Dice yellow potatoes into bite-size chunks. Add to a colander, rinse and set aside.
Slice bacon into strips and cook in a large dutch oven pot on medium heat. Stir occasionally ensuring not to overcook. Transfer and drain on a paper towel-lined plate. Pour bacon grease into a container.
In the same pot, add butter and minced garlic. Once the butter has melted, stir in flour. Use a whisk to to make a smooth mixture.
Add potatoes and seasonings: chicken bouillon, salt, black pepper and chili powder. Stir well.
Stir in water, milk and heavy cream. Cover and cook on medium heat until the soup has thicken after 15 minutes. Check that the potatoes are cook throughly by piercing with a fork.
Stir in 1/2 of bacon. Reserve the remaining as a topping. Optionally top with chives or parsley.