6-7-2002Think it can't happen here?
Word from Argentina

Note: I copied this from the bulletin board at www.gold-eagle.com. It is apparently an e-mail which is originating from Argentina.

Millions of people living in Argentina are desperate and they need your help. You do not have to send money. They are just asking you to be part of this chain letter. Please take a few minutes to read this mail. Just an e-mail or a letter from you may help them a great deal.

Argentina has been sliding into catastrophe for a long time and it is now on the verge of total collapse. At the end of 2001 the Argentine government then in power froze all savings and deposits in the country s banks. The measure got tougher as one president after another was engulfed by the unprecedented crisis. The freeze is now a deadly concentration camp dealing a final blow to an already dying economy. People have all their life-long savings trapped inside the banks. They are not allowed to use their money and will have to wait years to get it back in a depreciated currency. Many of them are old, others are ill or unemployed. Some others have sold their houses and cannot buy a new one now. There is no end to the terrible stories that are unfolding because of this most unfair situation. At the same time, millions and millions of people of all ages, who used to survive on odd jobs, are slipping deeper and deeper into poverty and starvation by the minute because there is no money around. The government measure to freeze all assets within the banks and eventually give back account holders absurdly depreciated amounts has already been ruled unconstitutional by the Supreme Court but in most countries it would be labeled sheer theft. All the banks, without distinction by country of origin, shielded themselves behind this government measure and did nothing to return the money to its rightful owners.

The Government is trying to ban citizens from resorting to the Courts on this matter due to the country's economic emergency . You are kindly asked to do two the following:

resend this message as soon as possible to as many people as you can, both in Argentina and abroad. Also send letters (either by e-mail, regular post or in person) to international headquarters, home offices or local branches in your country of the foreign banks operating in Argentina. A sample text of a letter complaining at the banks failure to honor their commitments to their clients is supplied in four languages.

The foreign banks operating in Argentina (by country of origin) are: USA: Citibank, FleetBoston (BankBoston), Canada: Bank of Nova Scotia (Scotiabank) U.K.: Lloyds Bank HSBC (HSBC Bank Argentina) Spain: Santander (Banco Rio) Bilbao Vizcaya (Banco Frances) France: Societé Générale Banque Paribas (BNP) Italy: Banca Nazionale del Lavoro IntesaBCI (Banco Sudameris) Brazil: Itaú Banco do Brasil

Please do not break this chain. With no Justice to turn to, a flood of letters putting pressure on the banks from abroad may be the only way to end to this nightmare for millions of Argentines. Thanks a lot for your help.

Letter sample:

Dear Sirs, I am appalled at the news from Argentina, where the local representatives of your bank are shielding behind an unconstitutional government measure so as not to honor the commitments made to your clients there.

I believe the banking system is based on trust and your behavior in Argentina is destroying this trust. You are also squandering a reputation carved out all over the world over many years. In a globalized world, investors will most surely start to shudder at the thought of a similar fate in potentially unstable countries. That is all it takes to destroy the markets which financial institutions have tried to build. I will reconsider operating with your bank or to do so in the future if you do not review your policies in Argentina and honor the obligations to those who entrusted their money to your care.

Yours truly,


Editor: If you think it can't, or won't happen here, you'll be in for a great surprise one day. If you like surprises like that, then you're welcome to go back to the Saturday morning cartoons which pass for news these days. In the situation above, the banks covered their own asses at the expense of depositors, hiding behind corporate charters and government mandates for protection. But wait a minute, isn't Argentina a democracy?

Think your money is safe at the bank? Sure it is, as long as we all don't try to withdraw it at once. Because it's not all there! Ha ha! The joke's on you! In a way it's safe, because if it doesn't exist, it can't be stolen!

Have you ever stopped to think about money, and how the Federal Reserve System manufactures money? It is a complex series of machinations, designed to obscure the truth, which is that it's simply fabricated from nothing. The Treasury borrows money by selling bonds in the open market. We all know about the Treasury auctions which provide us with the spending money to keep this country running. But the Fed also buys Treasuries. It is allowed by law simply to fabricate a new checking account for the seller in exchange for the bonds. It now holds the Treasury's bonds as assets against the new money.

If that sounds suspiciously like what Enron was doing, you're not alone. Ron Paul thinks the same thing, and is about the only one in this country with the balls to tell Alan Greenspan to his face. It is an old trick that embezzlers know well - a more complicated version of a check kiting scheme, or a real big Ponzi outfit.

No doubt, it's great when things are going good. But the new dollars being created do not represent new value. The new money has value, but it comes at the expense of a reduction in value of all the other outstanding dollars. The old dollars lose value to the extent that the new one's gain value. This is a round-about way of saying that it causes inflation. And if you run that scheme for too long, you end up like Argentina did, complete with all the weeping and gnashing of teeth.

If this little diatriabe has scared you sufficiently, you should read "Conquer the Crash" by Robert Prechter. I was lucky enough to get an advace copy of the manuscript, and I highly recommend it. Not only will it scare the crap out of you, it'll help you avoid what the poor folks in Argentina are going through today.