You can legally have your crypto in a company that is not fiscally resident in Paraguay because. You can you only have to report if it's your person or your company it that is fiscally held in Paraguay so we started to open a lot of companies to people in other countries where they can, crypto-friendly countries, where they can incorporate and have their crypto legally there and that the company has an exchange account and everything. And then they spend it here. So it doesn't legally qualify something that you have to report. So it's kind of annoying. But I mean, once you have that set up, it's easy.¶

Timothy Allen: And is it still the big news at the moment? Is it still the biggest news story happening right now?¶

Raphaël Lima: Oh, by far, yes. Yeah, by far, yes. You have a lot of many like side stories because you're probably going to be Ueno files like you had the panama files you're gonna have to Ueno files like when everyone like opens that up and sees well who was partners who had money what who made the decision because everyone's livid so that's going to be investigated at some level I'm not saying that everyone's gonna get investigated but many people will so that we're gonna have the files of that there will be the Peña trial because he's in jail, but. There is still like, they have to try him and convict him. There will be the trial probably of the former central bank president, which that's the thing I'm saying. Like, I mean, it's sad that this happened, but the fact that we're talking about the legal and criminal trial of the president, of the former president of the central bank, like when would I use that phrase in Europe when when would I use that phrase in the us like. I mean it's shit that we're here but it's also kind of cool you know so you're gonna have those legal proceedings the most interesting most content generating curiosity generating storyline now is that when they raided Santiago Peña's mansion they found like a bunker like a secret like door behind like a stone there's like some Israeli vaults in there that they can't open and they're like what is there. I mean surely it's empty by now.¶

Timothy Allen: I just watched a video of that on Twitter like solid stone bunker isn't it like how are we going to get into it are you going to call it the Israeli company I have them open can we dig it out.¶

Raphaël Lima: So that's like oh I want to know now it's surely it's an empty room but like there was something there they probably moved it already but and they're like they're like people betting on what's going to be like. They were like oh so maybe it's a vault maybe like it's a winery maybe it's like a sex dungeon people are betting on the wildest things but yeah. There are like bajillion storylines on top of that and it's the story in the country. We're going to have fun with that for weeks on end.¶

Timothy Allen: What's the local sentiment, though, about the general idea that this was a massive collapse of the bank and this is symbolic of a wider problem in banking at the moment, which, you know, if you're evolving the circles that I revolve in, the talk of financial collapse is, I mean, it's always been a pretty hot topic, but it's very much more a hot topic now, especially with the advent of some pretty amazing LLMs, which know how to penetrate banks better than anyone used to be able to. So has that narrative made its way into Paraguay, or is this just a kind of something that people don't really necessarily think about?¶

Raphaël Lima: Well, to be perfectly fair, over the last weeks, I've been working 12 to 14 hours a day on our company because Brazil reelected a socialist president. We had thousands upon thousands of clients. So I haven't been on the streets talking to everyone. I'm following the situation, of course, but I wasn't in the protests and talking to the average Paraguayan on the street. So I might be off a little bit. But what I have talked with a lot of people, considerably a lot of people, is that they're annoyed that it happened. But they're like, oh, yeah, oh, yeah, the president was corrupt. Wow, what a twist of event. Yeah, but now he's in jail, so we're all happy. And I was like, well, what do you think of the new guy? I hope he does everything right. And he's scared shitless of everyone because it's like, we need to not screw up. So he's like, he's very quite clearly scared for his life and he should be. There is some political chariots going on. Think of like when recently in the UK, Keir Starmer went out and the Birmingham guy came in. And then you have to switch everyone, switch the offices. Yeah, there are still socialists, but you have that going on. So the factions are kind of at each other. So that's going on. But the average party everyone's like, oh, okay. We always thought that when it was kind of, hmm. So yeah, it was. We're happy he's in jail. They're still pissed because that happened. They're still pissed because the social security money and a lot of state money will be lost. So, which eventually is on the taxpayer. But they I want to say placated but placated is too is too good they they are less inclined to setting things on fire due to solutions moving on they're like okay so if solutions keep moving on that way stuff will be like politicians will not be set on fire so they're like okay if you want to call that placated, I think that would be too much of a stretch. But they're really proud that they as the people, because they don't see that as like, oh, so the politicians did the right thing and they stood up. Their understanding is we scared them into doing that. And that's good. They still fear us. That's good. Let's keep it that way. And it's interesting to see the narrative back in Brazil, I don't know the other countries, but back in Brazil, the left wing is like, oh, so you see the right wing country failed and they're now bankrupt and eating trash off the streets. And the right wing is replying by, no, first that's Cuba. And secondly, they jailed the president and the bankers and they're investigating stuff. So, and meanwhile, in Brazil, where they had also a banking scandal this week, the discussion is releasing the banker that did this candle so it's like the right wing is like that it's very bad that this happened but. I mean you did behave like we would expect Japan to do or something like that.¶

Timothy Allen: That's the bit I don't get is what it must be cultural it must be a cultural thing in Paraguay Because it's so common for people who commit financial fraud and to get away with it, right? To literally get away with it. As you've just alluded to in Brazil, they say, is it called? So it's a cultural thing in Panama, in Paraguay, is it?¶

Raphaël Lima: They're very culturally proud of themselves. They're very much fighting people. Like you you're not going to you're not going to bully your Paraguayan around and I see that in politics I see that in business I see that. I mean they're not rough they're very sweet people they're very welcoming they're very cordial they're very welcoming they're very they really want you to feel at home and included and etc but do not try to push them around you will fail and I see that even in chess like I play chess competitively and I play two tournaments here in Brazil when you get a position where it's like bro like if we played this position a hundred times he would lose 98 times out of our hundred resign and the other guys just he resigns and sometimes you get like very boring positions where it's almost surely a draw and really I had to draw this and do something else. Probably once they will not quit. It's like, I'm losing. Yeah, come at me. Come get me. They will not resign. And they will fight it out. It's amazing. And if you see the... I wanted to do the statistics on it. Their tournaments have very low draw rate. Someone's going to lose. They're not going to be like, no. Play. And. I think that's just a cultural reflex but everything is like that they're very proud people what you saw in the World Cup where. I think that was marked in. I think one of the cultural showdowns of Paraguay it was not Paraguay Germany it was Paraguay Turkey where they got a goal in like six minutes they had just been like crushed by the US everyone was like it was like a funeral in the country it was so sad so they came in against Turkey to get like one goal like six minutes and one of their players gets expelled and they spend like 90 minutes with minus one player getting like blasted and just defending just like they stalled it out defend do something. And i was watching in a bar with a whole bunch of Paraguayans I'm Brazilian I know what it's like to love soccer soccer I know what it's like. I saw brazil getting its fifth championship. They were happier when they beat Germany like the way that the team stood it out against Turkey. And then came up against Germany and we're like we're gonna beat you dudes. And then beat them like that's that's the paraguayan spirit that was not just an off game like you saw how they are and when they saw all of this they're like all right all right now now we're gonna let's talk you know and I was that was a very proud moment. I think in their history.¶

Timothy Allen: On the subject of the wider potential of financial collapse, has this affected your viewpoint on that at all? And what is that viewpoint?¶

Raphaël Lima: No. And also coming back to something you asked that I completely forgot. It was educational for them. They learned a lot about banking this week. Oh, so that can happen. Because the last bank bankruptcy here was like 25 years ago, something like that. So this generation had not experienced it. And they learned about that a lot. A lot of people got educated into that the bad way, but there's only two ways of learning, repetition or pain. So yeah, a lot of people learned. A lot of people got interested in crypto too. They were like, oh, now I get it. So the money is mine, not the bank. Oh, like if you sell crypto here, like if you're a crypto advocate in Paraguay, you're having a field day. Because it's just like, oh, it's money that is yours, not some friend of some politician. So you're probably going to have a field day for months on end right now. And personally for me, I mean, I think I've been one of those people who thinks, there's a financial collapse. When you start getting into libertarians and Austrian school and this sort of thing, you kind of turn into that quite quickly. And then you realise we're a lot more resilient than that. And countries and governments are very much more resilient in how they can kick the can down the road than you think. And Japan has been proving that since the 80s, pretty much. You can kick a can pretty far. Eventually, that's going to be a problem. Yeah, is it going to be a problem tomorrow? I mean, it's going to be a problem sometime. But I don't think that's likely tomorrow or something. Of course you should be educated into that You should understand what going on You should at least even if you don own crypto you should understand it It's kind of, I do an analogy with preppers. Like, you don't have to be a prepper. But if you know nothing about, like, how to stand up for yourself, that could be a problem. I mean, you could just, like, learn a little bit, you know. Have some education. But I don't coming back to it. I think that when that happens and that's going to be at some point there will be a reckoning we're not going to have QE infinity at some point shit's going to hit the fan but. I think that what this event taught us is that in the end it's going to be are the people going to accept this or not and this is something I'm sorry to cut you off but this is something that I have been talking far more with my public in Brazil after the elections in Brazil where the socialists got re-elected, and I've been saying that to libertarians in general. It's not the politicians. It's not like, oh, the politicians in Europe, here in the Union, or the globalists. It's the people. The politicians, they didn't just drop out of, I would say drop out of the sky, but it's actually, they didn't emerge out of the pits of hell. That didn't happen. That tends to happen very strongly because the average Joe in the streets either thinks that's good or he tolerates that or he's submissive and just allows it because he's unaware. And that's how you get this far in the situation where you get the debt and the deficit in the US, or you get the crazy situation with migration, legal problems in Texas, and that in Europe, and the left-wing wave that was in Latin America that is now clean, except for Brazil. That's how you get those situations. Politicians don't conjure things up in their evil dens. I mean, they sometimes do, but they need the public to be there, or they need the public supporting it, or they need everyone to be calmly in their houses. If everyone just, which is what happened in Paraguay, if everyone calmly and in a very civilized manner flips the fuck out and instructs politicians on the fact that. There is a line and you have crossed it, move backwards, or we will make you so, things tend to find solutions quite quickly. So I think that's the lesson that we should get from this one.¶

Timothy Allen: With regards to the socialist wave that we're now apparently seeing in the West, first of all, do you think that's real? I mean, we're certainly going a little bit left and secondly does it happen that quickly would it would it happen that quickly in back in Latin America we've had it we've seen it we've seen a swing away from from that kind of politics you could argue that in the states all it took was Trump to be in in in for a couple of terms for everyone then to go oh my god this is ridiculous let's go back the other way so you know. So I don't know, you might not think that's what's happening, but how would it work in Latin America? Could it swing back to its former situation quite rapidly, do you think?¶

Raphaël Lima: It absolutely could. There is a very cultural difference between Latin Americans and Europeans in that we're very emotional and we're hot-tempered. I think the Spaniards and the Italians can get that a little bit better, which is where we got it from, of course. I mean, it didn't come out of nowhere. But the Germans, the Dutch, they're more objective about it, so they don't really quite understand that. So it could happen in the sense that Latin America is very emotional. So if there's a trauma or if. You can really appeal to people's anger or their hearts, you can get a lot of political results. And, of course, the basic reply to that is, well, that happens everywhere. Yes, that happens everywhere. But in Latin America, that's a plus. There is an extra effect into that. But the right-wing wave that is happening right now in Latin America has to do with the fact that the left has not delivered. The left got a lot of governments, and what they delivered was no economic growth. They did not deliver safety, much to the contrary. Usually crime goes up quite significantly. There are exceptions to Argentina and Uruguay, but in pretty much every other country in Latin America, crime went up very strongly during this left-wing wave, and they're very corrupt. So then people come back and vote to the right-wing, partly because also Latin America is very Christian, which does help. Of course, Christianity, especially Catholics, are infiltrated by the left wing globally, but especially in Latin America. But in general, Christianity helps as a protection. But also they go to the right wing because some that won't fail, let's go to this one. At least they're fighting crime. Like, so Bukele was a huge influence in creating the meme of. You can just do things. You could just jail the criminals, which he's now replicating in Haiti. So he's like widely loved in Haiti. Right. So. There is that. But then what happens is that usually what happens, and I'm sorry, but this is the truth. Usually the right wing comes in and fails to deliver and people swing back, which is what happened with Trump. There used to be a common sense point in the right wing in the 70s and 80s, which was best explained and prophesied or organized. I'm going to say organized because he himself said that he wasn't creating anything. He was just making explicit, which was Meyer's theory of fusionism, which was the idea in the 80s held by Ronald Reagan, which was a Meyer fan. He talked about him too much, a lot. Margaret Thatcher, she actually read Hayek. She didn't just pose with the books. Actually studied him, and Pope John Paul II, which was the triumvirate against the Soviet Union. It was the fusionist idea of conservative Christian morals and free market economics. And that was the consensus-based position of the right wing in the 80s and 70s, but especially in the 80s, Reagan, Thatcher. It wasn't even like a theory. It was just, duh. It's what we are. And I think that maybe because the Soviet Union fell and the right was like, oh, so from the enemy it's done. So now we can infight. And then just started fighting each other. Maybe it was that. Maybe I don't know exactly. But the right wing started to drift away from free market economics and thinking maybe I can make state work and you had guys. I think Bush was a part of that. I think other governments were a part of that Trump is the worst manifestation of that in that he very clearly thinks that the problem of government is not that government doesn't work, it's that it's not his. Because if he was the CEO of America, he could just fire people, he would fix it and make government work. He really thinks that, which is wrong. But that started to become a mainstream idea on the right. Like I was saying before, it's not the politicians do that. Voters, the public Thinkers do that. And then politics just follows it It downstream right So in I don know what happened There was the libertarian wave with Ron Paul And sadly it seems that it lost because the statist wave was stronger. And so what happened was that throughout the world, you have right wings whose position is, we hate the left and we hate crime. And then they get in and it's like, oh, right. So now improve the economy, cut spending, privatize, deregulate. And they're like, no, no, no, no, hold on, hold on, hold on. It's us now. And we can totally make this work. So we don't need to do that anymore. And it fails to deliver results, obviously, is what Trump did with the tariffs and everything and running deficits and basically not listening to Thomas Massie. And well, now you had the resolve, right? And I think that's the tendency of what happened. I think that's why the left wing is coming back. And if you look at the right wing in Europe, it's pretty much like, the way I describe Le Pen is that she's a right-wing socialist. I mean, she has very many right-wing positions, but then you look at her economics and it's like, what? What? You know, You see the right wing in Europe, they're very concerned about migration, which they should. But, I mean, look at Britain. What did the right wing do during their whole reign to rein in government and make business easier? They did nothing. They had the perfect opportunity with Brexit to reform everything. And then they intentionally botched it so that Brexit would come out poorly and they could come back and say, oh, see, that's why we should have been in the European Union the whole time because they didn't want to do it, right? So I think that if that continues and probably that's going to happen, yes, there will be a swing back from the left. And to summarise, the right wing needs to come back to read the Mises and Ron Paul and we need a Ron Paul back. To summarise listen to Thomas Massie like how hard is it.¶

Timothy Allen: I think the problem the problem with the right wing and the left wing currently is that there's no incentive to solve the problem of big government and the deficit that we see in all countries. I mean the crippling thing that's happening in my country which seems to be quite common is the fact that the government is a bankrupt and the only way it can get more money is to either take it from citizens in tax or to borrow it from various sources. And both of those are detrimental to the life of a citizen basically so. So and the incentive to sort of fix that doesn't really exist in a democratic system because the way to fix it is to is to basically piss a lot of people off it's just to say well unless you're making the government smaller, of course, in which case I'm not necessarily pissed off. But really, you need to stop spending so much money. You certainly need to stop giving away money to people to sort of do nothing. And those don't garner good results in the polls, as far as I know. So I don't know. I don't think anyone's going to fix it. I think whoever, certainly in my country, when I look at who the people that are vying for power, even the ones that I think, oh, maybe this guy is, he's saying all the right things. Almost certainly when he gets into power, there's not a lot he can do because the incentive model then will restrict him. Plus, you know, and this isn't talked about a huge amount in political spheres, but when the government changes in the UK, I think it's only a couple of hundred people that actually change. There's thousands of people in the civil service who stay exactly the same. Their politics, whatever they are, stay exactly the same. And I think there's a stat, which is quite funny, but it's true, that you're more likely to die in a position than you are to lose your job in the civil service in the UK. So you've got all these career people whose job is to basically spend your money and if they start spending less of it it's bad for them because they basically got to justify spending money so the whole system is just terrible ain't gonna fix itself I'm almost of the thought process now that really you know I'm a bit of a I'm a bit of a sort of financial doomer now. I think in in the end and I agree the can can be kicked well the can's been being kicked for a long time and I'm pretty sure since I was a kid people have said they're kicking the can you know and they're still kicking it so I don't I don't I'm not sure that how much longer we've got of that but it could be a hundred years more of kicking the can I've got no idea you know but. But. I think the only way this resolves itself is through a very serious collapse. But then again, look, this has just happened in Paraguay. And what do they do? I mean, I presume, where did they get the money from to give people back their funds? Did the central bank just conjure up a bunch of money?¶

Raphaël Lima: No, no, it was the deposit insurance, which is all banks are required. And that's a private fund, by the way. All banks are required to deposit a certain amount to create a fund to ensure all deposits. If a bank goes like that, that fund replaces people. So even if Ueno only had roughly 30% of their money, that's not the only money to pay back those people. You still have that fund, which is huge, and is paying back everyone successfully. And so you have an extra caution on that. So that's what that was what was paying right now. So it's not a government money, but it's just the insurance money on the deposits. But coming back to something you were saying, I think that there needs to be pain because something that I said before in the podcast, there are only two ways really that. You can learn something, repetition and pain. There is no other way. Right and. There is something that I got from Lew Rockwell and because Lew Rockwell if I'm not mistaken if I am do please correct me but he turned libertarian because his law he lost his brother in the korean war to friendly fire and he talks about that I think it was that like maybe there's something deal but but his point was that it was at that moment that he thought. But why was my brother duking it out with some Soviet in Korea and got shot by us? And that was what made him think about war and anti-war. And he was first anti-war. And then libertarian. You're not going to be in your pool on a Wednesday evening, drinking a beer. With your house paid off like two Porsches in your garage thinking you know what you know what. I think anthony. I think there's something really wrong with the world right now no you're not you're not gonna do that like something needs to happen to you for you that really like review your morals right and. I think that's the story of Javier Milei in Argentina because he what he did was was that he educated people. The state is going to continue huge. Europe is going to continue on this stupid path as long as people live under the illusion that this is working. And what Milei did was that he was able to educate part of the Argentinian electorate, not everyone, but enough to win, that politicians don't produce, that they take, that taxation is bad, that government needs to be shrunk, that the entrepreneur is the hero and the politician is the problem. He was able to get that in. But he was able to get that in, first of all, because he's a through and through libertarian like no bullshit about it he's not like like full on. Second of all he's a very good communicator. You might not like his style but it works you know. And he was in the situation of a crisis in Argentina because you could not be in Argentina with inflation over 200 per year with the economy stagnated like unemployment everywhere and people knew people in their family and their friends that were defrauding the government or being a parasite somehow. You could not be in that situation and fool yourself into thinking that everything's fine. So you had that alignment of things and he was able to get the win. Now, if he's going to be able to now do the reforms and get the win again, now that's a question, right? But, I mean, just do bear in mind that none of us thought that that was going to happen in the first place. So, I mean, we can be hopeful, right? But that being said, I think that one of the things that differentiated Paraguay here is that Paraguay still has its problems. I mean, it's a good country. I love it. I love the people. I love the culture. But they still have a lot of problems. Like, they have problems with sanitation. They have problems with the streets. They have problems with corruption. You cannot fool yourself into thinking that, oh, everything's fine. It's like, no, things are improving. But you're not in heaven. Whereas if you're in Europe, you can say, oh, all right, we're having this and that problem. But I mean, it's still London. I mean, it used to be better, et cetera, et cetera. But you're not going to have a gander in Manchester and think, you know, I just think that society is coming down. And this has clearly failed in every single way possible. I mean, it has problems, but people would still live... If you gave the option to everyone on planet Earth of where they could live in, many of them would pick Great Britain today. He would criticize that choice, but if he lives in like fucking Uganda, he would choose it. And the whole of Europe is that way still, because even though they have their problems, stagnation, crime, immigration, everyone has those problems. Belgium is still Belgium. The Netherlands, they're still fine. You still have one of the most successful societies in the history of mankind, even though they're fucking it up quite strongly right now. So. You can operate, you can still operate under the delusion that actually everything is quite fine because to understand it, you need to go into theory and all the numbers and everything and most people don't have the time for that. They're not, like they don't have, they're not like that. Like human beings are not like that. You are like that with very few things because. You can think, oh, those ignorant people. They don't understand economics and budget and everything and how central banking and a fractional reserve. What do you understand about notebooks, laptops, technology, the internet and cell phones and television? And there's nothing in that. Absolutely nothing. If 500 people on Earth died, we as a species would not understand how to do that again. We would have to do that everything from scratch. If the right airplane falls, we don't know cell phones anymore. We just trust that. We're just like, oh, seems to be working fine. I'm just going to use it, right? And that's how people are with politics and economics. 95% of people are like, dude, I got my children, I got my problems, I got my bills to pay, I got stuff to do, I got beers to drink. I don't have time to learn about this big-ass book about central banking for some reason, because some nerd in the internet is screaming about Bitcoin, I don't know. Unless they have something personally impacting their lives, they're just going to go on under things thinking that maybe this guy's going to fix it. Maybe not, but what am I going to do? Whereas the Europeans, they tend to be very much more passive. They tend to see a protest, except the French. They tend to see a protest and be like, oh, that's such fun. Why didn't they write a very strongly worded letter to their prime minister? What is the necessity of such ruckus? But we Latin Americans, we do that more strongly. And I think that's one of the reasons we get a right-wing wave here in Latin America, which is drawing a lot of conservative and libertarian Europeans to move here. Whereas Europe's probably not going to do that. They're just going to keep on writing strongly worded letters to their representatives and thinking that's probably going to do something.¶

Timothy Allen: Talking of strongly worded letters what's what's your view like your macro view on Bukele because he seems too good to be true almost like you you you mentioned a little while ago that he's he's been in Haiti recently and as far as I understood it correct me if I'm wrong but some Salvadorians were in Haiti and got abducted so he just said right we're gonna come and get you guys you know he's like he's like the dream leader he really does seem to care for people right but. But also I that that also makes me deeply uncomfortable because no politicians are that good are that honest are that genuine are that you know like maybe they are maybe maybe maybe I getting that wrong what do you think about Bukele.¶

Raphaël Lima: I got something this is copped up from [unclear] from Argentina I'm hoping I didn't just butcher his name from [unclear] he says well all politicians are kind of wrong in the head because you have to be in order to put your entire life and name and reputation at stake to convince the average voter who's a mental retard and to crave and enjoy people clapping at you. There is something screwy. You have to be that. So they're not normal. And as I have run for office, gladly I lost, I didn't want to win, but I've worked with politicians for like 10 years at this point in all levels. Yeah, that's correct. Like most people who are in politics, they do have very much fun at it. And I was in it, like person, I've been in the backstage for most of the time. I was in the front stage for like a few months and I just hated everything about it. Like every single thing about it. But so you have to be kind of wonked in the head And still, if you're a politician in Latin America, I mean, you're probably not squeaky clean. So we're not going into that. That being said, he has basically refuted most academics of liberal democracy in saying that we need to do these things this perfect way. And he's basically saying, well, I mean, if Darth Vader was a Jedi and, you know, he could have fixed it. You know, if the Jedi Council didn't bitch too much about Anakin and just let him do his stuff, you know, a lot of things could have been avoided if we just, you know, like, softened the rules on him a little bit and just let him go mayhem on things. Maybe that was an idea. Maybe we should have listened to a few guys and not just had that many meetings. But Bukele, he's the meme of. You can just do stuff. And he is. And it's effective because he's providing what civilization needs, which is security, economic prosperity, and the idea of predictability at some level, which is very much the Hans-Hermann Hoppe criticism of a monarchy would suck less than democracy because. You can have someone that is prepared. And if he's good, he just stays. You don't have to rotate in and put some retard in the middle of it. And if he sucks then someone just like coos him out like something happens so he and he does make the argument the fringe argument he's like kind of there for what would be a private society because in sort of a way it's what's happening it's what is happening like you have a small enough country where your government can be because if you have a huge country like fucking India The whole bureaucracy of that country is the population of a country. But the government structure of El Salvador can be like 200 dudes. You don't have a necessity of more than that. You can have everyone in a WhatsApp group. What he's doing is what a private city would do in saying, oh, so. There are people doing crime. Oh, we could just lock them up. Oh, but they're not going to just accept it. Oh, okay, we could just shoot them. You know, they seem to have a lot of guns illegally. I mean, I'm just saying, you know, we could just deport them or something, which is what a private society would do. They wouldn't have like a meeting about this. And so he's getting results into that. And a lot of people, when a lot of people went into that, a lot of people embarked into that because you realise this works. People tend to gravitate to results, which is what I was saying about like technology. Like we don't care how this works. Like some of some nerds here out care, like we care like marginally, but we're not going to get into like, you're not going to study the engineering of your house. You just like vaguely know it works and you pay a million pounds into it. And you're not going to wonder like, was that column like properly done? It seems it is. I mean, the roof not being the floor does seem to be good evidence of it. I'm not going to question that any further, right? So, but let's see the results. I mean, this is still young in terms of political history. It can seem that it has gone for a few years, and it does. But when you judge political events, you tend to glaze over a few decades. I mean, When I was talking a while ago about Meyer and the consensus of the 80s and 70s, I just glazed over 20 years. So even though these events are like, there have been a few years, I mean in 20 30 years people are just going to glaze over that and be like oh he did this this and that. And then this. Right So let see like the final chapters He still young. There is still a lot of stuff to happen. But he's very much demonstrating the idea that. You can have a guy that just has a lot of power, which breaks some senses. The classical idea of liberal democracy and just goes, but I'm just going to do the right things. I'm not going to be like a dictator. And actually do stuff, and people tend to prefer that.¶

Timothy Allen: Is there any truth in the idea that often in Latin America, leaders that have turned out to be quite despotic were very well liked in the beginning? Is there truth in that, and could that be the case with Bukele?¶

Raphaël Lima: Well, I think that's the history of mankind. Genghis Khan was very much loved. I can't talk about a few guys in the turn of the 20s, 30s and 40s that were very much liked in Europe at first. That's a very human thing. I don't think that's a Latin American thing. I think that in Europe that has gone away, whereas in America, in Africa, that's still the case in many places in South Asia, that's still very much the case. I can point to a few countries in Africa where this is the case. So I think that this is just the conundrum probably between, I really like this guy versus should he have power or not, and the issues with that. And I think that is working out with Bukele precisely because it's a very small and homogenous country. Because if you think about the examples, there's also a very important thing about Paraguay that we didn't talk about, which is it's an ethno state. It is. It is a state of mostly one idea, one religion, and one people. And I'm not saying that all countries should be like that or all societies should be like that. I'm just saying that it is. And it does make it a lot easier for you to have a government because. There is much less, there are very, very few things that you would disagree on. If you see elections here in Paraguay, it's candidates agreeing on everything. The municipal dispute here, the municipal elections, candidates agreed on literally everything except what to do with the traffic police. And one guy was reformed, the other guy was trying to weed out. And the woman, the girl that won, her idea was, I'm just going to fire everyone. That was the disagreement. That was the entire disagreement. So when you have an ethno state like that, which is El Salvador, and. There is no left wing, there is just one idea. You can get one guy, he does that direction, And 93% of the people are going to be like, yeah, I'm cool with that. Whereas if you have, like, think of, like, the United States. You have, and it's not like these people. Like, even, like, forget all that. Like, a third of the population is left-wing, a third of the population is right-wing, and a third of the population hates both. So there's no way, like, it's mathematically impossible for you to have a government that works. Like, two-thirds of the population will hate whatever happens. Why do we look at that and think, you know what, if we just have another election, if we just like primary better, like think the UK, like forget migration and religions, everything. Forget that. You have a country where a quarter of the population wants to deport everyone. A quarter of the population is a [unclear]. A quarter of the population is just, could we just calm down? Could we just calm down? And another quarter of the population is whatever the hell, I don't know. You're not going to get them to work. Whereas if you look at the countries today where you think, you know, that society is doing, they're doing pretty swish, actually. That's kind of working out. You're mostly going to find small countries, small populations, one ethnicity or one major one, one religion. So you're going to get Hungary, Czech Republic, Poland, South Korea, Japan, which is not a small population, but I mean, it's the people, the culture with the most internal preference of all cultures, right? So you're going to get those, Paraguay, El Salvador, Panama, maybe, you're going to get those ones where it's like, yeah, people tend to agree with that. So are you going to like countries where we kind of disagree with them politically, like Denmark. We disagree, Norway. We can disagree, they're social democrats, etc. But they're not a society at strife They agreeing that we should go over there. I think that shows that it beautiful to have different people and different ideas and everything. But when one gets the power to vote in the other it not going to work. It's not going to be... You could just do your thing over there. Because. You can like or. You can dislike Bukele. But the fact is that the majority of population are happy with that. And that's okay and if we had a situation in any country let's say like kind of like Alberta tried to do in Canada where it's like oh you're this and you're really not like that just go your own way you just do your thing you could do that oh California wants to be erasing socialists all right so become your own country do your stuff like try to stop parasiting everyone. And then we're gonna figure out quite quickly what happens when you do that which is what happened to Cuba, basically, or Venezuela. It's going to be quite quickly. And then people can choose the results. Why don't we just do that? And I think that's one of the reasons why Paraguay works. It's because the majority of the population is very right-wing. They consider being socialist, being a left-wing, some sort of a mental illness, which they're correct. They're very much Christian. They're mostly Catholic. But if you're a Protestant like me, they're like, oh, Jesus. Yeah, OK, right. There is no strife right there. So that works. And like, if you don't like that, don't come in. And if you like that, then come in. And then everyone starts themselves out. And that's the idea of Free Private Cities. Like just have your own thing and go to your own thing. And we can just be at peace and not have to convince someone that absolutely hates you to let you do your stuff.¶

Timothy Allen: Final question. In light of everything, if a Brazilian is asking you today whether to move to Paraguay are you saying anything different.¶

Raphaël Lima: But if a Brazilian asked to ask if he come to Paraguay if he would should move what would I say to him.¶

Timothy Allen: As in now as in now after the last week of events.¶

Raphaël Lima: It depends on what he does like the answer doesn't change over the last years. It's still the same country, same people, same ideas, same problems, same opportunities. So can you be an entrepreneur for yourself? Can you stand up for yourself? Can you open a business? Are you an on-demand specialised profession? Yeah, totally. Are you willing to endure some hardship to grow over one two maybe three years to kind of like work it out. And then grow and you want to grow and yeah all right do you want more of of a frontier situation where things are not done but you're part of that construction is that something that appeals to you yes but if you're like no no I want a country that is like completely done, everything is fine and nice, and I don't want to have problems, then that's not for you. I just want to have a normal job and just get my normal wage and live a normal, stable life, that's not for you. I want to, I work for the state, no. It's that type of thing. If you're looking to grow and if you're willing to face the hardship that you need to face to grow. And if you're an adaptative, creative, entrepreneurial person, yes. If you just want to be the guy that works his nine to five and chills out on the weekend, yeah, maybe that's not for you.¶

Timothy Allen: And nothing's changed in the last week.¶

Raphaël Lima: Nothing changed. If you would ask me, should I move to the US in the 1910s? That would be my reply. Like what sort of person would do that same question.¶

Timothy Allen: Well anyway thanks for bringing that to us and any where where do we direct people to these days for your channels just last time I spoke last time I spoke to you you were you were saying that you're you're English English you're trying to sort of ramp up the English speaking part.¶

Raphaël Lima: Yeah I still haven't done that that was supposed to be my November in December. And then Brazil re-elected a socialist president and now that's pushed back like a few months because we're having like insane demand right now it's it's like I have no time for my current social media like that so yeah but you could you could just look for Settee in any social media S-E-T-T-E-E the name of the sail and if you're if you're Portuguese speaking it's Ideias Radicais.¶

Timothy Allen: Is that how you say.¶

Raphaël Lima: Yeah radical which is by the way a quote by Hans-Hermann Hoppe that we need the radical ideas to change.¶

Timothy Allen: Yes well cool thanks thanks mate nice to speak to you again and thanks for the update and look forward to another one. Hopefully not about a banking collapse in Paraguay, but some more positive news, hopefully.¶

Raphaël Lima: I'll see you in Paraguay when you come down here.¶

Explore more conversations about how places govern themselves on the Free Cities Podcast with Timothy Allen at freecities.fm.¶

Watch more conversations on Timothy Allen’s YouTube channel.¶