Here’s an interesting video with a perspective from an Argentine financial analyst on a possible outcome of our current financial crisis. What’s important about his analysis is that Argentina has gone through a similar crisis not once, but four times during recent history. Although Argentina’s bust cycle has happened over much shorter periods of time, he believes that Western countries are going to experience a similar outcome.
In summary, his observations and recommendations are these:
Step one: Modern capitalistic governments always privatize profits and socialize losses for their financial institutions.
Step two: When the losses become too big, devalue the currency.
Step three: Export the losses to the creditor countries.
Step four: When resources become scarce around the world, war is ultimately the solution.
What to do? Take your paper money and buy hard assets – land, gold, cars, houses ……. anything but cash. This is how people survived in Argentina and this is the only way to hold on to your wealth in an inflationary environment.
Is he right? Only time will tell but it’s worth 15 minutes listening to what he has to say.
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