There is corruption at the highest levels of the government: The president, along with key officials in the government, financial institutions, corporations and the military, quietly move their money out of the stock market and banks and transfer their assets into gold and Swiss bank accounts. Once the members of the elite have safely parked their money away, the president suddenly announces a devaluation of nearly 50% of the currency.
The move stuns the stock market, which plunges to epic lows. There is a run on the banks as panicked depositors withdraw most, if not all of their money. The government steps in and takes over the banks. The devaluation hits the average citizen hard. Prices at the supermarket and gas stations almost immediately rise by 50%. Many businesses go bankrupt and shut down. Rents rise by 50%. Many people can’t afford the increase, get evicted, and are homeless. Many people go begging for food on the streets. Violent crime skyrockets. Vigilante groups form to protect neighborhoods from criminals.
It Happened in Mexico
A future scenario? No. All this actually happened, in 1982, but not in the United States. It happened in Mexico, where I was living at the time. Some commentators speculate about what might happen in a future economic collapse. We hear many different theories about how the banks might react, how the government might respond, and what panicked investors might do. Well, 36 years ago, I survived an economic collapse. Not a total collapse, but it was bad enough. Following is my story of what actually happened before, during and after an economic collapse, how I survived it, and lessons I learned from it.
I moved to Mexico in 1979, with the idea of supporting myself teaching English as a second language (ESL). This actually worked well for a while, as I worked not only for a university extension school, but also taught ESL lessons to several companies in private industry, including employees at factories, businesses and even the military sector.
Continue reading“I Survived an Economic Collapse – Part 1, by Siempre Listo”