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In The News and Readers Write In (with our answers to Questions)..........
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IN THE NEWS:
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FURNITURE MAKERS FACE VIETNAM COMPETITION - Tue Mar 9, 2004  - By Michael Flaherty – Reuters News Service
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NEW YORK (Reuters) - Furniture executives from around the world are knocking at the door of Vietnam, a rapidly emerging supplier of some of the cheapest woodwork exports on the market.  And while Vietnam's furniture boom is welcome news for global retailers from the European Union and Japan, who are cashing in on low-priced imports, it could spell more trouble for some U.S. manufacturers.  Indeed, with goods nearly 10 percent cheaper than those made in neighboring China, Vietnam is being courted by U.S. manufacturing and retail executives looking for inexpensive desks, chairs, and household sets made from pine, cajuput or rubber wood.  The socialist republic on the Indochina peninsula and its surging furniture industry has been a cause for concern among other furniture makers, especially those in the United States, where the industry is deteriorating.  U.S. wood-furniture manufacturers, based mainly in the South, have lost more than 30,000 jobs in the last three years, according to the U.S. Department of Labor. The loss is due in large part to a flood of cheap Chinese imports.
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http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=4531058
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THE DIVISION OF LABOR IS WORLD-WIDE: By Sudha Shenoy, March 24,2004 – Mises.Org
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The new protectionists, writes Sudha Shenoy, want to reverse the outflow of US capital to China and India, and stop the inflow of these particular goods and services and thus return these unsuccessful producers to their former profitable/high income position.  But that cannot be done. The circumstances under which these companies and people were once prosperous are gone forever.
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http://www.liberty-news.com/show.html?http://www.mises.org/fullarticle.asp?control=1475
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FACTOIDS FROM REUTERS NEWS SERVICE:
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Forrester Research Inc. estimates as many as 3.3 million U.S. service jobs will migrate offshore by 2017. And the American Electronics Association reports that more than 770,000 U.S. technology jobs have been lost since 2001.   Also, U.S. expatriate voters number more than six million worldwide.
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EDITORS NOTE:  If you thought you were alone in your desire to perhaps expatriate - then consider six million Americans living outside of the US is enough to form a small country.  Now you know.  In addition, ironically enough, it is reported that most American expatriates favor John Kerry in the US Presidential race.  We find this somewhat amusing in that expatriates are often attacked by liberals as being unpatriotic malcontents whom are interested in escaping their fair share of the social burden (in terms of taxation matters).  Yet, assuming the polls are correct, the vast majority of such persons are in favor of a liberal politician for President – Go Figure.   
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HOW HEALTHY ARE US BANKS? By Frank Shostak, March 29,2004
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How healthy are US banks? Greenspan says they are in great shape. Frank Shostak, however, noticed signs of deterioration. The Feds policy can generate the illusion of success, to be sure. But when it is reversed—-as it inevitably must be—-the illusion is shattered to reveal the painful facts of reality. Contrary to Greenspan, the expansion of the banking system and its apparent strength is built on shaky foundations.
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http://www.liberty-news.com/show.html?http://www.mises.org/fullarticle.asp?control=1480
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US INTRODUCES FINGER-PRINTING PROCEDURE
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AS from March 29,  (2004) all visitors to the United States will have their finger images recorded when they apply for their visas. US ambassador to Botswana Joseph Huggins demonstrated the new visa requirement process to the press in Gaborone yesterday.  According to advisors who accompanied Huggins to the demonstration, the information is sent to Washington, the US Capital, where within fifteen minutes, a decision will be given whether the individual is given clearance or not. Embassy officials said that it is hoped that by the end of October 2004, the fingerprinting mechanism will have been introduced in all US embassies and consulates worldwide. The system is currently in place in 75 ports of entry across the world. Applicants who already have US visas are not compelled to be fingerprinted on departure, but are expected to do so when they arrive at US ports of entry.
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http://allafrica.com/stories/200403260455.html
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EDITORIAL:  The Conscious of an Expatriate.
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The new bad guy on the block lately would seem to be the expatriate, which I include both individual citizens and corporations as well in the term.  But are such persons (or companies) really immoral anti-social types (shirking their so-called responsibility of continuing economic support of a high tax, high cost social welfare state)?  I suppose it all depends upon what side of the fence you are on.  Meaning, if you are someone who enjoys getting a free government handout (in one form or another) or is willing to give up your money and your liberty in exchange for protection from a national government, well then you are probably quite perturbed to learn that some are voting with their feet (and their money also).  Of course, if you are someone that values your own freedom and believes in your own self-reliance, then you might believe you are perfectly in the right to do whatever (legally and non violently) is in the best interest of yourself and your family.  Which is to say, the freedom and right to choose where you live and what affiliations you might make (politically, economically and so on) without the interference or chastisement of others (especially your own so-called free and democratic government).
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The current debate of course focuses on corporations that are outsourcing jobs elsewhere (due to lower labor costs, lower taxes, etc.).  However I think this issue of what can be called lower general living costs certainly applies to individuals as well (in the case of corporations we are talking about business expenses, but generally the same thing).   Meaning, it is not just about taxes (although if you can live somewhere whereby the local government does not pick your pocket with great zeal, then why not?).  There are then a number of other issues:  lifestyle issues, crime (or lack thereof), education costs for your children, cost of living, social issues (drugs, guns in public schools), etc.   So, the sole argument of taxation alone does not fly, although it is quite telling that this seems to be the spotlight of attention.  Which is to say, it would seem that once again, the focus is on the activity (of exporting one’s self or one’s business) rather than the reasons why.  Or, we can say that the concern is for the loss of tax revenue (and jobs) rather than why are individuals and companies leaving in the first place?  It is all a double-edged sword really.  For example, if you say you are in favor of free trade, globalization and the free unfettered movement of goods, jobs and capital, then you must accept it when you are not on the winning end of an issue (or at least you cannot expect to always be on the winning side of something).  Yet, this would seem to be the case with many politicians today (paying lip service to verbally supporting certain ideas, while balking when they find out there is some domestic downside).     In truth, many of these issues can be distilled down to governmental control and domination of a populace as the real undercurrent.
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I find Argentina to be a very real and recent case study of this.   Which is to say, you had the case of a national government and politicians that were allowed to run amok with public spending, public borrowing (sovereign bonds, IMF loans, World Bank loans, etc.).  In addition, or in tandem with that, finagling of the money supply and fractional banking (which is the case in most of the world, including the US) as well.  In other words, a case study of a central government that had all the power to make a mess and when problems cropped up, the power and authority to freeze and confiscate banking deposits of individual citizens as well afterwards.  The government makes a mess, and the individual citizens suffer in one way or another.  However that is not the whole story about Argentina.  In fact, the real story has to do with the people themselves.  Not all of the people of course, as many have unfortunately fallen victim to very severe economic difficulties.  Some news accounts state that 50 percent of the population now lives in poverty (not true from my experience, or certainly not that high of a percentage), but I think that is simply a wishful estimate based upon unemployment statistics (and what may or may not be reported).  Which leads us to the other statistic (which I tend to believe) that claims Argentines (private citizens) hold an excess of US$100 Million Dollars outside of the country.  To be sure, such persons make up the forward thinking, intelligent group that probably still loves their own country, but had enough common sense to protect themselves and their family from disaster by putting assets outside of the reach of the government.  This is why there is still money in the hands of private citizens in Argentina, although the government now has a severe cash flow problem.  This is also why Chile recently announced a record year for tourism with most of the increase in new tourists coming from Argentina (people living in poverty do not take a vacation in another country).  One can make the argument that this is analogous to the Americans who were smart enough not to turn in their own private holdings of gold when former President Roosevelt confiscated it all (from private citizens).
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My experience has been that expatriates in general can be called frustrated Libertarians.  Meaning, people that are not criminals in any way, shape or form and certainly not people interested in any sort of destructive actions.  However, they are realists.  Which is to say, people that still love their former country, but realize they cannot trust the central government to take care of them and certainly cannot afford to take the chance that the government will do the right thing in the long haul to fix some of the problems.   Is this selfishness or intelligence?  You decide, but for some clarification, just ask some of the citizens in Argentina who were smart enough to squirrel away assets elsewhere or obtain a second passport as well.
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READERS WRITE IN:
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How does one become an expatriate? Just go to a country you want to live in and renounce your citizenship?
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EDITORS REPLY:  The term expatriate is an interesting one, simply because depending upon who you talk to, it could mean different things.  The Merriam-Webster dictionary defines it as follows:  Medieval Latin expatriatus, past participle of expatriare to leave one's own country - 1: to withdraw (oneself) from residence in or allegiance to one's native country, 2: to leave one's native country to live elsewhere; also to renounce allegiance to one's native country.  So, both of these definitions could apply.  Meaning that one could simply decide to live in another country without necessarily renouncing previous citizenship, or it could mean that someone may formally renounce citizenship if they choose to do so as well.  There certainly are many Americans and nationals of other countries that are living or retired elsewhere (such as the Dominican Republic, Ecuador, Thailand, etc.) because cost of living is much lower, climate is better, etc., whereby such persons are still citizens of their home country, but have legal residence in their new country of residence.  Of course, some may elect to renounce previous citizenship as a more final and formal legal separation.  It is interesting to note that Americans really have more an incentive to renounce citizenship than Europeans when it comes to tax issues.  Most European governments for example, take a more practical or pragmatic view by exempting non-residents (expatriates living elsewhere that have not renounced citizenship) from many tax obligations because the thought process is that such persons are not living in their home country (and why should they be liable to pay taxes for government services they are not using, such as public schools, and all the other things taxes are supposed to support).  The United States, on the other hand, attempts to tax its citizens to death, regardless of where they are living or residing.  So, technically speaking, Americans are still required to pay taxes (and perhaps double taxation in many cases if you include the taxes they are paying in their new country of residence) even though they are no longer living inside the US.  While there is still an exemption on salaried or earned income up to about US$80,000 for Americans living and working abroad (some nice folks in Congress are trying to eliminate this just as some added information for you), one is still expected to report and pay taxes on ALL bank account interest, investment income, capital gains, estate taxes, social security taxes, and so on.  As my friend Moishe from Panama would say – Such A Deal!
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Another Reader Writes:
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Thanks for the news on Argentina--glad to hear they are doing better, although 25% unemployment is what the U.S. had in the 30's depression. Wonder how much English is spoken in the capital? Is there a limit on dollars coming in as a tourist? Are there parts of Buenos Aires that should be avoided? What are the chances of a single woman coming out of there in one piece? Any advice is most welcome
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EDITORS REPLY:  You are certainly correct that 25 percent unemployment is what the situation was during the so-called great depression in the US during the 1930’s.  In fact, this is the current unemployment rate also in Uruguay and the Dominican Republic as well.  However, unlike Americans during the 1930’s, no one is jumping out of windows.  Although just as in the US during that time period, speaking of Argentina especially, people are active in demonstrating against the government to do more to solve the problem.  But, this does not mean there is any anger or disrespect towards tourists or other foreigners living there – on the contrary.  In addition, even though I have heard all sorts of negative rumors about high crime and so on, I have to say that has not been my experience at all.  In fact, I found most people to be very helpful and friendly.  On the issue of dollars coming into the country, I am not aware of any limits and in fact it would seem the country more than welcomes this kind of incoming revenue at the moment (there is no problems changing dollars into pesos at any of the local banks or money exchange facilities).  In terms of safety, just as in any large city (Buenos Aires has a population of about 13 Million, including the greater metropolitan area) it is wise not to put yourself in a foolish situation and there are places (just as anywhere else) where you might not go –especially at night.  But, I can say that I found the city center area (Avenue Florida) and residential neighborhoods of Recoleta, Palermo, and Rivadavia plus a number of other middle class areas of the capital to be quite safe.
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Another Reader Writes:    
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Hello John - I live in Panama and would like to point out that there are two prices for real estate here too.  Some of high-pressure promoters have inflated the prices in some selected places 2 to 50 times.  When you get away from the promoters like in Boquete the prices are indeed very different.  The buyers who have paid inflated Florida or California prices usually do not speak a word of Spanish and distrust "those foreigners" while dealing only their shady nationals. They deserve to get screwed!  There is a reward for those who take the time and effort to learn the language or make friends with a good translator (like I have) then have her/him communicate with the locals.  I like Panamanians and as a rule I prefer them to gringos or loonies.  I do know a few nice US citizens and Canadians but as general rule I keep away from most gringos and loonies. Anyone who thinks Bush or Chretien/Martin is honest (or even human) to me is deficient in intelligence and defective in ethics.  You have had people on your newsletter that ranted about garbage coming into USA! My observation is that lot of garbage from USA with their race hatred, guns, and pitbulls are now leaving USA to infest/infect other countries. If the US cleaned up its own act (from phony presidential elections to Enron Scams) and cease intruding into the affairs of other nations, the world would be a safer place. Some of the garbage inside those "gated communities" are not much better than those in that gated community in Guantanamo ---the difference is only in the money they (stole) have. The bible babblers that surround Bush are not any different or less evil than those who surround Ben Laden.  Those without hate and fear as a motivator, do get to know and like the locals while the garbage likes to stick together.
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The hatred and violence that the US has exported for generations has come home and now the haters and their victims are looking for another place to live.  The world has had arrogant "super race" before led by defective and mediocre "Fuhrers" with a very predictable end. The USA better learn quickly before it becomes another Nazi Germany or Argentina.
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Here is a website which has properties outside of the real estate tourist trap areas as well of some in it - www.holidaycabin.com.  The business is a new start-up where the main input is from locals -- I am just the web-master. The prices are often very reasonable and affordable on this web site especially if you get away from the tourist traps.  Some of these properties are among locals with few "foreigners" nearby and would be nice places for those who can along with the locals.  Keep up the good work.
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EDITORS REPLY:  Thank you for your comments and information. 
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Another Reader Writes:
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Dear John, First of all I like to thank you very much for your help in all the immigration matters and the professionalism and punctuality of which everything was done (even though the DR is not a European Country in terms of proficiency). In regards to the discussion here on the site about USA-garbage, I only have the following comments: Born and raised in Europe I have traveled the whole world and have had companies and commercial operations in 15 different countries over the time, and am now focusing on Eastern Europe. I have traveled to America for holidays over the last 20 years and love Key West and L.A - everything in between is basically just the garbage that arrived 100 years ago and hasn't de-composed it self yet.  As hobby I trade in the futures market and went to a little town just outside Atlanta, Georgia 6 months ago for a one on one weekly study in market trading. I for sure didn’t like what I witnessed!!  I arrived a Sunday afternoon in this town and after check-in at the hotel I went to find something to eat and noticed RED LOBSTER. I ordered a nice starter, (and of course the Lobster main course) and a good bottle of white wine. The waitress told me that I was not allowed to drink on Sundays in this state and she could serve water or tea to my LOBSTER dinner.  I now fully understand what hit the US 9/11!!   Here where there are more churches than gas stations and people were more interested in what I believed in and what church I belonged to.  I don’t belong to ANY church, nothing in the world have created more problems than the stupidity about God and who's God is the strongest and the US is no better than the Muslims or the people of Israel, they are under educated and stupid most of the time. Even when I had a company in Tunisia, I as a foreigner and/or tourist was allowed to drink any time I wanted under my own personal supervision.  Try to leave the USA and see how beautiful Barcelona, Monaco, Lugano, Paris and Venice is and you will understand why only the losers who couldn't make it here went to USA or were deported to Australia. Today only the high taxes are driving us away for 190 days per year!   PS! Personally I think that China will be the next Superpower within 50 years as they have high education and hard working people, also they are not FAT like most in the US so they move faster and smarter.
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EDITORS REPLY:  Well, as always, thank you for your letters and comments.  To be sure, I think it is safe to say that the US can be a very insular place, and it is also true many Americans forgot where their ancestors came from.   For example, you are correct in that England used both the colonies in America and Australia has a dumping ground for criminals (just as Fidel Castro wisely emptied out his jails and sent the convicts packing to Florida when James Carter was President of the US).  But of course not everyone was a criminal or misfit to be sure and many people migrated for the opportunities (free land to homesteaders in the Wild West, of which free land was certainly not an option in Europe at the time).  The main point however is, despite the rhetoric, the US can be one of the most intolerant places to live.  As you pointed out, you were in a Muslim country and despite that fact you were exempted from the Muslim prohibition against alcohol consumption.  So, it also comes down to the issue of personal freedom and to what extent the state has the right to dictate certain things.  In the so-called most free nation on earth, are Americans really so free in comparison to their European counter parts or other citizens of other nations?  The answer might be very surprising.
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Another Reader Writes:
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Dear John, I have read several of your articles on offshore banking and investment as well as US tax regulations. All of these topics are applicable to US citizens. However, it is not clear how they apply to permanent residents or even to foreign investors. My understanding is that the US tax regulations apply to permanent residents and even foreign visitors if they reside in US longer than a given number of days/year. But it is not clear to me whether they have the responsibility to report offshore assets or incomes, or report only income earned in US. This line of questions also leads to the question of whether one should become a US citizen? Or is it true that once they become a permanent resident, it's all over.  Do you have articles on these subjects?
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EDITORS REPLY:  Interestingly enough, residents of the US (Green Card holders) get the same tax treatment as do US citizens, to a large extent.  Because of this, I have many European clients especially that have voluntarily renounced US Permanent Residency status (and of course not even considered applying for US citizenship).  In fact, a few clients have reported to have been interrogated by the INS when they have done so – Why do you want to give up US Residency?  Do you not know the US is the best country in the world?  Are you crazy, etc.?  So, I suppose it comes down to whether or not you feel it is worth paying for the privilege of calling yourself either a US resident or citizen.  And to be fair, as one European already alluded, Europeans suffer some very high taxes as well, up to 60 percent in some cases for seemingly meager middle class income levels.  However, the system in many European countries is fairer in that Europeans can at least legally declare themselves not resident for tax purposes (proving legal residency status elsewhere) and get a break in that regard (if they are not living in their country of citizenship).  This however, is NOT the case for US citizens.  In regards to US residents, while possibly exempt from certain taxation in their exiting country of citizenship, still suffer the full Set of US tax requirements.
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This information has been compiled and presented by John Schroder of Ascot Advisory Services, for the benefit of clients and readers. Ascot Advisory Services provides assistance with such matters as offshore company formation, Panama Foundations, offshore banking, and special services in the Dominican Republic regarding residency, free zone applications, etc. For more information:  
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Telephone 809-334-5387 or 809-756-1917 
Email: info@ascotadvisory.com
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