Posted Apr 28, 2013 by Martin Armstrong
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. This is why we find hundreds of cities in the USA issuing their own local currency because there was not much available especially after the sovereign debt defaults and the closure of more than 3,000 banks. In Japan when its currency collapsed, it entered a dark age where there was no coin issued for about 600 years. Rice became the standard of money. It is more often than not, basic commodities that become the alternative money supply. Currently, we are starting to see the very same patterns emerge in Argentina. These economic implosions are caused by the systemic flawed monetary system that we have developed since the late 1600s with government constantly borrowing money and then raising taxes to pay the interest. We are seeing grain starting to be hoarded in places like Argentina, which is entering the final stage of total collapse. That will spread like the flu from South America to Europe, then Japan, and eventually to the USA. The question is can we really blink before it is too late. I can say that there is some discussion now behind the curtain about reforming the banking system entirely. This is the result of Phase I, where the politicians convinced themselves it was just to confiscate assets of depositors rather than write another check for $700 billion. There is at least talk about the banking system that did not exist 5 years ago.