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Fernando “FerFAL” Aguirre and Lessons from the 2001 Collapse of Argentina

What’s it like to live through a collapse? It’s hard to imagine something you’ve never experienced, so when someone who has experienced real collapse shares his lessons learned it pays to listen and learn.

This month that someone is Fernando “FerFAL” Aguirre, who lived through the 2001 socioeconomic collapse of Argentina. You’ll get some insights into his thoughts on personal protection, currencies, personal health, and more.

Argentina: The Collapse Of 2001

The crisis faced by Argentina in 2001 exemplifies the social, economic and political upheaval that can occur during times of severe financial and economic crisis. During the 90’s, Argentina was seen as successful in increasing its economy and standard of living. There was absolutely no shortage of foreign investment worth billions of dollars, pumped into the nation’s economy. The country’s inflation rates were below that of the U.S during the same time, and its economy was among the fastest growing ones in the entire Latin American region.

Argentina was also strictly adhering to the advice of IMF, but in 2001, its economy plummeted to a breaking point. The government declared that they cannot pay back the nation’s foreign debt and that government spending – ranging in billions of dollars – will be cut. This led to a significant reduction in the salaries of government employees (up to 13% reductions). During the crisis, it was observed that unemployment spiked to about 20%. And just in a single year, Buenos Aires, which was considered Latin America’s most expensive city to live in, became its cheapest.
Experts contest the exact reason for Argentina’s economic meltdown. Some believe that this was because of IMF’s poor policy advice, whereas others (including IMF itself) blame the corruption and irresponsibility of the Argentine government. However, it is interesting to note that central to every argument is the failure of the country’s fixed exchange rate policy.

Throughout the 80’s and early 90’s, on IMF’s advice, the government decided to fix its peso’s exchange rate against the USD, (1 U.S dollar = 1 Argentine peso). This fixed exchange rate was supposed to serve as a stabilizing factor for the nation’s economy after a hyperinflation period (up to 200%). In credit to the policy, both the dollar and peso were made interchangeable. Both of these currencies circulated throughout the Argentine economy as ATMs dispensed both pesos and dollars, and bank loans were allowed to be made in any of these currencies.

The trouble with this fixed exchange rate was that it resulted in increasing peso’s value at the matching rate of the U.S dollar throughout the 90’s boom. Thus, the rising value of the currency caused the country’s exports to become costly, compared to its total imports. And since Argentina’s biggest trading partners were the European Union and Brazil, whose currencies valued lower than the Argentine peso, the export market of Argentina was stalled. This limited the economic growth of the country.

The Aftermath

The economic crisis faced by Argentina affected all levels of the country’s society; this was because it went on to create an environment of uncertainty for the nation’s future. In order to control the crisis, it was recommended by the IMF that the government should cut its spending dramatically. These measures caused a reduction in pensions and public-sector wages, and also a hold-up in pension benefits for more than 1.2 million retirees as well as their families. Additionally, as the rate of unemployment grew, more and more Argentines went after social services, for e.g. unemployment insurance. These were the very services that were being cut by the government. All of this forced a lot of people to search for jobs in informal sectors, which more often paid little and provided no future security.

The country’s workers also started to take out their savings from the banks. This was in Pesos in exchange for the dollar as fear erupted that rising prices would make their savings worthless. To control this cash flight, the government put restrictions on cash withdraws ($250 per month) and also froze bank assets all together – this was done for short periods. Furthermore, those who took loans in U.S dollars faced harsh repayments that almost doubled because of the increase in interest rates. This caused Argentines to be squeezed between job uncertainty, rising prices and limited access to cash. It was also seen that crime rates skyrocketed and that food and water became scarce, especially for poorer citizens throughout the country. And this was something that a complete generation of Argentines never witnessed before.

Furthermore, the nation was shocked by the economic unraveling, thus many citizens decided to protest in Buenos Aires, which took a violent turn. It was described that the protest was an unprompted demonstration by citizens who were angry due to their government’s lack of leadership. Besides this, many other protests took place in the country that lead to the resignation of Argentina’s Economic Minister, Domingo Cavallo, and its President Fernando de la Rua.

Enter Fernando “Ferfal” Aguirre

He is a husband, father and survivalist. The 31 year old author resides in Buenos Aires, Argentina and started writing on urban survivalism after witnessing the 2001 socioeconomic collapse of his nation very closely.

Fernando has authored several articles that can be found online and his work is admired and recognized among both the preparedness and survival communities, this especially due to his no-nonsense approach on the topic of survivalism.

The everyday experience of residing in the South American nation after the events of collapse has provided Fernando with abundance of experience, which he also shares with his readers via his published writings and personal blog.

A Brief Glance on His Work

FerFAL is the author of the famous book called The Modern Survival Manual: Surviving the Economic Collapse. In the book, which is an easy read, FerFAL showcases pragmatic and simple solutions on how to survive the kind of economic collapse that happened to Argentina, and might very well happen to the US and the rest of the developed world that are highly interconnected with the global financial system.
Critics of the book have praised FerFAL’s discussion on guns. He has summarized some of his counter arguments and arguments regarding guns in the survival world, and his conclusions make good practical sense.

The author believes that in a survival situation, pistol tends to be the primary firearm and that other weaponry like shotguns, rifles, assault rifles and sniper rifles are of secondary importance. Additionally, his explanation of personal experiences of living in Buenos Aires throughout the crisis is also a great read. The writer also has a practical philosophy in relation to knives. He himself carries a serrated knife, which he carries in his front pocket. He takes this as a very important “first line” in his survival gear.

Besides this, there are several issues that Aguirre has described in a practical manner that makes the book well worth a read. Such as finding workable ATM machines, relationship with neighbors, gold vs. cash, dealing with family and relatives, household pets such as dogs, and other social and mundane issues. At the book’s end, his spouse writes a list detailing her top survival recommendations – from a woman’s perspective.

Some recommendations from Fernando:

In his book, Fernando covers many aspects of survival in an urban setting, but he emphasises certain things:

Physical fitness

When a crisis strike your body will be your greatest tool – and your greatest liability. So take good care of it now, so that it can take care of you when you really need it. During a crisis you’ll not only need raw strength, but often the case will be that you’ll have to walk long distances so stamina is just as (if not more) important.


During a collapse or severe crisis water will be the first thing that will be gone from the supermarket shelves. We’ve seen it in Argentina, Venezuela, even in New York when Hurricane Sandy struck. You’ll die in just a few days without it, so water should be #1 on your preparedness list.

FEMA recommends you store at least one gallon of water per person for three days, but we’d recommend you go even further and aim for at least a week’s storage. So if you’re four people in the family you need to store 1 gallon x 7 days x 4 people = 28 gallons of water. Also, a water filter should be at the top of your list. The Lifestraw Personal Water Filter will set you back $20 and can filter up to 1000 liters (264 gallons) of contaminated water. Get one for each family member and you’ll be covered for almost 9 months when consuming 1 gallon per day.


After water shortage comes food shortage. We’ve seen it again and again, when a crisis or full-blown collapse hit a nation or region people panic and empty the food shelves in the grocery stores. Those who have not prepared ahead of time will have to fight over the food left on the shelves. We don’t recommend that as a survival strategy.

As a minimum you should have a week’s supply of food at home at all times, but we recommend you aim for a month while you’re at it. If you stick with basic food items such as pasta, rice, dried beans, etc. you’ll be surprised how much food you can get for a hundred bucks.

Vehicle preparation

If you have a car, make sure you have extra gas because once the crisis hits it might be too late to fill up. Ideally, you should have enough spare gas to fill up the tank at least once. Another strategy to make sure you have at least half a tank of gas at all times is to simply fill it up every time it reaches 50%. I.e. don’t wait until you’ve nearly run out of gas, fill it up at the 50% mark instead. This ensures that you’ll always have enough gas to get home whatever happens. Also, it pays to have an extra tire in the trunk and other reserve supplies in case the car breaks down.

Personal protection

If you’re serious about protecting yourself and your family, you’ll want to own a firearm. And according to Fernando the top firearm of choice during a crisis is a gun, because you can carry on you at all times (concealed if needed). So what should you do if you’ve never held a gun before? If I were you I’d check at nearby gun ranges for beginners classes where you can learn how to shoot, handle and care for a gun in a safe environment with professional instructors.


During any major crisis, be it natural disaster or economic collapse, chances are credit cards will be worthless. Either because there’s no electricity in an area, or simply because the banks have collapsed or introduced currency controls. So it pays to have hard cash on hand. And if it comes to the point where people have lost faith in the banking system and the nations fiat currency, physical gold and silver is what you want to own. After a collapse Fernando is of the opinion that gold and silver jewellery can be even more valuable than gold and silver coins, for the reason that they’re easier to trade / sell.

The lessons learned by him included the importance of all these factors, and how necessary they are for the average person.

Additionally, his experience of living through a society that has faced an economic collapse has provided him a special insight into the types of issues that an average urban citizen may have to endure during such an emergency situation. For instance, food shortages, which can threaten the survival of a society.

It is always a good idea to be prepared for an emergency situation. As seen in the case of Argentina in 2001, you never know when hardships may arrive, or how severely they may affect you as well as your loved ones. Moreover, it is best if you try to adapt a simple lifestyle, and avoid extravagance completely.

Similarities between the Argentine Aftermath and Greece Right Now

There exist various similarities between the Argentine crisis of 2001 and what is happening in Greece right now.

In the context of commercial and financial liberalization, and economic deregulation, the Argentine “convertibilidad” policy, which was responsible for the pegging of Argentine peso to the U.S dollar, and Greece’s adoption of the Euro, went on to establish an overvalued and fixed exchange rate regime. This assisted in controlling inflation, but at the cost of deterioration of local productive capacity.

In both cases, economy’s stability became reliant on capital inflows – this to stimulate domestic demand. Although because of permanent balance associated with payment deficits, both the economies went on to be dependent on foreign debt. And this is why the trigger of the respective crisis event (in both countries) did not come from fiscal deficits, but the limited external financing.

When the Greek and Argentine capital account crisis deepened, this along with them facing 2008 crisis and 1998 Asian financial crisis respectively, wage contraction and fiscal austerity became the creditors’ mantra. The creditors preferred having an interest in the maintenance of the exchange rate regime, because they preferred to not face financial losses. In the case of Argentina, in spite of recession, the IMF encouraged the government to implement orthodox measures, such as decrease in social spending as well as ease of labor protection. In the case of Greece, the troika (European Central Bank, European Union, IMF) imposed detested adjustments, similar to the ones observed in Argentina, this to ensure the monetary regime’s continuity and the protection of financial sector’s profits.

In 2001, after the occurrence of an unprecedented social and economic crisis, the Argentine government devaluated its currency and also defaulted on more than 65% of the entire public debt. In combination with a boom in natural resources, such measures went on to contribute towards a cycle of exceptional growth.

As per many analysts, the Argentine experience of 2001 resonates in Greece in 2011. This is because the restructuring of an unpayable debt as well as improvement of competition are some essential elements that can restore production and create employment. Although in both cases, the political economy makes it difficult to believe in a sort of linear reprint.

Firstly, return to a Greek currency that is depreciated against the Euro is expected to face severe opposition from Germany. This is because measure like this will go on to affect its export based growth strategy. Additionally, the limited productive capacity of Greece also hinders the chances of discovering alternative international trade past the E.U.

Secondly, the Greek debt is based in German, British and French banks. There are less likely chances that these nations will promote any sort of debt structuring that is big enough to restore the Greek government’s solvency. Comparatively, in the case of Argentina, it was observed that the country’s debt was distributed among several institutional and individual creditors, and around 40% of it was based locally, this greatly facilitated the negotiation process.

Moreover, the country’s aggressive renegotiation strategy received support from the U.S, which wanted to decrease the moral hazard existing in international capital markets – this by creating an example out of Argentina. Furthermore, in 2001, the global economy was observed to be witnessing a period of healthy growth, and comparing this to now, it seems that there exists a deep international crisis throughout the world.

Finally, the intervention of IMF in Greece is being done alongside the European Central Bank and the European Union, and these European organizations are leading the process. This is why IMF’s role is fairly limited as it can provide loans that are attached with the conditionality package (related to privatization and fiscal austerity) of the EU and the ECB. In the case of Argentina, the key global power players left the matters solely in the hands of the IMF.

Therefore, it is fair to assume that the reestablishment of an inclusive and sustainable growth path for Greece is much more complex as compared to Argentina. Moreover, any such path demands a robust commitment by all European Union member countries to decrease asymmetries throughout the region. The regional dimension’s centrality in the Greek crisis’ resolution means that Europe must re-assess if it is somehow willing to safeguard and promote financial interests, this at the price of social bases. And these social bases are the factors on which the entire European Union was founded in the first place.

This is why as per some critics the Greek crisis is very a tricky one, and something that Europe has never faced before.

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