Argentina: A Case Study in How An Economy Collapses

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"When you ask any Argentinean person what concerns them the most, the first thing they’re going to be telling you is the crime problem. And the second one is the financial problem. Those are by far the top concerns the average Argentinean person has, and I think that eventually it will happen in the U.S.A., as well. I think that five years from now or so, you’re going to be talking to people, and the thing that’s going to be concerning them is that Joe down the street suffered a home invasion and got beaten up, maybe even got killed. All kinds of crime that didn’t used to happen in the good parts of town. It’s going to be one of the greatest concerns people will have, eventually.

And, of course, the financial situation as well. If you look into what people are worried about right now they’re worried about losing their jobs not being able to put food on the table the next month. They see that if they lose their jobs it’s not as easy as it used to be to find another one as well. That’s terrible, because it’s very cold when you look at it in numbers, but it’s—I’m telling you—it’s so much different when it happens on a social level and you see that on the street . When you see the people picking up garbage on the streets to eat."

Hyperinflation survivor Fernando “FerFAL” Aguirre shares his observations of life during and after Argentina’s currency collapse in 2001. He notes that the decline initally began slowly, with most of the populace slow to wake to the danger. But when the eventual collapse occured, it happened practiclly overnight - catching the country by surprise. In the wake of the collapse, dealing with poverty and violent crime became the dominant themes.

Worth our attention is his observation that he now sees the sames signs in the US and other major developed nations that he saw leading up to Argentina’s collapse. In fact, he foresees a similar endgame as all but inevitable.

Click here to access Part 2 of the interview, which focuses on smart steps individuals can take in preparation before an economic collapse.

Fernando “FerFAL” Aguirre experienced the hyperinflationary destruction of Argentina’s economy in 2001 and continues to blog about his experiences and observations of its lingering aftermath. His website (www.themodernsurvivalist.com) and his book Surviving the Economic Collapse (Self-published, 2009. ISBN 978-9870563457) offer windows into the probable outcomes to expect during a collapsing economy. Note: Our site’s What Should I Do? Guide offers specific guidance relevant to a number of the risks FerFAL mentions in the interview.

 

This is a companion discussion topic for the original entry at https://peakprosperity.com/argentina-a-case-study-in-how-an-economy-collapses-2/

2

Great interview! Two of my favorites, Martenson and Aguirre, together at last!
(Now if only we could get Lira, Foss, Durden, Smith, and Greer to also join in!)

I just wanted to bring up a few points:

  1. It’s already happened in Belarus, with their devaluation of the Belarusian ruble and hyperinflation.
    https://peakprosperity.com/forum/all-eyes-belarus/58340

  2. This was an article from April, but it seems prophetic:
    Riding Along With The Cops In Murdertown, U.S.A.
    http://www.nytimes.com/2011/04/17/magazine/mag-17YouRhere-t.html

  1. Thc0655 (a well-respected member of our community, a fan of Fernando “FerFAL” Aguirre, a law enforce officer, and author of the Protecting Yourself Against Crime and Violence and Fortifying Yourself And Your Home Against Crime posts), two days ago mentioned an article in the Huffington Post by Janet Tavakoli, called:
    Third World America 2011: Forget “Fast Tracking to Anarchy” We’ve Arrived
    Third World America 2011: Forget "Fast Tracking To Anarchy" We've Arrived | HuffPost Chicago

Tavakoli describes the breakdown of law and order, the looting, rioting, wilding, mob violence that is starting to occur, due to our ongoing economic collapse.

Poet

3

This was an excellent feature we can all learn from.  I’d like to emphasize a few points Aguirre made that I strongly agree with but I believe are much too often glossed over or outright denied.

  1. Crime will become THE most important daily concern of most people. I know it’s not like that now except in traditional high crime areas, but it’s coming.  And that doesn’t mean that everywhere will be like ghettos are now.  It won’t take much but an occasional home invasion, gunpoint robbery, a victim hurt or killed after a robbery, a stolen car or home burglary in previously low crime areas to raise the issue of crime to the forefront of people’s minds who never really gave it much thought before.  Aguirre politely alludes to a common American idea that “we’re different, those kinds of things can’t happen here,” and the plain psychological denial of unpleasant possibilities that is keeping many Americans from beginning to prepare for our near future realities.  Maybe there was a time in a America when the majority of people were so morally upright and law abiding that an economic collapse would not lead to greatly increased crime.  But look at our people now.  Here and now, we are not that morally and ethically solid.  It won’t take much to light the fire of crime and violence.

  2. The explosion in crime will come when previously middle class and law-abiding people are reduced to poverty and near-helplessness by economic difficulties.  Many, many people unaccustomed to such feelings will start feeling trapped, desperate, raging angry, and oppressed.  Some percentage of them will feel “forced” into victimizing others in order to survive and/or avenge for how they’ve been taken advantage of.   Those already below middle class who have long felt the same things will be further stressed, and even more than are currently involved in crime will succumb to stealing and violence. Remember that our growing economic difficulties will be matched by growing public awareness of the fraud, greed and immorality of many of the actors who have brought these difficulties on us all. That awareness will cause rage and violence to rise, particularly among those who were previously inexperienced in much of either. We humans don’t always focus the expression of our anger appropriately on the people who have harmed us. Instead of expressing his anger at his Congressman or the corporation that laid him off, a man may express that anger at the stranger who refuses his demand to hand over his wallet.

  3. The most important transformation people will have to go through, as Aguirre points out, is in mental attitude and preparation.  Because you’re very aware that a burglary may occur while you’re away at work that awareness will cause you to check to confirm all your doors and windows are locked and your alarm is activated when you leave. After shopping, you will look from the store across the parking lot to your car and assess the scene for potential crime dangers. You’ll have a plan for how to approach your car, look around you as you’re walking to it, get in quickly, lock the doors immediately and drive away.  Because of your awareness of the possibility of home invasion robbery, you will talk to people at your front door through your intercom without opening the door or  through your locked security door to keep the person/people from pushing in and taking you captive for a robbery.  A mental attitude that accepts the possibility of crime and a determination not to be an easy, unaware victim is the key to survival.  You can discipline yourself to develop that now, or you can wait until the crime wave is upon you and forces you into a new mindset. Hopefully, you won’t be one of the first victims in your “safe” area whose loss and trauma helps to wake others up.

  4.  Think long and hard and unemotionally about trying to avoid the economic and crime problems by moving to a place that will allegedly not be affected (or not as much).  There will be a few such places but not as many as we would all like, and certainly not as easy to predict today as we’d like. There are however plenty of salespeople who would be glad to tell you what you want to hear in order to get your money.  I wish I had a link to the article I read last year, but in it a man writes about how in the late 1930’s he and his wife saw that a great world war was coming and they resolved to wait it out in some forgotten corner of the world.  They did their research, sold all their belongings and moved from the US to the obscure (at that time) Solomon Islands in the Pacific Ocean.  Of course, that was the sight of probably the most intense warfare in the Pacific theatre of World War II !  If you have the urge to move to a better place to ride out the storm, might I suggest as Aguirre does that you think through the security and crime issues and prepare accordingly. Don’t just move and think you’ve addressed the safety issue – move AND prepare.

4

That quote alone speaks volumes.  My thanks to both of you for the excellent interview.

Travlin 

5

tch0655,
Thanks for taking the time and effort in talking about crime.  It is now my #1 concern.
On another issue, how did gold and silver hold up during this period in Argentina?
Nate

6

Hi everyone, it was good to finally talk to Chris. The only problem is that every question opens a new topic that we could spend hours talking about!Laughing
I’ll check this thread for a few days, if there’s comments or questions feel free to post them here and I’ll reply as best as I can. Thanks!

Fer

7

[quote=FerFAL]I’ll check this thread for a few days, if there’s comments or questions feel free to post them here and I’ll reply as best as I can. Thanks!
[/quote]
I’ll start you off easy.  This is off topic, but my curiosity is killing me.  For years I’ve wondered how you got your nickname FerFAL, and why the last three letters are capitalized.  Also, did Chris pronounce it correctly?  I know he is meticulous, but I thought it would sound like “fur fall” with the accent on fall.
Thanks for doing the interview.
Travlin 

8

That’s definitely an easy one…Oh, c’mon, Travlin. If you’ve really been following him for years, you’d have known FAL stands for Fusil Automatique Léger, his favorite Belgian rifle! :wink:
Here’s the link to confirm. (I already knew the answer, having read it on one of his blog pages a while back):SURVIVING IN ARGENTINA: I am not Esteban Morales
I’ll leave the pronounciation question unanswered. :slight_smile:
Poet

9

I think Fer is “Fernando”, and being a shooter, I can only speculate that FAL means Fusil Automatiq Legir.
The legendary service rifle that served the Argentine Military.
FerFAL - I’ve got a few more questions for you, and I can’t express my gratitude at your presence here. I’m sure that I’m one of a great many.

  1. Housing - We’re already seeing a drastic increase in “extended” family becoming “close” family. That is to say, sons and daughters moving back in with parents/grandparents. How has this dynamic created stress or added benefits to the average Argentine’s life? I have a friend in Argentina who lives with her family, and almost all her brothers and sisters live in the same flat, which is not very big.

Is housing overpriced in general, or is it simply safer and more secure to stay in family units?

  1. I hear a lot of talk about community “co-op” food growing. This to me seems like a great, but terribly difficult to manage situation. Are there “community” gardens? Are they unique to places that are gated? 

In Cuba, we saw a huge surge in agriculture after the Soviets collapsed and the country was left without oil. 
In North Korea, we see the opposite; a massive, starving population.

I worry greatly, because most American workers do not have the agricultural skills to sustain even themselves, let alone a large population. What are your thoughts on how to procure food and water?
I know it’s a boring subject, but how does this rank on your priority list? 

  1. What skills did you possess that have made your family safer and closer that you’d suggest people develop while there is still time?

Again, many thanks!

Cheers,

Aaron

10

[quote=Poet]That’s definitely an easy one…
Oh, c’mon, Travlin. If you’ve really been following him for years, you’d have known FAL stands for Fusil Automatique Léger, his favorite Belgian rifle! :wink:
Here’s the link to confirm. (I already knew the answer, having read it on one of his blog pages a while back):http://ferfal.blogspot.com/2010/06/i-am-not-esteban-morales.html
[/quote]
Thanks Poet. 

11

Hi! Fer is my name, (Short for Fernando is usually Nando or Fer) FAL is for my favorite battle rifle, the Fusil Automatique Léger .
Yes, its “Fer” as it sounds, not “fur”.
FerFAL

12

Dear FerFAL

I think that means Fer is pronounced similar to the  english  word “fair” (long a sound)

in english “fairFAL”

in spanish, it sounds the way it is spelledSmileFerFAL

Thank you and Dr. Martenson for a terrific and very practical interview.

Denise

13

Hi Aaron!1) Yes, that happens a lot around here and its happening in USA too, so its yet another similarity. OF course there’s the tension you can expect from adults living together, maybe parents pulling the “under my roof” thing to people that are already adults and “moving back to mom’s basement” for reasons  beyond their means. That’s a bit of an unatural situation and there’s sometimes a bit of tension and stress.  In most cases though its understood that the situation is different from what it once was and the economy if forcing these situations. What people do is join reasources, adult sons helping with the bills, so the cost is divided among more people with jobs which is of course welcomed. Grandparents that are retired help doing house cleaning, cooking food, doing errands or babysitting, same for those that happen to be unemployed at the time. Its a lot of help and you save money on daycare, babysitting and cleaning. I thing this isn’t that bad, rather a more natural way, like it used to be some time ago where the family stayed together. Not that I’d like to live with my parents again…
2)You dont see much in terms of community gardens. I’ve seen a limited ammount in some of the more poor neighborhoods but really, its not that common. I do see more of free comunity classes being organized so as  to teach people how to garden at home though. The problem with comuinity gardening is that a)Its not that productive, so its more of a luxury in comparison to other, more profitable jobs b) It becomes complicated to tell who deserves waht ammount 3) Gardens in general are difficult to secure. Any given night it can be picked clean, or someoen working can pocket a few extra for himself. These are some of the reasons why its not a great as it sounds in theory. While I undestand the advantage of producing your own food, I think that people will often find more productive activities. Other than the mere pleasure gardening and growing your own food produces, during tough economic times you cant avoid telling that job x allows you to buy 10 kilos of tomatoes per hour worked, while on gardening you’d have to work 10hours to provide that same quantity (just and example of what I mean by job productivity per hour) If its something you enjoy doing anyway, then all bets and numbers are off since you’re doing it anyway out of pure pleasure. Having said this, your long term food storage is esential for preparedness. Dont even bother doing much else unless you already procured 6 months worth of food with a long shelf life. Its that important.
3)I took serious defensive shooting training at a rahther early age, 15 years old. This I believe has helped me develope a cetain mindset and level of awareness not everyone esle has and thanks to that I’ve avoided or managed to solve some tricky situaitons that would otherwise have gone much worse. Obviously my english skills help me tremendously for obvious reasons. A good education, a seond language (that would be Spanish) thats the greatest edge I’ve had when it comes to looking for jobs. My brother and sister also, being fluent in English has given them a edge in their lines of work. So basically defensive shooting and self defense skills, an understanding of security and how to avoid it,  a good education, including practical tools such as a second language, skills wit different computer programs, those are the things that would take care of the main two concerns after an economic collapsse: Being safe and capable of protecting yourself and having tools so as to earn a lving and have an edge, an advantge over the other 50 curriculums going for the same job. I suggest starting with a qualified defensive pistol beginners class and taking it from there, probably adding some combatives and hand to hand self defense along the way. Also staying in shape, not only for fighthing but the obvious health benefits, that should be a priority for everyone preparing. No sense in talking crisis economics, guns and safety if your greatest threat to you and your family’s well being is the extra 50 pounds of fat that is killing you but you prefer to ignore, concentrating more on zombies and end of the wolrd scenarios, that happen to be more fun than dieting.
FerFAL

14

funny thing about bears is they are always gloomy no matter what.  You can find newsletters from the roaring 50s and mid 80s and all decades back a couple of hundred years going on about the financial collapse or anarchy or return to the dark ages etc. etc. etc.
I seriously doubt that the US will go the way of Argentina, it was a very specific case… just think for a second how many hedge funds, investment and mutual funds, investors, banks etc. were holding Argentinian Pesos before the collapse ?

How many stock exchanges, futures exchanges, options, derivatives, commodities etc. traded in Argentinian Pesos… or whatever toilet paper used to pass for money down there ?

Now compare that with the US.

Now also compare if you want to move something from one side of Argentina to the other, how easily could you do that ? If you wanted to setup an office, hire people, get things done ? How easy would it have been ? Also compare the position of Argentina geographically with the US. Its far away, no one was that interested in the place, its mainly very rural and full of only partially educated and lazy corrupt people. Stereo type I know, but I lived in Mexico and Chile so I can speak on latin america.

Even in Mexico which in theory as a neighbour to the US should be a wealthy and decent place, you can’t get anything done. The postal service is as close to a garbage collector as you can get. Domestic shipping is expensive. Stuff goes missing all the time. Its hard to get anything done. The working class are lazy, self interested and badly educated. They don’t give a damn. The weathier classes are arogant beyond belief. A landlord rather snub you and leave his apartment empty a year, than drop the price even $100 a month…  In 3 years living in Mexico we got through 10+ maids. They just can’t work. Hopeless. Argentina I am sure is no better. No one gives a damn in these counties that’s why they are a mess. I’ve lived in one of the most exclusive condo buildings paying a fortune in rent, the place was like a slum building, always maintenance, elevators broken all the time. Finally they had to bring someone from Germany to fix the elevator, because no one could get it done… probably cost them 10 times what it would to fix an elevator in the US. 

In the US on the other hand, people are generally decent. You can get things done. You hire even the dumbest schmuck to flip burgers and he will flip those burgers. You want to ship a package it gets delivered. You want to lease an office, easy… in the US above and beyond every other nation, you can get things done and do business.

There is a culture that makes things easy. Even in the EU its twice as much hard work to operate.

This is why the US will thrive. Government is making a mess, but the US and its culture will continue. There are expectations. People don’t expect packages to go missing. They don’t expect to wait all day in a filthy government office to be met by a fat corrupt sweating clown eating his lunch, and expecting a bribe. They don’t expect to go to the airport and be harassed by a dozen taxi drivers with falling apart vehicles. They don’t expect to find entire families with kids wandering the streets selling things and sleeping rough. If you go into a hospital it doesn’t look like ventinary clinic. etc. etc. etc. on and on… there are standards and those standards will continue because people expect to work to build them… whereas in latin america no one gives a hoot… you can’t get things done, and most officials are either looking for bribes or out to bloster their pathetic egos and make themselves feel important.

Even in the UK where I am originally from, you go to the more deprived areas and they just don’t care. They want a miserable life, they will do anything to hold onto that pathetic existance. Whereas in the US they generally don’t. People want to move forwards, they want to be helpful, standards are generally upheld, and things get done. Its an appealing place.

Even when you talk about the bureaucracy in the US its half that of Europe.

I think people like the excitment of things falling apart. It makes their mundane lives more interesting if they can fantacize about the world falling apart, and they can say knew it would happen.

 

 

 

15

Technet, 
I’m not sure living in Mexico and Chile qualifies you to speak on “Latin America”, or broadbrush entire groups of people.

Perhaps the social situation has led to a sense of desperation and the lack of leadership has failed to inspire people to work towards betterment, and as such, no one seems interested in it because betterment appears unaobtainable.

Mexico is a failed state. Argentina is a very modern, educated nation who succumb to the same ills and troubles we have here. The problem is, Argentina was infected, while we are the progenitor of the disease. The disease is Fractional Reserve Lending, the FED and exponential debt.

Having known a few Argentine’s, I’d say they’re nothing like what you’re describing. 
Some of the easiest going, best educated and hardest working folks in Latin America.

Cheers,

Aaron 

16

FerFAL-
Great interview and a lot of good information. 

Starting this year my family and I will be spending most of our time overseas in Mongolia (my wife’s home country) to pursue some long-term business opportunities, but we will still be spending time in the United States for a few months each year for both business and visiting family.  So as you might expect, I have concerns about freedom of travel and the ability to move money back and forth, and have a few questions about your experiences if you don’t mind:

  1. During and after crisis, was it more difficult for Argentinians without dual citizenship to travel abroad?  Did other countries that formerly did not require a visa for Argentinians change that policy, or were visas that used to be easy to obtain become more difficult to get?  As you are probably aware, US citizens don’t need visas for short visits to many countries (a HUGE advantage), but I think it’s reasonable to expect this may change.

  2. During and shortly after the crisis, was it more difficult to get physical cash (local&foreign), monetary instruments, and gold/silver out of the country (I think I recall you previously mentioning a 50% tax on gold coins in Argentina)?  Obviously money in banks couldn’t be moved at that point or at least not until after it was devalued, but did capital controls include more restrictions on what you could physically carry out of the country?  If so, did any such restrictions come into effect slowly over time, or within days or weeks after the crisis? 

  3. Finally, how badly were the air travel costs to and from Argentina affected by the crisis?  I’m sure they went higher in terms of the local currency of course, but did the flights become more expensive in terms of dollars and other currencies as well?  I have a mental picture of the airlines cutting back on the number of flights and increasing prices after the economic crisis due to reduced demand and ever-increasing costs of doing business in the country.  Thus increasing costs for all fliers, not just ones using the local currency.

Interestingly enough my wife’s home country experienced its own currency crisis in the 90’s, but as a former communist country and non-Western culture it is a rather imperfect basis of comparison to America’s situation.  I find greater similarities between America’s situation and Argentina’s, and as such I find your writing and experiences very informative.  Thank you for your time!

  • Nick
17

FerFAL,
Thanks for taking the time to speak with Chris, a fascinating interview. It has been interesting and also distressing reading your news from Argentina on your own blog. I was lucky enough to visit back in early 2000, made some good friends and learnt a lot whilst I was there. Of course this was before it all blew up, but the signs were there that things weren’t right. Spanish corporations were buying up half the country, the cracks were showing in dollarisation, and in BsAs at least, I could see for myself huge disparities in wealth - little kids begging barefoot on the Subte, for example, but nothing like I saw in Sao Paolo where whole families were living on the pavements and scratching a living by collecting scrap cardboard.

I second AlphaMike’s rebuttal of Technet’s rather disrespectful view of the country. Seems to forget Argentina was once the world’s third-largest economy, and should be up there still. An impression I got was that the people had been beaten down and robbed so many times in the intervening decades that (some) had almost given up trying for fear that whatever they achieved would be taken away again. Looking back on events since I was there, seems they were not so wrong after all. It’s painful seeing how bad things have got, and I worry for the people I’ve lost contact with. I know Argentineans are not the feckless, apathetic, uneducated layabouts of Technet’s stereotype. But as everywhere, if a country is run solely for the benefit of the ‘top’ 1%, the rest are soon crushed.

Thanks again for the news and your insights FerFAL.

18

Hello everyone I have to intervene in this post because, I’m Venezuelan, I currently live in Spain, I went to college in the US and I know a lot of Argentinians that migrated to Venezuela in the 70s and to Spain after 2000. I hate to say it, but Technet has a point. I know all those realities first hand… Maybe he wasn’t politically correct, but corruption, graft, lazyness & stupidity exist all over Southamerica, from Mexico down to the South Pole. Its been like that since the British & French helped local revolutions against Spain in the 19th century. If we had stayed coupled with the Spanish Crown till today we could be kinda Spanish Speaking commonwealth…But we were divided and conquered afterwards…So after 200 years this is where we stand. Nothing to show for and, specially my country giving oil money away for bolivians, nicaraguans, ecuadoreans, CUBANS, and Argentinians…And Venezuela energy system has collapsed, and we are under a crimewave and social unrest just second below that of Mexico…Sad for an oil exporting country…You all know Chavez, dont need to explain further, but the downward spiral started like 30 years ago and now all hells broken loose. However, that does not mean that something similar cannot happen in the US with time. There are many guns around, many racial & economic tensions and the empire is overstreched…And from what Ive seen, the politicians are tweetin their penises and harrasing young girls online…So, I would say to Technet to beware…With those politicians I can foresee an ugly future…I remember when Venezuelas was almost a developed country with higways, concordes, factories, back in the 70s and we had maids from the rest of the world, even from Europe…It is a pretty humbling experience to see the dutch sindrome happen in front of your eyes Of course we cannot compare both realities and the achievements of the US with the rest of Latam. On the other hand, FerFal seems like a pretty intelligent guy, from a proud once productive country, but he’ selling to the crowd. I remember argentinians and uruguayans telling me that their countries were so much better than the rest of latam because everyone was white there, whereas brasil, colombia, venezuela, etc was full of blacks and mongrels so they were doomed from the start.Poverty was their destiny…Well, see where they are now, bankrupted and subsidized by a mongrel communist president…So sometimes reality puts everyone in their place without taking into account race and background. Argentinians were educated yes, but they had military regimes for a long time, both leftist and fascist and that killed any development they could’ve achieved…Most argentinians I know here in Spain are comunist…I’d say that the picture FerFal paints of Spain in this interview is not all that accurate…We are not as bad as you guys may think… I live in Europe now and I have a good job in euros and I sincerely feel that Spaniards, French, Germans, Italians have more tools and social & transportation & manufacturing systems in place to survive the great depression we’re entering than most American countries…Will we prevail? Don’t know…Will we be able to withstand the pressure from the middle east? Dont know either…All I know is that we have to prepare and be humble because we’ll never know…Just reading Orlov and Kunstler scares the shit out of me. Martenson at least gives a bit more optimistic approach for the sorry ass world thats coming…My apologies for my engish because is a bit rusty

19

[quote=nickbert]FerFAL-
Great interview and a lot of good information. 
Starting this year my family and I will be spending most of our time overseas in Mongolia (my wife’s home country) to pursue some long-term business opportunities, but we will still be spending time in the United States for a few months each year for both business and visiting family.  So as you might expect, I have concerns about freedom of travel and the ability to move money back and forth, and have a few questions about your experiences if you don’t mind:

  1. During and after crisis, was it more difficult for Argentinians without dual citizenship to travel abroad?  Did other countries that formerly did not require a visa for Argentinians change that policy, or were visas that used to be easy to obtain become more difficult to get?  As you are probably aware, US citizens don’t need visas for short visits to many countries (a HUGE advantage), but I think it’s reasonable to expect this may change.
  2. During and shortly after the crisis, was it more difficult to get physical cash (local&foreign), monetary instruments, and gold/silver out of the country (I think I recall you previously mentioning a 50% tax on gold coins in Argentina)?  Obviously money in banks couldn’t be moved at that point or at least not until after it was devalued, but did capital controls include more restrictions on what you could physically carry out of the country?  If so, did any such restrictions come into effect slowly over time, or within days or weeks after the crisis? 
  3. Finally, how badly were the air travel costs to and from Argentina affected by the crisis?  I’m sure they went higher in terms of the local currency of course, but did the flights become more expensive in terms of dollars and other currencies as well?  I have a mental picture of the airlines cutting back on the number of flights and increasing prices after the economic crisis due to reduced demand and ever-increasing costs of doing business in the country.  Thus increasing costs for all fliers, not just ones using the local currency.
    Interestingly enough my wife’s home country experienced its own currency crisis in the 90’s, but as a former communist country and non-Western culture it is a rather imperfect basis of comparison to America’s situation.  I find greater similarities between America’s situation and Argentina’s, and as such I find your writing and experiences very informative.  Thank you for your time!
  • Nick
    [/quote]
    Hi NIck!
    1)Yes,  it’s estimated that 200.000 Argentines left to Spain after 2001, many others left to other countries as we’ll during the worst of the country.
    Having dual citizenship ( I have EU citizenship, my father was born in Spain)  was a huge advantage. It meant you has Europe opened and lots of opportunities. The lines on the Spain and Italian embassy were huge, and for those that had a Spanish or Italian father ort grandparent, it suddenly took years instead of weeks before they got the citizenship. Indeed, it’s a big advantage. AS you’d expect with such a situation, most countries started hardening the requirements or just unofficially made it harder for Argentines to get in, understanding that the chances of them overstaying their visa had increased considerably. Things would have to get pretty bad though, before countries start doing such a thing to American citizens. More of a concern though is the anti-American sentiment that is growing around the globe. Just as an example and if there’s any American expat reading this he can chip in, right now in Argentina an Illegal from Bolivia living in Argentina can live in a shanty town without paying taxes, stealing water and power with illegal connections and that’s ok with the Chavez-like government we now have. Now an American looking to live here, he will go through lots of troubles, be forced to pay ridiculous fee one after another for every little thing and actual residency will be hard to acquire.
  1. The 50% tax goes for everything being imported, including gold and silver. Right now imports are down right frozen and things are getting ugly fast. Something as simple as buying a washing machine that also dries is nearly impossible. There’s just no imports coming into the country any more, those that are here already are being held by customs. It was hard to leave the country with more than a couple thousand dollars unless you had the connections to do so. If not I believe 10.000 USD is still the limit. These restrictions were enforced immediately to prevent what was happening, rich people leaving the country with suitcases full of USD.
  2. Prices of plane tickets were the same in USD, and went up in pesos accordingly, depending on the exchange rate of the day. One day it was 1000 pesos to get from Bs As to USA, then when it went to 4:1 it was 4000 pesos. Local airports and companies increased the price some beyond that in some cases with extra fees and taxes, sending the price up beyond that 5% to 10%.
     
     
    Hi Macs, thanks. Unfortunately what you saw in Sao Pablo became a reality for hundreds of thousands of families in Buenos Aires after the collapse, you would often see and still do, entire families collecting cardboard and junk to survive, if not directly eating out of the trash.
     
    About some of the very misinformed and at times racist comments about people in South America being lazy and stupid, I’d rather not comment. I will say though that corruption is a huge problem all across South America and especially in Argentina, getting worse thanks to the socialist and anti American sentiment. At times combined with anti-guns politics, it’s the perfect cocktail so as to have more and more uneducated people that can’t fight tyranny, which happens to be the purpose of the 2nd amendment.
    ScubaBonaire, I’m sorry that  you are going through a rough time in Spain but your bitterness toward me is uncalled for. My parents and brothers are Argentinean and life in Spain, they aren’t communists. Most Argentineans (here or in Spain) aren’t communists. That’s simply a lie.  Maybe it should be re-evaluate the wisdom of having a socialist government were half the population has to suffer so as to sustain through welfare the other half that doesn’t want to work. When I visited Spain 5 years ago I was surprised by the amount of 20 and 30 year olds that didn’t work and spend all day skate boarding and doing drugs, I never saw so much lazy people put together in one place. When I asked a 30 something skateboarder (looked more like a bum than an athlete, but he had a board so I guess I should call him that) from UK how he managed to live this way, he said that every once in a while he went to interviews, did an awful presentation so as to not get hired, and then went back to living on welfare. Something told me that wasn’t going to last long…
    Argentina and Uruguay were (and still are) better than most of south America not because we are white, but because by the time Venezuela didn’t even know they had oil, we already had nuclear power plants and a much better general education level. We had better education (and still have compared to 4th world places like Venezuela) and had been more prosperous in the past, earning the nickname “granary of the world” .  Even with the hyperinflation during the 80’s we still had a decade of what was called “sweet money” during the 90s. Like it or not and in spite of how much it may pain other south Americans, Argentina was a better country, more prosperous and better educated than our neighbors. This only changed after 2001 when the economy collapsed. Even today any tourist can visit Buenos Aires and Caracas and tell the obvious difference. You can like it or not, just the way it is. Its because we were clearly the better off country of South America, that the falling to the 3rd world status common in South America is relevant to North Americans. Bolivia or Paraguay, those are even worse places to live in than Argentina, but they weren’t prosperous before and  didn’t even have a strong middle class to begin with so there’s no parallelisms to be drawn to what could happen if USA’s economy collapses. Even after the economy collapsed in Argentina in 2001, it was still a better place than some of the poorest countries bordering south and we still had people immigrating from over there.
    As for South Americans being lazy or stupid, of course it’s a racist thing to say. It is something you hear often though, especially from the poorest and most ignorant groups in Europe, often blaming “Sudacas”(derogatory term used to describe South Americans)  for their own incompetency.
    Truth is that South Americans in general are more used to coping with problems and fixing them than people in 1st world countries that are used to a system that works. Some of my US friends in the military noticed this, how few things get thrown and are beyond repair in South America. One army special forces friend told me last year  “cars that are to be destroyed in USA get fixed in the 3rd world. I’ve seen mechanics use two totaled vehicles, cut the halfs that still work and put them together to make one working vehicle”. I think it’s a good example of how necessity creates people that, in general terms, manage to cope and deal with inconveniences that just don’t occur in 1st world countries. Other than that, as individual we are all different and there’s corrupt, capable and lazy people all over the world.
     
    FerFAL
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Hello Fer I have to tell you that I’m having a great time in Spain. In the last 15 years I have accumulated more equity than I ever dreamed and worked for top of the line software companies in Europe (pretty good coming from the 4th world) My wife is Spaniard so I have the citizenship and all the rights and duties that come along with it. So the sudaca thing, is only happening in your head…As I said before, you sound like a pretty intelligent fellow but I think it is necessary that we clarify somethings here, because most american readers of this blog have never gone to Latam and all they think when they hear about SA is chickens inside a plane or drug dealers right out clear and present danger…and you may be misleading them somewhat… We use to have a joke back then…What’s the ego? That little argentinian that lives inside everyone of us :wink: no hard feelings thou…The real REAL truth is that Uruguay, Argentina & Chile are white banana republics,WITH NOTHING TO SHOW FOR EXCEPT a decent soccer national team…In dire straits like the rest of us…and even way before the Falkands defeat Argentina was in bad shape, but you knew how to market your country real well, and called it Europe in South America and stuff, without realizing that those days that you were called the barn of the world are over. Even fooled MS and the IMF, until the SHTF…Corralito anyone? People were abandoning Argentina when Americans were testing the Saturn V. You, like Gonzalo Lira have this wrong thesis that Europe is going to crash the day after tomorrow, and are advising people to drop the euro or that the US is going to become, from one day to the next, a hole in the ground… Too bad that you, being half Spaniard and with a large audience, are spreading the word that Spanish youth is lazy and drug users mostly… I can assure you that roughly the same amount of addicts abound in Buenos Aires or Washington or San Francisco…You are stereotyping the same way Technet is doing, but in a more insidiuos way…The educated way…The way nazis convinced the rest of the germans with pseudo science about the need for the final solution…No wonder most nazis that escaped Nuremberg landed in your home town. Anyhow, don’t mean to debate or offend you or anything of that sort…Like I said, I like to learn from everyone…And I want to invite all the people reading this blog to come visit Spain to check first hand if this really looks like a country thats about to crash econmically like Greece or Ireland…My reccomendation is to follow Keiser, he’s an American living in France and he can tell you first hand about Europes real economic and social position with a view that differs the MSM. Even Fer, if you come to Madrid I can show you around and convince you that dumb skater was just a minority fellow that stands out from the crowd…Probably he was wearing a Che shirt…wasn’t him? You just visited to the wrong parts of town…In fact most of the people in sol square were doing just their piqueteros show because the PSOE is getting kicked out the government sooner than expected…When sound PP politicians come into power we’ll see this euro bond nonsense disappearing… Saludos y un abrazo