Is This How America Ends?

By Chris Hunter

You can hardly mention this without offending people these days. If you do, you risk being called “unpatriotic.”

This, of course, is nonsense. The idea of America is that people should have the right to shape their own lives...seek out opportunities...and go wherever they want.

I still believe in that America. That’s why I always encourage people to keep seeking out new places where you can live freer or better. I suspect it’s why you’re reading these Postcards—because you, too, are searching for that original America all over the world.

As a family wealth manager, it’s my job to help families protect and grow their savings so that they can be passed onto the next generation. Two threats concern me the most: inflation and higher taxes.

America now spends far more than it earns in tax revenue. To close this gap, Washington does two things: it borrows dollars and it prints them.

The scale of this effort is staggering.

The amount of U.S. government debt forced into the hands of the public has risen by $3.62 trillion in just over two years. That’s an increase of 61%.

Meanwhile, over the last four years, Ben Bernanke has managed to create out of thin air 60% of the entire monetary base of the country. (This is a term economists use to describe the amount of money available to the economy.)

This is bad news for the dollar. That’s because the more dollars the Federal Reserve creates, the less each dollar is worth. The dollar has already lost 95% of its buying power since the Fed was created in 1913. Given the unprecedented increase in dollar creation over the last four years I expect each one of today’s dollars to hold onto just half their current buying power by 2020.

Twined with this inflation threat is 100% certainty of higher taxes in the future. If you earn $62,068 or more you already pay four out of every five dollars collected by the IRS. At the other end of the scale, today roughly 50% of adult Americans don't pay any taxes...whatsoever. This shrinking tax base will force Washington to collect more of the tax take from those already shouldering most of the tax burden. Anything else would be political suicide.


The dramatic increase in federal spending, the record number of fresh dollars entering the system, and the shrinking tax base all mean that time is running out for savers and earners who still have their homes, their salaries, their savings, and their investments denominated in U.S. dollars.

My advice is simple: get out while you still can. Seek to diversify your savings into other currencies and overseas assets. Seek advice. And most important of all, don’t stop searching for new lands of opportunity and new Americas beyond your borders.

GREAT QUOTE...

"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary." -- H.L. Mencken

SLOW DAY IN TEXAS $100 Bill

It's a slow day in a little East Texas town. The sun is beating down, and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit...On this particular day a rich tourist from back east is driving through town.

He stops at the hotel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.

As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.

At that moment the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money and leaves town.

No one produced anything. No one earned anything. However, the whole town is now out of debt and now looks to the future with a lot more optimism.

"And that, ladies and gentlemen, is how the United States Government is conducting business today!"

Stop the madness ~ Silence is Submission!

LORD MONCKTON ON GLOBAL WARMING

Punta del este Uruguay

The picturesque, sleepy Uruguay town of Punta del Este represents a unique opportunity for savvy investors. Boasting affordable real estate, a remarkably high standard of living, and a party season each summer that transforms the town into a prime spot for South America's rich and famous, Punta del Este is primed for a real estate boom. See the following post from Daily Wealth for more on this.

I'm writing to you from a farm in South America...

There are three horses outside my bedroom window. My host, Fitzroy, lets horses roam his property. In the morning, we find them munching grass on the front lawn. And when we're having afternoon tea on the back patio, they'll come wandering slowly past...

In a moment, my wife and I will walk across the garden, past the horses, to the main house, where we'll join Fitzroy's family for breakfast. The housekeeper, Alexandra, is there. She's already set the table, pressed the oranges, and prepared a large plate of organic sausage, ham, and eggs.

After breakfast, we'll saddle the horses and Fitzroy will take us for a trot around his property...

We're in Uruguay, in a town called Punta del Este.

They call Uruguay the "Switzerland" of South America because of its powerful banking secrecy laws. It's also one of the last countries in the world where you can own property anonymously. Finally, there's no tax on foreign earnings. So Europeans and South Americans move here to avoid income taxes.

These laws attract money to Uruguay. Uruguay is the second-richest country in South America, after Chile.

For six weeks every summer, Punta del Este is the most important party town in South America. If you're a celebrity here, this is where you come for your summer vacation. If you're a wealthy aristocrat from Brazil, Argentina, or Columbia, you come here to party with the celebrities.

During this "party month," tables at nightclubs sell for $10,000 a night, rents jump 4,000%, and it takes two hours to move across town because of the traffic.

Luckily, high season doesn't start until January. For now, we're the only tourists in town...

For full-time residents, Punta del Este is a sleepy seaside town. Three-quarters of the houses and apartments are empty. Most of the restaurants are closed. And they disconnect the traffic lights. The standard of living for these folks is extraordinarily high...

Fitzroy, for example, lives in a large country house with wooden floors and big windows. He has a lake, a forest, and a horse paddock on the grounds. On the other side of the lawn, there's a cottage for the housekeepers and another cottage for guests.

He told me his country estate would sell for around $750,000 if it were on the market today. The same property in England or America would cost 10 times as much...

We went on a tour of Punta del Este's real estate market with Fitzroy. We found dozens of seaside cottages and small homes for under $200,000. They come with neat lawns, brightly painted walls, and fruit trees. Most of them even have separate quarters for housekeepers. A full-time housekeeper costs $400 a month. The country club charges $150 a month for offseason membership. And the top private school charges $200 a month per pupil.

The weather is wonderful. It never freezes. In the summer, you rarely need air conditioning. Travel connections are great, too. The international airport is two hours away and offers direct flights to the United States and Europe.

In short, Punta del Este is the perfect location for expatriates. It's cheap, easy to reach, and the quality of life is unbeatable, even in America. Best of all, there's going to be a property boom here as money flees from the bankrupt governments in America and Europe.

If you ever get the chance to visit Punta del Este, I highly recommend it. Just make sure you avoid the party season... unless you like that sort of thing.

This post has been republished from Daily Wealth, Steve Sjuggerud's contrarian investment site.

Margarita Island, Venezuela

BY Karl Ike

Do you know the average life span in the United States is 76.9 years? That’s 28,068 days and I have already lived 21,900 of them, which means that I have only 6168 days left and I really want to make the most of them. That is unless I get T-boned at an intersection going to a job that I don’t like and get to work with a bunch of people that I do not socialize with away from work, but I get to do the same thing every weekend except for two weeks a year on my paid vacation. Then I get to clean out the garage and sleep late. I really don’t think I will ever see 76.9 cause if I don’t get T-boned going to work, a cancer will probably rot a part of my body away.


One thing I do know. I can’t retire in another 5 years, as I haven’t put enough away to retire which means that I will have to work the rest of my life at Wally World asking people want “paper or plastic” That’s why I want to make the most of my 6168 days left. I know that I cannot live on Social Security in the US so a couple of years back I decided to see what the rest of the world has to offer as a way of life. I went to England, France, Germany and Amsterdam but they are right up there with the US. Costa Rica I wasn’t impressed with, Canada is way too cold and I did live in Mazatlan Mexico for a year.

Mexico is not as cheap as it used to be however liquor and cigarettes are still cheap: helps get that cancer thing going and medications are cheaper to help kill the pain.

Mexico is definitely out.The Bahamas and Virgin Islands are right up there with Hawaii and my last name isn’t Trump so affordable living isn’t there either. I was stumped?

One day checking my e-mail, an old friend, Scott Boswell sent me a note. Scott and I met while we were both living in Mazatlan but this message wasn’t from Mexico? Scott & Kasey were e-mailing me from Margarita Island Where in the world is Margarita Island? As it turns out Scott had been looking for the perfect place too.
He had checked Central America, Equador, Argentina and a friend of Scott’s recommended this Caribbean island. To make a long story short, Scott went to visit for 6 weeks, came home, sold everything and moved back. Now he’s recommending it to me. You make your own decisions. I’ve made mine.

Scott started describing this wonderful island with a temperate climate year round located outside the hurricane corridor with beautiful Caribbean beaches, great restaurants, casinos and much more. Located off the coast of Venezuela in line with Trinadad, Bonaire, Curacao and Aruba. Now Scott is from Texas and ya’ll know how a Texan can stretch a tale so you have to read between the lines? He started spinning more tales. Like when he filled the gas tank on his Toyota Land Cruiser and it cost him $2. I had to yell “Horse apples Scotty! There ain’t no such thing as gasoline at $.09 a gallon. Don’t tell me that. Your Texas president wouldn’t allow that!”

Then he tells me that a bottle of beer at a beach bar is only $.40 and he and Kasey can go out to dinner at a great Italian restaurant for $20 (with a bottle of wine). I thought Scott might have had a few too many of those forty cent beers? Then this clown tells me that you can buy a nice 3-bed/3-bath house for $40,000 or a nice high-rise condo for $25,000.


“More horse apples Scotty. Stop lying to me!”

Then he tells me that I can have a cute full time maid to clean up my mess for another $4 a day. I told this Texas windbag , I’ll be there Friday! My work buddy, Leo and I needed a vacation and I desperately wanted to prove that Scott was full of hot Texas air so we booked a flight!

OK! So hold onto you wallet! Airfare from Las Vegas is only $530 round trip to Caracas. It cost me another $56 to take a 737 hop to this pearl in the middle of the Caribbean. So, for $590, I get to take two giant steps backward into this supposid third world country. We landed on Margarita Island Venezuela on Friday. The name alone was worth the price of a ticket. Wonder if Jimmy Buffet is here? If not…….Why? This little dot on the map looked pretty good from the air and a whole bunch bigger.

The island is about 40x60 miles with hundreds of white sandy strips called beaches, turquoise water and several big green mountain with scattered villages and towns. I was expecting a dirt runway with a couple guys in camo uniforms carrying machine guns. Cool! I like thrills. Much to my dismay, it was a very nicely appointed, very clean, air-conditioned airport that made many of the US airports look bad.

Scott picked us up in his Land Cruiser. (And with no dingle balls and Oh-ugah horn. Come on Scotty. This is supposed to be third world and we’ve all seen Romancing the Stone!) Scott drove us 6 miles to a very nice hotel in Polamar, a cosmopolitan city of 200,000 with high-rise condos and hotels. I kept looking for the third world? It’s here somewhere? Our hotel Marbellamar was a very nice hotel with open-air lobby, swimming pool, restaurant and bar, parrots, concierge, travel agency and more. Well, I didn’t catch Scott on the car but I sure can get him on this hotel. This place ain’t cheap!

The front desk clerk said a room was 70,000 Bolivar’s (B’s) a night. What? My hand started shaking as I reached for some money. (I had exchanged $100 at the airport with some money-changing guy) So not being familiar with the exchange, I had to do the calculator thing. (We changed our money at the rate of 2200 Bolivar’s to the dollar) The room came to $31. Per person right? No. It was for two people. Stick around……it gets worse!

We spent 3 days at this hotel and then decided to try another so we moved to Katarama Hotel. A smaller hotel with a nicer pool, breakfast was included, pool bar and a larger room with bedroom, bathroom, kitchen, living room with American TV for 60,000 B’s ($27) a night for two with breakfast. We spent the next 7-days here. If it got any cheaper they would be paying us! We rented a car. Scott took us to El Yaque, which was far from Yuckie. A beautiful sandy beach known for wind surfing, great beach restaurants and girls using dental floss for bathing suits so we stopped for a cold one. A beer was 1000 B’s ($.40) so we had six. I was wondering if any of those girls did any house cleaning? On the way back we needed to get gas for the Avis rental car so we pulled into a gas station where they still give you full service. While a girl washed the windshield and filled the tank I went into the convenience store for a cold beer.

The convenience store is like any 7-11 or Circle K in the States and is very well stocked. The official Venezuelan currency exchange rate is 1920 Bolivar’s to the dollar. You can exchange almost anywhere for 2200 to the dollar. Scott was getting us 2500 to the dollar. So when we paid for the gas, the girl squeezed 2483 Bolivar’s of 91 octane into the tank. About $.99 for a tank of gas! The beer was $500 B’s ($.20) When was the last time you got a tank of gas and a cold beer for under $1.25?

Never! Until today. Scott had gotten me again! I was wondering if girl who pumped our gas, cleans houses? Now I understand why Venezuela has won the Miss World competition more than any other country! They have some beautiful people even if all they wear is dental floss or a gas station uniform. At night, after a wonderful Italian dinner with a bottle of wine for $16, Leo decided to go home and I decided to go to Senor Frog’s. One thing I noticed is Margarita Island is very family oriented. I have never seen so many men out entertaining their daughters! I am really too old for Senor Frogs but I failed to see any age gap.

A beer there was the most I spent anywhere and it was 2000 B’s ($.80). If you like disco’s and loud music, that’s the place. Right next door there are two wonderful outdoor restaurants as well. Very cosmopolitan/European style. By the way, nightlife really starts at midnight and goes until the wee hours of the morning. From there I went to Margaritaville and the band didn’t start until 12 pm. And no, Jimmy Buffet was not there but he would love it.

Coming from Las Vegas, Sin City, the town that never sleeps, I decided to go to the Hilton Casino. I dropped the car off with the valet and stepped inside. The casino, while smaller, was very similar to US casinos. Blackjack, Caribbean Poker, roulette, and tons of slots in a beautiful building on gorgeous grounds. Complimentary cocktails served by beautiful women who I wished cleaned houses. The fun part was playing blackjack with $10,000 bills ($4) After having my fill of cocktails and losing 100,000 Bolivar’s ($40) I decided to call it a night. We also ate lunch at some small no-name beachside restaurant by one of the marinas where Scott took us. It is the kind where you fan the flies away to eat. Guess what? No flies but we met people from around the world there. Most of them live on their boats that they sailed from London, Florida, Georgia and other islands.
What an extremely interesting group. That is why we ate there about five times. Leo had never been outside the United States and had never had fish cooked with the eyeballs, teeth and lips. He was ecstatic and lunch was $8.

Scott took us to Sambil, a local third world mall or should I say third world MEGAMALL! This place was huge and beautiful like Rodeo Drive in Beverly Hills with everything that we have in the US and far more.

Hundreds of stores, beautiful tropical restaurants with bridges over water ponds. and a food court to satisfy all your cravings for grease. McDonalds, Wendy’s, Burger King, Domino’s and Pizza Hut are here as well as world cuisine. We stuck to local flavor.

There is Venezuela’s version of Home Depot too. Actually, very modern, nicely stocked and almost everything you would need to build or re-model a house. There are other very nice modern shopping centers plus clinics and pharmacies with the same or better prices than Canada or Mexico for prescription drugs. And many you don’t even need a prescription for.
We decided to look at property that you can buy for almost nothing so Scott took us to La Asuncion which is a small clean town about 6-8 miles from Polamar. We looked at a 3-bed/3-bath house in a ¼ acre (1300 sf). One bed/bath was the maid’s quarters off the laundry room. The house had a chain link fenced yard with vines covering most of the fence and a huge playpa roofed patio that served as an outdoor entertainment area. Complete with a huge log table, hammock, TV and outdoor kitchen area.. It was great!

The house had a beam ceiling, 3/3, living room, Spanish tile floors, kitchen, AC, W/D, satellite (Direct TV) phone and needed nothing. Nice neighborhood in a quiet area. Price? $32,000 USD. In Vegas, something similar would be close to $200,000 on a smaller lot.

Leo and I looked at a brand new high-rise condo in Polamar with a two-story underground parking facility with security cameras. A gated high-security community with beautiful grounds and pools(s) weight room, sauna, party room, etc. The condo was 1300 sf with new American appliances (W/D, micro, dishwasher, refrigerator and stove) 2-bed/2-bath, central air, cable, phone and a wonderful view of the ocean and pool(s) from a monster-curved deck. Price? $85,000 USD unfurnished, $100,000 furnished.

In Vegas this condo would be $400,000 easy. Then we looked at an older two-story penthouse, 3-bed/3-bath, den, W/D, window AC, cable, phone, and security-gated grounds with pool. Price? Asking $32,000 The kitchen needed about $2000 worth of tile work done. Scotty had gotten me again! Unbelievable property for unbelievable prices.

Beautiful homes for the price of a small mobile. Maybe you don’t want to buy? You can rent a nice apartment for $100 a month. You can rent a very nice security gated apartment for $200 and for $300 you will have the penthouse.

So maybe rent for a year?

If you are 65 or over the airlines have a “senior discount” with round trip airfare from Caracas to Miami for only $125. Miami is only 3.5 hours away. And they are adding a direct flight from Margarita to Miami early 2005 which will make the time even shorter.

I am still trying to find a downside to Margarita Island. I mentally went through food, clothing, utilities, medical, rent/purchase, cars, TV, and all I could come up with was bowling? Then I remembered that I saw a beautiful bowling alley at one of the shopping centers.

Bottom line is, Scott took one look and moved completely. Leo has never been outside the United States. He took a look and has his house on the market and will be moving by June of 05 when his SS starts. Hopefully, I will be there sooner.

One thing I do know is that I can live very comfortably on SS in Venezuela. And the other thing I know is that I would rather be sitting on a beach having a cold beer or fishing, rather than asking people if they would like “paper or plastic”.

Another thing I have to point out is we were getting 2500 Bolivar’s to the dollar and the official rate is 1920 (which fluctuates) so our dollar automatically is worth more. We needed to exchange some money, we cashed in $400 and got 1,000,000 Bolivar’s.

One million of anything can, and will, go a long ways. And it did. For 50,000 B’s a day you can live comfortably and $800 a month on SS is 1,536,000 Bolivar’s at the official exchange rate. At $800 in the US, you will be pushing a shopping cart and eating cat food out of a can.

Leo and I figure that if the whole economy falls apart, which isn’t likely because Venezuela has a lot of oil, we have two choices. Move a couple islands over where tourists have been coming for decades or come back to the US and find a shopping cart on our Social Security.

And that Scott! One thing is, I will never doubt him again and another thing is that bag of hot Texas air has made a complete liar out of me cause nobody is going to believe me, without going there.

If you have any questions, you might want to e-mail Scott at discovermargaritaisland@yahoo.com as he really helped me (and you don’t have to read between the lines) or e-mail me as I am going through the moving process. I would be glad to help.

To contact Karl Click Here karl_ike@hotmail.com

VILCABAMBA ECUADOR

Living Better (and On Less) Than Ever in Ecuador

By Suzan Haskins

Dear International Living Reader,

About a year ago, I told you about a couple my husband and I met who live in the small town of Cotacachi in the Ecuador highlands. Lee and Peggy Carper, I wrote, live on a monthly budget of about $660, which includes rent, utilities, food, medications, transportation, and even food for their two dogs and a passel of strays they feed.

As you can imagine, Dan and I were impressed…even more so because we fell in love with Imbabura province, where Cotacachi is located. Majestic mountains loom in every direction…and the air is mountain-fresh and cool enough for a light jacket in the evenings. Just about two hours north of Quito (the cosmopolitan capital of Ecuador), Imbabura is home to several artisan villages, including the textile town of Otavalo, where you’ll find the largest open-air indigenous market in South America. Major shopping…in modern supermarkets, hardware and department stores…is done just a few minutes north in the large, bustling city of Ibarra.

We were so impressed, in fact, that we decided to spend our summers here and we bought a small condo on the edge of town with a picture-perfect view of Mount Imbabura.

It’s been fun outfitting our condo with handcrafted pieces made to order by local carpenters. At the local the mercado we buy fresh produce or we eat at one of the many small local restaurants that specialize in home-cooked food. We walk everywhere we go and I’m certain we are losing weight. We feel very healthy here.

There’s just one problem…

Since we have been here in Ecuador, I have been told—not once, but three times—that I got it all wrong when I wrote about Lee and Peggy Carper.

The conversation usually goes something like this…

“Hey, that couple that lives here on $660 a month…they must be living pretty extravagantly. Because we’re living on about $500 a month.”

Ok, I can understand that coming from Bob, a single guy. And even from John and Sue, who live in Vilcabamba and own their home and therefore don’t have a monthly rental expense…

But last week, we met Jack and Eileen.

They rent a three-bedroom furnished house for $150 a month. Jack walks up to a local asadero (tiny restaurant/grill) where he eats an American-style breakfast of bacon and eggs and toast. Cost: $1.25. At the mercado, they buy a big bag of veggies (already cleaned and diced) for $1, which makes a big pot of soup that lasts for several days. Sometimes they go out for dinner. (At the best restaurants in town, a steak dinner with salad and potato is no more than $5.)

A woman comes and collects their laundry, which she returns washed and neatly ironed for about $8. Big 20-ounce bottles of Pilsener beer cost about 75 cents each (less if you buy by the case.) Freshly baked softball-sized buns from local bakeries cost 12 cents each. The bus to Otavalo is 25 cents and to Ibarra it costs 40 cents.

“It’s tough to spend $500 a month here,” they say.

Properly chastised—and after living here the last two months here, I have to agree. And I fully expect that next we’ll meet someone else who is living here comfortably and happily on even less.

Editor's note: John Curran, the fellow from Vilcabamba that Suzan mentions above, will be speaking about his experiences in Ecuador (as will Dan and Suzan) at the upcoming International Living Live Overseas Conference in Las Vegas, Oct. 1 and 2. If you’re just starting to think about living or retiring overseas, this is the event for you. Learn more here.