FerFAL: Understanding Societal Collapse
As we write about the risks of our over-indebted economy, of our unsustainable fossil fuel-dependent energy policies, and our accelerating depletion of key resources, it's not a far leap to start worrying about the potential for a coming degradation of our modern lifestyle -- or even the possibility of full-blown societal collapse.
Sadly, collapse is not just a theoretical worry for a growing number of people around the world. They're living within it right now.
This week, we catch up with Fernando "FerFAL" Aguirre, who began blogging during the hyperinflationary destruction of Argentina’s economy in 2001 and has since dedicated his professional career to educating the public about his experiences and observations of its lingering aftermath. He is the author of Surviving the Economic Collapse and sees many parallels between the path that led to Argentina's decline and the similar one most countries in the West, including the U.S., are currently on. Since our 2011 interview with him "A Case Study in How An Economy Collapses", FerFAL has successfully relocated his family to Europe.
Given his first-hand experience with living through, and eventually escaping, economic collapse in South America, we asked him to offer his insider's perspective on the current crisis in Venezuela, as well as the devolving situation in Brazil:
The greatest points to keep in mind is overwhelming corruption. People get lost on what exactly went wrong in Argentina, in Venezuela, or what’s happening right now in Brazil. What they all have in common is that the people in charge had no real interest in doing things right; they really didn't care about destroying the country. They just cared about filling their pockets as much as possible.Think of Venezuela this way: you have a country where water is more expensive than gasoline. What sense does that make? I mean, you had Hugo Chavez walking down the street pointing with his finger saying “Nationalize this. Nationalize that”. And when he was saying "nationalize", he was saying "Steal this". He didn’t have any great plans or political grandeur going on in his mind. He just wanted to steal as much as he could.
I know for a fact that they’re slaughtering one another in the streets right now in Venezuela. For at least three years it’s been a case of out-of-control crime and corruption over there. It’s not getting better any time soon unless something changes on a deeper level.
For the average "middle class" person in Venezuela -- educated and still holding on to a good job -- he needs two years of wages to buy a single plane ticket in his own currency. He needs to work for two full years to buy one single plane ticket -- he's stuck there. The problem is that he waited too long to leave. That's something important that I write about often: You have to know when to leave. You needed to leave Venezuela at least three or four years ago; now you’re getting to the point where you’re stuck there. The official exchange rate between the USD and Bolivar is 1 to 10, but unofficially which is the real one you experience, is more like 1 to 1,000. So they basically are starving you to death through a completely devaluated currency which is what you’re getting paid in.
Basically need to find ways of leaving the country by any means possible. What I would do if I was in Venezuela right now is I would leave on foot. I would leave any way I could, because it’s not safe. I know people that have killed people surviving Venezuela, I actually know guys that had to do that to live. You can't even find some land and grow your own food. You cannot do that when you have the government stealing it from you. It’s a no win situation.
Click the play button below to listen to Chris' interview with Fernando “FerFAL” Aguirre (55m:03s).
A heads up: the audio quality of this podcast is not at our usual standards, due to the phone conditions in Spain where we managed to contact Fernando.
Chris Martenson: Welcome to this Peak Prosperity podcast, I am your host Chris Martenson. We need to talk. We need to talk about Venezuela; it’s in meltdown right now, social, financial, economic, political – meltdown, is that too strong a term? I don’t think so because people are rioting. They are storming grocery stores because they’re starving; street justice is taking root, death squads are roaming all over which explains why the morgues of Caracas are overflowing. Inflation is running in the hundreds of percent officially, maybe more unofficially and accelerating. And of course Argentineans experienced a sort of thing like this back in 2001, it's close, and so we’re wondering what sorts of lessons learned can be gleamed from that experience.
Today are fortunate to be speaking with Fernando Aguirre, also known as Ferfal, Author of Surviving the Economic Collapse and also Bugging Out and Relocating, two books, you should check them out.
Ferfal experienced the hyperinflationary destruction of Argentina’s economy in 2001 up close and personal. And has since dedicated his professional career to educating the public about his experiences and observations of the lingering aftermath. His blog, Surviving in Argentina, found at Ferfal.blogspot.com, is covering the events as they unfold there as well as elsewhere and more general topics around the idea of navigating an economic dislocation wherever you happen to live.
Now, given rising concerns—we are seeing this in major hedge fund operators. Really large financial titans are beginning to express their concerns about the possibility of a much larger and unfortunate conclusion to central bank meddling, one that could sweep the world. Our listeners are increasingly asking to hear from voices that have firsthand experience of what it’s like to live through a large upheaval such as the one Venezuela is undergoing. So Fernando, thank you so much for being with us today.
Fernando Aguirre: Chris it’s great to be talking with you again.
Chris Martenson: Okay right from the top, what are the similarities between Venezuela and what you experienced in Argentina?
Fernando Aguirre: I think that the greatest points to keep in mind is overwhelming corruption. People sometimes get lost on what exactly went wrong in Argentina or Venezuela or what’s happening right now or even Brazil. What they all have in common is that the people in charge had no real interest in doing things right, they really did not care about destroying the country. They just cared about filling their own pockets as much as possible and that’s exactly what you’re seeing in Venezuela.
You have this communist speech going on in Venezuela and it was very similar to what the government had in Argentina as well. Now these are people that were wealthy beyond our wildest dreams, people that have no problem with amassing huge fortunes. So they have no problem doing this by any means possible.
Chris Martenson: So this corruption obviously it leads to all sorts of problems. We’re seeing very low investment back in the country. We’re seeing a lot of the capital that does come from the country flee. In Venezuela this is bizarre. We’re talking about the country with the second largest stated oil reserves on the planet; I know it’s the junk out of the Orinoco Belt but still bestowed with plenty of oil. Nigeria, another country with plenty of oil, but again just crushing sorts of poverty, corruption... how does that happen?
Fernando Aguirre: I understand how confusing it can be. But Chris think of it this way, you have a country where water is more expensive than gasoline. What sense does that make? I mean you had a guy, you had Uwu Chavez walking down the street and pointing with his finger saying “Nationalize this, nationalize that”. And when he was saying "nationalize", he was saying "steal this". Well he doesn’t have any great plans or any political grandeur things going on in his mind. He just wanted to steal as much as he could and that’s basically what populism is all about. You see it in Venezuela, you saw it in Argentina. The [Inaudible 00:04:45] government now has – they, right now they’re talking about... the new president of Argentina, which is a much more serious type of person—they’re talking about an entire year's GDP being stolen during the [Inaudible 00:05:00] government. So imagine what kind of corruption we’re talking about.
Chris Martenson: An entire year's GDP, is that what you just said?
Fernando Aguirre: Yes that’s exactly what I said.
Chris Martenson: Huh, well that seems like quite a lot; so that would be stealing $18 trillion from the US.
Fernando Aguirre: I mean our entire structure of over-pricing anything that’s being done by the States, going to friends that are actually owners of companies and that are owned by the same people in power [Inaudible 00:05:36] they basically stole in such a shameless way and one of the things that is being said a lot in Argentina and people are now just realizing it, all the money being stolen – it’s not being stolen out of thin air, it’s being stolen from the people. All that money that hasn’t been invested in roads and hospitals and schools, that’s all money that’s missing and it’s in their pockets and in their bank accounts in Seychelles or wherever.
Chris Martenson: This corruption idea is very interesting. When I had John Perkins on, Confessions of an Economic Hit Man writer, author, he talks about this sort of corruption and it happens a lot. It’s a very systemic thing. It’s not just the United States doing it but there’s a system in place which really encourages this behavior and a lot of these leaders are encouraged to participate in this bribery. The IMF is involved, the world bank, these big loans are created and never actually enter the country they’re supposed to be dedicated towards, although the assignment of the repaying those gets attached to the country. But the money goes from a server in a bank in New York to a server in a bank in New York and that’s it, right?
Fernando Aguirre: Right.
Chris Martenson: And many of these leaders think they’re rich because they siphon that money off, they squirrel it away, but then as Mr. Perkins said they really don’t actually have access to it because as soon as they run afoul of what certain worldwide interests want, they’re outed as corrupt dictators and the money is seized. So they never really actually had it, but it felt like it. Meanwhile the country just gets looted. So are you saying that Venezuela is just at the tail end of a long run of corruption and that’s where it’s problems mainly stem from?
Fernando Aguirre: Yes it’s basically the end of a very sad story of out of control corruption fueled by a very populist present with that common speech of taking away from the rich and giving to the poor. Basically I mean that sounds all very Robin Hood but who is really the rich? I mean if you’re the wealthiest guy in the country, who is it that you’re stealing from to get to give to the poor? You’re stealing from yourself? We know that’s not true. You know you’re not stealing from yourself to give to the poor.
It’s all very systematic. I mean for instance there’s an entire agenda—and this isn't theory; this is fact. They had an entire plan of forming the mentality of people. In Argentina they had a Ministry of National Thoughts, which was pretty much as bad as it sounds. The idea was to indoctrinate kids from a very early age, basically destroy their ability to read and understand text. Right now in Argentina about half of the kids that even finish primary school, they don’t understand what they’re reading, right? They lack reading comprehension to such an extent. So that kind of population is very easy to control and abuse them in all these ways.
Chris Martenson: Well that sounds familiar to other countries, let me leave that topic for a moment. So Venezuela, how bad are things there right now?
Fernando Aguirre: Well it’s pretty disastrous. There’s an interesting website where they’re showing what people actually have in their fridges; I mean it’s less than a grocery bag full for any of us. I mean a couple bananas, half a bag of flour and I mean it’s really desperate. That’s why you see people truly starving. It makes no sense. As you said, they have oil. They have a country that it’s – come on it’s in the middle of a tropical region where they should be able to produce as much food as they could possibly want, and they’re starving to death? Last year they didn’t have even toilet paper. What country ends up not having toilet paper?
Chris Martenson: Yeah it’s really tragedy at this point but you know the videos I’ve seen of people rioting – rioting is maybe the wrong word. Very, very hungry people who have been queuing in line for eight or nine hours in the hot sun, being told the store is closed, get a little angry and say “I’m still hungry and I’ve got hungry kids at home” and they break into the store. I’m not sure that’s the same as rioting, per say, but it sounds like people are actually getting to starvation at this point, like losing weight.
Fernando Aguirre: Yeah and as you were explaining pretty accurately now it’s not always as easy seeing everyone that’s looting and breaking into – it’s not as simple as it’s sometimes seen. These are honestly people that are starving, right? And folks don’t understand how complex that is. I was reading in a forum some of them were saying “Well that lady looks pretty fat and she’s hungry”? They don’t even understand – most folks don’t understand that many times people that have a weight problem are some of the poorest people around the world. They don’t have the quality of food or the gym subscription that some other folks have. It's people that are really desperate. I mean six months ago I was writing about an incident where one sister killed another over a pack of rice or flour. These are honestly people that are very desperate.
Chris Martenson: And it’s the – the pictures that I’ve seen of the hospital conditions are just beyond third world at this point. Like Greece did a while ago, Venezuela has run out of basic medicines and people who are on certain medicines are finding that they’re not available at any price because the country doesn’t have the hard currency to import them. So it’s rapidly becoming a food crisis, a medical crisis, a security crisis. It’s really hitting the bottom of Maslow’s hierarchy of needs. I mean these people are really getting down to a very serious humanitarian situation at this point.
Fernando Aguirre: Again we go back – the key word is corruption. You know what they did in Argentina during the middle of the [Inaudible 00:12:01] government? They replaced medicine for cancer patients with water. They stole the actual medicine. They charged it to the government as real medicine. The government would be paying for them. Of course all this money was always channeled to the [Inaudible 00:12:11] family but they were giving water to cancer patients and killing these people. Again, not anything that I’m making up; it’s all available on the internet and people are actually being charged for this right now. But those that are dead, they’re not going to come back.
Chris Martenson: Now do you think – let me guess, you think things are going to get worse in Venezuela before they get better?
Fernando Aguirre: I think in the case of Venezuela, yes. Yes because – in the case of Argentina fortunately they changed... We still need another year or so to see if really things are – if there’s hope. Right now they have Mauricio Macri for President which is a guy that I never thought would – because he’s actually a well-educated person, seems quite decent, which is a very nice change. But you still need some more time, another six months or a year to see if things – now in the case of Venezuela they are really heading to – they’re really crushing bad before they see something better. We haven’t still gotten to that point. Until you actually have people, decent people in the government, there’s little hope.
Chris Martenson: Now what’s the chance there of something more serious like a coup, civil war, rebellion of some kind do you think?
Fernando Aguirre: Chris it’s already very bad. I mean how much worse – people are – I know for a fact that they’re slaughtering one another in the streets right now in Venezuela. And it’s not just now, it’s been for – I mean for at least three years it’s been a case of out of control crime and corruption over there. And people have been having – a significant percentage of the population has been struggling with food for at least a year as well now. So it really – it’s not getting better any time soon unless something changes on a deeper level.
Chris Martenson: All right so let me ask you this: Assume for the moment you’re not one of the lucky ones who can leave—and I know a lot of Venezuelans have left to go to Miami—it's really a study in Venezuela in some sections. So those are the people who could afford to leave, let’s assume you’re not one of those people and you’re in Venezuela, what would you be doing right now?
Fernando Aguirre: Well as you mentioned, the people that actually left, those are the ones that have the right strategy. I mean there’s – for the average middle class person in Venezuela and talking about the middle class, even a little bit of an upper middle class, right, educated a good job? He needs two years of wages to buy a single plane ticket in their own economy, in their own currency. He needs to work for two full years to buy one single – I mean that average middle class person is stuck there. The problem is that he waited too long and he didn’t manage to leave. That is something that I write about often is know when you have to leave. In order to leave Venezuela was at least three or four years ago. Right now you’re getting to the point where you’re stuck there. Now you’re stuck in a country where no matter what it is that you do, you’re always going to be earning in bolivars, which is a currency that is completely fake. They have an exchange rate – official exchange rate of 1:10 dollars, but unofficially, which is the real one, it’s almost like 1:1,000 dollars. So they basically are starving you to death through the economy, completely devaluated currency which is what you’re getting paid for, you basically need to find ways of leaving the country.
What I would do if I was in Venezuela right now, I would leave on foot. I would leave any way I could because it’s not safe, it’s definitely – I know people that have killed people to survive in Venezuela. I actually know guys that had to do that to live. And the only solution you have is you cannot stay there. If you had – and again folks that have a fridge with a couple bananas and an orange, how can you sustain life like that? At the same time, if you’re thinking about farming, you have a government that stole people’s land. I mean Chavez, he [Inaudible 00:16:42] those forms. Those folks that are thinking of buying a chunk of land and growing our own food—you cannot do that when you have the government stealing it from you. And you’re not going to be winning against the government's military or police. It’s a no-win situation.
Chris Martenson: So let’s rewind then, what were the warning signs that Venezuelans should have been listening to, if they could have, before things got bad? How long ago were those and what were those warning signs?
Fernando Aguirre: Well again the similarities with Argentina... Many years people in Argentina were saying “We’re turning into Venezuela” and there was actually a phrase, a word coined was "Argenzuela", because Argentina was looking so much like Venezuela that the local joke was “We’re turning into Argenzuela”. And you see the same thing. You see it so clearly. First you see a populist leader rise and has this hate speech, which is something that unfortunately we’re seeing in many places around the world these days. That hate of "we’re the poor ones, they’re the rich ones" and I mean at the end of the day you know as well as I do that behind all this there’s always a big bank person running things, right? But when you have this kind of populist leader with that Socialist, Communist thing going on and he says he’s going to be stealing or nationalizing stuff and giving it back to you, and one of the things he does is right away he tries to control the media. Of course when he cannot control the media because they’re own desires clash with reality, they want people to believe something that’s not true; so they get desperate with the media. They try to control it, to censor it any way they can. They start closing media outlets that are not friendly to them. Those are real serious warning signs.
Chris Martenson: All right and so those signs have been cropping up for a while. And things are clearly very bad in Venezuela; we’ve been writing about it for a while and commenting on it. But the articles just come on a daily basis, failed state collapse and things like that; so it’s clearly on a bad road so I agree with you. I think that if you have the chance, even if it’s by foot it’s probably best to leave.
But let’s talk about some other places where maybe we’re seeing the same warning signs. So where do we start even? Well let’s start with Argentina. How are things shaping up there? Were you invited to the international bond market, some recent political turnover; how are things looking there?
Fernando Aguirre: Right, in December of last year were elections and [Inaudible 00:19:31] lost to Mauricio Macri. Mauricio Macri is a rich guy, from a rich family, a wealthy family from Argentina, has been around for some time now. His father was actually one that had a big company and Macri is actually – Mauricio Macri is actually an engineer, he speaks English fluently, he’s well educated. And he is someone that was pretty much interested in keeping the family business. He got an interest in football, what you guys call soccer, and he became the president of Boca Juniors Club, which is a pretty big club which is a big deal in Argentina football. So that was his pretty much first step in politics. Then he got into politics when the [Inaudible 00:19:51] government started doing its populist thing and whenever someone complained about something they said “Okay if you have a problem with us start your own party and win the election” and that’s exactly what Mauricio Macri did. He started his own political party, brand new, picking up the people that he thought would be good for the job. So you see Macri with a – everyone in his political party is well educated and has a good background of transparency and – there’s always something a little bit gray here and there but in general honestly it’s maybe one of the best things we have going on in terms of politics since as long as I can remember, definitely in the last 30 years.
So you have a guy that honestly seems to be – if you want to put in some box, he's a center right type of conservative type of person. I think he's more of a center. But again the important thing is he doesn’t have that corruption thing going for him which [Inaudible 00:21:33] exact opposite. But you still need at least a year or so because they’re still very much – the [Inaudible 00:21:43] government made sure an entire generation—as we were talking about before—the entire generation of people that they taught that it was right to be corrupt and to steal through the government. So what do you do with thousands of people like that, hundreds of thousands of people like that? It’s not going to be an easy job, but yeah I think it’s a good start.
Chris Martenson: Well to sort of paraphrase a famous scientist who said that science advances one funeral at a time. People with belief systems that are entrenched, sometimes you have to really literally wait for them to die before those belief systems will go away because that’s how it works for them and that’s how they see the world, so I understand. It’s a real tragedy to have a whole generation of corrupt, let’s say inoculated people who grew up that way. Or in the case of Greece and even Spain, which I understand I’m calling you in, which we’ll get to in a minute. But having a huge chunk, 50% or more of young people out of work has a corrosive long term effect; so that corrosion of society, I get it. It’s a really big deal and I think it’s overlooked; so thank you for bringing that up.
Now let’s shift just a little north from Argentina. How about Brazil? That’s really in the news; it seems to really be having trouble finding its footings. If you lived in Brazil are you seeing warning signs there that would say time to go to Miami?
Fernando Aguirre: Brazil is definitely not as bad as Venezuela by any means. But I mean it always was a third world country. It’s not a politically correct term but it is what it is. A third world country simply that lacks that kind of structure that allows – in a developed nation you can put a turtle for a president for a term or two and the country will still roll, right? In places like Argentina or Brazil or Venezuela which don’t have the stability, you really need someone to change course, maybe a guy like Macri. Right now in Brazil they have Dilma Rousseff, which she has been removed from her presidency and it’s a pretty serious political crisis. It’s hard to say how that will end up. I think that it will – especially with the examples you have around when you have your neighbors like you have in Venezuela, then people are more likely to say "okay, let’s calm down a little bit and see how we can fix things unless we end up like those guys," you know? So that’s always an encouragement. I know it was for Argentina. Argentina, the greatest fear we had was ending up like them, ending up like Venezuela; we never wanted that. People in Brazil I assume will try to fix things but it’s definitely going through some serious political crisis.
Chris Martenson: So Fernando in Brazil it’s a political crisis at this point but it’s not yet economic or monetary?
Fernando Aguirre: Well it’s not doing great economically because it is affecting of course – as you well know the economy is all about trust. The fiat currency we use is pure trust in a piece of paper. So as soon as people lose faith in a country and its economy and ability to answer, then the economy starts struggling pretty bad. But it still has—Brazil is the largest economy in South America so it still has a little bit of backbone left to get back on track. We need a little bit more time to see if it gets back on its feet or not.
Chris Martenson: Okay well how about Puerto Rico though? We’re looking at... well it’s bankrupt at this particular stage so they’re going through debt restructuring. That situation I’m not as familiar with in terms of how much corruption has played a role in what’s happened there. Whether that was just good old fashioned mismanagement in Puerto Rico or how much corruption might have been welded in. What’s your view there?
Fernando Aguirre: Yeah I think Puerto Rico had its fair share of corruption. It’s smaller, which makes it easier to fix. It doesn’t have the leverage like a bigger country has but it’s also somewhat easier. Puerto Rico always had that paradise thing going for it. Many expats chose it as their location, so with that kind of... it still has a little bit of hope of getting back on track but it’s not as serious as Venezuela. When there's people with money that have an interest in a place, usually a way is found to get things fixed.
Chris Martenson: Well all right, so Europe then. I have increasing debts in my brain about the idea that Europe is not going to survive a lot longer as a single union, and I know that’s maybe a slightly controversial view. The refugee crisis, the way that second state status has been granted and shoved down Greece’s throat and it’s probably going to visit some of the other southern European nations over time. Italy is fully bankrupt as a nation, but yet things sort of carry on. You’re living over there now, what’s your views from the street view; what do you see?
Fernando Aguirre: I’m actually very close to [Inaudible 00:27:34] which is near the southern part of Spain and actually right in front of the ocean now, the Mediterranean Sea –
Chris Martenson: You get sunshine there.
Fernando Aguirre: Yeah, a lot of it, yes, yes. It’s a beautiful place really. It’s full of tourists. That’s the thing – the thing about Europe that maybe none of our people will have that much of an understanding especially if they haven’t traveled through it. It’s a collection of countries really and each country has its own very rich culture in terms of thousands of years of history. And each country, even though right now it’s the European Union, each country has its way of dealing with things. I think for example Spain would say you look at the – kind of put together a government you would think people are at one another's throats on the street, and really that’s not the case. It’s quite peaceful. You have more of a relaxed way of doing things. We went through a pretty big crisis which they’re somewhat recovering from. Unemployment is still an issue but at the same time you walk on the streets and you see some signs of, you know, jobs wanted and such. So it’s definitely not good but it’s not as disastrous as it may seem.
One of the things I try to explain is the difference between crisis and collapse. Venezuela is collapsing right now. It has been collapsing for some time. Argentina collapsed. Collapse, in my mind, means the president resigns and escapes in a chopper like we saw in 2001, right? The people start burning everything you know? And no one wants to even be president of the country; that’s what collapse is in my mind.
Crisis is still very bad and when you have that kind of economic crisis and you see such a shift from middle class to poor, it’s a real tragedy. It’s not joke; definitely not. But the example here in Spain is there’s not the level of crime that we saw in Argentina, not nearly anything like that. People here walk on the streets in the city and it’s definitely much safer than many other places I’ve been to. The murder rate is like a fifth of what it is in the United States. So it’s still a safe place to be.
Now what you were mentioning about the integrity of the European Union and especially now with Brexit—with Britain thinking about leaving and such, it can be compromised and there's always a possibility of things going south pretty fast.
Chris Martenson: Yeah well that’s the piece I’m sort of tracking here. So here in the United States— and I'd love to get your views on how Europe is sort of watching this circus of a presidential cycle over here. But before we go there, there’s a growing discontent in the United States between the protected class and the unprotected class. The unprotected has a much harder run of it here in the United States in many places than Europe because we don’t do a social safety net thing here. You get a few weeks of unemployment if you happen to have been working in a job that qualified, and then you’re out. Meanwhile we’re just absolutely screwing ourselves every possible way we can with healthcare, food costs, you name it. It doesn’t matter, whatever it is. If you can get away with charging people for it, that’s fine; so people are getting squeezed and we’re seeing it really show up.
I was starting to detect strains of that particularly around the refugee crisis where there was a little bit of a cultural crisis going on, which I totally understand. When you have a culture and you try and drop ship a whole bunch of a young males in particular who are insistent in bringing their own culture in, there’s some shock involved with that. You can’t just sort of have Brussels wave their bureaucratic wands and "say you have to suck it up because we say so." That’s what I thought the Brexit was about was more and more ordinary people saying “Hey that ruling body in Brussels seems really out of touch and bureaucratic and kind of heavy handed and increasingly so; we don’t want any part of that”; is that a reasonable characterization or is that going too far?
Fernando Aguirre: Well there’s probably some of that – the thing is I’m always giving my experience of why I distrust governments in general. I distrust mainstream media a great deal. I know there’s always interests involved. I mean look at what’s happening for example with Brexit, who is going to be benefiting from it. I see a media fueling it on a certain direction, which they have a point in some things. Then again right now I mean they have a Muslim mayor in London, that’s happened in the last six or 12 months. The entire community over there already in place. So is it really that way you want to be leaving or is it maybe some financial interest that benefits greatly from separating itself from the European Union and some of the things that they don’t like as much about it? I tend to be quite distrusting.
It is very true what you’re saying about having such a mass of people... and I have refugees here, I see them. Honestly there’s a lot of people who have been here far longer than many of us maybe for several generations with their own cultural thing. And there's clash; they have their ideas of how you should treat women. Maybe I don’t agree with them that much, you know what I mean? I think it’s always possible at the end if you really try you can live together. I think it’s possible to have peace even if you have different ideas of what a family is and how you manage yourself and your loved ones. It’s not always easy –
Chris Martenson: I agree but it’s definitely easier if you have ample resources and there’s plenty of jobs and people aren’t fighting for basic survival. When you’re in crisis for sure but especially when you go to collapse I think that those cultural frictions that’s when they really amplify and become very problematic.
Fernando Aguirre: Think of it as tinder just waiting there and you just feel a spark and it's a perfect excuse for a lot of ugly stuff, to put it some way. So yes it is a problem, it is an issue. Then again it’s also true, at the end of the day, people make money for governments. When you import hundreds of thousands of people, yes there are a lot of problems involved with that but it also means an increasing in capital as well as a country. I look at it different because I am from Argentina. My grandparents came from Spain to Argentina and I married a descendant of Italians in Argentina. I have maybe a little bit of a different perspective of what it means to be an immigrant that needs to make a new country your own. I feel 100% Argentine, myself, but I also understand my cultural – the Spanish culture that I inherited and the Italian culture that my wife inherited. And it somehow ends up working but yes it is true that there is an economics problem and economic crisis and it’s going to be a bit more complicated.
Chris Martenson: I understand. So let me ask you this then: As honestly as you can, you did move from Argentina with your family and you did that because you wanted to leave a worsening situation for hopefully a better one. Any regrets? I’m interested in what’s worked well and what do you miss?
Fernando Aguirre: Yes I’m definitely happy I left, there’s no doubt about that. Even now... I was just talking with my grandmother; 92 years old and she visits me a great deal and she is talking about how things are within the government. I mean this is what I do. I know that its going got be taking at least 10 years for the country. If everything works great, it will be another 10 years for the country to be fixed. You cannot just rush back because of a new president. [Inaudible 00:36:53] lacks that kind of stability that is enjoyed in other places. So definitely it was a very good thing to leave Argentina even though it’s not always easy and it’s painful to leave your country behind. But they’re worse today than they were four years ago or five years ago when I left. But when I first left I went to Ireland, it was – I wanted my kids to have the experience that I had when I moved to Boston when I was little and lived there for three years. It really helped me. I’m actually speaking to you in somewhat fluent English thanks to that experience. It’s not just the language, it’s the experience of having lived in another place. I learned to appreciate many American things that I integrated into my own family. I wanted my kids to have that and we got that in Ireland. But Ireland is a fantastic place and I have recommended it to people that have moved there and cannot thank me enough for it, they are very happy. The climate thing is a little bit tricky; the rain gets a little rough sometimes.
I guess what I’m trying to say is we got what we wanted from that experience and at the same time I am both the Argentine and Spanish and Spanish is my language and culture and I wanted my kids to have that as well. So that’s why we’re in Spain right now and we’re really enjoying it.
Chris Martenson: Yeah and so when you decided that it was time to move from Ireland, was there any consideration of going back to Argentina?
Fernando Aguirre: No, not at all. Not because – we understand very well the difference between a developed country and a country that hasn’t gotten to that state yet. South America is still – it has lots of potential. Argentina is huge and has such a small population. You would think it has everything for it, massive lands of all kinds and somewhat educated population. Yet with all the political problems they have... and one more thing it really hasn’t got that wave of immigrants and different cultures clashing. Argentines are 99% Argentine people, you know what I mean? They have similar religion and basically are coming from Spain or Italy, so pretty uniform in that regard. But the political aspect is what ends up ruining everything. It wasn’t easy to leave Ireland as well because it was a great place to be in. But we decided we wanted something a little bit more to what we were used to, the Spanish culture and the climate – being completely honest, the climate thing was probably the biggest thing for us. Do we really want to be living 10 years more under a cloud, damp all the time? Beautiful place though.
Chris Martenson: Of course you ended up on the Mediterranean, that makes sense. Let me switch gears with the time we have left real quick. I mentioned you have two books and one is: Surviving the Economic Collapse, and the second one: Bugging out and Relocating. So we’ve discussed the relocating part because you’ve done that. The bugging out part, when we talk about bugging out a lot of people think "oh gosh, okay now we’re talking something that’s apocalyptic. It’s really unlikely. I won’t have to do that." But the good people of Fort McMurray in Alberta Canada had to do exactly that recently, on really short notice. And you wrote about that experience; so what kind of learnings came from that experience do you think?
Fernando Aguirre: Well in the book I actually describe pretty accurately what those people ended up going through. In the book I explain that bugging out may be a number of things. Bugging out basically means that wherever you are right now is no longer possible, it’s no longer viable. You may have five seconds, five minutes, five hours or five weeks to leave but the point is you still have to go. If you have a fire like that you have just seconds to leave; so you have to have a plan ahead of time. Go through the mental exercise of: "if I have to leave right this moment, get into a car and leave, what is it that I have to work with?" If you have warning of a storm or flood heading your way, you have a little bit more time, can you grab a bag or some other gear? Where is it that you’re going to be going? What route are you going to be taking? And once you start doing that you start thinking of “Okay I’m going to be taking this route and I’m going to be needing this much gas to get there. This is what I’m going to be finding when I get there”. You start thinking about locations or where is it you’re going to be going. I get mad sometimes when people say "I already live in my bugout location." I immediately tell them it’s impossible. You’re already living there no matter how rural it is, how great it is or how fantastic your place is, it’s no longer your bugout location because it has to be somewhere else. Basically that’s the idea behind bugging out; it’s when your current place of residence is no longer viable. Once you live there it's no longer that location.
Now it may be the case of something like people saw in Venezuela or they saw in Argentina when the slow change where you have months, maybe even years to leave, but you always [Inaudible 42:51] people say “No this cannot be happening; it will get better” and sometimes it does not. It simply does not get better; it just gets worse. Think of Venezuela, think of Ukraine. People that were living there a few years ago completely at peace, suddenly some of those actually end up dying there because they didn’t leave in time. Some folks left from their homes were [Inaudible 00:43:14] and they just left with the clothes on their backs. So what I say is don’t think "it’s never going to be happening to me" because millions, literally millions have thought that and wish they had planned different.
Chris Martenson: So let’s talk about Fort McMurray; I was reading accounts where some people had zero minutes. Like they’re at work and they’re like “Oh you’re being evacuated” they didn’t even have a chance to go home and get their bugout bag. Other people were just — suddenly it was a blue day and now it’s suddenly a dark day and they’re being told they have to leave; so they had minutes. A few other people had slightly longer amounts of time but the overriding thing that I learned was that very few people heeded the messages early, right? So there was a couple stories I found where people just got a gut sense, they knew it was going to be bad and they left before everybody else. There was still time to be in the gas station and just minutes later there would be 200 cars lined up and nobody had enough gas for the trip they were going to have to take. Things like that. So if you were going to advise people there or any other place that could be affected by a calamity like that, what should everybody have prepared way in advance?
Fernando Aguirre: You should have a plan. You should have an idea of where it is you’re going to be going if where you are right now is no longer possible. What I explain also in the book is ideally you have someone within your neighborhood; say a neighbor, a family member, someone – if it’s an isolated incident, your house burns down, it happens to people every single day. Where is it you’re going to be going? Can you go to someone’s house nearby for some time until you get back on your feet? Also have someone further away in the next county. That means that if something more widespread like what happened in Canada takes place and the immediate mid-range is no longer good, you have somewhere else to go. You need to have all these options; the more options you have the better. In the case of something maybe like what happened in Venezuela where the entire country is going down and you have people in other places if you keep in touch with some family and friends – I know folks that left and stayed in someone’s living room until they got a job and got back on their feet. It happens, its life; so having these plans ahead of time really helps a great deal.
Chris Martenson: And yeah so most of these people, they didn’t have a plan. They didn’t really know what to do so there’s a lot of confusion. Things sorted themselves out and I think it was handled really well with no loss of life. A lot of loss of property. Pretty interesting to see how that all shook out. At the same time –
Fernando Aguirre: The thing to keep in mind, sorry Chris, is that it is Canada. The same thing happens in other places, you know as well as I do there would have been significant loss of life, no doubt.
Chris Martenson: Yeah no, I was astonished. I even commented on this and I think one Canadian on my site took exception but I’m watching this video. It's front and rear dash cam footage and behind this guy’s truck is a guy on a motorcycle and there’s just a wall of flames there and this guy is wincing away from it and there’s a whole empty lane for oncoming traffic that’s not oncoming because everybody is leaving, right? And it’s not being used. And there’s all these four wheel trucks and they’re all in this orderly line with all these flames right there and it’s just in a suburban neighborhood. I tell you way before that happened in America the trucks would have like gone four wheeling across people’s lawns. That guy on the motorcycle would have absolutely been just tearing up the sidewalk or whatever. But they’re they all were in a line, you know, very polite and very mannerly. So I think that really speaks to the cultural capital and how much that plays out in a crisis or collapse. And when your culture has been ruined by corruption and lack of trust and every man for himself, I think things go bad, worse more quickly. I think you’re right. When I asked you about Venezuela and you started right on that, like, this is a corrupt country and that’s why it’s so bad right now.
Fernando Aguirre: In Venezuela I know for a fact it would have been everyone for themselves. Those lanes would be completely covered with people. Many of the cars would have stalled or broken down in the middle of the thing. It's those little details. Every guy in Canada had an idea of "be responsible; my car has to work, for myself and for others as well." In Latin America it’s like "yeah my car is okay but if it breaks down in the middle of the road and I end up causing problems for thousands of people, that’s not my problem." That kind of mentality at the end of the day causes everyone problems. You have such an organized society, it's much better. Life is better in general.
Chris Martenson: Absolutely. That’s at least part of – I love the distinction you made, there’s a big difference between developing and developed and all of that. Final question then is about how long do you think the developed countries are going to stay that way? You and I have been tracking this potential financial and economic collapse for a long time. I’m surprised Fernando, I’m surprised by how long it’s taken. How about you? Are you surprised by how this is unfolding? Do you see anything on the horizon that concerns you at this point or do you think “Wow they’ve proven the power of money printing” and it actually works?
Fernando Aguirre: No. I don’t think that just – I think the planning going along just as – everything is going as planned. What you’re seeing is a lot of people from the middle class are starting to become poor.
Chris Martenson: That’s true.
Fernando Aguirre: And this is the kind of thing as we were saying before it’s not covered as well in the media because there is always their own interest but it’s – you know it to be true in the US. There’s a lot of people who used to be middle class who are no longer middle class anymore.
Chris Martenson: 47% of people, 47% of respondents to the last Fed survey couldn’t come up with $400 in an emergency without borrowing it or selling something, 47%. If middle class is the middle of your country, the middle of my country can’t come up with $400.
Fernando Aguirre: Okay Chris what does that tell you?
Chris Martenson: There is no middle class anymore; that so called middle class band is shrinking and climbing up the ladder.
Fernando Aguirre: Let’s be generous and say there is still some but it’s shrinking. It’s shrinking every single year. Every year it gets smaller and smaller and those guys that used to be able to do certain things and have a certain quality of life are losing it little by little. That trickle of financial ability and quality of life that’s been taken away from them. And of course going in one direction. I know that I never accidentally made a billion dollars; I don’t know if you know someone that actually did this. Whenever someone goes “Whoops, I made a billion dollars” like it wasn’t an accident my friend, you actually planned for that and you executed very beautifully and it went great for you. But all that shrinking middle class is going to that little bunch of guys that are taking great benefit from it. That means – as years go by that’s going to be happening. It’s going to be that struggle of clawing your way up that iceberg to stay on top of it.
Chris Martenson: Yeah the way I see it is that because of the amount of debt we have, because of the shrinking resource base that’s out there, that the pie doesn’t expand like it used to. Unfortunately we have a debt based money system which means that there’s always, always, always a siphon that’s vacuuming wealth from the bottom to the top; that’s just how the system works. I’m not going to say if it’s good or bad; it’s a feature. But the problem comes in when the pie is no longer expanding, that vacuum is still sucking at its normal rate and so you just get—less and less is left at the bottom and more and more accumulates at the top and that creates an unstable situation. That’s what we’re seeing politically in this country in the United States. We’ve got Donald Trump fans expressing one form of dissatisfaction, Bernie Sanders another, with Hilary representing the corrupt class who want everything to stay corrupt or whatever she represents, I’m not clear on what the attraction there is. So there’s sort of a status quo, "keep everything moving" by Hilary, and "let’s change things" from Trump and Sanders. But that "let’s change things" I think is just representing people who are increasingly feeling squeezed and pinched. Many of them don’t actually understand why—because you’re right, it isn’t well reported on. We don’t really talk about it. Sometimes they throw big statistics around but the truth is there’s a systematic looting of the middle class and it’s being done with regulations and lobbying and rule changes and stifling barriers to growth that favor big companies over small companies. My judgment for my country: The engine of growth has always been small and medium sized companies and those are just getting killed. So we’re busy in the process of killing the goose that laid the golden egg over here and not actually talking about what’s happening realistically. That’s how I see it.
Fernando Aguirre: Yeah it’s more like – it’s the chain around the goose’s neck and squeezing for all its worth and it’s no longer getting you that beautiful golden egg, it’s a little bit – pebbles or grains of gold and they’re just killing it trying to get more out of it. That’s the image that I have.
Chris Martenson: Yeah. That's—
Fernando Aguirre: I think unfortunately nothing is going to be changing politically. I mean it’s already – I mean with the candidates that you have you know that nothing is going to be changing no matter who wins at this point.
Chris Martenson: I know. That’s the greatest illusion of them all is that it actually matters which of the three candidates get in.
Fernando Aguirre: I think it's funny how they fight over... It’s not going to be changing no matter who wins at this point. The candidates that you have right now, you’re not going to be changing anything. They’re just going to be making sure that everything continues the way it is. And the way it is, is that middle class is going to be shrinking. Unfortunately people still have to learn the hard way, and it’s going to be taking maybe another term until people say "it no longer works, we really need something else. We cannot have the same thing about us being squeezed little by little every drop of blood out of us; we are a different idea of what politics means, what a politician is, what the president should be representing." Until that changes people will still be suffering.
Chris Martenson: I totally agree, and so we’re just going to have to track this. I love the message that it’s just going to take time. It’s going to be unfolding for a good long time. As it does, first I want to thank you for your time today. And then I want to know what’s the best way for people to follow your writings and your thinking?
Fernando Aguirre: Sure, I have my website which is TheModernSurvivalist.com and, as you mentioned, my books basically are explaining the kind of strategies I applied myself to get through this kind of thing. Granted, in Argentina it was an economic collapse, but it’s still valid for what people will be looking at in the future.
Chris Martenson: All right so TheModernSurvivalist.com we’ll provide a link at the bottom of this with the transcript. Thank you everyone for listening today and Fernando thank you so much for your time.
Fernando Aguirre: Thanks Chris.