Stocks During the Economic Collapse of Argentina?

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Dear Ferfal,

I think I’ve read every blog post you’ve ever written. Long time fan. Thank you so much for sharing your experience and wisdom with everyone.

The Dow Jones just hit 20,000! I have a question about what the stock market is like when TSHTF. Like most Americans, I “own” stocks through my retirement plan. If inflation goes really high, is a stock like a gold ring that doesn’t have value until you sell it (and therefore increases with inflation), or will stocks kind of stay the same price, and therefore lose tremendous value? What happened in Argentina?

And I want to say that you have actually changed my life. I live in a very safe place, the kind of place where people still can leave their front door unlocked. Which I sometimes do when I go next door (on the other side of the porch), but I’ve made it a habit to always lock the door behind me when I come inside. If I come home and someone is inside, I can run away. But nobody’s coming in when I’m home unless I let them in (not too many ways out except the front door). Anyway, I think it’s a good habit, and I think I’m better prepared for what’s coming thanks to you.

Best Wishes,

-Adam

Hello Adam,

Thanks for being a long time reader. I’m glad to know I helped make your life a bit safer! These are all little things we do, habits and strategies that start building up as our mindset changes.

I see survivalism, at least the practical version of it that I call modern survivalism, as a lifestyle in which practical decisions are made keeping in mind the best possible outcome in a worst case scenario. Sounds paranoid but it’s not. If doing one thing instead of another improves my odds and quality of life (better, safer, more peace of mind) then it is the one that provides the most strategic advantages from a tactical point of view. From the items in your EDC, the clothes you wear, the car you drive and the place where you live.

Regarding the stock market in Argentina during the crisis, here yet again we see that common assumptions and what actually ends up happening during an economic collapse have little in common.

Of course, the stock market has collapsed in the past and such a possibility is something to keep in mind, but we must remember than these situations are pretty complex, both in causes and effect. It is crucial to fully understand the former to correctly predict the latter.

Here is where we must ask ourselves, what caused the collapse in the first place? In the case of Argentina it was a bank run followed by a devaluation. The knowledge of an impending devaluation and rumours of accounts being frozen obviously triggered such bank run. If the same had happened for example with stocks, rumours of a bubble, followed by sharp sales and loss of value the story would have been different. The chart below reflects the Merval, the most important index of the Buenos Aires Stock Exchange.

We clearly see a big drop as expected at the time of the economic collapse in December 2001, but then as time goes by it starts going up, even as the Peso goes down, why? Well, the price is now in Pesos no longer pegged to the dollar, but even more important is that stocks represented something physical to own, a part of a company (even a struggling one!). Even if people suffered it often occurred that companies did well eventually. The common saying in Argentina years after the crisis about “its great that the economy is doing much better. Too bad we don’t get to see any of it” reflects just that. With a 25% inflation per year anything that held its value was better than the Peso. Real estate, US Dollars and yes also stocks.

I would say that looking at it from a historical perspective, good time-proven stocks tend to do well on the long run. High risk ones are more of a question mark. It sure isn’t a chunk of gold or silver in your hand, but the chances of it being worth only the paper they are printed on and the company going belly up isnt as high if you invest wisely. As always, don’t keep all your eggs in one basket and so on.

FerFAL

Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.

Serious Survival: How much food should you stockpile?

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It seems that for every blogger or forum member there’s a survival expert as well. That’s great because there’s such wealth of information and you can learn from different experiences and accounts.
Then again the downside… every blogger and member thinks he’s an expert.
You see, for realistic survival and preparedness it’s crucial to differentiate the “I think” and “I believe” from the “this is how it went down” “this is why”.
We all know that food is essential for survival. No food and you won’t last long. Same goes for water (and I see it overlooked more often). Keep in mind that while a day without food may suck a bit, but a day without water will be tough indeed. In certain warm climates it can be downright dangerous.
We all get how important food and water is, but then there’s the classic survival question: How much food should you have stored for emergencies?
Doomers say you need years worth of food. Decades even. After all you die if you don’t eat. Members of The Church of Jesus Christ of Latter-day Saints (Mormons) are famous for their year worth of food approach, although many have far less than that.
Officially speaking, what would a real expert recommend? Ready.gov says to have 3 days worth of shelf stable food and bottled water. That may seem as very little but in general most emergencies are either resolved within that time frame or help becomes available. Still, tell this to anyone that spent a week or more snowed in during a storm and he’ll find it lacking.
So how much? A Week? A Month? A year?
The first piece of advice is one you’ve probably heard before and that it is to store what you eat. If your kids don’t even know what rice looks like then having buckets full of the stuff isnt that much of a good idea. Either store something else or actually start eating rice.
There’s two very important reasons for this.
First, if you don’t rotate your food supply it just becomes one of those “just in case” things, and you’ll find yourself throwing food away every few years. This makes keeping large quantities of food stored a great waste of money. Second, if you store what you eat there wont be any difference between emergencies and “normal” times, at least food wise.
In our home we love rice and lentils and prepare rice and lentils stews often. Its tasty, very healthy, stores well for years and its pretty affordable too. Some canned tomato and vegetables and you have all you need for a great nutritional meal.
Another important point is understanding how much calories you actually need. The standard reply here is 2000 calories. Sure, if trekking the north pole you’ll need 5000 instead but even if some manual labour may be needed during disasters there’s people that stay healthy AND active with a lower caloric diet. 2000 will do well enough.
OK … SO HOW MUCH DO I NEED?
The 3 day recommendation by ready.gov is based on a rather optimistic government recommendation. If they have said instead to have 7 days immediately people would be wondering “Wait, so you’ll let me hang there for an entire week?!” People don’t react well to uncertainty and avoiding panic is a government’s #1 priority. Two weeks worth of groceries is just common sense. It doesn’t put a significant dent in your wallet if done correctly, and yes, it is true that it will cover 99% of the disasters and emergencies you’re likely to face in your lifetime.
I already imagine people thinking “but I want to be ready for SHTF, a worst case scenario, the real end of the world stuff!”.
OK, lets do that. Lets say it’s a worst case, total SHTF scenario. But lets keep it real and look how does it actually play out in the real world rather than fantasize about it.

Related image
Lets say you have 2 years, no, 10 years worth of food. Lets say you have that plus means of producing more, a fully working farm.
Now lets suppose you have your ten year supply of food, plus a farm, plus a pile of guns and ammo… and you’re sitting in Eastern Ukraine when the Russian troops roll in. Or Aleppo when they are levelling every structure around you with barrel bombs. Or in South Africa when white farmers were exterminated and kicked out of their homes. Or in Fukushima when the tsunami destroyed everything and the radiation scorched the land. Do you see a trend here? More food, or a bigger farm would have done you no good. In all of these sometimes like more cash or gold to take along with you when you bug out or even better money in an offshore account would have been far more useful.
“But… I want the end of the world to be more convenient…”
Ok, what about Venezuela? You have out of control inflation, out of control crime and poverty with people starving. Even farmers starve there(posted about just this a few weeks ago), just like Irish farmers starved during the genocide known as the Great Famine or Ukranian farmers died during Holodomor, reduced to cannibalism. Yes, sometimes its natural disasters, but in others its lack of means of production, and an authoritarian government ensure that people starve in spite of having land and the knowledge to work it.
In my experience after the collapse of Argentina’s economy I would say it was somewhat similar to Venezuela during the times of Chavez. By this I mean horrible inflation, but not reaching the levels of food poverty seen today in Venezuela. Food was available, just two or three times more expensive than before. Just imagine how you would deal with such a scenario if you woke up to it tomorrow. Indeed, we all wished we had more food stocked up, and we rushed to buy more right away desperately trying to beat the nonstop inflation. I sure kept several months worth of food stockpiled. But still, at the end of the day if you had money you ate.
I stayed for over a decade after the collapse of 2001. In retrospective I probably should have left sooner. Personal circumstances, heck, life I guess, made us delay our departure. Still, we always had the resources to leave ASAP if needed. This is more than what most people in Venezuela can say.

Image result for irish great famine
In such a complex situation would a 10 year supply of food, or a farm, made much of a difference? Not really. The food would have been nice, but the money to buy it was just as good besides having a conservative stockpile. A farm? Maybe more of an anchor to the country at a time when leaving was the clear path. A farm in a place like Venezuela, where you cant sell it, or if you do you don’t get anything for it, really does you no good.
So, start with a couple weeks worth of stockpiled food. Work towards a month. Then 6 when you can afford it and have the room for it. 6 to 12 months is the maximum I would recommend, with 6 months being the most realistic objective for most people. Six months of food gives you plenty of time for things such as unemployment, family problems. 12 months helps greatly when dealing with inflated prices, food shortages, and overall instability in the country where you maybe spent several months maybe saving money and looking for a job abroad, for a way out of the country entirely.
The lesson being, If you need more than 12 months worth of food, then more food will do you no good because what you really need is to get the hell out of there!
Take care folks,
FerFAL

Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.

Coup d’état in Argentina likely?: Yes.

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Hello Fernando:
I have read your work for quite some time. You have given me a lot of ideas over the past couple years on my attempt to go “Galt” and I thank you.
You are the only person at the moment that I could think of to answer a really bizarre question, is Argentina in the midst of a coup?
Background:
My wife’s family is from Argentina. She has an aunt visiting from B.A. who phoned home to check on the dog and a neighbour told her that there was a possible coup taking place…..
I have not seen or heard anything anywhere, but then again propaganda being what it is today….what would one expect?
I understand this email is coming from out of nowhere, and completely understand if you wish to ignore it. But if you are able to confirm or deny you will keep my wife’s aunt from life support ( and me supporting her for the rest of my life). Please – no need to publish any of this in your blog. —- unless you think it fits a discussion/narrative on propaganda.
Cheers.
Edward
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Hello Edward,
Thanks for your email. Actually, yes, your question is pretty accurate.
Coups aren’t that rare in Argentina. A coup d’état literally mean “blow of state”. In December 2001, it is well known that while the social agitation was very real and people were indeed angry, Peronist leaders were the ones that gave the situation that extra push. President Fernando de la Rúa sure lacked the political skills to keep the country under control but the various Peronist governors and leaders across Buenos Aires were the ones that allowed the looting to get out of control forcing the president to resign.
It’s actually the same populist and nationalist politicians which are attempting the same thing now, most of them aligned with the previous Kirchner government. I cannot emphasize enough how important it is to never EVER give up reason, logic and sensible debate to extremist nationalist and populist ideas no matter how good they may seem to some. You cannot expect anything good to come out of someone you already know is corrupt and lacks any kind of moral compass.
Right now we have Mauricio Macri for president. In spite of his flaws, he’s by far the best president we’ve had since the return of democracy after the last military junta.
Your aunt’s neighbour is right. They are trying to get rid of him. They will try to either kill him or overthrow him. The thing is, killing him would leave his sidekick vice president Gabriela Michetti in charge, and she would continue his work. Now if they manage to overthrow him along with his entire political party and everyone associated to it, then the corrupt Peronists can take control of the country again. The main objective here is pretty simple. It’s a matter of survival. Former president Cristina Kirchner is against the ropes. Every day a new offshore account is found, another of her dogs is caught with gym bags full of cash, even her daughter was caught with 9 millions USD in cash in a safe deposit box. We’re talking billions of dollars here that she stole through different channels. Every day she’s closer to going to jail. There’s even accusations of treason given her dealings with Iran. If she doesn’t manage to overthrow Macri she will go to jail along with her two children and accomplices. This is no secret though and most main media groups in the country are already connecting the dots and showing how indeed there is a deliberate plan to create instability among the population and question the legitimacy of the government. I doubt they will be successful, mostly because the cat is out of the bag and the population knows this. They know what they are trying to do. Still, the may manage to do it if the government doesn’t stop the operation against them in time. December is usually the hottest month in Argentina, both weather and political wise. Most episodes of political violence occur during the summer holyday of November and December.
Who knows. All I know is that I cant wait to see the Kirchners and their accomplices rotting in jail.
FerFAL
Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.

Q&A about moving to Buenos Aires, Argentina

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Mr. Aguirre,

I will be moving to Buenos Aires in June. I have some questions that you may be able to answer. Google has given me some info but it’s never as good as info from people such as yourself.

-J

Hello J,

I get similar questions pretty often. This is surprising given that I’ve literally written for years about how bad the situation was and still is in Argentina. Still, people have their reasons. So, if others have similar questions here it goes:

  1. I will be living near the city center. Can you give me an idea as to what areas I should avoid?

All of them except these ones. Try sticking to either the city center or northern part of the city. Palermo, Recoleta, Belgrano, Las Cañitas, these are ok although nowhere is really safe in Argentina so stay alert. Avoid entirely the western and southern suburbs of Buenos Aires if possible. They are particularly dangerous although again, there’s crime everywhere.

  1. Are there any recommendations for transportation? Any I should avoid?

The subway is pretty good in Buenos Aires, but in general I move around with remis (sort of like Uber) from this company.  http://www.rcremis.com.ar/inicio.php. Write their number down and add it to your contacts. They are safe, reliable, fast and affordable. You don’t get all of that very often in Argentina. Avoid taxis though, in general they will rip you off.

  1. Are there regulations on knife carry?

They are considered weapons and will get you in extra trouble if you use them in crimes, but for law abiding citizens there’s not specific restricting legislation enforced. So get a knife and OC Spray (also legal) as soon as you land.

  1. Are there any like minded(self defense, knife/gun culture) people that you would recommend I contact or possibly put me in contact with?

I would recommend going to one of the shooting clubs, either Tiro Federal Argentino or Tiro Federal Lomas. Take a class or two with Jorge Baigorria (http://jorgebaigorria.com/) You’ll learn a lot and get to meet those “like-minded people”.

  1. Any other suggestions would be much appreciated.

Thank you sir,

Jacob

Just stay safe, keep your guard up and enjoy the stay. I always talk about the bad stuff about living in Argentina but it is a country with great potential and people are fantastic.

FerFAL
Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.

There’s Hope for Argentina!

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President Mauricio Macri and Governor of Buenos Aires, Maria Eugenia Vidal

I barely dared to hope. Just barely. I had seen so many times my beloved country go down the toilet during elections, consumed by corruption, ignorance and populist ideology.

Yesterday something changed in Argentina. Mauricio Macri is now president of Argentina. Macri is the product of the 2001 crisis, starting his political party in 2003 and winning the mayoral elections of the City of Buenos Aires in 2007 where he did a great job. He ran the government of the city of Buenos Aires with professionalism, free of favouritism and corruption with clear goals for the city which he mostly achieved. Mauricio Macri can be described as a center-right conservative, known for building skilled teams around him and solving problems in a methodical way, probably due to his background in civil engineering.

As great as this is, the damage done to Argentina is still considerable an years, maybe a decade or more will pass before it becomes a nation with standards of living similar to the ones found in developed nations. The horrible crime problem, even the corruption and economic instability, you don’t get rid of those overnight. Macri knows a thing or two about being a victim of crime. He spent 13 days in a hole, kidnapped himself.

Still, its great news. There’s hope, and now there’s a president that will work towards fixing things rather than filling his own pockets. A president we can finally be proud of…that is, until he starts dancing…

FerFAL

Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.