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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 August 1, 2006 Newsletter Edition
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SANTO DOMINGO REAL ESTATE:
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Many readers have asked about real estate opportunities in Santo
Domingo, so here are just two brief examples for you (there are many
more). One is a brand new luxury apartment building going up in
the affluent Piantini neighborhood (2 bedrooms each with own bath,
visitors bathroom, 2 underground parking spaces per apartment, formal
lobby with elevator, 24 hour emergency generator for the building)
starting at US$118,000 (new construction due to be finished in December
2007). For people interested in land and perhaps a somewhat
speculative investment, we found a half-acre building lot (no error, it
says half acre or 2,000 square meters) in the city - located 10 minutes
from the airport off the highway (between the zona oriental and the
airport) with a sea view if you were to build a two or three story
home, with utilities already in place. The price is RD$2 Million
(US$61,500) for the two lots combined with two separate 1,000 square
meter titles (1/4 acre each one next to each other) already in place
(should you wish to keep one and sell the other, which comes out to
US$30,800 for each quarter acre lot). The general area is still
undeveloped, but residential projects are going up nearby with even
possible commercial use considering location near the highway. By
the way, residential building lots in the city are now going for
RD$1,600 pesos AND UP per square meter (about US$50 per square meter)
so at RD$1000 (about US$30) per square meter, maybe not such a bad deal
for future use. For more information, please feel free to contact
our office or send an email: info@ascot-advisory.com
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PANAMA MERCHANT ACCOUNTS:
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Our office in Panama has recently secured an arrangement with one of
the local banks in Panama that is now accepting new Merchant Account
Applications. The bank claims they will process new applications
within 30 days and processing rates are 3.5 percent with a minimum of
US$20,000 monthly activity. Brand new merchant account clients
will gladly be considered but telemarketing operations, and others with
high charge backs will not be. However, assuming you have a
current operation in good standing (with very low charge backs) OR are
a new business looking to move your business and your merchant
processing offshore, then this may be of interest. In conjunction
with that, for those clients that might be interested in a merchant
account, a new Panama Company, a bank account in Panama (with the same
bank processing your credit card transactions) AND an additional USD or
EURO bank account in the Dominican Republic, there is a complete
packaged fee available. This includes the banks merchant account
application fee, the cost to establish a new Panama Company plus
banking assistance services as noted. For more information,
contact our office at 809-334-5387 or 809-756-1917. Via email: info@ascot-advisory.com
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IN THE NEWS:
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SHOULDN'T THIS DUAL CITIZENSHIP THING BE STRAIGHTENED OUT BEFORE WE ALLOW MILLIONS MORE IMMIGRANTS?
By Allan Wall - June 21, 2006
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As an American resident in Mexico, I can assure you that U.S.
citizenship is seen as a desirable thing. But I have never heard any
Mexican say I want to become a U.S. citizen because I love the Bill of
Rights and I want to be part of a Universal Nation. No, most
Mexicans who seek American citizenship for themselves or their children
do so for personal benefits, and not to become Americans. When
the Mexican government realized they could benefit from this as well,
it changed its own citizenship law to allow Mexicans to be dual
citizens of both the U.S. and Mexico, for the benefit of Mexico.
In 2003, when the U.S. invaded Iraq, the Mexican government tried to
exploit the situation by announcing a census of Mexican citizens (and
soldiers of Mexican ancestry) in the U.S. military and a negotiation
with Saddam Hussein the release of American prisoners of war who were
also Mexican citizens! Nothing much came of it, but it
illustrates the vast possibilities for meddling inherent in widespread
dual citizenship.
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Does U.S. law allow dual citizenship? You wouldn't get that
impression from the oath of citizenship. When an immigrant
becomes a citizen of the United States, he swears an oath of
allegiance. Here is what the new citizen promises: I hereby
declare, on oath, that I absolutely and entirely renounce and abjure
all allegiance and fidelity to any foreign prince, potentate, state, or
sovereignty of whom or which I have heretofore been a subject or
citizen; that I will support and defend the Constitution and laws of
the United States of America against all enemies, foreign and domestic;
that I will bear true faith and allegiance to the same; that I will
bear arms on behalf of the United States when required by the law; that
I will perform noncombatant service in the Armed Forces of the United
States when required by the law; that I will perform work of national
importance under civilian direction when required by the law; and that
I take this obligation freely without any mental reservation or purpose
of evasion; so help me God.
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That certainly sounds like the U.S. doesn't recognize dual
citizenship. But in fact, dual citizenship is now law of the
land. As the website of the U.S. embassy in Mexico announces to
the world: Being a dual national and carrying the passport of
another country is perfectly legal. Under U.S. law, naturalizing as a
citizen of a foreign state will not in and of itself cause you to lose
your U.S. citizenship. The Selective Service System even exempts
some dual citizens from registration. In the old days, when
citizenship meant something, the United States had rules to control
this sort of thing. There were acts that were expatriating acts, which
could cause one to lose his citizenship. Clemente Perez, a U.S.
born citizen of Mexican ancestry, moved to Mexico before World War II
and voted in a Mexican election. In Perez vs. Brownell (1958 the
Supreme Court ruled 5-4 that an American citizen who voted in a foreign
election could lose his citizenship. But a scant nine years
later, in the landmark Afroyim vs. Rusk case (1967), the court ruled
5-4 that Beys Afroyim, a naturalized citizen, did not renounce his
American citizenship by voting in an Isareli election, thus
infalidating Perez vs. Brownell. U.S. law followed suit, and now
it's almost impossible for an American citizen to lose his citizenship,
no matter what he does in a foreign country. Would you like to
serve in a foreign military? The State Department says that Military
service in foreign countries usually does not cause loss of citizenship
since an intention to relinquish citizenship normally is lacking.
Would you like to run for office in a foreign country? The State
Department says that Currently, there is no general prohibition on U.S.
citizens' running for an elected office in a foreign government.
How could a dual citizen of the U.S. and another country lose his
American citizenship? The State Department has a document
entitled "Possible Loss of U.S. Citizenship and Dual Nationality" which
reveals that it's almost impossible to lose one's citizenship.
Its list of possible expatriating acts includes being naturalized in a
foreign country, serving as an officer or NCO in a foreign army, being
employed by a foreign government, and even serving in a military
engaged in hostile action with the U.S. or being convicted of treason.
Yet none of that the actions listed above can cause loss of U.S.
citizenship only if performed voluntarily and with the intention of
relinquishing U.S. citizenship. The Department has a uniform
administrative standard of evidence based on the premise that U.S.
citizens intend to retain United States citizenship when they obtain
naturalization in a foreign state, subscribe to routine declarations of
allegiance to a foreign state, or accept non-policy level employment
with a foreign government. In other words, you could commit a
possibly expatriating act and still not lose your citizenship. In fact
the state department assumes people will do these things and still be
U.S. citizens. The key concept is "intent". Even if you say
to a foreign government that you're renouncing your U.S. citizenship it
doesn't count on the U.S. side unless intent to renounce can be
proved. So how could one lose his American citizenship? Nowadays,
the only way is by making a formal renunciation of nationality before a
diplomatic or consular officer of the United States in a foreign state,
in such form as may be prescribed by the Secretary of State.
That's it. That's the only way to renounce citizenship.
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http://newsbyus.com/more.php?id=4090_0_1_0_M
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EDITORS NOTES:
This gentleman wrote this article as a complaint against dual
citizenship, but the fact of the matter is, every thing he has to say
is completely true (and is in fact an argument FOR dual citizenship for
some people). We do get a large number of Americans asking the
very question and in fact, some people have actually gotten erroneous
information from the US State Department by telephone (many geniuses
working for the State Department are seemingly clueless, or then again
maybe they do know and are lying - your guess is as good as
mine). Anyway, now you know that DUAL CITIZENSHIP and a second
passport is completely legal (and permitted) for US citizens. But
on another note, we have had a number of US clients who have tried to
renounce citizenship at US Embassies abroad (in various countries) who
actually have been frustrated with all the run around and red tape to
do so. In other words, just like the Mafia, it would seem they
would not make is so easy to get out regardless. Hey, you are a
cash cow, income-producing (tax paying) asset - why would they want to
let you go so fast? Of course, on the other hand, there are many,
many smaller countries that would just love to have you. Isn't
that nice to know?
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PRIME MINISTER DEFENDS DUAL CITIZENSHIP - July 25, 2006
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Prime Minister John Howard says allowing dual citizenship gives
Australians the opportunity to become business leaders overseas.
Mr Howard said he was willing to listen to emerging community concerns
about allowing Australians to have joint passports, but added it did
offer great opportunities. We want Australians to become the
world wide managing director of the multinational companies, Mr Howard
told Macquarie Radio. There are many limitations of what you can
do in many countries without becoming a citizen in that country and I
think we have to look at this thing from a number of viewpoints.
I can emotionally understand what people are saying and it's a debate
that I will follow very closely. Mr Howard said more than one
million people held citizenship of Australia and another country.
I point out the largest incidence of dual citizenship is probably
Australian-Britain citizenship, it's not Australian-Lebanese
citizenship, he said. For years we've have hundreds of thousands
of dual citizens in this country - not because we allowed it - it's
because other countries allowed their citizens to become Australians
without surrendering theirs.
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http://www.theage.com.au/news/National/PM-defends-dual-
citizenship/2006/07/25/1153746830075.html
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EDITORS NOTES:
I want you to remember this comment and burn it into memory: For
years we've have hundreds of thousands of dual citizens in this country
- not because we allowed it - it's because other countries allowed
their citizens to become Australians without surrendering theirs.
A very important (and true) point we will address in just a moment.
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MPs SQUABBLE OVER COST OF SAVING DUAL CITIZENS
By Tim Naumetz, The Ottawa Citizen - Wednesday, July 19, 2006
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A debate raged yesterday over the government's decision to rescue
thousands of Canadians in Lebanon who are dual citizens and likely
reside there permanently. Conservative MP Garth Turner said the
Canadians with two passports are not "accidental tourists" and
taxpayers might question the cost. A Liberal MP agreed, saying
priority should be given to Canadians who were only visiting Lebanon
when Israel began air attacks. But other MPs criticized Mr.
Turner - saying a Canadian is a Canadian -- while an entry on the
Conservative MP's blog sparked an Internet war of words over the
issue. A Foreign Affairs Department official, meanwhile, said
12,000 Canadians had already registered their presence in Lebanon with
the Canadian Embassy in Beirut prior to the Israeli attack. The
figure could be an indication of the minimum number of Canadians who
reside permanently in Lebanon, but department spokeswoman Kim Girtel
said Foreign Affairs does not keep track of Canadians with dual
citizenship or Canadians who are permanent residents in other countries.
.
http://www.canada.com/topics/news/national/story.html?id=d0c57c7f-fc77-419e-86b3-aa42c02bd167
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EDITORS NOTES:
I want you to remember this comment from the Canadian Foreign Affairs
official as well (we have already heard from the Prime Minister of
Australia above), and burn it into your mind: Foreign Affairs
does not keep track of Canadians with dual citizenship or Canadians who
are permanent residents in other countries. Thank you Kimmy - we
already knew that, but it helps when a government official comes right
out and says it in public.
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DUAL CITIZENSHIP: OUR VERY OWN TROJAN HORSE
By Klaus Rohrich - Tuesday, July 25, 2006
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In 1977, the Liberal Government of Canada headed by none other than
Pierre Elliot Trudeau enacted a law that redefined the meaning of
Canadian citizenship. The act passed on Feb 15, 1977 made it possible
for individuals to be citizens of Canada as well as one or more other
countries simultaneously. According to the Citizenship and Immigration
Canada web site: A person may have several citizenships at the
same time. For example, a person who was born in a country other than
Canada, who applies for citizenship and is naturalized in Canada, and
then naturalized in a third country may be a citizen of all three
countries. Like most of the ideas emanating from the brain of
Trudeau, the redefinition of Canadian citizenship had some foreseeable
and potentially costly consequences. The reality of this law is that
individuals coming to Canada may live here for three years and then
become naturalized Canadians, while retaining their status of citizen
of the country from which he or she originated. It precludes making any
commitment to Canada while it confers all the benefits of Canadian
citizenship.
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As George Jonas pointed out in Saturday's National Post, that's how
some 40,000 Canadians wound up being trapped in Lebanon, while the
U.S., whose population is 10 times that of Canada only had some 20,000
of its citizens trapped in the war zone. Jonas called them paper
citizens, meaning that many have a collection of passports, which are
usable, according to which citizenship might happen to be more
advantageous at any given time.
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http://www.canadafreepress.com/2006/klaus072506.htm
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EDITORS NOTES:
So, we have some people who are asking the question - Why are we
spending taxpayer funds and government resources to rescue and aid dual
citizens? I understand and get the argument, but here is another
one. The relationship between a citizen and his country (and
perhaps more than one country) is a social contract. Meaning, the
citizen pays his or her taxes and in turn government provides certain
kinds of services (be they social or otherwise). So, if we know
what happens or what the law says when one side of the contract breaks
its part of the deal in a private situation, then how does that apply
when the scenario involves a citizen and his or her government?
Let us break this down. If the government reneges on the
contract, or changes the rules in midstream, or alters any of the
conditions - then does this mean the citizen can also do the same on
his or her end? Can the citizen legitimately say - OK, you tell
me I am only a part time citizen, then I should only pay half or part
time taxes as a result? If I am not good enough to rescue, then I
should be excused from paying into that system that is not providing
service to me. This is all about the money, or economics if you
prefer, on both sides. The argument is not really about
nationalism or patriotism because no one gave a damn before about whom
did or whom did not have dual citizenship prior (not really, not as a
front page issue). It has therefore come to light because we are
faced with a COST to provide aid or services to such persons that the
so-called true citizens (the ones with only one passport) would rather
not absorb collectively. Fair enough, however, it is a two way
street. And so, dual citizens then should be excused from
supporting the national health insurance system I am thinking (so Ms.
Cranberry in Vancouver can get her no cost to her government knee
surgery, and Mr. Jones in Ottawa can get his no cost to him government
cat scan, etcetera and so on). Is that not right? The
problem is that with social welfare state programs, many people want it
- providing someone else is paying. We, the legitimate and true
citizens of our nation (as they would call themselves) do not wish to
pay for the rescue of you mister (or misses) dual citizen. Fair
enough, but then we, the dual citizens, should not have to pay for your
national health care services either. You follow me?
.
Watch this space, or better said this topic, very closely moving
forward. We truly believe this will become a topic brought to the
front burner, as more and more citizens from the high tax nations
obtain dual citizenship. With that, this will teeter-tooter back
and forth as the non dual citizens will insist that dual citizens be
taxed at a higher rate, or in the least not be excused from tax
payments to the welfare state - while at the same time, arguing they
are a second class kind of citizen not entitled to certain government
services. In addition, the dual citizens are going to think to
themselves - why the heck am I still paying for membership in a country
(that is what citizenship is really on one level or to one extent,
membership, with a passport indicating what club or clubs you belong
to) that offers me no real benefit? From the domestic side you
are going to see arguments that hide behind nationalism and patriotism
(emotions, not hard dollars and sense) - but this is just a smoke
screen. It is about the money, and perhaps more importantly,
whose money and from where to support this behemoth social bureaucracy
that is indeed going broke. The folks left behind in the homeland
(I hate that word, homeland, it reminds me of something George Orwell
would cook up in a 1984 sort of way) are going to feel the pinch as
taxes go up and services go down. The folks already out might
just start saying in mass, take this passport and shove it. What
if someone wanted to gave an office party for Fred, who is retiring,
and 40 percent of the office staff decided not to contribute? For
sure, less money means less of a party - no? What if 40 percent
of the general population or even just 40 percent of the dual citizens
decided to opt out of the high tax welfare state? Watch this
topic, you will hear about it some more as we go forward into the
future abyss. As for those that echo the opinion of the above
news article - I say keep flapping your mouth. Dual citizens have
a choice - you don't. Think about
it.
.
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DUAL AFRICAN AND AMERICAN CITIZENSHIP PONDERED FOR DESCENDANTS OF SLAVES - BET.com News and Wire Services - July 25, 2006
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If you could have dual citizenship in Africa and America, would you
take advantage? The dual-citizenship idea came up in a meeting
last week between African leaders and private U.S. business and
economic types in search of partnerships to end Africa's poverty.
Presidents from 12 African countries attended the four-day Leon
Sullivan Summit, along with former U.S. President Bill Clinton and
World Bank President Paul Wolfowitz. Anthony Archer, a Santa Monica,
Calif.-based lawyer, is heading a committee to consider how citizenship
could be awarded. Meanwhile, Ghana, a poor country eager for more
U.S. tourists, donors and investors plans to soon offer slave
descendants lifetime visas or even dual Ghanaian-U.S. citizenship.
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http://www.bet.com/News/dualcitizenshipafrica.htm
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EDITORS NOTES: There are some important points and or predictions
I want to highlight for you. One is the fact that most
governments never know which of their own citizens have obtained either
legal residency status or even dual citizenship in another
country. It is not reported back to the previous or first
government of citizenship (unless of course your are wanted by
Interpol, in which case they will show you the door very quickly, no
crooks need apply). Secondly, I do think the topic will come up
for debate in the future, as the piggy bank of the welfare states run
dry - and the realization is made that dual citizenship offers a large
number of benefits (tax and otherwise) to the individual. Which
is to say, it is a bad deal for the state as they loose some control
over you (which is why all the ruckus), but good for the individual in
that they have more options and more freedom as a result (both economic
and otherwise).
.
I suspect you will start to see a backlash and more animosity towards
expatiates and dual citizens because of the various tax and other
options available to dual citizens that are not available to single
citizenship holders (however it should be noted that this backlash will
ONLY be seen in the high tax nations, whereas the so-called poor
developing nations will hold the door open for you to come on
in). However, the author of one of the above articles says:
Unfavorable situations at home, easy electronic communications and
inexpensive air travel help accelerate why people leave one country for
another. Ironically, this is exactly the case and argument for US
citizens who want to expatriate and leave the US (or any place else for
that matter). We called this a new trend and labeled it trading
places in some previous articles. The poor people in foreign
countries still believe the myth of the US as the wealthy land of
opportunity (yet they find out the reality once they arrive). US
citizens, on the other hand, know better. They want out, and the
middle-class especially is the new group leaving the US in
droves. Our analysis and speculation is if this trend continues
is, the poorer so-called emerging market nations will be the
beneficiaries of well heeled, educated, financially stable new
residents. In turn, these very same countries will get rid of
their poor and unskilled, as these groups still seek to enter the
US. Case in point is what has happened between the US and Mexico
(financially stable middle class Americans go to Mexico for less
expensive cost of living and retirement, poor Mexicans continue to
flood over the border into the US to mow lawns and hang out in front of
Home Depot - Mexico wins on both counts - and in fact benefits from all
that money these immigrants are sending back home, and the US stuck
with even more poor people straining the government social services,
including the public school systems). So, watch out for these
poorer developing markets to develop policies to lure attractive new
residents from the wealthier, high tax welfare states (take note of the
previous news article above regarding dual citizenship for Americans
and African countries), and watch for more pressure inside countries
like the US as the tax base erodes and gap between wealthy - poor
divides even further (in part from the changing demographics - loss of
the middle class who are leaving, gain of poorer people to replace
them). We believe all of this will lead to more draconian
crackdown on expatriation of people and their wealth from the high tax
welfare nations going forward. Once again, an issue of trading
places. As Mr. Ripley used to say, Believe it or Not. There
is a currently popular American television commercial that asks the
question: What's in Your Wallet? A valid question indeed in terms
of how many valid and legal passports do you hold (and perhaps why you
might want to consider more than just one).
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MORE THAN A MILLION DIDN'T GRADUATE HIGH SCHOOL THIS YEAR
July 10, 2006
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Less than a month ago, the graduating class of 2006 experienced the
ultimate rite of passage. But as students grabbed for their diplomas,
tossed their caps and said goodbye to high school, almost one-third of
their former classmates were left behind. More than 1.2 million
students in the United States failed to graduate from high school this
year, according to a report by the Editorial Projects in Education
Research Center. The center's research reveals that the national
graduation rate has hovered around 70 percent since the mid-'90s with
little progress. Despite continuing efforts to keep kids enrolled, it
seems as though many students are closing up their lockers for good
before the final bell rings.
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http://ww.mtv.com/news/articles/1535857/07072006/
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EDITORS NOTE:
Another problem or reason why the middle class is losing ground and the
country as a whole losing jobs. The problem in the US is, higher
wages than third world nations yet apparently not so much higher
quality of workers in terms of education. I know you think I am
being cruel or antagonistic in say this, but it happens to be
true. You know just as well as I do, that the number one
complaint from high tech industries in the US in the recent past has
been lack of qualified applicants. This applies specifically in
those industries that require advanced degrees in mathematics and
engineering from job applicants. Am I lying? The statistics
and comments from private industry indicate otherwise. You must
be well aware that Silicon Valley only functions because of the high
number of Indian and Chinese programmers imported from abroad. In
addition, we reported to you in past newsletters that those Indian
programmers have started moving back to India and creating a new low
cost version of Silicon Valley there. Education and with that,
higher education is key. There was an HBO documentary some time
ago about the Lost Boys of Sudan who were sponsored and taken in by
some relief organization in the US. The number one request of
these adolescents was education. Instead they got used furniture
donated by some churches. This is not criticism by the way of
these church or other organizations. However, I am amazed that
literally poor adolescents, who are orphans that were plucked out of
refugee camps, instinctively know that education is the key to
advancement. American adolescents - what are they up to?
They have the opportunities and live in a country with the resources at
their disposal - yet they take it for granted and could seemingly care
less (not all of them of course, but 30 percent not graduating is a
very significant and almost incredulous number, and after all, we are
talking about the United States here and not Ethiopia). The
situation is so bad, that the US Army a few years back had to dump the
8th grade reading level training manual they gave to new recruits and
replace with a comic book that a second grader could understand.
You think I am joking or am being sarcastic? Check it out for
yourself, as it happens to be true. Americans love to blame their
woes on the Arabs, the Chinese, the Mexicans, the French, Global
Warming, the Democrats, the Republicans, etc. The truth of the
matter is they have no one to blame but themselves, and THAT is the
most painful realization in the world to admit (which is probably why
the majority of the country is still in denial and any criticism is met
with aggressive rebuke). However, blindly refusing to believe it
is not going to make it go away or improve.
.
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READERS WRITE IN:
.
From the last newsletter issue and news items regarding Americans
stranded in Lebanon, and the related rescue issues involved - this
reader says:
.
Just shows you why Americans should stay away from these crazy people.
Plus, the French could rescue Americans for the next 1000 years and
never repay their rescue from OCCUPATION.
.
EDITORS REPLY:
Well, I have heard the argument that Lebanon is an unstable place and
therefore anyone who traveled there was taking an undue risk (and
therefore the initial comments by the US State Department to charge
them supposedly justified). However, I do think it fair to point
out that Lebanon was moving closer to stability and trying to rebuild,
rather than the other way around. In fact, Beirut used to be
called the Paris of the Middle East (prior to the civil war in the
1970s) and many Lebanese in recent years felt they were on track to
returning to this case once again. New bistros and restaurants
were opened, new investment money was coming in, and Beirut looked like
it was coming back, so the argument that it was the same place as 1985
was not exactly true, economically and otherwise. Which is to
say, many reasonable people who knew what was going on in Lebanon went
back BECAUSE things were better recently in comparison to ten years
ago. Regarding the French, I do not know what to say other than
WWII has been over for more than 60 years now. I find it odd that
this argument is always and only tossed at the French, when Italy,
Holland, Belgium and the rest of Western Europe were ALL occupied (and
in theory if one wants to make the connection, saved by the
Americans). In addition, the Germans also refused to support the
latest war in Iraq, yet I noticed Americans have NOT stopped buying
cars made by Mercedes Benz and there are no new cute names for German
sausage either (Liberty Sausage?). Former US President Kennedy
stood by Berlin and conducted an airlift of goods during the cold
war. Some would argue that the Marshall Plan saved Italy and
Greece from going communist. All these things were done because
there was a strategic and perhaps economic US vested interest in
it. By aiding these other nations, there were helping themselves
too in a longer-term broader sense. On the same token, US foreign
policy (at the time it was being implemented) supported Noriega in
Panama, Pinochet in Chile and the list goes on (and in fact the US was
instrumental in putting these people in power in the first
place). I am NOT discounting the benefits that came out of
entering WWII or helping the European nations in other ways, but let us
call it like it is, and move on to the next century. Or, we can
sit around and talk about the good old days, and discuss why perhaps
Spain (and Europe in general) owes a debt of gratitude to the Muslims
for bringing them out of the dark ages (the Moors brought science,
mathematics, architectural knowledge, libraries and higher learning to
Spain at a time when Europe was experiencing feudalism and a medieval
frump intellectually speaking). We can argue for days on end
regarding who did what for whom, when they did it, and how much of a
payback is required. Or, we can try and solve the real problems
we have right now, and those we know are coming in the near
future. Or is it that the past really looks a lot better than the
present (and future) and why we would rather hang onto it instead?
.
I expected some strong reaction to this topic, and once again, I was
not disappointed (either you are with us or against us as they say -
and god forbid you are critical of a really stupid idea put forth by
the politicians). However, not wanting to discuss or examine
certain issues because it may be disturbing or an affront to ones
nationalistic pride - does not in and of itself mean one should not (or
that the points highlighted are not true or not a possible
problem). I am not trying to defend the French per say, and for
sure they can be just as arrogant as Americans, if not more so (which
is probably why they clash politically so often). But I do think
it noteworthy, that after this heightened sentiment to boycott French
wines (and other products) in the US, and the name change of fried
potatoes to Freedom Fries - the French rescued a group of American
citizens anyway or despite it all. I wonder if the situation was
reversed, if French citizens would have been allowed to board a US
ship? If the US government was willing to charge US citizens to
come and rescue them, I wonder what the attitude would have been for
non-US citizens also (charge them double?). These are
hypothetical questions, but worth asking just the same and not so
trivial either in terms of the hypocrisy at play often enough. By
the way, the Americans in Lebanon had no choice but to head for the
beach and hope for their ship to come in - literally. They had to
do this because if they went north to the Syrian border, they would not
have been allowed to cross (we no take American Express or Americans -
praise Allah). Of course, other nationalities did not have this
problem (Spanish and Swedish citizens who hot footed out on a tour bus
across the border). So, having another passport means having
other options. It really does not get any more complicated than
that - you have another one, or you do
not.
.
.
ANOTHER READER WRITES:
.
Your newsletter is free, and despite the popular wisdom that free
advice is usually ignored, I find your work to be excellent and well
worth paying attention to. I particularly liked the very well
argued and balanced writing appearing in the latest Opus (your line by
line comments to the dear reader). We appreciate your efforts
immensely and thank you for affirming Libertarianism and, dare I say
it, classic Anarchy {not chaos or bomb throwing, thank you, just plain
old anti-hierarchy}. My own political outlook is in fact way off the
scale, well beyond Libertarianism or Anarchy, but you are one of the
few sane voices out there that I find little to differ with. As
to social welfare programs, they do have their place and I am not
against them in practice or principal when applied to the destitute or
incapacitated. In fact, I would willingly contribute. The safety net
allows for a more humane society. But the massive state support systems
of the getting over class of individuals and the lobbying corporations
are essentially legal parasitism. Indeed as a resident of
PR, I know the syndrome well. I look forward to many more of your
reports and thank you again for the work you are doing and the
inspiration you are providing.
.
EDITORS REPLY:
Thank you for your letter. I suppose I could be called a moderate
Libertarian (if such a thing exists). I think there is a place
and room for a hand-up, rather than a hand out, especially when it
comes to education. Education is the key to escaping
poverty. It does not offer a guarantee that you will escape
poverty or have a better life, in part that depends upon the
individual, what they do or do not, and sometimes a bit of luck as
well. But, it offers more options or a chance to improve ones lot
in life. If you manage to help people to help themselves, then I
think you are on the right track. As I write this I am reminded
of the old adage - Give a starving man a fish and you help him not
because he will be hungry again the next day. Teach a man to
fish, and he has the knowledge and capacity to starve off hunger
permanently on his own (of course, if the man is lazy and chooses not
to fish after you have taught him, then there is nothing more you can
do for him). Carrying that idea forward to education, there are
some people who do not want to help themselves. There are some
people that say it is too hard to suffer through four years of
schooling and will not do so, even after you offer to help cover the
costs entirely (not a student loan, but rather pay the bill in
full). So, while there are ways that government and society can
help, on the same token one must be honest enough to recognize and
admit that some people out there are bums. I hate to say it and
it may sound cruel, but it is the truth, and one has to strike a
balance between helping people (who truly want to help themselves) but
also not to the extent that free riding or abuse is so easily taking
place. Some people want the gain without the pain or the
sacrifice. You cannot legislate morals, work ethic or any other
positive character traits in people. Either someone has these
qualities, or they do not, and current economic status has nothing to
do with it. Again, I can highly suggest a recent book by Thomas
Sowell (Black Rednecks and White Liberals). The book is not
entirely about what you may think, but rather a very intuitive study
about culture, society and why Armenians, Lebanese, Chinese, Jews,
Italians, Germans and other immigrant groups showed up in Malaysia,
Singapore, Africa, Argentina, Chile, Canada, The Dominican Republic
(and yes the United States too, even though most Americans think the US
was the only place on the planet where poor immigrants arrived and had
a chance to prosper) and improved themselves even though they may have
had two cents in their pockets and a rope holding up their pants.
.
However, with that said, the current US system allows for too many
abuses (gaming of the system), and certainly is extremely unfair. Like
you, I would not be opposed to paying say an additional amount per year
in extra property taxes IF I knew my children (and everyone else's
children regardless of who they are) had the option to attend a local
city or state university for free (providing of course they could pass
the entrance exam, which is correct and fair in my opinion). It
may be the case that I would prefer to send them to some accredited and
prestigious private school, but if I did not have the money at that
time to do it, at least there would be other options. However,
the system does not work that way in the US. The middle class
(and homeowners) that pay all the various kinds of taxes are usually
told they do NOT qualify for student aid, tuition help, government
loans, and so on. So, the people that fund the thing get nothing,
not even a loan. On the same token, both newly arrived legal and
illegal immigrants get the freebies, even though many never paid in one
cent. Of course, if you make this statement in public, the
automatic response is an accusation of discrimination or racism, when
the fact is the issue is nothing more than economics (and fairness of
the system, or lack thereof).
.
It was not too much of a problem or issue many years ago because
university tuition costs were more or less manageable for most middle
class families, economically speaking. Guess what? The
middle class cannot afford to pay for education anymore, inflation and
tuition costs that have exceeded salary increases of most average
citizens has made sure of that. And by the way, it is not
necessarily true that free or public colleges need to be poorly run or
deliver inferior education. At one time, Baruch City College (a
public, city funded college in New York City) was called the poor mans
Harvard. It was that good, and turned out students who went on to
do great things. So, public education does not need to be
inferior - so why is it so today in many cases?
.
Corporate welfare is just as grave of a problem today as other kinds of
wasteful and unfair subsidies as well. But, when you have a
scenario (as is the case today in US politics) whereby corporations
provide 95 percent of ALL political campaign financing - whose
interests to you think the politicians are going to embrace?
Corporate income tax rates have come down, while income tax rates for
individual citizens stayed the same (or increased in some cases).
Why? General Motors is going bankrupt. Why are they going
bankrupt or whose fault is it? Does this mean the average citizen
taxpayer needs to foot the bill the bail them out? Why? Did
GM give away free cars to US citizens at some time that I am not aware
of? General Motors is a company, and when a company or business
does not provide a competitive product at a competitive price, they go
out of business in the free market capitalistic system. That is the way
it works.
.
As I have said earlier, I believe in the free market system (as opposed
to a controlled or manipulated economy, socialism in its many flavors)
yet at the same time, there cannot be an environment whereby one group
(be it corporations, be it social groups, be it whomever) has the
ability and opportunity to control and manipulate the political process
completely, nor can there be corporate welfare either. So, there
must be some checks and balances, some brake on what I might call
legalized corruption. Alas, campaign finance reform will never
happen, because it is like asking the pig to voluntarily go on a diet
when the farmer continues to throw buckets of corn into the feed
trough. Stated another way, in terms of asking the politicians to
police themselves - sort of like asking an alcoholic to kick the habit
while being locked inside a liquor store. Maybe they should scrap
the entire thing and give it back to the Indians. What the heck -
there might be more jobs for people in all the new casinos.
.
.
ANOTHER READER WRITES:
.
Dominican Republic vs. Panama as Countries for US Retired Seniors -
Please, I would like to have your opinion in regard to those countries.
.
EDITORS REPLY:
This is a common question, which is to say that many people ask which
country is best for relocation? The honest truth is, it all
depends upon you, what you want. I often advise clients to make a
check list of the top ten or twelve things that are very important to
them, and from there try to find a place that scores the highest.
For sure, no country is perfect, but it is true that some countries
will score more points on your personal checklist than others.
For older people, it is often the case that health care issues are
number one, or physical location close enough to take a quick flight to
visit the grandchildren (or have them come visit you). Younger
families may of course have other top priorities. So, each list
is going to be very personal and different. In regards to Panama
versus the Dominican Republic, again, it is an issue of which offers
more of what you want. With that said, I can of course give you
some of my own thoughts and I have lived in both countries as well (and
we continue to offer services in both for our clients).
.
In regards to positives, negatives and neutral (in that both countries
are about), let us start off with the neutral or commonalities
first. Both the Dominican Republic and Panama offer excellent
private health care, and fairly inexpensive private health insurance
programs from private carriers. If you remember, we examined
Medicare for US Senior Citizens whereby we reported to you that monthly
Medicare Part B premiums are rising to almost US$100 per month in 2006
and Medicare Part A premiums for some people range from about US$200 to
US$400. Not only that, Medicare Part A (hospitalization) start
off with a US$1,000 deductible and god forbid you are in the hospital
more than 60 days, you have to pay US$200 per day out of your own
pocket. Medicare is a joke but unfortunately the joke is on
you. The good news is that it is voluntary and you can opt out,
which I suggest you do. For about the same monthly premiums, you
can get excellent private health insurance in Panama or the Dominican
Republic, and the care is quite good. Moving along to other
matters, I would say in general that cost of living is more or less
about the same (some things more, some things less relative in
each). I will say though, all depending upon where you purchase
real estate, you will probably get more for your money in the Dominican
Republic, although I am basing this strictly on two cities (Santo
Domingo and Panama City).
.
On the positive side, Panama is very Americanized in terms of doing
business and the general culture, so probably easier for the average
American that has never lived abroad before. Infrastructure is
quite good, and a large number of stores and services certainly
available in the larger metropolitan areas (Panama City and
David). In addition, the Panamanian Government does have a
specific residency program for retirees (which is quite attractive in
terms of ease of qualifying), not to mention offering discounts for
public transportation, movie theaters and other shopping or services as
well. However, one down side is that the country is humid, humid,
and humid (did I mention the county was humid?). If you are not a
fan of humidity stay out of Panama, unless you plan on living up in the
mountains. This of course leads us to the comment that many
promoters have been pushing retirement and lifestyle tours (real estate
tours) and as a result, real estate prices have gone through the roof
(from where they were before) in the areas of Chriqui and surrounding
areas. Not to mention the area slowly over run with American
expatriates in general. So, this may or may not appeal to you
(living in an enclave of gringos) but for sure, expect higher prices as
a result. Also, since most of Panamas electricity is generated
from oil-fired plants, expect electricity rates to go up (they already
have, and in truth, higher energy costs will be a factor everywhere).
.
The Dominican Republic, on the other hand, is something unique and
truly more exotic in some respects. When in Panama City, to some
limited extent, you might feel like you are in just another
predominantly Spanish speaking American city. Not so when in
Santo Domingo (and other parts), for sure you will know you are not in
Kansas anymore culturally speaking (some people love this, others do
not). However, the complaint ten to fifteen years ago that the
Dominican Republic lacked many modern stores and services is no longer
true today. Santo Domingo is on par today with Panama City in
terms of what is available, and in some regards, has possibly surpassed
it. In addition, since the DR does have their own national
currency, the Dominican Peso, you are not tied into the negative
effects of a possible US Dollar devaluation, as would be the case in
Panama (Panama uses the US Dollar). Also, there are no currency
or exchange controls in the DR and you may easily bank in US Dollars,
Dominican Pesos or Euros (all at the same time) without
restriction. There is not enough space here, but you may want to
read some of our previous newsletters that talked about this idea (live
in a country with a weaker currency than your own home base currency,
US Dollar or Euro, for keeping up with inflation). The down side
to the DR includes the electricity issues, in which case a battery
inverter system for your home or apartment is a must. However,
the DR is way ahead of Panama in terms of alternative home systems
(solar and wind) because of past experiences. Imported goods can
cost more in the DR than they do in Panama, generally speaking, but
local goods (including food products) are inexpensive. The other
down side for some, as I said, is that you are in a country that is
very culturally different from what you are used to - and this will
take some effort on your part to adjust, all depending upon the kind of
person you are.
.
In
summary, both offer about the same cost of living, although I think
your real estate dollar will go further in the Dominican Republic, BUT
imported goods can cost more than in Panama. Panama uses the US
Dollar as its national currency, whereas the Dominican Republic its own
sovereign currency, the Peso (this can have its good points and bad
points, all depending upon where you think the US Dollar is headed and
inflation, going forward). Both offer diverse topography, and the
ability to live in the mountains or by the sea (beach front).
Both offer modern shopping and services (in the larger or metropolitan
areas) and both can be a viable option for people considering
relocation or retirement. In addition, both will offer lower
costs of living than in the US, especially when it comes to real
estate, health care, education or university costs, and labor (you can
easily have a live in maid for about US$250 per month in Panama and a
bit less in the DR though). If I had to distill all the
differences to just one thing, I would have to say it comes down to the
culture or general environment. If you want to live in a place
that is possibly more structured, more Americanized (for lack of a
better way to say it), plus has a large number of other retired
Americans close by - then Panama is probably your preference. If
you are a Libertarian, are very independent, can adapt and get along
easily, do not care if you live in an expatriate enclave, and can
thrive in this kind of do-it-yourself environment - then the Dominican
Republic will probably be more to your liking. Since everyone is
different, it is merely a case of what kind of environment you
prefer. You must remember that Panama has had years and years of
strong and direct American influence, and that has shaped certain
things accordingly. The Dominican Republic is very Libertarian,
perhaps more by accident rather than specific intended design, but none
the less that has shaped and molded the attitudes and flavor of the
people accordingly as
well.
.
.
OUR FAVORITE CRITIC FROM THE UK WRITES:
.
Yes, another news letter full of half-truths and absolute
rubbish. If your aim is to educate your readers then why not
balance the content. The references to one of the most ignorant
Americans (Sowell) should be read with the following review. What a
strange list. Remember we are World Citizens wanting to make
World investments. Although the US accounted for 45% or so of the
World's economic activity in 1945, although now very important, it
currently accounts for about 13%. So surely your readers need
some education on how the rest of the World is organized with World
case studies. Yes, I am a follower of the 'third way', a movement of
global importance. If you want to invest successfully take off
your US bias, find out how the World is really organized and act
accordingly. Ignore US authors, watch German TV, and forget
CNN. Successful World enterprises such as Nokia have been born
and thrived in nations (Finland) with highly developed social systems
and excellent state education but few natural resources. US
commentators such as you mention talk at the level of a 10 year old,
and unfortunately the US does not have any effective broadcasting,
filtering or political system to present both sides of the
argument. So I hear from Americans, that for example, the Bank of
England is privately owned. It was nationalized in1948 but
several web sites must date from before 1948 that perpetuate these
myths. There again there is little editorial responsibility in
American society. Write a book, make a quick buck, and so what if
your views cause people to die.
.
So the US today is a rogue state and needs to be brought back into the
international community. It needs to reform many parts of the
society along the path of the 'third way'. International debt
will encourage this and encourage responsible consumption. Major
US corporations and enterprises will be sold off to more intelligent
nations (e.g. IBM personal computer business to the Chinese) who can
and will act more responsibly. Knowing this is essential for an
individual investment route. The nonsense of the America's huge
prison population, rampant corruption, high levels of poor education,
ghettoes, minimum wages less than one half of other civilized
countries, total incapacity to deal with a crisis, hospital black spots
(areas), lack of comprehensive affirmative actions in the World's
richest nation will end by this mechanism. Now I am afraid that
more Americans are disinherited by the selfishness of white ruling
elites. I will invest more in America when these people rise up
and take the reigns of power.
.
EDITORS REPLY:
Thank you for your letter - again. In reply to your very first
line, all I can say is, one mans rubbish is another mans
treasure. We are in agreement on some things, but certainly
divergent on others (I do not think the answer is to transfer ownership
of IBM to the Chinese, although the way things are going, the Chinese
will put them out of business real soon anyway). I did not
re-print the review of the book by Thomas Sowell due to lack of space
(along with just a few other things). I can say, I did not find
his books to be particularly full of anger or any belligerence, as the
book critic seemed to believe. On the contrary, I think Sowell is
one of most thought provoking and interesting historians of our time,
choosing to look at history (causes and effects) from a different
perspective (that of course may open up your mind to see things
differently, or it may anger you if you disagree - but then again, how
you react may be indicative of the kind of person you are to begin
with). My question for you is: Did you actually read the
book, or did you find some negative book review and offer that up
instead? My guess is, you never read it, because it if you did
read it - you would be able give me your own views in your own words
rather than someone else's (I do not mind if you did not like it or
disagreed with the author, I just want to know that you did read it).
.
Of course, there are many, many other worthwhile books to read and you
should read them. You should understand all views and all sides
of any topic. You should watch (and read) news coming out of
Germany, plus Japan, plus Thailand, plus anyplace else for that
matter. I agree you should certainly educate yourself on
everything that is going on, both economically and politically.
You are correct in that at times, we have a bias towards the US in
terms of topics, but it is also true that a large percentage (but not
all) of our clients are Americans and in addition (as you stated), I
also believe a great deal of information is not disseminated via the US
mainstream media (which I think to think is less of a problem in
Europe, although there could be some so-called filtering going on there
as well). I do not think the US is a rogue state per say, but
certainly one managed by either a group of complete idiots, or some
very smart but very devious individuals with a less than admirable
agenda. The jury is still out for me on that, but regardless, I
do not like what I see and question the logic of it all.
Certainly, I do think, the rise of the welfare state and concentration
of state power has not boded well for the citizenry at large.
Forget so-called political ideologies (Democrats versus Republicans,
Labor verses Tories for those in the UK) - as regardless if one is pro
or con in terms of social welfare agendas, they all seem to want more
state control, not less. This is certainly a danger to individual
liberty, and it is disturbing.
.
I do not know what this so-called third way is. I do know what a
third rail is, and believe me, it is something you do not want to
touch. However, regardless of what you believe or subscribe
to, I think everyone is certainly entitled to his or her own opinions,
and certainly has the legitimate right to live the kind of life you may
wish in the kind of society you may wish (providing of course that does
not in any way hinder or harm others). But, with that said, I do
not think you or anyone else has the right to force others to live your
ideals or under the social system you subscribe to. In other
words, if you think it a good idea to join a hippie commune up in the
Scottish Highlands - do your thing (just do not ask me to join, nor try
to force me to participate because I am not interested). Of
course, on the same token, you have the right to live how you wish and
god bless. In closing though, the last two lines of your letter
sound more like Karl Marx rather than Groucho Marks, which is also
indicative of something - a seething racial anger of some kind and I do
not know why. Why do many socialists advocate violence and forced
acceptance of their ideologies? Personally, I think that is the
only way they can get sensible, intelligent and learned people to go
along. You point out that many countries have gone left lately
and this alone is proof of a good idea. Many people also drank
the poisoned Kool-Aid Jim Jones offered them too, and mainly because
Jones was a good salesman (he probably should have signed up with Amway
instead of starting a cult, but water under the bridge). I
predict if Bolivia keeps on the current path, the country will become
an economic basket case in 10 to 15 years. Ditto for Peru and any
other politicians who offer up the old arguments to the masses.
The Soviet Union went away, plus China and Vietnam is more Adam Smith
these days than Ho Chi or Mao. Must be a reason - no? Or is
it those dopes the other side of the world did not know what they were
doing and the current politicians in Bolivia (and elsewhere) are the
real deal? I guess we will have to wait and see, but I would not
bet the farm just yet. History has proven differently so far.
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