You were way ahead of the
curve in what you perceived in the coming collapse of Argentina. I just read this and you
came to mind. I thought I would share the article.
E-
Hi, I’ve been receiving lots
of email about this article.
Remember that scene from the
movie “Braveheart”, where Mel Gibson says he’s William Wallace and one of the
guys says that cant be because William Wallace is seven feet tall and has arms
as wide as tree trunks or something along those lines? This somewhat reminds me
of that. I’m sure that the person that wrote it didn’t mean anything by it but
there are several inaccuracies that I’d like to address. We all make mistakes
of course and as time goes by memories tend to blur a bit, happens to me all
the time. But I believe its important to stay as accurate as possible so that
any lessons gained from these events are also truthful.
First, about the people
doing battle with the police. Anyone doing battle with the police at any time before
or after the fall of President Fernando DelaRua’s government was either rioting or looting. The original “cacerolazo” of December 19th in
Plaza de Mayo was a peaceful demonstration against a president that had lost touch
with reality, but that had nothing to do with those destroying private property
and looting. It is true that some innocent people died, caught between the
looters and the police, and that cop got “trigger happy”, yet its hard to believe
that everyone that got shot right in the middle of a mass looting in a
supermarket just happened to be there looking for his son, his uncle or the
neighbor’s dog. If you are in the middle of a violent looting and cops trying
to stop it bad things can happen to you. Normal, by this I mean law abiding citizens didn’t
do battle with the police. The country was falling apart, and the last thing we
needed was another roadblock, another “imperialist” McDonald being trashed or
another looted supermarket.
While bank accounts where
frozen, you could still use credit and debit cards. The problem was that many
stores, especially smaller ones, didn’t accept them any more in Argentina.
For some time it was only big chain store accepting them in the country. Still, if you were abroad, say in the United States, you could use your credit
card without a problem. I know this well
because we went Aspen, Colorado, for a week on January 2002, a couple months before I got married.
My folks had invited us all and there was no point in canceling the holidays. The
“corralito” was an attempt to stop the flight of capital from the banking system, money leaving banks
and going either abroad or under people’s mattresses. In fact, as an incentive for people to do this, they would
give you back 5% from taxes if you paid with debit cards. I remember this well
too because I would deposit the money I would use for making the monthly
grocery purchases just the day before going to the store, so as to take
advantage of the discount yet not leave money sitting there given the obvious
instability. That plus another 15% discount you got from the store when paying
with debit or credit card which the big chains were still accepting made for a
much appreciated 20% discount.
While it is true that electricity
went off often, its not true that stores run low on food. Sometimes there wasn’t
quick resupply of certain products. Sometimes rationing was imposed so as to
avoid hoarding and you could take maybe 1 pack of sugar per day or 3liters of
milk per day per family group, and even this you could avoid by going to
another store and buying there too. But other than the supermarket itself being
closed because of recent looting, as long as you had the money, cash or money
in the bank for some of the big stores that accepted credit cards, you could
buy as much food as you wanted. Don’t get me wrong, people did
starve to death and they still do, but because they cant afford the food, not because
there isn’t any.
An important point, food never became a medium of exchange. This simply never happened. This
I want to clarify because if not people may be lead to believe that it could be
a possible scenario. At least during the economic collapse that took place in
Argentina I can assure you that food never replaced currency. The closest to
that was coupons used in some of the various barter clubs, Clubs del Trueque,
which did become popular but never did it replace the local defaulted peso,
even less, a much sought after shiny US dollar bill. Even gold, which became sought after for selling
in some of the “We buy Gold” stores that sprouted everywhere within days, even
then it didn’t become an alternative currency used by people.
People did accept the local
currency, the peso, but they would do so at whatever exchange rate it had that
day with the US dollar, so within days the peso had devaluated to one third of
its value. Still, in spite of that, if you have the cash and enough of it, you
bought as much food, gas, or any other goods and service as you wanted.
About leaving the country
with cash, back in those days it wasn’t nearly as hard as it is now, at least
hard when doing it legally. Especially if the cash you had could be fitted in
your pants, it was really not a problem at all to just keep it there, walk through
customs and security and board a plane that would take you abroad. The crazy restrictions and extra control regarding
ordinary people traveling maybe with a bit too much cash started after the
reelection of Cristina Kirchner in 2011, not in 2001.
The more accurate the
accounts, the better the lessons we learn from these events. Again, I’m not
saying any of this to discredit anyone and I know that as time goes by many of these details are harder to remember.
If anyone has any questions or
would like to add anything feel free to comment below or send me an email.
Take care people.
FerFAL
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