I couldn’t visit Buenos Aires myself in time to write today’s blog entry, so I read Janelle B’s account of her recent visit there and looked over her tourist photos. Even without seeing it in person, there is no mistaking that Buenos Aires is a happening, cosmopolitan city with a rich culture and history.
Why do I care about what is going on in Buenos Aires? It’s a way of not taking the United States’ looming banking and currency crisis too seriously. Yesterday’s political meltdown in Washington does mean the U.S. economy is in big trouble. After that large-scale blunder by political leaders, there is probably no stopping the collapse of a segment of the U.S. banking system and a crisis of the U.S. dollar in the coming year, or the difficulties that will spread across the U.S. economy. But it is not the end of the world.
Buenos Aires proves that. Buenos Aires was the focal point of a banking collapse just 7 years ago. It was a difficult time, but people got through it:
It took a while, but it all worked out in the end. Although many of the details are different, the fundamental problem was identical to the situation now facing the United States. The Argentine government had no cash and the foreign currency reserves were not capable of providing sufficient liquidity.
That is from “How Argentina Survived Its Banking Collapse,” written yesterday by Guy Bennett on the streets of Buenos Aires. The United States does not have much of a history of crises in banking and currency, so U.S. readers would do well to read Guy’s entire account of the Buenos Aires experience of its crisis and its perspective on the Wall Street crisis. You’ll understand why the Wall Street crisis is not the top headline all over the world. And the thought you come away with, I hope, is that if Argentina can do it, Americans can do it too.
Politically, there is no undoing yesterday’s mistake in Washington. After a week of running around Washington in a panic saying, “We have to do something,” politicians will not easily have a change of heart and say, “Whoops! Looks like we shouldn’t have done that.” There is little hope of leadership of any kind coming from Washington as the resulting economic turmoil spreads from one sector of the economy to the next. After blowing a trillion dollars gambling on Wall Street, Washington has nothing left. Washington cannot rescue us. We will have to rescue them.
I suppose today is a good day to be angry at Washington for putting this crisis together and dumping it on us. By Monday morning, though, we have to get over it, because there is so much we need to do. The top priorities:
- Do everything you can to make sure you are healthy and able to work.
- If you have money, don’t keep it all in one bank, and don’t procrastinate on buying things you know you will need to survive.
- Make sure you are getting along with your friends and family. Get everyone’s contact information on paper. Having it in your telephone or on your computer may not be enough.
- Do simple fixes to save energy. This is especially urgent if you live in a cold climate and have to heat your home to survive.
- Develop basic skills that make you more self-sufficient, especially cooking. If you never walk anywhere, even though you could, build up your walking until you can comfortably walk at least two miles.
- Get things done. Don’t let the word “depression” make you feel depressed. Don’t let the word “hyperinflation” make you hyper either, and don’t let the prospect of a “currency collapse” make you feel like collapsing in the nearest chair. This is a time for action.