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Weekly Update Bulletin On-Line.........  
In The News, Editorials, and Readers Write In (with our answers to Questions)



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DOMINICAN REPUBLIC BANKING:

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Interest rates for US Dollar savings accounts and time deposits (certificates of deposit) have come down quite a bit from just 5 months ago.  Most banks are currently offering less than 2 percent for US Dollar Savings Accounts and about 3 percent for 90-day certificates of deposit (although we have heard of rates as high as 5 percent for longer terms).  In any event, local bankers tell us the trend is downward for interest rates in the DR.  We have spoken about the economic reasons why in some earlier bulletins, so we will not repeat it here again.  However, the interesting thing is that this has not trickled into the local bond and commercial paper markets.  Investors can still find local US Dollar commercial paper investments offering yields ranging from 7 percent up to 9 percent.  We believe the reason for this is that the recent flood of US Dollars has been somewhat isolated to the banking sector.  Considering that local banks have not lowered interest rates to borrow money (although many think these rates will be lower in the next 90-days or so), it is probably still that case that the cost for a local company to borrow US Dollars from a bank will be in the 12 percent to 15 percent range.  This being the case, it is still less expensive for a local company to issue commercial paper paying 8 percent interest.  Of course, as we reported previously, there still seems to be a shortage of Pesos (as opposed to a flood of US Dollars in the banking system) and thus bank certificates of deposit in PESOS are still paying between 18 and 20 percent (commercial paper in Pesos paying up to 24 or 25 percent). 
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DOMINICAN REPUBLIC REAL ESTATE UPDATE:
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From time to time, some people have made the comment that we seem to be telling tall tales about real estate costs and other things when it comes to the Dominican Republic.  What is the problem really?  Well, many foreign investors often DO NOT bother to learn Spanish or bother to seek out the true local real estate market.  Instead, they rely upon advertisements in English for properties or they rely on a US based real estate brokerage chains (in the Dominican Republic) for advice.  This is not to say that all brokers are out to get you, but certainly the incentive often enough is to show ONLY the higher priced properties to foreigners (because they think they have a more lucrative audience in that the assumption often is that all foreigners are super wealthy) or because the commission paycheck drives the incentive NOT to show the other lower priced real estate.
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We recently (February 2005) decided to scour through the local newspaper classified ads, and also take a drive around some of the newer middle class residential areas of the National District (Santo Domingo) to see what we could find.  After a little bit of research and visits to different properties being offered in the local market, we found the following:
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BUILDING LOTS AND RAW LAND:  Within a 25 minute drive of the Naco - Piantini - Evaristo Morales residential sections of the city (where many of the restaurants and newer stores are located) we found a new residential project offering building lots starting at 1/3 of an acre on up.  What is the price for a ONE-HALF ACRE home site to construct your new dream home in the Caribbean?  The answer is US$37,500 at current exchange rates for one-half acre of property.  Much further into the mountain areas near Bonao (about a one hour drive from Santo Domingo), we found a project offering ONE ACRE sites for US$35,000 - and the developer is offering a 20-percent discount if you pay cash.  In both cases, the owner claims clear title is available upon full payment (or the registration process can be started right away to have title transferred to your name, which normally takes about 60 days).
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NEW APARTMENTS:  We found brand new apartments under construction (some ready to move in, some about 80 percent finished), about 15 minutes away from the Naco and Piantini areas.  A brand new 1,400 square foot 3-bedroom (2 and one half bath) is being sold for the equivalent of US$65,000.  Three new apartment buildings are going up on the same block, more or less same size, same amenities and same price.
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NEW and PREVIOUSLY OWNED HOMES:  Our research for single family homes took us to a few sections of the city and while some homes were being offered for what we think are ridiculous prices, we did find some smaller brand new homes for about US$125,000.  Also, we also found a 2,400 square foot home for sale by owner (with a decent sized yard and patio area) for US$100,000 located in a quiet residential area (in the section where we looked, many homes are located in a cul-de-sac).  We also found some upscale new construction north of the city (2,200 square foot) being offered at the equivalent of US$98,000.  Some homes had building lots large enough for a small swimming pool out back, next to the patio - and are located in a brand new gated community, with 24-hour security at the main entrance.
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In summary, the affordable housing is out there.  You just need to take the time (and effort) to go look.  If you are interested in the US$450,000 homes or apartments being marketed mostly to foreigners, they are out there too.  However, these homes or apartments, which are way over priced in our opinion (for the Dominican Republic) do not constitute the entire housing market.  For some photos and other information:
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http://www.thedominicanrepublic.net/Real_Estate/
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For investors looking to develop a housing project or resort in a beachfront area, Bruce Pierson of DR Paradise in Samana tells us he has 10-Acre Parcels (40,000 square meters) being offered at US$6 per square meter.  That comes out to US$240,000 for the entire property.  While perhaps cost prohibitive for some investors, Bruce is putting together a list of a few investors that may want to pool their money as a group.  If five people are interested in coming up with US$50,000 each - it means each investors gets a 2 acre lot in the hills of Samana, with one of the most beautiful ocean views in the Caribbean (if you have seen the whale watching presentation on CNN lately, the location was Samana where Bruce is located).  In any event, an interesting idea plus where in the Caribbean can you get 2 acres of Ocean View for US$50,000?  As Moishe from Panama would say - Such A Deal.  Contact Bruce as follows (Bruce Pierson is an American that has been living and working with Real Estate in the Samana area for many years now, so he is an old hand at this):
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Bruce Pierson
DR Paradise Real Estate
Tel. 809-240-5067
Cell. 809-889-6305
Email:  bruce.pierson@verizon.net.do
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IN THE NEWS:
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TORRIJOS GETS HIS TAX INCREASE, by Eric Jackson, Panama News
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The Torrijos administration's tax plan was approved on third and final reading by the National Assembly on January 31, and the president signed the measure a couple of days later. The measure, which amounts to a substantial tax increase, even garnered the support of three opposition deputies.  Certain income from abroad that was formally exempt from Panamanian taxation will now be subject to taxes, and the law as written creates some ambiguities in this respect. Although it's apparently not this government's intention to tax pensions entirely derived from working abroad, the law's definitions do include foreign pensions as taxable income but they do not repeal the existing exemptions. Basically, those who reside in Panama and work from here for pay that comes from abroad will be treated as if their income was made here, with large exceptions for international commerce and securities speculation. Those who work as consuls or in other Panamanian diplomatic posts abroad will also be taxed on the income from such jobs for the first time.
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http://www.thepanamanews.com/pn/current.html
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EDITORS NOTE:  In short, it looks like anyone interested in living or retiring inside of Panama will now pay up to a roughly 30 per-cent rate of income tax for both local and foreign source income (on a sliding scale, and those people with pension, investment or other kinds of income from outside of Panama in excess of about US$5,000 will pay the most).  Even thought the tax kicks in above and beyond each dollar earned above US$800 monthly (the first US$800 of monthly income, regardless of source, is exempt), it would seem that most foreign pensioners have a pension or other income source above this amount.  Assuming this is the case, almost every single foreign retiree in Panama will now pay income tax to the Panamanian Government (on world-wide income).
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In addition, from reviewing the law it also looks like foreigners with RESIDENCY in Panama can no longer enjoy tax-free bank account interest any longer (if we are interpreting these new regulations correctly).  Interestingly enough, it would seem that income derived from outside of Panama for a PANAMA FOUNDATION or PANAMA COMPANY remains to be tax-free as long as a local citizen or resident of Panama is not benefiting (although there is a new corporate tax of 1.4 percent, which does seem to include foreign source income).
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What is the end result?  While we still view Panama as an ideal choice for many clients in terms of the formation of a Foundation or Incorporated Company, it seems the sizzle certainly has gone from the steak in terms of benefits for foreigners who may want to RESIDE or RETIRE in Panama (in regards to what is now personal income taxation on world wide income).  How did this come about?  Well, we noticed that the proliferation of the many Panama Retirement or Real Estate Tours (operated by many different parties or companies) seems to have prompted many Panamanians to think they had the golden goose, after seeing a flood of Americans moving into Bocas Del Toro, Boquete, etc.  Meaning, the minimum bank account deposit for one of the residency processes in Panama was raised from US$100,000 to US$200,000 fairly recently.  I guess it was thought everyone was just dying to move to Panama, so why not up the requirement?  Now the latest is that residents are taxed on worldwide income.  What next?  Too bad the politicians can never see the forest for the trees and too bad for the Panamanian economy. 
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We still do like Panama as a jurisdiction for business issues, and we continue to suggest Panama as a choice for company or foundation formation (as the tax benefits remain for non Panama sourced income in the case of an incorporated company, etc.), however, it would seem in this case, the Panamanian Government has decided to create a disincentive for foreigners to live there.  Because of cases like this, we have said before that no country is perfect (the politicians are usually at fault, looking to solve financial problems with easy targets - in this case, all those foreigners with their pension and investment income from abroad) and it is always wise to think globally in terms of citizenship, banking, etc. in order to be both flexible and mobile no matter what comes down the pike.
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What almost all the politicians fail to understand is, we live in a fluid world economically speaking, and many people (even those with modest wealth) can move and live where they wish - often in a heartbeat if they so choose.  Obviously this is even much easier to do when you have your personal finances, investments and other matters set up already, to allow you to say - Adios, Bocas Del Toro, Panama - Hello, Montevideo, Uruguay (or where ever else you might consider) without too much disruption.
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HEALTH CARE COSTS MAIN CAUSE OF PERSONAL BANKRUPCY
(IN US), STUDY FINDS
- by NewStandard Staff
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Feb 4, 2005 - A study published Wednesday in the policy journal Health Affairs found that approximately half of people in the US who file for bankruptcy cite medical costs as a significant reason for their financial troubles. Based on a survey of 1,771 personal bankruptcy filers, the researchers extrapolated that between 1.9 and 2.2 million people were driven into bankruptcy because of health care costs in 2001.  Led by David Himmelstein, an associate professor of medicine at Harvard Medical School, the researchers further found that three-quarters of those "medical bankruptcy" filers had insurance at the onset of illness. Analysts thus conclude that providing health care coverage to the millions of uninsured Americans will not necessarily save severely ill people from financial hardship unless other reforms are enacted to improve coverage.
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http://newstandardnews.net/content/?action=show_item&itemid=1439
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WHY THE UNITED STATES IS LOSING STANDING AS AN ECONOMIC POWER:  ADULT ILITERACY IN AMERICA
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NEW YORK, Feb. 9, 2005 (AScribe Newswire) -- There are not enough young people in the educational pipeline to fill the nation's workforce needs in the decades to come. Thus, it is essential to focus more attention and resources on the three million adult education students in the system and the 30 to 50 million other adults with low basic skills.  "The gap between the haves and the have nots in American society is growing, and the main pathway for the education and training needed to hold decent jobs and function well as parents and citizens is through the community college door, the report states. Although this has long been the case, it warns that we are now at a critical juncture. We ignore present realities at our own peril. We can't afford to keep doing business as usual. A growing number of adults lack a high school credential. Too few adults are enrolled in ABE, ESL, and GED or other diploma programs, and two few are making the transition to community colleges.  We are reaching only about three million adults with current programs, out of 30 to 50 million adults with low basic skills, and service and planning efforts are fragmented and under-funded.
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http://newswire.ascribe.org/cgi-bin/behold.pl?ascribeid=20050209.095928&time=
10%2050%20PST&year=2005&public=0

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Congress in 1988 directed the Department of Education to carry out an assessment of the literacy skills of American adults. The result was the National Adult Literacy Survey (NALS), a monumental study that remains the most comprehensive, statistically reliable source of data on literacy in the United States (completed in 1993 at the national level).  The NALS found a total of 21-23 percent - or 40-44 million - of the 191 million American adults (defined as age 16 or older) at Level 1, the lowest literacy level. Although many Level 1 adults could perform many tasks involving simple texts and documents, all adults scoring at Level 1 displayed difficulty using certain reading, writing, and computational skills considered necessary for functioning in everyday life.
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http://www.nifl.gov/reders/!intro.htm
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IT IS GETTING WORSE:
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The literacy proficiencies of young adults assessed in 1992 were somewhat lower, on average, than the proficiencies of young adults who participated in a 1985 literacy survey. National Adult Literacy Survey participants aged 21 to 25 had average prose, document, and quantitative scores that were 11 to 14 points lower than the scores of 21- to 25-year-olds assessed in 1985.
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http://nces.ed.gov/naal/resources/execsumm.asp
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EDITORS NOTES:  Incredible but true, more than 20 percent of the US adult population cannot: locate an intersection on a street map, locate two pieces of information from a sports article, identify and enter background information on a social security card application and cannot calculate total costs of purchase on an order form.  These are not my own comments, but rather actual examples taken directly from the information mentioned on the above referenced web sites indicating what is means to be classified a Level 1 literate (Level 5 is the highest).  Perhaps even worse, only about 18 percent of the US Adult population was classified as Level 5, with everyone else falling somewhere below.
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Want to know why US companies are moving clerical jobs to India?  Perhaps it is because Ashok Patel can read and write basic English and Johnny Smith cannot, (not to mention that literate Ashok will work for US$1 per hour and semiliterate Johnny wants US$8 per hour).  Some people will say that I am simply being critical of the United States, but that is not the point at all.  Instead, many Americans want to know why corporate America is moving jobs overseas.  Many want to know why the US is in decline economically.  You have to ask?  Some 40 Million Americans cannot find an intersection on a street map.  Forty Million people in supposedly one of the wealthiest nations on earth that lack basic skills, and we are moving into the information age that will demand a high level of literacy and competence in the future (and we are moving out of the so-called industrial age, when the ability to push a button on an assembly line was good enough).
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In addition, we are told the rest of the world is worse off, both in terms of economics and education.  However, the following study from UNESCO (see web site link) would seem to indicate that perhaps many countries such as Panama, Argentina, Ecuador, The Dominican Republic are really not so different (perhaps in some cases much better) when it comes to literacy rates in comparison to the US today
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http://www.uis.unesco.org/en/stats/statistics/literacy2000.htm
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THE US versus EUROPE: From The New York Review of Books
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The United States of Europe: The New Superpower and the End of American Supremacy - by T.R. Reid, Penguin, 305 pp
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The European Dream: How Europe's Vision of the Future Is Quietly Eclipsing the American Dream, by Jeremy Rifkin, Tarcher/Penguin, 434 pp
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Free World: America, Europe, and the Surprising Future of the West, by Timothy Garton Ash, Random House, 286 pp
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America's cultural peculiarities (as seen from Europe) are well documented: the nation's marked religiosity, its selective prurience, its affection for guns and prisons (the EU has 87 prisoners per 100,000 people; America has 685), and its embrace of the death penalty. As T.R. Reid puts it in The United States of Europe, "Yes, Americans put up huge billboards reading 'Love Thy Neighbor,' but they murder and rape their neighbors at rates that would shock any European nation." But it is the curiosities of America's economy, and its social costs, that are now attracting attention.
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Americans work much more than Europeans: according to the OECD a typical employed American put in 1,877 hours in 2000, compared to 1,562 for his or her French counterpart. One American in three works more than fifty hours a week. Americans take fewer paid holidays than Europeans. Whereas Swedes get more than thirty paid days off work per year and even the Brits get an average of twenty-three, Americans can hope for something between four and ten, depending on where they live. Unemployment in the US is lower than in many European countries (though since out-of-work Americans soon lose their rights to unemployment benefits and are taken off the registers, these statistics may be misleading). America, it seems, is better than Europe at creating jobs. So more American adults are at work and they work much more than Europeans. What do they get for their efforts?
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Not much, unless they are well off. The US is an excellent place to be rich. Back in 1980 the average American chief executive earned forty times the average manufacturing employee. For the top tier of American CEOs, the ratio is now 475:1 and would be vastly greater if assets, not income, were taken into account. By way of comparison, the ratio in Britain is 24:1, in France 15:1, in Sweden 13:1.  A privileged minority has access to the best medical treatment in the world. But 45 million Americans have no health insurance at all (of the world's developed countries only the US and South Africa offer no universal medical coverage). According to the World Health Organization the United States is number one in health spending per capita--and thirty-seventh in the quality of its service.
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As a consequence, Americans live shorter lives than West Europeans. Their children are more likely to die in infancy: the US ranks twenty-sixth among industrial nations in infant mortality, with a rate double that of Sweden, higher than Slovenia's, and only just ahead of Lithuania's--and this despite spending 15 percent of US gross domestic product on "health care" (much of it siphoned off in the administrative costs of for-profit private networks). Sweden, by contrast, devotes just 8 percent of its GDP to health. The picture in education is very similar. In the aggregate the United States spends much more on education than the nations of Western Europe; and it has by far the best research universities in the world. Yet a recent study suggests that for every dollar the US spends on education it gets worse results than any other industrial nation. American children consistently under-perform their European peers in both literacy and numeracy.
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http://www.nybooks.com/articles/17726
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EDITORS NOTES:  History repeats itself and the truth of the matter is, there really is nothing new under the sun in terms of cause and effect.  You spend more than you make, you will go broke.  You live on borrowed money, you will go broke.  You neglect the education of your children and you will have a future generation more likely to have worse (not better) prospects for employment and economic advancement in the future. 
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The comments indicate that the US is a wonderful place to live if you are wealthy, but what about if you are middle class?  Interestingly enough we have seen a tremendous upswing in the numbers of middle class Americans and Europeans expatriating to places like the Dominican Republic, Ecuador, Brazil, Thailand, etc.  Why?  Because these countries allow these middle-class refugees from the expensive, high tax nations to live a decent and comfortable life, which is something no longer possible where they are at the moment (or are coming from).  Interestingly enough as well, we are also seeing Dominicans who have been living in the US for some time, who are moving back to the Dominican Republic so they can enroll their children in private bilingual grade and high schools or local private universities for less US$2,000 per year in tuition costs (plus the lack of guns, violence and drugs are a welcome change of pace as well).  These are people who are also selling their over-priced middle class homes in New Jersey, Massachusetts, and New York for US$500,000 and are buying very nice new homes in the Dominican Republic for 25 percent of that amount (and are putting the difference in the bank so they can live off the interest - locally tax free).  We know of one Dominican Real Estate agent in New Jersey that has picked up on this trend and has started a new real estate agency in Santo Domingo to tap into this (smart man), by coordinating the sale in the US from the local office there, and helping with the purchase of a new home in the DR for cash here.
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Changing Places:  This is hard for many Americans, Canadians and other nationalities to swallow or understand.  Meaning, such nations (such as the US) are used to seeing poor immigrants clamoring to gain entrance, and they still are coming - meaning the poor without higher education from other nations who still believe the myth of plenty awaiting them (until of course they wise up after living there for a few years).  What is a new phenomenon however, is the concept of a reverse migration, or the idea of solvent middle class families wishing to leave North America (as an example) to relocate to what is often thought of as a third-world country.  This is a new and mind boggling concept to many who cannot believe anyone in their right mind would want to Escape From America (to quote Roger Gallo), yet it is happening just the same.  This trend started a few years ago and has gained even more momentum, not less.  In addition, US immigrant residents who arrived 10 or 15 years ago or so are now flying the coop as well (and are going back home).
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READERS WRITE IN:
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Dear John - Thanks for the insight, I always enjoy your insight and has been a part of what is leading me to plan on overseas relocation for tax savings purposes.  Do you think there are nations that are favorable as potential relocation points due to being better or worse in terms of avoiding trouble with the IRS seeking back taxes against oneself, once relocated to that country?  I have been trying to get a feel for that sort of thing just as a precautionary measure?
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EDITORS REPLY:  This is an interesting question and relates directly to the trend we are talking about above.  In other words, what you have is a case of middle class people with some money, or some modest savings (if you think a net worth of US$250,000 after you sell your home and liquidate your investments - is a large sum of money in the US, you are kidding yourself - you are middle class and probably barely that, at least inside the US anyway) that are leaving to go where the grass is greener (and cheaper).  What has been the backlash or result?  Well, for starters, tax hungry politicians who are starting to take notice and looking for ways to attack those unpatriotic %&#@*.  So, as a result, we now have the so-called expatriation tax for Americans (whereby you are in theory supposed to turn over 50 percent of your wealth to the US Government for the privilege of leaving - although most people are not that stupid, they simply go on vacation and never go back).  In addition, we have new pressures from Uncle Samuel, who is trying as best he can to force, encourage, and cajole foreign governments with lower tax rates and or tax advantaged situations to do away with what they have, and or to bring the rates up to US levels (so these places are no longer attractive places for Americans as a place to retire or relocate - this new tax on world-wide income in Panama sounds an awfully lot like this very thing to me).  In addition, a new free trade agreement by any other name (a rose by any other name) that sounds good in theory, but has all sorts of hidden agendas in terms of eliminating taxation benefits in the country where such benefits exist.  Coupled with the IMF, World Bank, direct US Government Aid (or lack thereof) and all the other circus acts that have the same goal in mind - and you have an organized effort from a number of different pressure points to achieve the same long-term goal (get rid of the competition by force or coercion, rather than trying to compete themselves).
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Interestingly enough, and not to go off on a tangent (but I will because it relates), the US needs the up and coming economies of Central America and South America much more than they need the US.  The problem is many of these small nations do not understand this, and as a result, often take the bait offered by the mouse catcher.  You must understand that the US economy is about 75 percent dependent upon the American consumer.  Many other economies are not overwhelming dependant upon local consumers to keep the economy going, and instead still manufacture things (either raw materials, agricultural products or finished goods) for EXPORT.  Which is to say, they (the growing third world nations) still sell things to other countries (whereby the local consumer in that other country buys them, often enough, someone inside the US or Europe). What does the US sell them?  Aside from music and movies, the truth is almost nothing.  Forget about American Brands, such as Maytag, Whirlpool, Timberland Boots and Lane Furniture as none of that stuff is made in American these days.  Sure the US Corporations that own the brand names are raking it in, but the stuff is not made in the US anymore (and certainly not made by US workers) and on top of that, many large US corporations have been trying to funnel profits to lower tax offshore subsidiaries anyway.  So much for the brief and quickly condensed lesson on why the US has such a huge and ever increasing imbalance of trade, but this is part and parcel of the same much larger and interrelated big picture.
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Moving along with this idea, let us suppose the American consumer decides he cannot keep consuming the way he has been.  Let us suppose the American consumer is already choking on credit card debt, interest only mortgage payments, car leases, etc.  One day will come when he cannot buy any more, and then what?  If he or she makes up 75 percent of the US economy, and he or she falls down on the job of continuing to spend and spend (including spending money he or she does not have, in other words spending borrowed money) what will happen to the US economy?  Let us now suppose that these so-called third world nations are not so third world anymore.  Let us say that as a economic percentage of growth (in the so-called Third World), percentage of the population that has moved from being poor to middle class and or generally now has a growing percentage of local consumers that all of a sudden have the capacity to buy various goods or services (cell phones, Yoplait frozen yogurt, Black and Decker coffee makers, Gorton fish sticks, and so on) well into the double digits.  Who then are the new consumers with the new capacity to buy in the 21st century?  Where are the fastest growing sales for General Electric self-cleaning steam irons?  Boston, Massachusetts or Sao Paulo, Brasil?  Check the numbers, they may just surprise you. 
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Finally, summing it all up to answer your original question: what government in their right mind is interested in being a tax collector for another?  The answer I suppose is only those that are somehow interrelated, or perhaps one that has some sort of reciprocal benefit.  Nations that are members of the European Union fit this bill, however in such a case only among themselves and not in concert with the US. Why?  The US and NAFTA member nations are really competitors to the European Union.  You may not see it that way, but that in fact is the truth.  So, why in the world would you proactively do anything to help your competitor, economically speaking, gain some sort of benefit (especially when it costs you money to do the work for them, and it pulls money out of your own economy)?  In the case of emerging market nations elsewhere, such as in Central and South America, I gave one example why perhaps Canada and the US need these so-called poor third-world nations more than vice versa.  The other reason or point with these kinds of countries is, all of the poor people with limited job schools want to go to North America, and the wealthy middle class from there want to now come to the so-called poor third world countries (wealthy and very well educated people in third world or emerging nations do NOT want to leave home - why should they?  They have it pretty good where they are).  Obviously, the previous myths of both still remains in the minds of the general public on both sides, even though the myths are no longer exactly true (that the US is the great land of unimagined wealth and unbridled opportunity  - and that the third world or emerging market nations are lands of severe poverty, misery, hunger and without any kind of infrastructure, whereby no one in their right mind would want to voluntarily live).
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In short, the following below is the formula or profile of a nation that probably is not interested in this new world order nonsense (so you can find the list of countries on your own).  Which is to say, the rhetoric is (from the so-called wealthy industrialized countries, but the US primarily) let us have free trade, level playing fields in commerce and taxation (read this to mean, please bring your tax rates up to ours so you have no more attractive incentive because we cannot afford to lower ours), free exchange of financial information and transparency, and so on.  However, while some politicians in smaller foreign countries do not see the big picture and think all of this is a wonderful idea, many others are not so foolish (remember the Art of War: Never take what your enemy or rival voluntarily offers you  - it probably is a trick with some other hidden agenda).  All nations are rivals in terms of trade, commerce, and business.  This is nothing new and understandable in a capitalistic free market economy.  What is new however are the Trojan-Horse tactics, and some countries have been fooled by it, where as others have not. 
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In any event, look for a country that exports more than it imports, preferably much more.  I have said it before and I will say it again.  If you sell more to other countries than you buy from them, you are transferring wealth from there to you.  You do this long enough, and you will become wealthy as a nation (and they will become poorer as a result).  China fits this profile perfectly and now has more new millionaires per capita annually than any other nation I can think of (and where did they get this wealth? - from the US and European consumers of course).
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Look for a nation that does not have or need the IMF, World Bank and some of the other related organizations inside their country.  This is often easier said than done (to narrow the list down) as many emerging market countries had gotten themselves into trouble and invited the wolf to dinner.  But of course you have nations, such as Russia and Argentina, that have wised up a bit and are not so quick to let the wolf have his way any longer as they have come realize, it is really a wolf in sheeps clothing.
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Look for a nation that is a net recipient of new well-off middle class immigrants.  This is the reverse migration we have spoken about earlier, but an important new dynamic just the same (that will slowly but surely change the economic landscape over time).  However, let us hope the new governments receiving these people play their cards right and try to encourage them to stay, rather than leave (to go somewhere else).  And last but perhaps not least, also consider nations that fit the emerging market profile who have, shall we say, have not had a very pleasant experience in the past.  Chile comes to mind, whereby there was the unnatural demise of President Allende a few years back and the installation of General Pinochet as his predecessor.  If you think the Chilean people have forgotten about it, better think again.  Some fifty years later, the memory of it all still lingers and it shows in current politics with respect to willingness (or not) to jump on the bandwagon.
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The truth of the matter is, things have changed just as always.  At one time, Spain, France and England were the ONLY world super-powers, both economically and militarily.  At one time, the US was the wealthiest nation on earth and the net lender to the rest of the world.  China was a third world nation, albeit one with a huge population.  Now China loans money to the US and when they make public comments to the contrary, it sends goal prices soaring and nervousness through the bond markets.  At one time, America was the up and coming place that European and other immigrants flocked to for a better life.  Now it is China, Brazil, Chile, and India (just to name a few) that are the new emerging countries.  The problem is that a large number of people in the country that used to be number one are having a very difficult time psychologically accepting the change in economic status.  But life goes on and history is an excellent forecaster of the future (as it usually repeats, albeit with new or different players).           
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The information has been compiled and provided by John Schroder of Ascot Advisory Services.  Ascot Advisory assists clients with the formation of Panama Foundations and Offshore Company Formation, offshore banking introductions, Residency Services and other related services.  For more information:
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