Tuesday, September 29, 2009

Portable Gas Generators and Retirement Funds


Just finished your book. Very informative.

Question. At the end of the book your wife wrote about wanting a generator if she had to do over.

Since there are many types of generators what specifically would you use the generator for.

What size? How quiet, or is quiet important.

Question. I have very little money left in banks except for retirement accounts (I have money and silver at home in a safe). Were these type of accounts frozen also? Were they devalued even if the investments were not in the Argentine peso?

Thanks for your time,

Gerry K.

Hi Gerry, sorry for the delay in replying.
What I’d get is a small generator 1500-2000 W, mostly to keep the refrigerator going.
Over here we have Gamma, but the Honda are no doubt among the best.
Still, having several bottles of frozen water in the fridge allows you to keep going a couple more days easily without power if you’re careful.
Other than for keeping the fridge going, there really isn’t a true necessity for it. People get by without electric power every day, some just a few blocks away from where I live in those shacks and shanty towns.
I believe firmly in keeping things as simple as possible, and you can store food that doesn’t require a refrigerator. The more simple you keep things, the less likely they are to brake and you save money.
Quiet is more a matter of comfort: I firmly disagree with people that believe you have to pretend there’s no one in the house during a blackout. Empty houses get broken into! Better to keep doors locked, make it clear that there’s people and if someone tries to brake in with you inside… well.
All bank accounts were frozen, and for a while banks stayed closed and ATMs run dry so unless you had a fat pile of paper money or some precious metal at hand, you didn’t have access to anything.
What we call here “jubilaciones”, which are retirement contributions, those weren’t frozen and they kept paying people their retirement. Did little good because as hiperinflation skyrocketed, pensions stayed the same even when the contributions during 30 years had been mostly done in a 1 peso = 1 US dollar ratio. Yes, not much of a deal.
Of course this works in a different manner than in USA. But if it is in a bank, then expect to have the same problems applying: The banking system fails, some sort of emergency is declared, and you guys have seen it already with the bailout, they just get away with it.

Brick & Mortar or gold.

Real estate that gives you rent, some cash and precious metals at hand. Those you can trust on.
My grandparents, they all agreed that real estate was the only form of investment that was never stolen from there, here in Argentina during the various crisis and the 2001 collapse, or during the Spanish civil war and Franco’s dictatorship. That’s a good, hard earned lesson right there.



Kyle said...

Hi FerFAL,

I graduated from college in 1998 and spent a few months in early 1999 backpacking around Europe. There were hoards of young Argentinians doing the same. Since your country is fairly populous, and at the time had a large middle class, I wasn't surprised in the least, but what DID surprise me at the time was the explanation I heard constantly from these folks - "The peso being pegged to the $US has resulted in really high value of the currency, so I traded my money to $US because this won't last." They were aware that bigwigs were discussing decoupling the peso. They knew that the valuation of the currency was artificial.

What I found most interesting was the fact that everybody seemed to be aware of what was coming... not to the degree that it did, but they knew.

pompompom said...

Apart your own home, I wouldn't count too much on real estate for rental. Because the governement will tax whatever is captive and can't be evaded. You can't hide or delocalize a house. So the taxman has full power on you and rental revenues are too easy to tax.

This is an important point: When building your preps, consider how the taxman will introduce himself.