Monday, September 19, 2016
Hello Ferfal, read your first book. Fantastic! Mucho Gracias. Hope you and family are well and good.
Am reading some stuff by another author, Bonner. He writes, talking about the economic crisis in your country in 2001,
"Argentines found themselves using radically different new forms of money. And the interesting part is that they weren’t rare gems or coins. I'll tell you what their number one currency became, and it wasn't cash.
For example, this one small item you can buy at Walmart, or almost any department store, that during a crisis becomes an incredibly valuable currency for everyday goods. You may even have some in your home already."
What do you think of this? Hype or true? Asking you, what WAS your number 1 and 2 currency right after the big crisis in 2001?
What do you think he's talking about, the small item you can buy at Walmart?
Interesting stuff. He thinks the same Crash is coming to Amerika and you won't be able to get cash from the bank, etc.
I read your blogs all the time now. You can publish this if you like.
Thanks and be well, be safe.
Thanks for your email. I’m glad you enjoyed my book "The Modern Survival Manual: Surviving the Economic Collapse". In it I explain how things went down and what worked (and didn’t) when the economy collapsed in my country.
For those that haven’t read it, and answering your questions:
1)During and after the December 2001 Economic Collapse the currency was and still is the Argentine Peso. The only problem is that it devaluated greatly all of a sudden. Before the collapse, it was artificially pegged to the US dollar at a 1:1 rate. One peso, one dollar. Of course this was impossible to sustain and very hard on the national industry. After the collapse it quickly devaluated, first to 1.4, then 2 and finally 3 pesos for 1 USD in just a matter of days. This means that in a few days the national currency lost 2/3 of its value. Today, the exchange rate is about 1:15. Whats important to understand for the average Joe, is that during those first few days suffering a devaluation of nearly 70% it means that everything becomes 70% more expensive. Keep in mind that the national industry had been all but destroyed and replaced with imports, imports that had to be paid in USD… Try closing your eyes for a second and imagine what life would be like if everything was 3x more expensive, if you had to live with 1/3 of your current wage. How would you cope? Just imagining it for a few minutes will give you a headache. Actually going through it is a living nightmare.
2)In spite of the devaluation de Argentine Peso remained the official currency and by all means the one used the most. I’m not familiar with the author you mention but I just have to disagree with this part “Argentines found themselves using radically different new forms of money.” As I said, the Argentine Peso remained the official and most used currency. The only other currency used pretty often was the USD, which was of course highly regarded because it kept its value as the Peso lost it. If you had stashed say 10.000 USD before the devaluation, you still had 10.000 USD, which was now worth 30.000 Argentine Pesos, but if you had those same 10K in pesos you just lost a lot of money. As devaluation went on day after day, the USD became of course more highly regarded and sought after.
3)The only other form of “money” I can think of was the coupons used in barter clubs which I describe in my book. These were nothing more than cheaply printed notes to be used in the different barter clubs. They never came close to replacing the Peso as currency and were always only good within its own barter club, therefore of limited acceptance. You have to understand that unemployment was spiralling out of control. People had nothing, not even devaluated pesos. For someone that had nothing and was looking to trade a skill, service or good, the barter coupon offers some degree of hope, a way of procuring other needed goods or services. In spite of this, the peso was much preferred over coupons.
4) The Argentine Peso, the USD as a safe haven and as a last resort for unemployed, desperate people, coupons used in barter clubs. These where the only currencies used. Gold and silver did keep their value of course, but it was never used as an alternative currency even if having you savings out of the bank in precious metals would have been a life saver at the time. In all honesty having it in USD cash would have been the best choice, given that when selling PM you usually lose much more money given premiums, etc.
But let me makes this absolutely clear: There was no object, nothing you can buy in any Walmart that was ever used in Argentina as “currency” during that time. Not matches, lighters, canned food, none of the common barter fantasy stuff. If you had the crystal ball or the time machine what you did was go back in time, get your money out of the bank in USD cash. That was the ideal thing to do. If USA ever finds itself in such a situation, then naturally the USD would NOT be a safe haven therefore in that case you would travel in your time machine, get all your money out of the bank and buy precious metals before the USD collapses.
5) “What do you think he's talking about, the small item you can buy at Walmart?” I honestly don’t know. All I know is that no small item was used in place of the Peso or USD. Those two where the only forms of currency widely accepted, with the USD being the most prized one given the constant devaluation of the peso. No small item sold in Walmart was ever used as currency and most definitely not “incredibly valuable currency for everyday goods”. It does sound like one of those marketing gimmicks where you are given some cool guy tip that blows your mind if you buy whatever product is being sold or if you sign up for something, sometimes just to get your email. Again, no common use product was even close to being an alternative currency in any way in Argentina during that time and years after that.
My only advice in this regard is that if you want to prepare for an Argentine-like event in USA is to first have at least a months worth of expenses in cash, USD, and then have whatever you want to protect from devaluation in precious metals which simply wont be touched by the devaluation of the Federal Reserve notes.
Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.