Important!--Look to Argentina for coping skills in a broken economy

I started writing this in response to Bigmac, but it got so long and involved I thought I would turn it into its own post.

Argentina went through an economic melt-down similar to the one that I believe will be hitting the United States eventually, perhaps even sometime this year. I believe that conditions are such that things could deteriorate really quickly and disruptively. I've gathered some lessons about what the Argentines went through, plus a few pointers gained as a veteran hurricane survivor. I have been doing (or getting ready to do) all of these things:

1. strengthen home defenses against increasing crime;

2. have things to barter (and/or have a skill that can be readily bartered);

3. keep some cash hidden away-- they may close the banks or devalue what's on deposit (when Hurricane Rita "hit" this area the cash machines were all out of money, the banks stayed closed and no one came to refill the machines for days and days). Case in point from Argentina-- look at the picture and the caption, from the BBC article posted below;


A woman hammers on the closed shutters of a bank

4. keep stand-by water and non-perishable food (canned goods, rice, other staples) stored just in case (I live in hurricane country so I need to do this anyway) (this will do double duty as barter stock if you have enough, and provide help for your neighbors);

5. get to know your neighbors. We will all have to work together to get through this.

6. get psychologically prepared to trim down the things you don't REALLY need, like cell phones, the second refrigerator, the second car, the cable TV connection, expensive frozen foods, going to the movies and restaurants, etc...

7. Get out of debt before this hits, because interest rates are going to explode and your home equity is going to disappear.

8. have a passport and cultivate your overseas friendships. you might need to get out of Dodge.

9. read about Argentina!

If you're a yuppie or a professional, don't think that you'll be immune from taking a hit. Once your savings are gone you'll be in the soup like everyone else. There are lots of yuppie testimonials from Argentina that economic devastation hit people across the board.

**********************
Thursday, 9 May, 2002, 17:59 GMT 18:59 UK
Argentines barter to survive

In the latest of a series of personal testimonies on Argentina's crisis, psychotherapist Adriana Kundergraber describes life as a "by now ex-upper middle class Argentine professional".

"Buenos Aires used to be the Paris of South America, the most cosmopolitan city, but things have got so bad that hunger has become a growing reality. "We're permanently being confronted with homeless, with young children, with beggars asking for food - as a growing reality - it's terrible now.

"You still have areas where you can see restaurants packed," she says. But that's partly because the plunging value of the Argentine peso - down 70% since January against the US dollar - is starting to attract tourists from Uruguay and Chile. "They come over the weekend and try to buy everything for peanuts."



Beggars in Buenos Aires
"It's like a war without bombs"

Barter economy

For Argentines, restaurant visits are becoming a rarity. "Having a job - which is also paid - has become God's greatest gift! And bartering has become an increasingly commonplace way of paying for things. "The special characteristic of this situation has been the impoverishment of all classes of society," says Adriana. One of her clients is a fashion designer. "At the moment she is going to pay me with clothes from her shop, which is a top shop in Buenos Aires.

<snip>

The result is a rising level of everyday violence, particularly in bank queues, and growing patriotism, with fury at the government coupled with concern towards fellow Argentines. "As a result, there is not such an individual outlook, but for the first time everyone is more concerned and thinking on a more patriotic basis." But for many, patriotism co-exists with a desperate desire to leave.

<snip>

http://newswww.bbc.net.uk/1/hi/business/1977804.stm

the class that had their money in banks out of the country. The same class that always comes out of these situations smelling like a rose.

READ GREG PALASTS "GLOBALIZATION"

CAST OF CHARACTERS??

JEB BUSH, ENRON , WORLD BANK ( NOW IN WOLFOWITZ'S HANDS)

The Sacking of Argentina
by Tom Frasca
The Nation magazine, May 6, 2002

<snip>
http://www.thirdworldtraveler.com/South_America/Sacking_Argentina.html
The Implosion

Last December the IMF, realizing that Argentina was a bottomless pit, turned off the cash spigots. Facing bankruptcy, President Fernando de la Rua of the Radical Civic Union and his financial Rasputin, Economy Minister Domingo Cavallo, declared a corralito on bank deposits. This apt metaphor, suggesting cows liable to wander off and teams of neoliberal horsemen reining them in, meant, in practice, seizure. Confiscation. Argentines suddenly could withdraw only 1,000 pesos a month of their own money; otherwise, old-fashioned bank runs would have collapsed the system.

Implicit in the corralito was acknowledgment not only of the country's bankruptcy but also of the huge falsehood that had underpinned the entire economy for a decade: that the Argentine peso was worth one US dollar. Like the military dictatorship's assurances to the public in 1982 that the Falklands/Malvinas war would conclude with a glorious triumph, the political leadership simply couldn't give up its steady fix of convenient mendacity until it was far too late.

The Argentine military still hasn't recovered from that debacle and the subsequent airing of its horrendous crimes during the local version of the war on terrorism, and in fact no one suggests the generals are in any way itching to get back into the political game, much less stage a coup.

<snip>

In the early 1990s Argentina had a choice - a choice the people made freely - responsible economics or deferment of economic pain for a few years. The voters opted for the second option.

Realizing that its not other people's fault is the first step to solving your problems.

Any ideas for in-demand, "barter-able"/marketable trades/skills/services/work?

Common/traditional trades
- carpenter
- mechanic
- medical care: doctor, nurse, midwife
- painter

Easily/quickly learned trades
- uh?
-

Special tool/equipment related work
(in-demand work that depends on having special tools/equipment rather than expertise)
- ice maker
- welder/blacksmith
- seamstress

Trades/skills/work associated with economic need
(in-demand work that becomes valuable because of the economic distress itself)
- appliance repair
-
-

Trades/skills to produce trade goods
(work based on either special skills, facilities, tools or equipment valuable
for reasons of producing trade (trade-able, barter-able, sale-able) goods)
- pottery maker
- clothes maker
- shoe maker
- baker
- candle-stick maker
-

I didn't think of many, and of the few I did, they're either hard/time-consuming to learn, involve both real skills and expensive equipment or may not even be in demand...
if you can think of any 'good' ones, make like a sticky-note and post-it!

people tend to want to drink in a bad economy.