WHAT HAPPENS WHEN A CURRENCY DIES: Argentina’s farmers hoarding food rather than pesos

Let’s pray this isn’t a preview of coming attractions here.

Sales of Argentine soybeans are lagging this season due to expectations for higher world prices later and to domestic financial uncertainty that has prompted farmers to save in beans rather than pesos.

With world food demand on the rise, growers in the Pampas grain belt are filling their silos with soy rather than converting their crops into pesos, a currency that hit a new all-time low in informal trade this week.

Considering Argentina’s high inflation, clocked at about 25 percent by private economists, “money in the bank” is not as secure as storing soybeans next to their fields… “We are going to hang onto our soy. One can see higher prices ahead,” said Jose Plazibat, a partner with the firm of Bandurria and Plazibat Brothers, which farms more than 3,000 hectares near the town of Chacabuco in Buenos Aires province.

…Cut off from global bond markets since its 2002 default, Argentina needs farm revenue to help finance public spending increases ahead of October legislative elections.

…Growers say they would plant more corn if the government would stop placing curbs on exports. The farm sector has long feuded with President Cristina Fernández de Kirchner, who won re-election in 2011 on promises of increasing the government’s role in Argentina’s economy.

Confidence has since softened. The peso has slumped in the informal market, opening a breach of 71 percent versus the formal exchange rate and increasing market chatter about a possible devaluation to shore up exports… The government is likely to put off a devaluation of the official peso at least until the October elections have passed.

Say, perhaps the economic geniuses Paul “Enron” Krugman and Henry “POS” Blodget could explain why massive deficits, financial repression, and currency devaluation didn’t work for the Argentinian government, which has only tried their Keynesian policy prescriptions for, oh, about the last century or so.

Related: Don’t Cry for Me, America.

Doug Ross @ Journal

Report: Farmers Hoarding Food To Protect Against Currency Collapse

Which asset is more secure than money in the bank?

The answer is simple.

It’s the asset that will still have value when the money or the bank collapse.

All over the world, when people have been faced with the prospect of having their savings wiped out or confiscated they have turned to hard assets – physical goods they could hold in their possession and trade if necessary – as protection.

Argentina, a country that is no stranger to economic hard times and hyperinflation, gives us a prime example of what becomes money when the system collapses.

At an inflation rate of 25%, while their currency loses significant purchasing power, Argentines have made a mad rush into gold, silver, and other tangible goods that retain their barterable value.

Like many Greeks, who have headed to the countryside to grow their own food in the midst of complete economic destruction, farmers in Argentina are hoarding the one tangible investment they know will not lose value, no matter what their currency does.

With world food demand on the rise, growers in the Pampas grain belt are filling their silos with soy rather than converting their crops into pesos, a currency that hit a new all-time low in informal trade this week.

Considering Argentina’s high inflation, clocked at about 25 percent by private economists, “money in the bank” is not as secure as storing soybeans next to their fields, many say.

“We are going to hang onto our soy. One can see higher prices ahead,” said Jose Plazibat, a partner with the firm of Bandurria and Plazibat Brothers, which farms more than 3,000 hectares near the town of Chacabuco in Buenos Aires province.

With their currency in meltdown and food demand around the world rising, these farmers understand where real value comes from.

  • Their food can’t be lost in the stock market.
  • It’s intrinsic worth cannot be vaporized in a banking collapse.
  • And they do not need to wait for anyone to deliver it to them, as they hold it in their personal possession.

Hoarding commodities – not the paper receipts that represent your ownership, but the actual physical good – is a powerful diversification strategy, and one that is a natural response to times of uncertainty and government run amok:

Argentina is going through the classic stages of economic collapse.

The government seized all pensions. They are destroying everything that gives the people incentive to be a society that emerges from the cooperation of everyone.

When government turns against its own people, even as the USA is currently doing, you end up with deflation insofar as the economy collapses and wages are not available, while hoarding emerges as does barter.

source: Martin Armstrong

This strategy of buying commodities at lower prices today to consume at higher prices tomorrow can be implemented on a micro-economic personal scale in your own home. Doing so, especially with health and nutrition considerations, will not only provide you with long-term cost savings as global currencies continue to lose purchasing power, but insulate you against the possibility of a rush for food in the event of an emergency or widespread economic instability.

Whether you choose to stock your long-term food pantry by going to a grocery store, grow your own food in your traditional or aquaponics garden, learn to preserve it yourself, or prefer to do your own food storage packing, the key is to develop a plan and implement it now.

The US dollar isn’t getting any stronger over the next 10 years.

But the rice, beans, wheat, and pasta you stockpile will still have the same exact intrinsic value a decade from now as they do today.


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You