Helena Handbasket
Gold Meritorious Patron
I've just finished reading The Modern Survival Manual: Surviving The Economic Collapse by Fernando Aguirre, where he talks about the Argentine economic crisis of 2001, its causes, its aftermath, and what to do to survive this sort of thing. His world did not come to an end, but for a while law and order broke down completely.
He listed several stages to the crisis:
(1) Prelude: Financiers were ripping off the system. When they stole all the money Argentina had, they got the world bank to lend Argentina huge amounts of cash, all of which went into their pockets, too. All ordinary Argentines got out of it were debts to be paid off in the form of high taxes for the rest of their lives.
(2) Delaying tactics: As the situation got more extreme, a number of artificial tricks were used to postpone the inevitable. These included everything from falsifying the unemployment rate to artificially pegging the peso to the dollar at a 1-to-1 rate.
(3) Crisis: Once the fiction could no longer be maintained, the fat cats fled the country with suitcases full of cash, and the banks were temporarily closed. When they opened again, withdrawals were limited to 250 pesos per week (nowhere near the amount necessary to live on) and all US dollar accounts were converted into pesos. Although the conversion was done at the 1-to-1 rate, the real value was 3 pesos to 1 dollar, soon to become worse.
(4) Breakdown: Many things the people counted on to be there were there no longer. Law and order disappeared outside of the Capital District, electricity was sporatic, proper water treatment was replaced by mere overchlorination, and many of the necessities of life were only available through black markets.
(5) Recovery: This the author did not speak much about, but I suppose now, 12 years later, the situation is much improved. But at the end of the book he's talking about emigrating to the USA. Emigration is what he advises in the event of civil war or sustained economic troubles.
This book is written for people in the USA. Not only is it in English, but he consistently refers to people in the USA as Americans, even though most people in South America consider themselves to be Americans too. And he mentioned that the USA is in the first stages of an economic breakdown (and there are a LOT of people in the USA agreeing with him, enough so that his book is selling well).
Will any of this happen in the USA? Not only has (1) and parts of (2) happened already, I believe its too late to stop the rest. The last delaying tactic will be to seize whatever ordinary Americans have been able to accumulate for themselves and add that to the national purse. In 1933, the USA under FDR not only made the private ownership of gold illegal, they mandated that a Federal tax agent be present whenever a safe deposit box in a bank was opened.
Under the Foreign Account Tax Compliance Act (FATCA), the feds know who has a foreign account and where, so keeping money outside of the country won't protect it. I suspect the money in those accounts will be seized and replaced by inflated dollars. Legal? no, except in the technical sense of passing a law allowing it. Will they do it anyway? probably.
There WILL be a breakdown, but it won't be as bad as in Argentina. I'm sure the Argentine crisis was studied six ways from Sunday by Washington, and the government is in the process of preparing to minimize the disruption. Police forces are being bolstered by recruiting and training reserves. (While this may minimize crime, the woes of the newly poor will be considered someone else's problem.)
I'll write more about this, but for now here's a link to his book: http://www.amazon.com/The-Modern-Survival-Manual-Surviving/dp/9870563457 . Note: if you read the preview, and get to the part about where it says "Nuke caught your attention?", that's the back cover, and it's referring to the front cover.
Helena
He listed several stages to the crisis:
(1) Prelude: Financiers were ripping off the system. When they stole all the money Argentina had, they got the world bank to lend Argentina huge amounts of cash, all of which went into their pockets, too. All ordinary Argentines got out of it were debts to be paid off in the form of high taxes for the rest of their lives.
(2) Delaying tactics: As the situation got more extreme, a number of artificial tricks were used to postpone the inevitable. These included everything from falsifying the unemployment rate to artificially pegging the peso to the dollar at a 1-to-1 rate.
(3) Crisis: Once the fiction could no longer be maintained, the fat cats fled the country with suitcases full of cash, and the banks were temporarily closed. When they opened again, withdrawals were limited to 250 pesos per week (nowhere near the amount necessary to live on) and all US dollar accounts were converted into pesos. Although the conversion was done at the 1-to-1 rate, the real value was 3 pesos to 1 dollar, soon to become worse.
(4) Breakdown: Many things the people counted on to be there were there no longer. Law and order disappeared outside of the Capital District, electricity was sporatic, proper water treatment was replaced by mere overchlorination, and many of the necessities of life were only available through black markets.
(5) Recovery: This the author did not speak much about, but I suppose now, 12 years later, the situation is much improved. But at the end of the book he's talking about emigrating to the USA. Emigration is what he advises in the event of civil war or sustained economic troubles.
This book is written for people in the USA. Not only is it in English, but he consistently refers to people in the USA as Americans, even though most people in South America consider themselves to be Americans too. And he mentioned that the USA is in the first stages of an economic breakdown (and there are a LOT of people in the USA agreeing with him, enough so that his book is selling well).
Will any of this happen in the USA? Not only has (1) and parts of (2) happened already, I believe its too late to stop the rest. The last delaying tactic will be to seize whatever ordinary Americans have been able to accumulate for themselves and add that to the national purse. In 1933, the USA under FDR not only made the private ownership of gold illegal, they mandated that a Federal tax agent be present whenever a safe deposit box in a bank was opened.
Under the Foreign Account Tax Compliance Act (FATCA), the feds know who has a foreign account and where, so keeping money outside of the country won't protect it. I suspect the money in those accounts will be seized and replaced by inflated dollars. Legal? no, except in the technical sense of passing a law allowing it. Will they do it anyway? probably.
There WILL be a breakdown, but it won't be as bad as in Argentina. I'm sure the Argentine crisis was studied six ways from Sunday by Washington, and the government is in the process of preparing to minimize the disruption. Police forces are being bolstered by recruiting and training reserves. (While this may minimize crime, the woes of the newly poor will be considered someone else's problem.)
I'll write more about this, but for now here's a link to his book: http://www.amazon.com/The-Modern-Survival-Manual-Surviving/dp/9870563457 . Note: if you read the preview, and get to the part about where it says "Nuke caught your attention?", that's the back cover, and it's referring to the front cover.
Helena
