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Our on-line
newsletter bulletin now going on our sixth year!
Offering our clients and readers news items and headlines
often not covered by the mainstream media, articles of interest
regarding banking, economics, real estate, taxes, living or investing
abroad, plus much more. Finally, our very popular readers write
in section, with answers to some of the questions many of our readers
have - that no one else wants to answer truthfully, except us!
Want to See our Other Back Issues from 2002 - 2005?........Click Here
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Visit The Main Newsletter Section & Read Past Issues On-Line:
Dominican Republic Real Estate, Residency Filing, Banking and Interest Rates.
Panama Residency and Retirement. Naturalization and Dual Citizenship - Expatriate Issues.
Economics commentary, inflation, housing, stock markets and investing -
Plus a Whole Lot More !
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Our June 1, 2006 Newsletter Edition
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DOMINICAN REPUBLIC REAL ESTATE:
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If you take a look at the real estate article below regarding St.
Lucia, you will have a cardiac arrest. At least that was the
reaction of Ms. Joanne Hammond, a Canadian expatriate up on the North
Coast of the Dominican Republic, who has helped many of our clients
with real estate purchases in that area. After Joanne was able to
catch her breath, she informed us of prices for homes in the Dominican
Republic (for the price of a one-bedroom apartment in St. Lucia, you
can buy three homes in the DR - One for you, one for the kids, and
another for the grandchildren). Here is what Joanne says is
currently on the market today:
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US$125,000 -
This is a 1,400 square foot villa with 2 bed, 2 baths and a pool. In a
small gated community directly across the street from the beach in
Cabarete.
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http://www.coldwellbanker-northcoast.com/rm/listings/l0253.html
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US$115,000 - This is a 1,400 square foot townhouse with 3 bedrooms, 2 baths, located in a gated beachfront community.
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http://www.coldwellbanker-northcoast.com/rm/listings/l0180.html
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US$99,000 - Same townhouse complex as above but with 1,237 square foot and with 2 bedrooms plus 2 baths.
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http://www.coldwellbanker-northcoast.com/rm/listings/l0174.html
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US$115,000 - This is a 1,100 square foot villa with 2 bedrooms, 2 baths and a pool in a gated community
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http://www.coldwellbanker-northcoast.com/rm/listings/l0259.html
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$70,000 - 1,291 square foot villa with 3 bedrooms, 2 baths, in a gated community in the hills of Sosua
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http://www.coldwellbanker-northcoast.com/rm/listings/l0316.html
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To contact Joanne about these or other properties: Telephone 809-571-2324 (office) or her personal direct cell phone 809-657-4141
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Via email: j.hammond@coldwellbanker-northcoast.com
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IN THE NEWS:
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UNCLE SAM TAKES A BITE OUT OF EXPATRIATE INCOMES
By Sharon Reier - International Herald Tribune, May 26, 2006
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It may have been sold as a tax cut package, but the document that
President George W. Bush signed into law on May 17 will mean an extra
tax bite for many Americans who live abroad. Those expected to
feel the most pain are expatriate workers who earn comfortable, but not
lavish, livings and semi- retired workers earning some foreign income
while drawing U.S. Social Security, pensions and other income from U.S.
sources. Many of these expatriates will be pushed into higher U.S.
brackets, as will employees and independent professionals in no-tax and
low-tax areas like much of the Middle East, some Caribbean nations and
Hong Kong. As Steven Horton, a certified public accountant
practicing in Paris, put it: The middle class will get hammered.
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http://www.iht.com/articles/2006/05/26/news/ataxes.php
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EDITORS NOTES:
The accountant says the middle class will get hammered - So, what else
is new? There is a news article below about US citizens living in
Mexico who are becoming Mexican citizens and are renouncing US
citizenship in the process (Mexico does not permit dual citizenship for
new naturalized citizens, even though we can speculate as to how many
Mexicans may already be living inside the US with both). If you
ask why such expatriates are doing this, you need not look any further
than issues such as this one mentioned in the above news story.
Income tax rates in Mexico are a fraction of what they are in the US
(which is the case in many other countries as well that do not have
bloated social welfare bureaucracies in place).
.
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CHAVEZ MAY PRICE OIL EXPORTS IN EUROS
May 16, 2006 - Associated Press, London
.
Venezuela's president Hugo Chavez said Tuesday that he would consider
pricing his country's oil in euros instead of dollars in line with a
similar declaration made by Iran. Earlier this month Iran's state
television reported the country's Oil Ministry granted a license for
its first euro-denominated market. That is an interesting
proposal made by the president of Iran, Chavez told Britain's Channel 4
news. We are free to choose too between the dollar and the euro.
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http://www.businessweek.com/ap/financialnews/
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EDITORS NOTES:
We talked about this before, so nothing new. The problem is, as
the US Dollar continues to drop in value against the Euro and other
currencies, the cost of oil goes UP simply because of the exchange
rate, even if the price per barrel stays the same. Then again,
who in their right mind wants to accept a nations currency that is
going down in value? Can you really blame any business or country
for such a move?
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TREASURIES' SAFE-HAVEN STATUS FACES GROWING THREAT
By John Parry - Wednesday 17 May 2006
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The dollar's steep fall since mid-April has underscored the risk of
investing in Treasuries without hedging against currency fluctuations.
At the same time, inflation fears have sparked a sell-off of longer
U.S. maturities -- prodding major foreign investors such as Japan to
trim their Treasury holdings. A foreign investor holding the
benchmark 10-year Treasury note has lost more than 10 percent on his
investment since the start of the year from combined price losses and
the dollar's fall, unless the holding was hedged against currency
fluctuations. Oil exporters' ambitions to price crude in euros
instead of the dollar have put dollar assets under renewed threat from
a widely used rival currency. The euro has gained about 8 percent
against the dollar so far this year.
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http://today.reuters.com/business/
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DEMAND FOR LAND THREATENS PANAMA'S GOURMET COFFEES
Reuters - Monday, May 1, 2006
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BAMBITO, Panama Connoisseurs have nothing but praise for Panama's tiny
annual crop of gourmet coffee but they warn that farms where the best
beans are grown could vanish as landowners sell to wealthy foreign
retirees. International coffee tasters meeting in Panama's lush
highland growing region recently said that a real-estate boom has led
growers to sell farms just when the world is realizing how good their
beans can be. One farmer who asked not to be named said: I
want to expand, but my family is greedy. They want to sell the
land. In some parts of the picturesque town, where many houses
are covered with tropical flowers and surrounded by fruit trees, land
is selling for 30 times as much as it cost five years ago.
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http://www.iht.com/articles/2006/05/01/properties/web.brief0501.php
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EDITORS NOTE:
Some clients have written in asking why Panama had increased the
economic solvency requirement for residency up to US$200,000 (for the
non retiree or non pensioners program, which is still quite attractive
by the way if you are of retirement age). Why indeed? As
the article points out, what has happened in Costa Rica many years ago,
and in the Bay Islands of Honduras seems to be repeating itself once
again in Panama. I absolutely love the Boquete region of Panama -
But not at 30 times the price. But, it of course all depends upon
your point of reference as well (I remember when land in Boquete was
still quite reasonable). However, the following news article
speaks of a couple from Florida that believes Boquete, Panama to be the
perfect spot.
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OUTTA HERE:
Some complain Southwest Florida is too crowded, too polluted and too
expensive: For them, paradise still exists in places like Panama
By Vivek Kemp - Thursday, May 18, 2006
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While pundits, politicians and empassioned citizens argue over
immigration -- Who should get in? Who should stay out? -- Greg Smith is
turning the debate into a virtual revolving door. Some must come. He
must go. Step into his office at Edison College in Fort Myers and
the first thing he'll likely point out is the screen saver on his
computer: a picture of the lot in a Panama where he and his wife are
building their new home. The 58-year-old professor of
environmental studies says he has seen a steady rotting of Florida's
ecosystems and water life since he moved to the state in the early
1970s. The rising intensity of the destructive red tides are killing
the grouper that this former commercial fisherman has grown accustomed
to catching. The amount of traffic has, for him, become so
intolerable that even the allure of wind surfing is growing dull. To
get to the wind-blown haunts along Fort Myers Beach, it can take nearly
40 minutes or more. That's more than double the time it took 10 years
ago, he says.
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His solution: retire in a mountain village in Boquete, Panama, about
350 miles away from Panama City. Population 15,000, with consistent
temperatures between 67 and 75 degrees. His house will be in a
gated community called Valle Escondido, which has a golf course, a
country club, and stables for horses. All the comforts of Lee and
Collier counties. Smith sees the Panamanian village as a certain
Shangri-La. And over the next two years, he says, he will work to sever
his everyday connections with work and neighbors here in order to live
there full time. I feel like an environmental prisoner here, he
says, leaning back in his chair. I used to love this area, but
it's not the paradise they tell you it is anymore. This
soon-to-be expatriate isn't the only disenchanted adventurer giving up
on Florida. And in their search for places that offer similar life and
climate, many have found Central America the best option. The cost of
living there is a fraction of that in the United States, they say.
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Mexico and Costa Rica have attracted Americans for decades, but Panama
is quickly becoming a top destination, boasting great health care, a
stable economy and a large English-speaking population, according to
reports by the U.S. Department of State. To give you an idea about
scope of the migration: The department estimates that as many as 1
million Americans are currently living in Mexico. Another
estimated 50,000 are living in Costa Rica, says Elaine Samson, press
officer for the U.S. Embassy of Costa Rica. She adds that many
Americans have lived in Costa Rica for decades without seeking official
residency. While there are no official numbers, multiple
estimates suggest that thousands of Americans are moving to Panama.
Nearly 20,000 Americans were said to be living in Panama City in 1999,
according to a report by the U.S. Bureau of Consular Affairs. Since
then the number has grown to more than 30,000, according to estimates
by the U.S. Embassy there.
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http://www.naplesnews.com/news/2006/may/18/outta_here/?neapolitan
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EDITORS NOTES:
And moving out in droves they are, because of taxes, cost of living,
crime, drugs in the schools and a whole laundry list of other
issues. Get a move on yourself before the word gets out and the
prices go up. By the way, the Dominican Republic is STILL
affordable, and that is a fact (go check out the real estate prices in
the rest of the Caribbean if you do not believe it).
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BRAD PITT BUYING A HOLIDAY HOME IN DOMINICAN REPUBLIC
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Los Angeles, May 11: The 'Troy' actor reportedly fell in love with the
tropical island last year - after visiting it during filming. Now
the 42-year-old star - who spent four days touring the lush Caribbean
country - is dying to splash out on a luxury pad on the island. A
source told Britain's The Sun newspaper: Brad wants a summer home to be
like his old house in Los Angeles. He fell in love with the
island and decided he wanted to have a house there to have
breaks. Brad - who is currently in Africa with pregnant
girlfriend Angelina Jolie - will reportedly use the tropical hideaway
to have family breaks with Angelina and her adopted children Maddox and
Zahara.
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http://www.zeenews.com/znnew/articles.asp?aid=294462&ssid=1&sid=ENT
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EDITORS NOTES:
There goes the neighborhood. Just kidding, but the funny thing is
the actor was looking for a US$22 Million Dollar home. The punch
line is he could not find one. Know why? Because the real
estate in the Dominican Republic is NOT over-priced the way it is in
many other Caribbean destinations. On that note, I just finished
reading a recent news article about a couple from Great Britain that
just bought a ONE BEDROOM apartment in St. Lucia for US$450,000:
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http://www.iht.com/articles/2006/03/16/news/relucia.php
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Not only that, the gentleman is thrilled because he thinks it is a
bargain. He must be out of his mind. Do you know what
US$450,000 buys in the Dominican Republic? You can still get an
ocean view villa on the north coast for less than US$200,000. A
villa, or in other words an entire house - with a few bedrooms and
swimming pool, as compared to one bedroom apartment. Not only
that, for US$400,000 (which is very, very expensive by the way for the
Dominican Republic) you could have purchased a 2,000 square foot
3-bedroom apartment in a luxury gated golf course community in the
Punta Cana area of the Dominican Republic. The place is so
exclusive that you have to pass through three guarded checkpoints to
get in by car. Other high-end beachfront projects have offered 3
bedroom apartments for US$225,000 or golf course villas for
US$350,000. These prices by the way are very high for the DR and
for the most part tourist prices, but even still, certainly at lot less
than what you may pay for what amounts to a shower stall in some other
jurisdictions. In any event, while I have nothing against St.
Lucia and while I know the island and do think it very beautiful, on
the same token - they must be insane to ask for that kind of money for
a one-bedroom apartment in a place that has very few goods and
services. Which is to say, an island with perhaps 300,000
inhabitants total and certainly no modern or upper scale
infrastructure, stores and services. Oh well, to each his own.
But lets not tell everyone about the Dominican Republic, shall
we? After all, we do not want the property prices to jump 30
times in price as it has in Boquete, Panama - agreed?
.
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THE UNVARISHED IMMIGRATION DEBATE
By Mark Helprin, Washington Post - Sunday, May 21, 2006
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When nations in decline are assaulted from without, even if gently or
only rhetorically, they often lose not only the will to defend - but
the capacity to do so sensibly. They turn upon themselves in fits of
self-destruction marked by truncated, simplistic and merely assertive
disputation. Illegal immigration, an external pressure, brings forth
arguments of this type. Each party to the immigration debate
seems to know only a single truth. One faction says that it is a
mistake to conflate illegal immigration with terrorist infiltration: Of
the many millions of illegal crossings only a handful are made by
people of even suspect origin, and therefore the borders should remain
porous. Apart from the non sequitur, this takes no account of the fact
that terrorists by the handful are effective; that if one border is
open, traffic blocked at the others will flow to it; and that if a
nation hasn't the will to control its frontiers, and thereby
disestablishes them, its sovereignty will deflate. Not a single
illegal immigrant should or need enter the United States, not one.
Contrary to the common wisdom, the borders are easy to seal, and
controlling entry is hardly totalitarian. This is not the same as the
question of how much immigration to allow, an important matter rightly
the political decision of the whole people rather than of a febrile
militia of Willie Nelson look-alikes or the purposeful inefficiency of
a fence. And lest the government nurture a parallel and
unrepresentative authority, it would best attend to its
responsibilities and displace the armed geezers who have stepped in
where it has failed, though to do so with the military is wrong on half
a dozen counts.
.
This spring's pro-immigration marches attempted lamely to confuse legal
and illegal immigration. Of course everyone in the New World is an
immigrant or a descendant of immigrants, and immigrants have built
America and continue to do so. Legal or illegal, they are almost
universally good people who work to better their lot and that of their
children. That is not, however, license either for illegal entry or
America's failure to have an immigration policy except by unregulated
default. Businesses large and small, careerists with Latin
nannies, and those who want wages low, the unions suppressed and their
gardens well tended have made common cause with their political
opposites. The latter, who have embraced multiculturalism and
bilingualism, and who, though they may be little blast furnaces of
ostentatious compassion, are in their disdain for America as ruthless
as commissars, would be delighted to see it changed any which way as
long as it becomes unrecognizable. If you worry about the potential for
California and the Southwest to calve like melting glaciers and cleave
to Mexico, or vice versa, the left will mock your distress as it once
mocked and reviled anticommunism. And in the same vein the equanimity
of the business right is similar to the self-satisfaction of those who
would have sold Lenin the rope with which he planned to hang them. This
is the lobby, strange as it may seem, for illegal immigration.
.
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/19/AR2006051901524.html
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EDITORS NOTES:
And so the debate about immigration, illegal or otherwise wages
on. Want to know what the real story and problem is, BOTH for the
United States and the European Union? Here we go, and this is NOT
about racism but rather pure economics (and why many middle-class
Europeans and Americans see this coming and want out).
.
The Heritage Foundation (US) recently came up with some predictions and
statistics that claim IF the current immigration legislation (as was
proposed) is passed in the US, within 20 years it is estimated that 25
percent of the US population will be foreign born, or stated another
way, that the immigrants will make up 66 million of the US
population. All well and good, and as pointed out, the US is a
nation of immigrants (as is Canada, Australia, Argentina and a host of
other nations as well). So, the argument is not to exclude or
discriminate against Mexicans, Latinos, Muslims (the European problem
involves primarily Muslims from Iraq, Iran, etc. not to mention poorer
eastern European nations) and whomever else. The real question is
- With all the other social welfare and economic problems currently on
the horizon - can they afford it?
.
One must consider that BOTH in the United States and the EU, any
business involved with agricultural and construction (manual labor
intensive industries) cannot find native-born locals to do this kind of
work. In Germany, it is the Polish that pick the fruits and
vegetables that end up on the dinner tables of native-born
Germans. Same issue involving Mexican workers and native-born
Americans. But here is the rub. It is said the jobs are
currently there in need of these workers (legal or not) and that much
seems to be true. But what will be the scenario ten or twenty
years from now? It has been estimated that the US economy will
continue to grow at an anemic rate of 1 to 2 percent per year for the
next twenty years at least. So, if the immigrant population is
increasing faster than the economy - where will the jobs be for these
people? Surely we now know that manufacturing has disappeared
from the US, and has instead gone south to Mexico or elsewhere (China,
India, etc.). So, there will be no manufacturing jobs for these
people (or anyone else for that matter). Now it has been reported
that white-collar work is being outsourced also (architectural design,
computer programming and even other kinds of research and
development). The question then remains - how many restaurant
workers, grass cutters and nursing home attendants will these countries
truly need (meaning the US and EU countries)? In addition, we
raised the question previously that these lower wage and unskilled
workers may continue to place pressure on wages for everyone
else. Along this line, one of our clients from New York (a
computer programmer) was laid off from work, which resulting in him
saying goodbye to his old salary of US$95,000. When he applied
for another job elsewhere, he was told the new job paid US$55,000 -
take it or leave it. He was also told, our firm can get a guy in
India to do this job for US$25,000 so do not wait too long to make your
mind up. What is the point? Regardless if labor substitutes
are available for much lower wages abroad (in another country) or right
in your own back yard (in the form of immigrants willing to work for
less) - the outcome is the same: pressure to bring domestic wages down,
not up. This comes at a time when inflation may be eroding the
purchasing power and lifestyle of many middle class people in the US as
well. Our answer to all this has always been - do not fight it,
just leave. Instead of fighting about something you have no
control over (wages someone else is willing to pay you), why not focus
on living much better for less somewhere else?
.
In any event, getting back to the employment issue, we need look no
further than modern day France. The current estimated
unemployment rate on a national level for France is said to be about 12
percent. HOWEVER, the unemployment rate for the poorer, immigrant
population is over 40 percent (those were the folks throwing rocks at
the police recently in Paris - remember?). So, this baits the
question: Are there enough jobs even TODAY for all these lesser
educated, poorer immigrants in the wealthier nations? Or, is it
that these immigrants would rather collect the social welfare benefits
instead of working? Either way, these are not positive situations
for the society.
.
On another front, what is the profile of a typical immigrant and is it
really the case they contribute more economically than what they cost
(in terms of public schools, public hospitals, etc.)? Coupling
that thought with the strain already on the social welfare systems - is
it really going to be true that allowing all these people into the
picture will save the day? Difficult to say for sure and there is
plenty of debate, but it is interesting to note that the average cost
to educate a child in the US public school system comes out to about
US$9,000 per child per year. According to the estimates of the
children of illegal immigrants in the US, that total amount comes out
to almost US$30 Billion, and when factoring in additional costs for
bi-lingual school teachers and related special programs, US$36 Billion.
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Source: http://www.vdare.com/rubenstein/educating_illegals.htm
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A US worker (regardless of status) earning US$9 per hour based on a
40-hour workweek is earning US$18,720 per year. If we assume such
a person is in the 15 percent federal income tax bracket and let us
assume the person is paying another 7 percent for state and local
taxes, then such a person is forking over US$4,000 in income taxes (far
less than the cost to educate their children in terms of costs).
If they are illegal, then they are paying NO income taxes, but let us
for arguments sake assume that they are. Of course, most public
school systems are in fact funded by local real estate taxes, but since
most poor people and new immigrants do not own their own home, I have
left that out as somewhat of a mute point (and have used income taxes
instead to offer some comparison).
.
The bottom line to all this is NOT to be cruel, anti-immigrant, nor as
a racist comment towards any particular group. Instead, it is a cold
hard look at the economics involved (the dollars and sense, if you
prefer that term instead). The questions remain, and the possible
changes to both the future physical and well as economic demographics
along with it. Again, can any modern day welfare state really
afford to absorb a very high number of poor people, who certainly take
more out of the government public welfare systems than they pay in
(which by the way, the social welfare system was designed to do, tax
the middle and upper middle class to provide an economic support to the
lower wage earners or the poor)?
.
Some Comments From the Website Indicated Below:
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Baby boomer women are in trouble. Unlike any other time in our nation's
history, unless there are dramatic policy shifts, in terms of absolute
numbers, baby boomer women, most particularly minority women, will find
their elder years to be a "never ending" struggle. After selflessly
caring for their children and aging parents, a significant number of
our country's 40 million plus boomer women will not be able to afford
to retire, will fall below the poverty line and experience financial
insecurity and poorer health in their later years with limited aid from
traditional safety nets. Many of our boomer women will not have
secure retirement futures because of diverse and interrelated
demographic, social, cultural, political and economic societal factors.
Almost 30 million boomer women will face uncertain employment,
financial, heath care, housing and retirement futures because of
gender-biased public and private sector policies.
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Source: http://www.genpolicy.com/
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I am reminded of a gentleman from Washington, D.C. who told me, John -
these expatriates are nothing but tax-protesters trying to make a
statement. Once again, I say, it is about watching the trends and
problems, plus also watching the current politicians on both sides of
the aisle give the store away. It IS about long-term survival and
where all this is headed. No one decent human being will deny the
right and opportunity for another person to better their lives (via
trying to immigrate to the so-called wealthier land of opportunity),
although I think it quite ironic that these very same so-called
wealthier governments such as the US seem to want to stop their own
native born from leaving (via possible restrictions on money transfers
abroad, etc., etc.). Which is to say, I think they know all too
well the type of quagmire they are in, AND taking even more one way or
another (direct higher taxation or debasement of the money supply,
which is another hidden form of taxation) will be the only outcome.
.
What is the difference between then and now in terms of this argument
about hard nose immigration policies? Better stated, in a country
built on immigrants seeking a better life, what is the difference
between YOUR grandparents or great grandparents and today's
immigrants? In one simple explanation - the great welfare
state. When your relatives emigrated to countries like the United
States in the 1800s or early part of the 1900s, there was NO food
stamps, unemployment insurance, social security, low income government
housing, or any of the other welfare state programs that exist today
(which by the way happens to be the case today in Mexico, Dominican
Republic and most of the other countries Americans are moving
to). These immigrants that came before had to make it, without
taxpayer-funded wealth transfer or support programs. In short,
the difference today is the government entitlements such immigrants
(legal or not) can tap into from day one of crossing the border.
Again, this is not meant to be bombastic or mean spirited but rather to
ask the question - Knowing what we do about the financial health of the
government run social security and other welfare programs, can this
continue? Have the politicians sold out to so many special
interest groups that they would rather allow the country to go broke
(while staring down the barrel of insolvency regarding Medicare, which
is a problem TODAY, never mind about ten years from now) rather than
make the tough choices today?
.
We called this trend of middle class people from the existing wealthy
nations (such as the US, Canada, etc.) moving to the so-called
developing nations (with lower taxes, lower real estate costs and NO
bloated social welfare systems in place) TRADING PLACES. Trading
places indeed as their counterparts moving in to take their place are
the poor and uneducated working for minimum wage that many would argue
really take out more than they pay in, at least initially (from the
social welfare state benefits, that is). This all will have a
very severe impact over the next ten, twenty and thirty years.
.
Who will make out in all this? The developing nations of course
who are also getting new immigrants (like you), albeit those people
with job skills, business skills, higher education AND some liquid cash
to buy a home with or invest (who are NOT draining the social welfare
systems in the new country they move to, simply because such systems do
not even exist). It is not rocket science to predict the
outcome. This is the real shift that is taking place in terms of
economics, and of course the resultant changes going forward in terms
of what nations will be considered solvent (and those that are
not). As we have stated before, the developing or third world is
not so poor anymore as they continue to export their poor and unskilled
to the so-called wealthier nations in North America and Europe, AND at
the same time, gain new residents (and or citizens) escaping from the
high taxes and lunatic politicians (while at the same time, bringing
with them money, education and skills). As Mr. Ripley used to
say: believe it or not.
.
.
AGAINST TIDE, SOME SEEK MEXICAN CITIZENSHIP
By Chris Hawley, Republic Mexico City Bureau, May. 25, 2006
.
.
MEXICO CITY - Some came for love. Some came for work. Others just wound
up here and decided to stay. On a recent sunny day, 50 immigrants
from the United States, China, Italy, Spain and elsewhere rose to their
feet before a crowd of dignitaries and took a life-changing step: They
became Mexicans. Citizens, President Vicente Fox intoned.
Do you renounce your nationality of origin . . . to assume all the
rights and obligations that the acquisition of Mexican nationality
confers? Yes, we renounce it, the immigrants said, and the crowd
broke into applause. With a half-million Mexican migrants leaving
their country for the United States each year, Mexico itself may seem
an unlikely Promised Land. But last year, at least 4,349 people from
other countries became naturalized Mexicans, up more than sevenfold
from 510 in 1995. And that's not counting the 98,019 Mexican-Americans
who have reclaimed their Mexican citizenship since 1998. The rise
is partly due to new laws relaxing Mexico's immigration rules. Some of
the new Mexicans are poor people who want to become part of Latin
America's strongest economy. Others are professionals who see
advantages in having two passports in a globalized world. But
there are native-born Americans, too, among the ranks of naturalized
Mexicans. Frank Goebel, a U.S. businessman who used to live in
Phoenix, decided to get his Mexican citizenship after marrying a
Mexican woman. "It just seemed like the natural thing to do," he
said. In all, about 1,200 native-born Americans have become
Mexicans since 2000, the Foreign Ministry says. The Mexican government
is hoping the U.S. Congress will eventually confer preferential
treatment on Mexico when it comes to issuing work visas. If that
happens, a Mexican passport could be a valuable thing to have.
.
http://www.azcentral.com/news/articles/0525becomingmexican.html
.
EDITORS NOTES: Well, it sounds like Pancho Villa rides again (at
least in spirit). In any event, it should be noted that the
Dominican Republic recognizes dual citizenship and does NOT require new
citizens to relinquish previous citizenship in the process, which is
not the case in Mexico, or a few other countries as well.
.
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READERS WRITE IN:
.
Hi John - In your May 15th 2006 newsletter (dated May 15th 2005) your
editors note regarding "fixing the world economy part 97" state that
the global demand for US dollars would fall. When a person buys
something online the usual payment currency is in US dollars. What
currency do you think that would change to and should a person be
parking their savings now in another currency, say like the Euro or
Canadian dollar?
.
EDITORS REPLY:
To be sure, if you are an American especially or conduct any kind of
business whereby you are being paid in US Dollars, it can be difficult
and in fact impractical to escape the US Dollar altogether as a
currency. However, speculating that the policy of the US Federal
Reserve and US Government would seem to be one of inflating the US
Dollar money supply as a way out of the fiscal mess, then it is the
case of considering ways to either preserve your wealth in order to
hedge and protect yourself. In addition, I have mentioned earlier
with respect to cost of living, certainly there are weaker currencies
that will either sort of maintain a steady value with the Dollar or
continue to devalue against the Dollar, making this an attractive case
if you have US Dollars. In other words, we have talked about the
currencies of the Dominican Republic, Costa Rica, Thailand, and the
Philippines as just some examples of smaller countries with perhaps
somewhat weaker currencies. Other so-called third world or
developing nations that have commodities will probably see a
strengthening of their currencies simply because commodity prices go up
vis-à-vis inflation pressures regarding the US Dollar - - and if
the noted economist Dr. Marc Faber is indeed correct, we are coming
into a bull market cycle for commodities anyway. So, nations such
as Chile (copper), Brazil (wood, industrial and manufactured products,
other natural resources), and Venezuela (oil) are in a good
position. In the least, we have already seen the Brazilian Real
increase in value versus the US Dollar and I think this might be a
trend to watch (as an example of an up and coming developing or third
world country with a good economy AND commodities to sell).
Nations that do not have large amounts of natural resources and
commodities to sell (at what probably will be higher and higher prices
going forward in the world market) will be still be inexpensive places
for you to live and buy real estate IF you have US Dollars to
spend. So, I think Dominican Republic fits that bill, along with
Costa Rica, and Thailand, just to name a few. I have left out
countries that have formally switched over to using the US Dollar as
its national currency (Panama, Ecuador) because the real benefit comes
into play when you are constantly exchanging more and more of your US
Dollars (or Euros, Canadian Dollars, etc. as the case might be) each
year for more and more of the local currency in terms of the exchange
rate. In other words, you are indeed keeping up with any local
inflation this way. So, where you invest and where you live might
be two different countries simply because of economics and the exchange
rate issues. Live in a country with a weaker currency (lower cost
of living or in the least the ability to keep up with any inflation)
but invest in a currency and country that will possibly grow, but in
worst case hold its value (in terms of the currency).
.
Apart from that, the old standbys are of course hard assets that always
keep up with inflation: real estate (but do not buy at inflated or
speculative prices of course), gold, silver, and even other things
(such as vehicles, machinery although this is not practical for most
people). However, getting back to your original question, the
real concern is predicting which currencies have a better chance of
holding value. We already mentioned smaller emerging or
developing markets such as Brazil. In addition, certainly it
seems to be the case that the EU (with the exception of Italy) will be
slightly better off in the long run than the US. Another very
notable mention is the Australian Dollar, which is the case of a modern
wealthier country that DOES have commodities and in fact perhaps the
ONLY nation in the entire group run a trade imbalance with China to
their favor (they sell more to China than they buy). So, apart from the
Euro, the Aussie dollar might be a good hedge as well.
.
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ANOTHER READER WRITES:
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Does the Country Of Colombia have a Civil law system or a Common Law
system? I know you gave as a rule of thumb that generally if the
English Language is the official language or predominant in their
Government, then most likely is a Common Law System that's if I
understood correctly. My question is based on Colombia, but can
you please tell me about Ecuador also? In recent years I noticed
Ecuador change their currency to the US Dollar. Is that a good thing?
.
EDITORS REPLY:
Colombia is indeed a civil law jurisdiction, as is Ecuador. In
addition, generally speaking, any nation that has its roots as a former
British Colony will most likely have a legal system in place based upon
English Common Law, so English as the official language is a tip off to
this. With regards to Ecuador and use of the US Dollar, many
Americans erroneously think this to be a positive for them in terms of
avoiding any currency conversion. However, as we discussed above,
with regards to inflation inside that particular country and possible
devaluation of the US Dollar, living in another country that uses the
US Dollar is not a beneficial idea - strictly from these two points in
mind. Also, the down side to using the US Dollar (if another
country) is that you as a nation are subject to the political whims and
policies of Washington. If the official policy is inflation
(devaluation through over-printing) then you go down the same sinkhole
as well, all from the policies of another foreign government (the US in
such a case) that you have no control over.
.
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ANOTHER READER WRITES:
.
If a person has to go to a Doctor can their Medicare work there?
Does the DR have chiropractors? If income is received from an off shore
debit card (a Belize bank) how would the income be declared as far as
US/DR tax laws? Would I have a language problem if I only know
English? What are some of the benefits of having dual citizenship?
.
EDITORS REPLY:
Generally speaking I have to say that the entire idea is to escape the
welfare state, not embrace it. Meaning, if you are poor, if you
currently are dependent upon the various social welfare programs that
exist, then chances are you will be much better off staying put.
No - hospitals, clinics and private doctors will not accept US Medicare
nor any of foreign health insurance for the most part. However,
we did a comparison some time ago regarding the monthly Medicare
premium payments that MOST senior citizens make (which is voluntary and
calculated by your income) and what private health insurance coverage
costs in the Dominican Republic. The bottom line is that many
older middle class Americans pay upwards of US$300 per month for this
government health insurance. Of course, if you are poor or
indigent then you pay nothing, but then again if that is the case, you
should not be thinking about moving to another country anyway if you
currently live in one of the high tax social welfare countries to begin
with (you have it pretty darn good where you are).
.
In any event, we reported that for the very best PRIVATE health
insurance plans, you would usually end up paying in the neighborhood of
US$200 per month in the Dominican Republic. So, it is not only
less expensive than the government Medicare BUT also private insurance
that you control (and not some politician or government
bureaucrat). With that said, private health care in the Dominican
Republic is very, very good. The Dominican Republic does have
heart surgeons, plastic surgeons, orthopedic surgeons, chiropractors
and pretty much most of the other medical specialists. There are
not that many psychiatrists in the Dominican Republic, but maybe the
country does not have as many mentally unbalanced people as a
percentage of the population (an interesting theme for another day -
why are there more stressed out and flipped out people in the wealthy
modern social welfare countries??)
.
On the subject of dual citizenship, I will defer to one of the articles we already have on-line:
.
A SECOND PASSPORT OR SECOND CITIZENSHIP: WHY YOU NEED ONE NOW, AND FAST.
.
http://www.ascot-advisory.com/Second_Passport.htm
.
On the subject of language, it would be to your benefit to learn the
national language, regardless of what country you relocate to.
Obviously you will find it easier to communicate and simply get along
if you do. There are some people in the DR that are bi-lingual
with English (the government had started a new program to start
teaching English at the lower grade levels along with French but that
will have its effect with the younger generation now in elementary
school) and I have always found Dominicans to be very appreciate when a
foreigner attempts to speak Spanish. Which is to say, unlike some
other countries, Dominicans are very kind and humble with foreigners
(as opposed to the rudeness and arrogance I have sometimes encountered
elsewhere).
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