Realistic Firearms Training

As the self reliant individual advances in his path of improving his defensive capabilities many things become clear that used to be completely ignored before. One of those is understanding that training doesn’t mean that much if you don’t keep practicing to sustain and hopefully improve your level of proficiency.
In the initial stages it feels like seeing the light when you’re introduced to the world of defensive shooting and understand there’s so much more than aiming and pulling the trigger. The person that shoots at paper targets or plinks in the back yard, even goes hunting once a while, he may feel he’s at least proficient in the use of weapons for self defense if it ever comes to that, but that’s only due to his level of ignorance being so great, he doesn’t even know how much he ignores. Sure, you might scare a junky away with a 22LR Derringer and no idea of how to use it, but it takes years of taking classes, then practicing what was learned to evolve into a level of training that allows you a reasonable chance of survival in a gunfight where you’re being ambushed and outnumbered by more serious attackers.

Once the knowledge is incorporated, then the tricky part starts. How do I keep the skills that I learned? How do I sustain that edge gained as time goes by? Of course training is the answer, but this is easier said than done. You need the time, the money, the physical place and like minded people that add that extra factor to the equation. Solo training is ok, but its much better if you’re testing yourself against others and also being placed outside your comfort zone, going through drills and scenarios that you haven’t thought of yourself.
At least for me the solution came in the form of TEA, Tiro en Accion or Action shooting. (TEA Video) This is somewhat of a local IDPA version with a few variations, more oriented to defensive shooting. We do this for a few hours every Friday night, and its often the same people we do defensive training with. Its generally just 50 rounds being shot per Friday, so its not as if you’re spending a lot of money. 200 rounds per month is very reasonable and you keep an adequate level of skill. Its not only the amount of ammo fired but how you shoot it that matters. You may burn through 100 rounds shooting at a target and not learn or practice a single thing.

Race gun and speed holster, not exactly daily carry gear.

If you have friends that are willing to get together or you plan on joining an action shooting group so as to practice and sustain a level of training here’s a few pieces of advice:
1)Train with the firearm you carry, and carry an adequate firearm. Someone commented in a previous post that “the Best Gun is the loaded gun you have in your hand vs. BunderBarr Fantasy gun in the safe.” No man, that’s the crappy last resort. A responsible shooter will carry an adequate big bore gun in reasonably powerful caliber, reliable functioning, with enough capacity to respond to the level of violence and technology used to apply such violence. Its not 1800’s where the idea of firepower was to carry two or three single shot pistols. Today its multiple attackers with auto pistols that have an average 15 round capacity. If you have to keep in mind not to spend more than 2 rounds per attacker while fighting for your life you’re adding an unnecessary complication to an already delicate situation. Just say no to mouse guns, or insanely chopped ones. Same applies to race guns full of bells and whistles. If training for self defense, then you use the exact same gun you carry and forget about reducing your time by a few seconds during competitions.
2)The belt and holster must be the same you carry daily. A speed belt and holster may be fast, huge 23 round mags sticking out of your side makes for faster reloads, but I bet that’s not what you carry daily. “But IWB holsters sucK!” No, you suck, a good IWB holster is just as good as any other. Of course its not a race gun holster, which reduces your draw in 0.1 second, but here’s where sporting and defensive shooting go their separate ways.
The Bladetech Phantom I use is just as fast as an outside the waistband holster, it keeps the gun secured during normal activities and its kept concealed.
3)Shoot from concealment. During winter in TEA we use a concealment garment. Of course an opened vest of some sort is faster than pulling up a tshirt, but since I do it mostly for defensive practice and not to win anything I just cover it with my shirt. So I’m 0,5 seconds slower than the guy with the opened vest, so what? You will fall back to doing what you did when training.
4)Use similar ammo. Reloading milder loads may be an advantage for winning competitions, but not for realistic defensive training. Even when reloading, try to replicate the recoil of the loads you would be carrying.
5)Memory conditioning. If you use a certain type of mag carrier just to be faster but throw your spare mag in your pocket, expect your hands to reach for nothing when you need it the most. The gear, the clothes you wear and where you place and carry each piece of equipment should be the same.
6)Use these sessions to see what works and what doesn’t. Thanks to these Friday night sessions I realized that XS Big Dots weren’t for me and I got rid of them. I gave them a chance, practiced with them and when I added the timer and pressure factor a couple times I realized it wasn’t for me. I shoot just as fast but more accurately with tried and true Patridge style sights and so does the handful of instructors that tried them.(one didn’t even bother picking it up and just laughed at the stupidity of fixing what wasn’t broken…) Even if you do this for practice rather than sport, the timer does add that extra pressure factor, taking you outside of your comfort zone, telling you time is running. That’s your chance to try new gear and techniques.
This also means you’ll end up daily carrying more adequate gear. You holster, the clothes you wear, your belt. When your shooting gear is your carry gear and not something different, then your capabilities on the street improve considerably.
I was loading mags with a friend of mine and asked him why was he now using a holster when he usually carries his Glock with a Clipdraw tucked inside his pants. “I want to win” he grinned.
Decide what is that you want to do. If you want to improve your skill at certain shooting sports, then ignore the article, but If you want to practice defensive shooting then stick to what you actually carry in spite of the results.
Take care.
FerFAL
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1911 vs Glock for Defense

FerFal,

I wanted to get your opinion on choosing gun and ammo combinations.  I recently switched my main pistol from a 1911 to a glock 19 for the extra capacity.  I have been loading it with Federal 147gr. HST, but recently came across some Winchester 127gr +p+ T series.  Do you think there is a clear advantage of either of the two?

Also, do you know of any reason not to load a variety of ammo in the same mag? For example first round 127gr. +P+ HP, second round 147gr. HST HP, third round 9mm Nato (+P ball), then repeating until full. Seems like a way to have all the advantages of each type of ammo at all times.

Thanks,

Greg

Hi Greg, I’m just finishing an article I’ll be posting later today about realistic firearms training and it sort of covers a couple topics you may be interested in.

Yes, I think you did well in going from 1911 to Glock. A good friend of mine, die hard 1911 finally gave up and is now packing a Glock 19 as well. The advantages are numerous even for people like my friend that don’t really “like” the Glock, but simply cant deny the advantages. You have twice as much capacity before needing to change magazines. Overall capacity in general if you carry the magazine in the gun plus a spare magazine is 31 vs 17. That’s for 8- round 1911 mags and +1 in the chamber and Glock 19 Mags, but you could have a spare Glock17 magazine instead that gives you +2 rounds.

In terms of stopping power with good ammo the difference isn’t that significant. Of course 45 ACP is better at stopping humans, but with good ammo such as Gold Dot 124gr +P, you’re still talking about good stopping power. 

Glocks are also plenty accurate and more reliable than 1911s. 1911s where designed around .45 Hardball and the design will always be kind of picky of the bullet’s shape.

The user’s manual is more straight forward with Glocks, since there’s no safety to even consider. Now I know how fast and second nature it gets when you’re used to the 1911. A lightly customized 1911 was my first and only gun for many years and disengaging the safety is something you do as you draw without even thinking. I know some people prefer the 1911 ergonomics, but at least for me (medium sized hands) the Glock fits better and during all day long shooting sessions the Glock just feels better too. You don’t need to “melt” a Glock like some fancy customized 1911, the sharp edges are already removed.

Then you have its mechanical simplicity, legendary toughness, and the plethora of cheap and quality made accessories, holsters, etc.

As I’ve said before, I think you really see all this when you start taking more classes or competing (not talking about race guns but standard) and seeing how your firearms choice (in spite of obvious differences between shooters) does against others. You see the guy next to you still has half a mag left while you’re struggling to slam another single stack mag into a narrow well (the Glock is more forgiving because of the wide well and double stack magazine) or you have more failures than the guy next to you, or your magazines are more delicate than the ones of the Glock, or not completely depressing the grip safety when shooting with your non dominant hand in a hurry. Even the thumb safety is just something else that could go wrong. The “oh, that will never happen to me” attitude isn’t very objective. Keep in mind that you have to expect most things that can go wrong to actually occur in a gunfight, the less variables and possible things to go wrong you have, the better, and that’s why the Glocks simplicity makes it the standard by which all other defensive guns are measured. 

About the ammo question, for 9mm I prefer light & fast, 124 gr +p such as the Gold Dot or 115gr. Corbon., something that will slap with enough energy and expand quickly, creating the largest temporal (not permanent) cavity possible.

Of the two you mention, go with the Winchester 127gr +p+ , heavier bullets in 9mm don’t tend to be as effective as faster, lighter ones.

Regarding loading different ammo into a magazine, I don’t think it’s a good idea. Maybe if you want to keep some FMJ in another mag. in your vehicle for added penetration, that’ would make more sense, but don’t mix ammo in a magazine. You have to load it up for your most likely threat: An attacker at close range that isn’t wearing body armor. For that you want quality JHP such as the Gold Dots or Corbon mentioned above, and you want each and every round in your carry gun to be as effective as possible.

FerFAL

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Out of Control Inflation In Argentina

Several people emailed me these two links. Basically its what I often write about here, but the situation gets more crazy as time goes by with non stop inflation. All people can think of here is when will it all finally blow up (probably right after this years elections). You just know you can’t keep on forever with 10% inflation every given month, it eventually has to stop. 
Not much you can do other than putting what little you have in gold or silver. People here just buy a car and make monthly payments so as to have something of value in the long run. You try to cut expenses as much as possible and try not to go nuts thinking about it.

FerFAL

No One Cries for Argentina Embracing 25% Inflation of Fernandez

By Eliana Raszewski Mar 29, 2011 1:00 AM GMT-0300

Bloomberg Markets Magazine

http://www.bloomberg.com/news/2011-03-29/no-one-cries-for-argentina-embracing-25-inflation-as-fernandez-leads-boom.html
As an immigrant to Argentina in 1992, Zheng Jicong had to learn Spanish and adapt to local customs. As he’s built a chain of three supermarkets in Buenos Aires, he’s still adapting to inflation that’s about six times the rate in his native China.
Zheng, 35, says he has to change prices in his stores daily as suppliers send him new lists, with increases on some products ranging from 5 percent a month to as much as 5 or 10 percent in a single week.
“If I didn’t change the prices, maybe I’d end up selling goods at a price below the new costs,” Zheng says. “In Argentina, you have to get used to this.”
A decade after it defaulted on $95 billion of bonds following a four-year recession, Argentina is again witnessing an upsurge in inflation, Bloomberg Markets magazine reports in its May issue. While official numbers put the rate at about 11 percent, independent economists estimate that the number may be about two and a half times as high.
That would place Argentina second only to Hugo Chavez’s Venezuela, where the International Monetary Fund estimated in October that prices rose 33.3 percent last year, the highest in the world.

Accelerating Spending

Accelerating spending by President Cristina Fernandez de Kirchner’s government is stoking prices, economists say. Outlays on everything from highway construction to pensions climbed 37 percent last year from 2009 — and increased 39 percent in January of this year alone. Fernandez’s largesse is made possible in large part by the global commodities boom.
Foodstuffs such as soybeans, wheat and flour accounted for about 70 percent of the country’s export revenue in 2010, according to Agritrend SA, a Buenos Aires-based research company.
Export tax revenue, led by a 35 percent levy on soybeans, rose 11.2 percent in February from a year earlier to 3 billion pesos ($740 million).
Argentina’s 40 million people are spending, too — as a way to protect themselves from rising prices. They’re buying everything from flat-screen televisions to cars and even property. Sales of such goods as home appliances, toys and clothing soared 39.5 percent in December from a year earlier, the biggest increase for that month since at least 1998. Auto sales gained 43.3 percent in unit terms, the most since 2004.

Wages Increased

Demand for construction supplies such as cement, steel and paint was up 20 percent in December. Consumption helped push economic growth to 9.2 percent last year from 0.9 percent in 2009. Fueling that growth — and inflation — is government support for annual wage increases of 30 percent or more.
Prices — and wages — have been rising so fast that in November and December, the Central Bank of Argentina was unable to print enough money to meet the demand for cash from consumers and companies trying to cover year-end salaries and bonuses. As Argentines lined up at empty ATMs in the middle of a heat wave, the central bank took the unprecedented step of hiring Brazil’s mint to crank out 160 million 100-Argentine-peso notes, so that there would be enough cash for individuals eager to buy holiday gifts and start their summer vacations.
“If we have an inflation rate of 25 percent to 30 percent, that means an important monetary expansion,” says Roque Fernandez, a former president of the central bank and an economy minister in the 1990s. “What we didn’t know until then was that there were problems with issuing that amount of bills.”

Central Bank Response

In most countries, scenarios like that would strike fear in the hearts of policy makers and consumers. Not in Argentina.
Inflation is a result of companies being unable to meet consumer demand and should be resolved by boosting loans for production, Mercedes Marco del Pont, the current central bank president, says. She plans to increase the money supply by 28 percent this year to accommodate economic growth, a move she says won’t affect inflation.
“The price problem doesn’t have monetary roots,” the Yale University-educated central banker, 51, says. “The conditions that could cause inflation to accelerate don’t exist in Argentina.”
In fact, Marco del Pont says, the global economic slump of the past few years has shown how central bank intervention can play a role in developing the country’s economy. “The bank has a goal of stability not only in the financial system but also in the real economy,” she says.

‘We Had It Much Worse’

Many ordinary Argentines, who remember the days in 1989 when the annual inflation rate exploded to 5,000 percent, are taking today’s numbers in stride, too.
“We had it much worse,” says Carlos Roberto Acosta, a 35- year-old taxi driver from Avellaneda, on the outskirts of Buenos Aires. “I was a teenager working in a store when we had hyperinflation,” Acosta says. “I remember the owner coming up to me one day and saying ‘Don’t sell anything’ because we didn’t know how much it would cost to replace it.”
Much of the country’s economy is geared toward coping with inflation. “It’s all about adaptation,” says Marcos Katz, who runs a fabric store in General Guemes, a town of about 30,000 people in the northwestern province of Salta. He says he visits bigger cities such as Cordoba or Buenos Aires once a month to look at the prices in larger stores. “I try to keep up with their pace,” he says. “That’s what a lot of small-business men do.”

‘Banks Are a Dreadful Thing’

Katz, who’s been in business since 1974, says he’s learned to work mainly without banks after living through bouts of hyperinflation. “Banks are a dreadful thing,” he says. “You get a lot of financing from your suppliers.”
One consequence of Argentina’s long history of inflation is that people often pay in cash for even the largest purchases, such as homes or cars.
“It’s easy for Argentines to remember how to face inflation,” says Claudio Loser, an Argentine who led the Western Hemisphere Department at the International Monetary Fund during the 2001 crisis. “They defend themselves against inflation by investing.”
Eduardo Costantini knows that well. In four days during October, the head of Buenos Aires-based real-estate and asset management group Consultatio SA says he sold 900 lots in an undeveloped housing project outside Buenos Aires for a total of $75 million, without even advertising.
Costantini, 64, says Argentines are wary of investing abroad because of financial turmoil and are unsatisfied with near-zero interest on dollar bank deposits — not to mention the negative real interest rates on peso deposits.

Nowhere to Invest

“If you buy dollars, you are dead,” says Costantini, an art collector who founded the Museum of Latin American Art in Buenos Aires. “If you invest abroad, you don’t know what will happen because of the uncertainty, and if you deposit money in banks, they pay nothing.”
The construction boom has boosted business for Ceramica Fanelli SA, a brickmaker in Buenos Aires that’s investing 5 million euros ($7 million) for equipment from Italy that will increase its output by 50 percent this year.
“Production is being outpaced by demand,” says Claudio Moretto, the company’s commercial director. “It’s incredible, the pressure I’m getting from our clients.”
There’s a dark side to the increased demand, says Moretto, 50, who estimates inflation was 25 percent last year and forecasts a similar leap in 2011. “We can’t pass on to clients all of our cost increases, so the company’s margins are narrowing,” he says.

Inflation’s Dark Side

Rampant inflation threatens the whole country’s long-term economic health, says Roberto Lavagna, who as economy minister for Fernandez’s late husband and predecessor, Nestor Kirchner, led the country’s debt restructuring in 2005.
Argentina, Latin America’s third-biggest economy, has sunk to sixth in the region as a destination for foreign direct investment. It attracted just $2.2 billion in the first six months of 2010, according to the United Nations, compared with $17.1 billion for Brazil, $12.2 billion for Mexico and $8 billion for Chile.
“There’s a combination of a satisfactory situation regarding economic growth on the one hand but with imbalances that are reflected in high inflation and an investment rate that is below what the country needs on the other hand,” Lavagna says.

Costs for Importers

Inflation in Argentina is putting a lot of pressure on costs for importers, says Hector Trevino, chief financial officer of Coca-Cola Femsa SAB, Latin America’s largest soft- drink bottler. The Mexico City-based company saw its Argentine freight costs jump almost 70 percent and salaries climb 35 percent during the fourth quarter of 2010, he said in a conference call with analysts in February.
“The impact that we have had in freight cost in Argentina and salaries is tremendous,” he said.
Companies with employees in Argentina, which raise wages to keep pace with inflation, feel a similar pressure.
“In 2010, payroll costs in Argentina were up about 20 percent in dollar terms,” Antonio Brufau, chief executive officer of Repsol YPF SA (REP), Spain’s biggest oil company, said in a Feb. 24 news conference in Madrid. In 2011, those costs will rise as much as 25 percent in pesos, he added.
After presidential elections in October, the next government will have to make hard decisions on whether to tighten fiscal and monetary policy, says Lavagna, who now runs the Institute of Applied Economics and Society in Buenos Aires.

Fernandez Leads Polls

Fernandez hasn’t yet announced whether she’ll seek a second term. According to a Jan. 24 to Feb. 3 survey by pollster Management & Fit, Fernandez would win 27.1 percent of the votes in a presidential election, followed by opposition leader Ricardo Alfonsin, son of former President Raul Alfonsin, with 6.6 percent, and Buenos Aires Mayor Mauricio Macri, with 5.4 percent. About 38 percent of those polled were undecided or didn’t say whom they’d vote for.
Fernandez, 58, owes her lead in the polls partly to her continuing many of the policies of her husband, whom she succeeded in December 2007. She has kept the peso weak, so local goods have remained cheap and exports have been strong. Since Fernandez took office, the Argentine peso had fallen 22.4 percent as of March 24, the most among major Latin American currencies. As a result, unemployment tumbled to 7.3 percent in the fourth quarter of 2010 from 22 percent in 2002.
Kirchner, who died of a heart attack in October, also created or kept price caps on everything from electricity to beef. And he threatened foreign investors who stepped out of line, calling for a national boycott of Royal Dutch Shell Plc (RDSA) for raising fuel prices in 2005. The company backed down.

Index Underreported

And when inflation remained stuck at about 10 percent in 2006, Kirchner replaced the officials in charge of the CPI report. Since then, Lavagna says, the government has underreported the consumer price index. The bureau says prices rose just 10.9 percent last year, while research firm Ecolatina, which Lavagna founded 30 years ago, says the gain was 26.6 percent.
“What we said when we took office is that consumption ensures an active market, ensures growth,” says Lavagna, who left Kirchner’s government in 2005 and finished third in the 2007 presidential race. “But consumption that generates investment is one thing. Consumption that generates inflation is another thing.”
Fernandez last year invited the IMF to visit the country to help create a national inflation index. In February, her government began threatening independent research institutes, including Ecolatina, with fines of as much as $125,000 for not revealing how they calculate their CPI estimates. Jorge Todesca, a former deputy economy minister who heads Finsoport, one of the firms that received letters from the government, said the move is aimed at intimidating researchers and the companies they talk to.

Beef Prices Double

Threats or not, there are increasing signs that Fernandez won’t be able to use artificial means to hold off inflation. The price of beef — a sacred staple in a country that’s the No. 2 consumer of meat per capita in the world — more than doubled as ranchers couldn’t meet demand from depleted herds. Argentina’s trade surplus shrank to $241 million in December from $1.2 billion a year earlier. Despite the economy’s growth, it’s failing to attract enough investment to meet consumer demand, Loser says.
“The first effect of any inflationary process is euphoria, because people go out and spend,” Lavagna says. “But later come the costs of that policy.”
Once the party ends, Argentina’s next president will have to tally those costs.
To contact the reporter on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net

Argentina on the Cusp of Hyperinflation

April 1st, 2011 | Author: Pater Tenebrarum

An Inflationary Crack-Up Boom

We want to comment on recent events in Argentina, which have not gotten much play in the news media given the flood of newsworthy events in recent weeks. Argentina represents an interesting real time case study of a developing inflationary crack-up boom, or as Mises termed it in the German language ‘die Katastrophenhausse’ (literally, the ‘catastrophic bull market’).

Officially, ‘inflation’ , or rather, the decline in money’s purchasing power as measured by an official  ‘price index’, runs at about 11% in Argentina, but most independent observers reckon it is closer to 25% (we have to use quote marks due to the fact that rising prices are not inflation, but represent one of its effects,  and price indexes are not measuring anything, because what they purport to measure is unmeasurable). Everybody knows that Argentina’s government is just making the numbers up, i.e. they are constructed in such a way as to downplay the situation and the government is quite testy about competing inflation estimates. We doubt that even the unofficial estimates truly capture the extent to which the value of Argentina’s money is spiraling down the drain; one only has to consider the first paragraph from a recent Bloomberg article quoted below:

(continue reading…)

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Video review of the Victorinox Rescue Tool

This tool has the same blade as the 2008 Solider Victorinox Soldier knife, as well as its flat screwdriver/light preying tool, punch, and Phillips screwdriver.

 

Victorinox Swiss Army Rescue Tool 

It also has rescue specific tools such as a glass breaking tool, glass cutting tool and seat belt cutter. Its basically a nice folding knife with a generous locking serrated blade and some rescue specific capabilities that makes for a great tool to have during disasters.

FerFAL
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Real Estate After the Economic Collapse

Hi guys, I’m trying to sep up with the emails. For some reason I got several about real estate after the economic collapse. These two cover the questions others asked as well. If there’s other things you’d like to ask feel free to email me and please give me some time to reply.

Hello Fernando,

Read your book and enjoyed it very much.

Lots of good tips for sure.

Question please:  After 1 to 1, what did real estate prices do? go up? down? stay the same or what?

Thanks!

Loren

Hi Loren. Real estate stayed pretty much the same, it kept its value in dollars as the peso collapsed. What happened was that it was already “well priced” to being with. By this I mean that well located, consolidated neighborhoods with a well established reputation were priced accordingly, and new developments were more affordable. There was no real bubble in terms of artificially inflated prices. What happens in USA sometimes is that a developer buys a few hundred acres, build several “Mc. Mansions”, houses that look fancy and expensive, and while big are in fact cheaply made, and pretend to sell it for half a million bucks. Its not realistic to pay 5 times the cost of building for a property that is located in an area where there was just wasteland a few months ago. This is what I mean by unrealistic, inflated prices. We didn’t have that so after 2001 real estate properties didn’t fall, there was no bubble to burst.

Prices did go down some in certain low demand areas but mostly because there was no credit and no money so it was a supply and demand issue. At the same time real estate was one of the few things keeping its value in a country where its currency was turning to toilet paper by the hour. As always people saw brick and mortar as one of the few ways of protecting their savings. Prices dropped 10% give or take right after the December 2001 collapse, but a few months later they went back up. Basically what happens is that real estate kept being sold and priced in US dollars, even after the loss of convertibility. A house that cost USD 100.000 during 1.1 peso /dollar conversion rate still cost USD 100.000 after the collapse with a 4.1 Peso/dollar exchange rate. Even today, real estate and cars are priced in dollars.

Fernando, I’ve been reading your book and consider it very valuable and also entertaining. Thanks for the good read.

I’m curious about some additional detail if you have it. Real estate – what’s the deal. I have a moderately priced home that I still owe a lot on and then a condo that’s a rental that I could conceivably pay off at some point and own free in clear. In the event of a SHTF scenario in the US, do you see rampant foreclosures becoming a serious issue. In other words, for shelter’s sake, would it make sense to own something outright so that it couldn’t as easily be taken away by the govt?

I may have answered my own question since this scenario seems like an obvious “yes, pay it off if you can”. But still, I would appreciate any contect you can give me from your experience.

Thank you – G

Thanks G. Rampant foreclosures will be an issue if that happens, yes. If you understand how these things work, you know the government will do nothing about it.

The government (including the USA gov.) considers that certain part of the society (the richest elite) is “too big to fail”, so they get bailed out, while they consider the middle class, “to lazy to care”, so they work out things so that the middle class/upper middle class and rich ends up bailing out the elite. Actual labor and sacrifice has to come out of somewhere, someone has to get up every morning and “work”, create something of certain commercial worth. It’s the average Joe that ends up paying for these bailouts through higher taxes and inflation.

As this inflation and taxation grows, it will translate into higher rent, so this is a way of you using the tools the system usually uses against you to protect your savings. Your property, that’s real, you renting it is an actual service and that can’t be taken away from you through inflation.

After December 2001, people that couldn’t pay their house loans ended up losing their homes. The banks had made the contracts in dollars, so on one hand a) They converted your dollar accounts to pesos, making you instantly lose 66% of your savings, then a few days later 75% b) at the same time they kept you accountable for the loan you took in dollars. Imagine that for USD 13.000, you had to make 60 monthly payments of USD 359,64.

Only after 6 years did the justice system come up with a resolution, and only for those that bought their first and only house under USD 100.000. In that case you only paid back 1.83 pesos for each dollar owed instead of the 4 pesos the dollar is worth. Again, only for houses under USD 100.000 and first and only homes. If you, say, had asked for a loan already owning another house, then you were treated like a greedy capitalist pig, and the socialist loving banks got paid in full. Ah, the system does work!

Anyway, this may or may not happen in USA if the economy ever collapses in full. For some private debts and certain public banks (state or provincial) , you only paid 1.4 pesos per dollar owed and that was a sweet deal for people that took up loans.

Basically, real estate is a good way to protect your savings when done wisely and it does generate an income that somewhat adjusts itself to inflation. Being conservative and avoiding deals that sound too good to be true is a good guideline.

Take care folks and see you around,

FerFAL

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