Saturday, September 19, 2009

Argentina: Surviving without money

Hi guys, watching this right now. I'll comment on it latter.
Edited to add: The video is of 2001, pre December 2001 crisis.
To all the barter theorists, note the need for some form of currency. Most of those places no longer exist as true barter clubs, most simply started adopting the local currency (even dollars and euros) thus transforming into fairs and open markets.



Norcal said...

Wow, is this our future? in the USA?

I have something to add on the door issue. In San Francisco, many people have a "cage" around their front door. You have to be admitted into the "cage" made out of ornamental iron, before you can get near the door.

I do not know the name of these cages.

Also, a bank employee from India told me people live in reinforced "castle" type homes that are nearly impenetrable. They store their vast stores of gold in their homes. They also the right to have guns and us the, if necessary, he said to protect their gold.

he said you could not drive a truck through the homes in India (upper and upper middle class) He said that middle class store their valuables if any in the bank as they do not have as secure a home.

Norcal said...

Here is a website with pictures of what I've seen in San Francisco. These iron doors are found in almost every neighborhood.

Anonymous said...

Norcal, the apartment building I lived in had a solid steel entry door at street level with an expensive lock, and you had to get through that and THEN each apartment had a solid steel door. The building is at 1156 Sutter.

Then I moved to 513 Bush, which had ornamental iron on the entryway, and that led to an old mechanical elevator that didn't work half the time. There was a "hidden" door next to the businesses on the ground floor that led to a stairway inside, which is what most people used.

Most houses in San Francisco have their entry doors in an alcove type area which enables the placement of an iron grate on the entryway giving some space between the outside and the door.

As for the video, Ferfal said on Minion Report that this was a last ditch desperation measure, and that it ultimately failed. Most of those barter clubs have been replaced by simple markets. My guess is that most of the healthy looking unemployed in that video now live in shantytowns.

Buy Low, Sell High said...

Bartering can work well enough, especially when organized like that, for most basic items & labor services.

A friend here in the US is a salesman who joined a barter network of businesses that would pay him not in cash but in the discounted retail value of their products. If his ad's cost, say, $100, then he might receive perhaps $90 in credits. The credits were tracked on an electronic debit card and good at any of the barter network member locations. Tax free, I think.

This works well enough & members can save hard currency for required imports like fuel, vehicles/parts & electronics, etc.

Patrick said...

FerFal, I participated in an Ayahuasca ceremony last night, it had a lot more kick than the sacraments of my youth and I say that with utmost respect to Catholicism. The latter half of the experience was a realization that I will die and a wonderfully liberating acceptance of it, however a post you wrote the other day triggered this long, undulating theme that the weight of the hammer of a handgun is infinite - I simply couldn't stop thinking about someone pointing a gun at my head and if I could pull the trigger were someone threatening the life of my son. The resolution I came to is that while I would not hesitate to pull the trigger in defense of my family, I would give ten million dollars away to avoid ever having to be in that situation. Money is a grand hallucination that people kill over, and if we can utilize a form of money that is more equitable, maybe we can have better things than a polluted, paranoid, over-centralized society based on agriculture that rapes the earth with acidic petro-chemicals.

What is your opinion of local currency that operates on a credit clearing mechanic, such as the ones issued in various provinces during the 2001 crisis? I'm referring to currency that comes into issue when a transaction occurs as opposed to currency that comes into issue when new debts are created, as the global system currently operates.


DaveC said...

"[barter credits] also have a limited shelf life, to keep them in constant circulation." Wow, there's a recipe for hyperinflation, because no one wants to get stuck with a pile of expired credits.

Bartertown's co-founder talks as though one credit equaled one dollar, while forbidding anyone to exchange them at any ratio.

Paper notes only have value if the issuer is willing and able to redeem them for something of actual value. Dollars and pesos are no longer based on gold, but you can at least pay your taxes with them. In Russia, cash-poor companies issue notes redeemable in their product (e.g. electricity, diamonds, vodka) and these notes often circulate as currency.

In contrast, barter credits can only buy junk that no one would pay real money for. No wonder grocery stores refused to accept them.

Argentines have no money because they produce nothing of value. The Peronists taxed all productive industry out of existence "to fund social programs and redistribute wealth".

Anonymous said...

"Argentines have no money because they produce nothing of value."

Sounds a lot like the USA. All our industry was shipped to China so that the environmentalists would be happy and to "save money", so all we had to offer the world were financial instruments, now that nobody will buy our debt any longer we're screwed. Once the world starts using gold as a general medium of exchange again, the US Dollar will be worthless, then we will be like Argentina.

Some Guy said...

I have spent some time in Laos, a SE Asian country that has severe problems with inflation. The currency is so inflated that over 10,000 units (the Kip) equal $1US. What is worse is that there are not many denominations, so the biggest bill you find in common use is the 50,000 Kip - less than $5US.

Therefore... the locals use the Thai Baht, which was, during my visit, about 44 baht to the $1US.

Or they use US dollars. Some places will accept the Euro. In the frontier, they will accept the Vietnamese dong, because most of the people doing business are Vietnamese, anyway. ;)

What am I getting at? Every vendor has a calculator and the day's posted exchange rate at their stall. They post a price in whichever currency they prefer - usually Kip, although large transactions, such as vehicles, are almost always posted in baht - and simply calculate the price based on the customers' preferred currency.

Watching all this, the first thing I thought was, "We'll be doing this in the US before too long."

Anonymous said...

The barter idea, your observations seem to back up this article:

How Much Money Do We Need?

"...Certain goods eventually proved themselves more widely accepted in trade than others, and people started acquiring them primarily to make future trades. A good widely used for such indirect exchanges became known as money. Among its various physical qualities, the money chosen was divisible into smaller homogeneous units so that the chair-maker, say, with money at his command from a previous exchange, could acquire a dozen ears of corn, for instance, without giving up a whole chair.

Commodity money, then, arises through the voluntary cooperation of market participants, meaning there is widespread support for the money without violation of anyone’s property. Over time, gold, and to a lesser extent silver and copper, became the market’s choice of monies..."

I'm so hooked on reading your stuff. AGH! The problem with preparing for the storm yet to come is, everyone thinks you're nutz for doing so.

Anonymous said...

to Norcal, you could build one of theses