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WHERE CAN YOU AFFORD TO RETIRE TAX FREE?           WHY ARE SO MANY OF THE MIDDLE CLASS LEAVING THE US & EUROPE?

Our July 2005 Newsletter:
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More Dual Citizenship Issues for Americans.  Are Asset Confisgations by Government Agencies the New Undeclared Tax??
John Schroder - Author of The Ascot Advisory News Letter Bulletin and Numerous Expatriate  Articles
DOMINICAN REPUBLIC REAL ESTATE:
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How about escaping the winter snow in the Dominican Republic, directly on the beach in your very own apartment?  It is a possibility.  I know we are still experiencing summer in North America and winter seems like a long way off, but Gordon Green from Island Realty in Punta Cana tells that there just two apartments left in the beach-front project he mentioned before.  The one bedroom apartment is US$95,000 and a two-bedroom with loft (third bedroom perhaps) is US$180,000.  Anyone purchasing a property now still has enough time to close and take title, and be ready for Christmas in the Caribbean.
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For those people who have just a bit more space in mind for their beachfront Caribbean dream hide-away, Gordon also has mentioned 7 acres (not a typing error, SEVEN ACRES) being offered on the beach for US$375,000.  That comes out to about US$53,000 per acre. Do you have seven friends with US$53,000 each?  Get them all together and start marking off the volleyball court.  For more information about these and other properties in the Punta Cana - Playa Bavaro area:
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Mr. Gordon Green
Island Realty Punta Cana
Direct US Tel. 281-380-3790
Punta Cana Office: 809-503-5098
Punat Cana Fax: 809-552-1635
Email:   ggreen337@yahoo.com
Email:   ggreen@remax-islandrealty.net
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Note: Gordon Green is an American and native of Texas who commutes between Texas and the Dominican Republic at the moment.  His business partner is in the Punta Cana office full time, but Gordon invites any North Americans who might have any questions or inquires to contact him directly via his cell phone, which is functional both in the US and in the DR also (or email as well).
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QUOTE OF THE MONTH:
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Where Liberty Is, There Is My Country - Benjamin Franklin
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IN THE NEWS:
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As a follow up to the recent article we wrote for the Escape Artist regarding a housing bubble in the US and parts of Europe:
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http://www.escapeartist.com/OREQ12/OREQ12.html
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BUSINESSWEEK recently (July 2005) reports the following comments by Alan Greenspan:
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Greenspan came as close as he ever has to declaring housing a bubble. "Whether home prices on average for the nation as a whole are overvalued...is difficult to ascertain, but there do appear to be, at a minimum, signs of froth in some local markets," he said.  Greenspan also admitted that he couldn't rule out a nationwide decline in house prices.
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http://www.businessweek.com/bwdaily/dnflash/jul2005/nf20050721_0075_db016.htm
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THESE PEOPLE TRULY SPAN THE GLOBE, By Maria Puente, USA TODAY
June 29, 2005
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Teddy Roosevelt is surely fuming in his grave: Nearly a century after the 26th president ridiculed dual citizenship as a self-evident absurdity, untold numbers of Americans are taking steps to become citizens of other countries.  Such a thing was nearly unheard of 40 years ago. For most of the country's history, dual citizenship was considered the civic equivalent of bigamy. In Roosevelt's words: We must unsparingly condemn any man who holds any other allegiance.  To which many Americans would now say: Not any more we don't.  This shift in the culture and in attitudes toward what Roosevelt called Americanism could be dated to 1967, when the U.S. Supreme Court struck down a law that forced people to relinquish their American citizenship if they acquired another citizenship. Now more Americans are becoming aware that having a second passport could be useful.
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http://www.usatoday.com/life/lifestyle/2005-06-29-dual-citizenship_x.htm
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EDITORS NOTES:  There are no accurate statistics really on the number of Americans that hold dual-citizenship (or a second citizenship elsewhere), but the estimate is that it could be up to 40 Million (but this supposedly factors Mexicans living in the US also, including those of the illegal immigrant variety as well, so the numbers are not well defined).  Indeed, it is certainly often the case that your new country of citizenship does not report to your previous or other nation of citizenship (that you have now acquired a second nationality), so this contributes to the lack of statistics as well.  More interesting though is who is seeking dual citizenship and why.  Common thinking is that this involves only the super wealthy or tax dodgers.  Surprisingly enough, it is the middle-class and those often enough trying to survive the now uncertainties surrounding lost pension benefits (both private and public) and all the other, shall we say, challenges to middle class economic survival.  In other words, many are faced with either trying to recoup lost funds (difficult to do) or finding a way to maintain the kind of lifestyle that they want, for less.  The latter being very possible if you wish to explore the idea of relocating to Panama, Thailand, The Dominican Republic and a host of other places.  In addition, if one is a US citizen and if one starts to consider that they claim the right to tax you regardless of where you are living (not to mention estate taxes, which may NOT exist in many other jurisdictions) then the idea of seeking out another citizenship (and maybe even renouncing previous citizenship) becomes a natural progression.  Of course, cost of living and being able to possibly retire on less is only one part of the equation.  The ability to perhaps enjoy more liberty and more freedom elsewhere is another compelling part of it as well.  It is very interesting to note that Fortune Magazine tackles this idea to some extent with a recent series of articles about retirement (see below).
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YOU'RE ON YOUR OWN (And That's Okay) - By Justin Fox - FORTUNE
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It has not been the sort of year that makes you breath easy about retirement. United Airlines got permission from a judge to default on $6.6 billion in pension commitments. The government's Pension Benefit Guaranty Corp., which picks up some of the burden when companies like United fail, is in need of a taxpayer bailout itself. President Bush declared in his State of the Union address that Social Security was "headed toward bankruptcy." Ford announced that it was suspending matching contributions to the 401(k) plan of its salaried employees. Even state and local government pension funds, those bastions of old-style retirement generosity, ran into money troubles and political headwinds. As for the stock market, that 1990s answer to all retirement quandaries, it spent the first half of 2005 going in its new favorite direction: nowhere.
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A retirement nightmare, you might say, except that we're not going to wake up and forget it. The dream, it turns out, was what our parents (and their counterparts in many other wealthy countries) experienced in the half-century after World War II: Work hard for four-plus decades, then kick back to enjoy a well-funded retirement for which someone else did the planning. That's not the way it's going to work anymore. Mom and Dad got help; you're pretty much on your own. You can't count on a corporate pension or even Social Security to be there.
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http://www.fortune.com/fortune/investorguide/articles/0,15114,1077178,00.html
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EDITORS NOTES:  It is interesting to think that part of the reason one contributes to a social welfare state is so that the government can take care of you, is it not?  You turn over your money, they do all the work and all the management - and you in turn give up part of your freedom and independence in exchange for a guarantee of security (security in that they will give you a retirement check when the time comes).  However, what happens when the guarantor falls down on the job?  What if they, and not you, change the game midstream?  Sort of like a social contract whereby one party has almost reneged on the contract, on in the least, not fulfilled all of the promised pieces of the bargain.  What if the other party admits they need to change the terms of the contract, but at the same time insists you keep up your end as originally stated - perhaps even by force?  Not a very pleasant scenario indeed.  However, we have talked about this and other themes to exhaustion in the past, so more space need not be devoted to this topic by us.  But, it is very telling that a major mainstream business publication, such as Fortune Magazine is now addressing this issue.   Even more interesting is the title - You're on Your Own.  And yes, it is OK, provided that means completely.  The very term, on your own, would seem to indicate the interchange stops in both directions, does it not?  Meaning, you are not getting a check but at the same time, you are allowed to back out and stop paying in as well, no?  Or am I missing something?  Is it only a one-way deal, whereby the money stops coming to you - but you need to keep forking over yours?
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PARADISE FOUND: WHERE TO RETIRE ABROAD - By Ellen Florian Kratz, Fortune Magazine
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Who can resist the fantasy? Instead of catching the early-bird special in Florida, wouldn't it be more fun to sip away your sunset years in Provence? Such thoughts often occur on vacations. During a pastis-induced haze, you think, Who needs Target or Oreo cookies or 100 cable channels to make life enjoyable? I could live here forever. You nurse the dream, lingering over real estate ads in a local café. But soon you realize that your nest egg isn't going to let you buy one of those overpriced villas and live like Peter Mayle for the rest of your life. Before you know it, the vacation is over, and so is your reverie. Don't fret. We found five idyllic places--from Patagonia to Phuket--where you can still live like a king on what you've saved. So dream on.
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http://www.fortune.com/fortune/articles/0,15114,1076994,00.html
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EDITORS NOTE:  One comment I can make it that perhaps it is not necessarily the case that you must give up Oreo cookies or 100-channel cable television (I do not watch them all, but I think I have about 86 channels, with about 20 or so in English, including HBO and all the rest).  Many people are under the impression that living in a place outside of what constitutes the so-called modern industrialized world is a form of banishment from all the comforts and conveniences we may have come to expect.  However, this is a falsehood, and the fact is that even many countries considered to be Third World not so long ago are often surprisingly not so backwards as one might think.  After some serious investigation on your own (rather than gathering information from Fred, who dispenses daily worldly advice from the office water cooler, even though he never set foot outside of Ohio) - you may be very surprised to find out what exactly is out there (and at the same time, what not).  Oh, and by the way, for our readers located in the New York area, I can tell you that you can now buy Patsy's Pasta Sauce in Santo Domingo (just in case you were wondering). Oreos have been here for years - Famous Amos too.  Come to think of it, there really is not too much you cannot buy (and even some new things not available - back there).
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READERS WRITE IN:
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Dear Mr. Schroder - I simply don't know where to begin in regards to thanking you for supplying the wonderful information that you have provided. While I have not finished the perusal of this month's newsletter, I have already received an earful with regards to the IRS and taxation requirements. Myself, being a born citizen, and my wife being a legal resident, both with future plans to retire to the Dominican Republic--let me just say that you have left us both astounded. I must state that the proposed ten-year tax requirement that is now placed upon us both brings to mind a specific event in the history of America.  Do you recall The Boston Tea Party? (smile)  John, keep up the good work---it is definitely appreciated.
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EDITORS REPLY:  Thank you for your letter.  Keep in mind though that this ten-year taxation issue has been around for a few years now.  What has changed is a new and somewhat confusing litmus test, in addition to the older one still seemingly in place.  In regards to the Boston Tea Party, what we had was a group of Americans dressed up or disguised as Indians who boarded private merchant ships and dumped tea overboard in Boston Harbor to protest the new tea tax at the time.  Today, some might say that the modern day equivalent would be the expatriates dressed up as tourists going on vacation that simply never go back.  It is interesting to note that the latter does not involve trespassing, nor destruction of private property, nor any sort of violence what so ever.  Yet, there would seem to be more of an aggressive agenda to cajole or harass such persons these days.  Perhaps we have created something far worse than old King George, and the few extra cents one might pay for a packet of tea.
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ANOTHER READER WRITES:
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Hi John - Reading your newsletter is lake a ray of sunshine through an overcast of black clouds.  As far as buying real estate offshore and not having to report it - A Canadian must report this on the tax form if it is over US$100,000 or you get big fines.   Also, did you know that in free Canada, if you are a senior citizen and have a tax debt - the wonderful and kind government will seize all of your pensions and leave you with nothing (as the clowns in Ottawa run around the world trying to find someone to give money to)?  Here at home, and unknown to the general public, these blood-sucking thieves rob their own senior citizens.  And that's the way it is in the wonderful and free north country of Canada.
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EDITORS REPLY:  I was not aware of the real estate reporting issue in Canada.  However, thank goodness you can still buy an apartment or home in many places for less than US$100,000 in other countries (such as in the Dominican Republic, Ecuador, Brazil, Thailand, etc.).  Another option is that you buy nothing in your name (but perhaps use a Panama Foundation or other entity to own property and other kinds of assets).  Unlike a common law trust from Canada, US, Bahamas, etc. - a Foundation cannot be invaded BY LAW (after three years) to settle any lawsuits, tax claims, etc, against the benefactor or patriarch (the person that put the money into the foundation).  In other words, someone that wants your money has up to three years to plead their case, after that, all bets are off.    
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AS A FOLLOW UP TO OUR LAST ISSUE:
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In reply to the changes or new litmus test regarding how or when either a US citizen or permanent resident might be considered a tax exile (and subject to taxation for ten years after renouncing citizenship or residency) a client wrote in and we replied as follows:
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Well, here is the interesting thing (Editors Comments):
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If you read the US State Department information, it talks about a tax liability of US$100,000 and a net worth test of US$500,000.  However, if you read the details from the American Jobs Act of 2004 (which became effective Jan. 1 of this year), it talks about a tax liability of US$127,000 and a net worth of US$2 Million.  Which is correct or what are the figures?  Good question, and the truth is I do not know.  Better said, are they leaving the window open to apply either one, depending what is more beneficial for them?  Is it the case the US State Department has one set of figures to apply as a litmus test, and the IRS yet another?
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The client did some of his own research and here is what he found out:
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John - Just to have to follow-up on this.  It is interesting that the State Dept. fails to acknowledge P.L. - 108-357 (2004 American Jobs Creation Act) on their website.  I did a search and the law is nowhere to be found.  They only refer to the old law (P.L. 104-191) from 1996.  Therefore, one can only assume that this is why the IRS demands that when anyone files Form 8854, they must also notify the Dept. of State or Homeland and receive an approved Certificate of Loss of Nationality before achieving expatriation.  If P.L.-108-357 does not apply to the Department of State/Homeland then they will enforce P.L.- 104-191.  Therefore, maybe you are right- both laws now apply.  So what appeared to be a big break is actually an enhanced version of the 96' law that eliminates the IRS ruling request on the 877 provisions while increasing penalties for noncompliance with disclosure requirements. Since the ruling by the Dept. of State/Homeland is also obligatory and these Departments do not recognize the new law, then the 96' laws are still in force also. Confusing is an under statement, but I guess my cynicism was correct to begin with - Too good to be true.
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EDITORS REPLY:  Well, it certainly is interesting to note the two different sets of litmus tests, and perhaps how and when they might be applied.  However, ever since the so-called expatriation tax (passed a number of years ago as an addendum to some other unrelated bill), which basically says you are required to turn over 50 percent of what you own to Uncle Sam, should you decide to formally expatriate - most people have simply been quietly drifting off into the sunset (unannounced).  Meaning, I tend to think that most people are not so foolish to turn over half of their net worth simply because they have decided to change citizenship.  Stated another way, many people simply go on vacation (and stay on vacation permanently).  This is perhaps why there are no very clear statistics on the number of people that do in fact expatriate.
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In any event, think about this idea for just a moment.  If you decide to expatriate (using the definition of formally renouncing citizenship rather than simply retiring or living in another country, which is another matter altogether), then they say you should turn over 50 percent of your assets to the US Government (obviously there is a litmus test for this).  Then, after that, they claim the right to continue to tax you for up to ten years after the fact (assuming you meet the litmus test for that).  I hear it is difficult to relinquish membership in the Mafia, but at least you get out when you die.  In the case of the US and taxation, they still try and get you by taxing your estate after you pass on.  So, the joke of the day is:  What is the difference between the US Government and the Mafia?  Answer: At least the Mafia lets you go when you die. 
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ANOTHER READER WRITES:
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Dear Mr. Schroder - Each time I have read the submissions provided by Ascot Advisory Services, I have at the same time been impressed by the collective knowledge of the group, and also I have become terrified - literally terrified - at the conduct of our various governmental enforcement agencies to eradicate privacy from the American public and corporate life.  I was not old enough at the time to understand the implications of events, which almost went amok during the period of Joseph McCarthy and the conduct (read witch hunt) associated with the House Committee on Un-American Activities.  But with the added abilities provided by new equipment, technology and even permission of our Federal Judges, that agencies like NSA can literally invade every aspect of our personal and corporate business to the point that George Orwell never imagined, I have become absolutely terrified.
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How can any American be so dulled from apathy and ignorance to ignore the implications of loss of their privacy in matters of personal possessions and even the private conversations of their supposedly private lives?  It's almost like Life, Liberty and the pursuit of Happiness doesn't anymore include things called "RIGHTS." There is a VERY clear and distinct difference between a RIGHT and a Privilege. Somehow, we have all allowed that distinction to be lost.  The current crisis in American Civil Liberties has brought together very strange bedfellows. Traditional Constitutional Conservatives, and traditional "tree-Hugging" Liberals find themselves united in their horror and angst over the loss of privacy rights and the general "throwing-out" of the baby with the bathwater.

Is the supposed half-percent gain in physical security regarding real and imagined acts of terror worth the 95% loss of our freedoms which is the supposed price of our so-called security?  The of loss of "some" of our privacy is labeled as a "minor inconvenience" and our new-found "security" is supposedly WORTH the abdication of everything we hold dear as Americans? I think not, sir!  It is on behalf of the PROTECTION of these very freedoms which all my parentage and I, myself, stood in foreign battlefields to face the enemies of our nation and our way of life.  Now, are we truly supposed to walk dumbly into the furnaces of our own making, and accept this holocaust of destruction of our privacy, freedom of our movements and of loss of control of our possessions and of our property with a stoic acceptance that it simply represents an "inconvenience?"
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EDITORS REPLY:  Technology, like dynamite, is a wonderful thing if properly used, or used with positive intentions.  I make the reference to dynamite because I am reminded of Alfred Nobel, the Swedish inventor of dynamite, who after seeing his invention misused or used for purposes other then he intended (warfare, etc.) set up a trust fund from the profits to establish the Nobel Peace Prize we are familiar with today.  Alfred Nobel seemingly thought his invention would be used for peaceful purposes, such as blasting through rock to build new roads, and so on.  Alas, the military implications were too enticing to ignore (and one might conclude in terms of today, we have people that might not be able to do what they do if it were not for such inventions).
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In any event, as I have stated before, people often do not think about cause and effect or long-term consequences of political decisions.  Watching world events, economic trends and political decisions is sort of like watching a chess game.  One must think about what the next moves are, or possibly could be, and filter through the rhetoric.  This application can be useful both for your own personal investments, as it could be in terms of figuring out where a country (any country) is headed, politically, economically and so on.  One connects the dots, so to speak, and a pattern or trend emerges.  What you do with that information is of course up to you.  Some people will act upon it, whereas others refuse to see the forest for the trees (even after a tall oak tree falls down two feet in front of them).  Some people will outright refuse even to talk about such things, because the negative possibilities are too painful or difficult to consider.  Yet, refusing to talk about or discuss them does not make them go away.  Private property rights and personal liberty are very precious things indeed to be safeguarded.  If you start to ignore them or refuse to defend them, no one else will do so for you (in fact, you will only encourage those that want to take away such basic rights even further).
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ANOTHER READER WRITES:
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I recall learning when I studied American History that there was a little thing called the Boston Tea Party, which occurred due to Taxation without Representation.  Yet that is what the government is attempting to impose on the American Expatriates!  Do we not learn from history?
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EDITORS REPLY:  This is the second letter this month referencing the Boston Tea Party.  The Boston Tea Party must be on the minds of many people these days.  In any event, I do not know if I would call it taxation without representation, but certainly it seems to be a case of paying for something you are not using (or not getting in return).  Europeans, as I mentioned before, at least allow their citizens to formally declare themselves non-resident for taxation purposes IF they are NOT living full time in the country of citizenship, which would seem to be a much fairer philosophy.
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ANOTHER READER WRITES:
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In reply to a letter written by a gentleman in the last newsletter which states as follows:
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I am starting by using what little good credit I have to buy a townhouse / row house in Baltimore's inner city.  Most of which can be bought between $20k & $60k and can be renovated and rented out (per HUD/Section 8 program) for $1500 for a 3 bedroom apt. Even a person like myself can afford a $900-$1050 MONTHLY mortgage if I'm bringing in $3k off of 2 apartment buildings. At this point, a savvy person will be able to save about $900, give or take, per month AFTER paying the government their share (local, state & feds and banks).  It really pisses me off to see US dancing around on cable, BLING-BLING - shining, sports playing, when there is a better way of doing things.  These guys just waste that money and then their crying about how the MAN did this to them.  HEY, invest your cash.  The best place is REAL ESTATE, then there are other vehicles to invest in - but real estate is the only one I know that will ALWAYS bring in a return on your money.
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In which case, another reader states:
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My comment to this:  Don't be too sure of your investment.   The government can now seize your investment because it doesn't bring in enough tax revenue.   You will then be in the same category as the guys you say that just waste money and then cry about how the MAN did this to them.
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EDITORS REPLY:  Well, I hate to say it, but there is a margin of truth to it.  On a similar note of private property rights, or lack thereof, we now have had a case in Connecticut regarding eminent domain (or the idea that the government can take your property away for whatever reason).  In this particular case, the reason is to build a waterfront commercial project, along with new condominiums as well.  Some homeowners (many who have had the homes in the family for more than two generations) are of course fighting it, and refusing to relinquish the property.  So, this issue or concern about the government taking away your home is not so far fetched.  Interestingly enough, the Supreme Court has recently ruled against the homeowners and in favor of the politicians (claiming it is OK for government to seize private property so it can be used in such a way to generate more tax revenue).  All of this is very disturbing in that it would seem to indicate the government is now legitimizing confiscation of property as a new alternative tax revenue generating mechanism.  In other words, if the politicians do not change the tax code formally to increase tax rates, they will simply just take it away anyway via confiscation.
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Indeed this is not new but rather a progression of some things we have seen already.  For example, we all know about the US government agenda to seize assets of persons supposedly accused of drug dealing, money laundering and now terrorism.  However, it would seem to be case today that US law enforcement has taken this even further.  Many people have complained to me about random motor vehicle stops in some US states, whereby cash was found in the car after a car search, and thus promptly seized or confiscated.  While I do admit it may seem odd for someone to have, say US$50,000 in cash, in their possession - this in and of itself is not illegal - or has it become so without being formally passed into law?  If you know anything about the wholesale nursery business in the US (plants, flowers) then you know that this business has always operated on a cash basis (probably because of the perishable nature of the product).  Someone is Vermont, for example, may buy a trailer load of poinsettias from a grower in South Carolina, and pay the driver in cash when delivered (maybe US$8,000 or whatever the cost is).  Car dealers, when going to an auction, often bring US$50,000 or more with them to pay for purchases at the auction.  Nobody wants to accept and IOU in such a case, and certainly it is impossible to get a blank certified bank check whereby the person fills in the amount later on (and of course could never know in advance what the purchase price will be at the auction).  So, again, it is not unusual for someone in this kind of business to have large amounts of cash on their person.  Yet, there have been numerous cases of police stops whereby such cash was simply taken away, even though no other illegal substances were found and no other issues involved (other than maybe an illegal U-Turn committed by the driver).
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I am reminded of a comment made to me by someone when I worked on Wall Street many years ago.  This gentleman told me, John - There is nothing new.  What are you talking about, I asked?  Well, inflation, incest, drugs, prostitution, crooked politicians, high interest rates, low interest rates, taxes, government confiscation, terrorists, rebels, trade wars, war over oil and anything else you can think of - has happened before, has been done before - there is nothing new.  I thought about this for some time and had come to the conclusion that this gentleman is 100-percent correct.  If one wants to take some time and review history, specifically ancient Greece and ancient Rome, as a case study for problems in a democracy involving inflation, terrorists, politicians, trade wars and even government confiscation - we see some very interesting parallels.  For example, one of the key indicators that the Roman Empire was declining was that the huge and bloated government bureaucracy was running out of money.  The Roman Emperors first started clipping coins (shaving off some gold around the edges) and later started to reduce the gold content altogether by substituting lead and other non-precious base metals.  So, eventually, a 1-ounce gold Roman coin was no longer 1-ounce of pure gold.  Of course, this was done to extend the gold in the treasury and make it go further, ergo inflation (and devaluation) of the money supply.  In addition, many Roman soldiers in the field and especially in the outer territories (Gaul, which is now modern day France and parts of Germany, Switzerland, Britain, etc.) were either subject to being paid very late if not at all in some cases.  What did the Roman soldiers start doing?  They started confiscating food, gold and other assets from the locals.  In short, those responsible for keeping the peace and protecting the general public became outlaws and robbers, albeit a group that was granted legitimized authority by the Government to act in this capacity.  What was the result of that?  Well, we know that the supposed barbarian tribes of Europe eventually sacked Rome.  This did not happen overnight and it certainly did not happen without the support of the local population in one way or another.  What is the moral of the story?  Well, anytime a government or the officials or representatives of government authority start to abuse their position and begin to confiscate land or assets of the citizenry, rebellion will follow eventually (but not before quite a bit of damage has already been done to the citizenry).  Indeed, before that happens, there will be even more police state type of activity, confiscations and crack downs as agents become quite emboldened once they realize what they can get away with.  After all, a 49-year old woman traveling alone in an airport is no match for five men with guns and handcuffs (see below) who have the legal authority granted to them for such confiscations, and if such agents can get away with the deed without any reprimand or problems, certainly it will motivate them to continue.
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In any event, I encourage you to read and explore history.  Trade wars, war over oil (olive oil not petroleum, but oil still the same) rebels, inflation, democratic form of government and all the rest are truly nothing new.  History does certainly repeat itself and it is truly one of the best teachers available.  Unfortunately, we as human beings never seem to learn from our own history, even after thousands of years of it.
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A recent news article (see link below) says the following:
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IMMINENT DOMAIN? BY NICOLE GELINAS - July 6, 2005
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Not yet. It's not too late for state politicians to stop themselves from stealing New Yorkers' property. The Supreme Court's new definition of "public use" under the U.S. Constitution's eminent-domain clause could spur Gotham's spendthrift politicians to seize vast swaths of private property, just to generate more tax dollars to feed the city's bloated $50 billion budget - unless state lawmakers act.  Two weeks ago, the court ruled against families in New London, Conn., who sought to protect their property from seizure by local government officials.  Those officials had invoked eminent domain because they want to bulldoze private homes and turn the land over to developers, who would build luxury condos and office towers to generate more tax revenues on the property.
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http://www.nysun.com/article/16551    
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OTHER ON-LINE CONFISCATION ARTICLES:
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Police stopped 49-year-old Ethel Hylton at Houston's Hobby Airport and told her she was under arrest because a drug dog had scratched at her luggage. Agents searched her bags and strip-searched her, but they found no drugs. They did find $39,110 in cash, money she had received from an insurance settlement and her life savings; accumulated through over 20 years of work as a hotel housekeeper and hospital janitor. Ethel Hylton completely documented where she got the money and was never charged with a crime. But the police kept her money anyway. Nearly four years later, she is still trying to get her money back.
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http://www.isil.org/resources/lit/looting-of-america.html
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http://www.fff.org/freedom/1093c.asp
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NOTE THE INCREASE IN CONFISCATION REVENUES FOR THE
CITY OF CAPE CORAL, FLORIDA:

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Of interest is the almost 10 fold jump between 2003 and 2004.  Confiscation has become one of the most lucrative and successful cash revenue generating schemes for US police departments.
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http://64.233.179.104/search?q=cache:qqWRVUhXbXgJ:www.capecoral.net/
citydept/fiserve/Special%2520Revenue%2520and%2520Capital%2520Projects
%2520Funds%2520pages%2520189%2520-%2520204.pdf+police+confiscation
&hl=en

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If your stolen car is some how confiscated by the police, is your insurance company liable to pay off on the insurance policy?  In the state of Texas, the State Government Insurance Department says NO.
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http://www.tdi.state.tx.us/commish/bulletins/b-0042-8.html
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ANOTHER READER WRITES:
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What is happening with interest rates in the Dominican Republic? I have had a peso certificate of deposit for the last 18 months and been averaging a 16% return, but have noticed over the past two month, a deposit to my current account of half the normal amount (that represents a return of less than 8% annualized).
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EDITORS REPLY:  The goal of the new Fernandez administration upon taking office last August was two fold:  reduce inflation as much as possible and stabilize the currency exchange rates (if not improve them).  To this end, they have succeeded quite a bit.  Inflation has gone from an estimated annualized 55 percent last August to a projected single digit in the third quarter of this year.  As far as the exchange rates go, we all know the Dominican Peso has increased in value versus the US Dollar by almost 100 percent (from a high of about 52 Pesos to the current 29).  Sounds good, but what does that have to do with interest rates?  Good question.
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One of the problems also hampering growth and investment was the fact that both businesses and individuals were not spending.  Individual consumers were not buying new homes or apartments, not buying new cars, etc.  In terms of business owners, why invest in new equipment or a new building when the bank was giving you better than 24 percent?  Real estate, the same thing in the sense that it was better to leave the money in the bank and pay rent off the interest, rather than tie up the capital in a real estate purchase.  As a result, the goal this year was (and is) to get the high interest rates down to discourage an over supply of cash in the banks, and encourage other kinds of spending and investment.  If you think about this, it is logical.  If you were or are earning 24 percent interest tax-free, for doing nothing other than passing by the bank every month to withdraw your interest, why do anything else?  Meaning, you would need to find some investment or some other activity offering you a much greater return than that to motivate you to take your money out of the bank and place it elsewhere (in a new home or apartment purchase, expansion of your business or investment into new equipment, etc.).  So, in short, this is why you have seen interest rates come down in the Dominican Republic.  It is a proactive government initiative for economic stimulation.  However, this has started to take effect as we are seeing much more new construction lately and a more active housing market as well.  More commercial activity means more jobs, more investment, etc., etc.  This is the end goal of the government.
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ANOTHER READER WRITES:
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Dear Mr. Schroder - I have been following the Bobby Fischer story in the media with some interest.  Not that I support his view that America should be destroyed, but that he was fed up with the government intrusion that was taking place during his life and the life of his parents, who were intruded upon by the FBI and CIA.  As a last gasp, the Fed's got the IRS involved, but fortunately, the Iceland government will not allow his extradition back to the US.  Have there been any publicized cases in the Dominican Republic of former US citizens who have gone through battles with the IRS while in the DR and how did they turn out?  As always, I love your newsletter.  Signed, A Concerned Citizen.
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EDITORS REPLY:  Well, in regards to Bobby Fisher, it should be made clear that the only thing he did (or what started all of this) was the fact that the went to the former Yugoslavia to participate in a match at the time when the US State Department prohibited US citizens from traveling there (and conversely prohibited citizens from there to visit the US because of the war that broke out in the Balkans).  If you know anything about Bobby Fisher, then you know he is outspoken and feels he should not have to ask governmental permission to play a match somewhere.  Maybe because he is outspoken, they decided to harass him and make an example out of him, or at least that is my guess.  All he did was visit someplace to play a match, nothing more, nothing less.
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In any event, they did issue a warrant for his arrest after he went and my guess is he said, forget it - I am not going back to be thrown in jail because I played a match somewhere.  What he did after that, as far as tax issues or anything else goes, I could not say.  However, my guess is that he probably thought to himself, let me renounce my US citizenship and become a citizen of a more reasonable country.  Obviously as it turns out, Iceland agreed with him and took him in.
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The question is what would you do?  Let us say the US government says it is now illegal for you to visit Canada and buy your prescription medications there (because it is cheaper for you to do so).  Let us say you are a 68 year old retired gentleman just getting by on your fixed income pension and this is the only way you can make ends meet (by having the ability to buy your medications elsewhere, in another country, at a lower price).  Let us also say you decide to keep doing it and you find out the authorities are planning on arresting you for this reason.  What do you do?  Do you stay in Canada and tell the US government to %#@#?   Do you go to jail because you decided to continue to buy your expensive heart medication in Canada?  I do not know what the answer is as only you can decide what is correct or not for yourself.
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With regards to any country (I do not care where it is), no country wants foreign criminals in their country (everyone has enough problems of their own, never mind taking in criminals from someplace else).  However, what constitutes a criminal?   Does this include drug dealers, murders, bank robbers, rapists, etc?  Does it include someone that bought prescription heart medication in Canada?  The answer depends upon what you think is reasonable or logical and what might be simply an insane law or regulation.  What I mean to say, more clearly, what any other government may think or feel that is reasonable or not.  In the case of Bobby Fisher, the government of Iceland probably felt the man did nothing wrong by visiting Yugoslavia and that no one should be incarcerated for such a thing.  Obviously the US shelters war criminals, malcontents and crooks from other countries also, whereby the former nation says that such a person is a criminal and that they want the person sent back (presumably to be incarcerated).  Is there a double standard here?
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This is not a new problem or issue, by the way.  If you recall, many, many young people left the US for Canada, Sweden, and a host of other places during the Vietnam War in order to avoid the draft.  Technically, ALL of these people were criminals and subject to jail if they came back to the US, at least according to US authorities at the time.  Other governments disagreed, or disagreed with the Vietnam War and did not feel compelled to deport someone so they can fight and die in a war.  Were all these people right or were they wrong?  They too technically did violate the law at the time, but they broke the law for moral or philosophical reasons - yet such persons were not necessarily dangerous criminals (or had no other criminal intent).  I am not saying I agree one way or another and I am not encouraging anyone to violate the law in the country where they are living.  But, it is an interesting issue to discuss a case whereby one thing or activity is illegal in one country, but may not be in another.  Or we can also say, one country finds a law or regulation of another country to be immoral, unjust and simply idiotic.  One can argue the point back and forth, but the fact remains - those young men that did leave (draft dodgers) are alive today and have both homes and families of their own (often enough in the new countries where they settled).  So, their choices then ended up saving their lives as the long-term result.  Are they crooks, unpatriotic malcontents or whatever else?  Were they wrong to do what they did?  The answer all probably depends upon whom you ask.  The same perhaps can be applied to those Americans that might decide to expatriate today.        
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However, this is one reason why having dual-citizenship is very important these days.  Having dual nationality or at least starting the process, gives you options.  It gives you the option of acquiring a second nationality BEFORE you decide to renounce your previous citizenship for what ever reasons (or keep both nationalities as the case may be).  If you think you are citizen of (and live in) the greatest, most wonderful nation on earth - then stay where you are and forget about the idea of another citizenship.  If however, you think there might be problems on the horizon (social collapse, war, economic collapse, forced military service, whatever) and you are concerned, then in such a case you might rather be safe than sorry.  However, I will say that in my opinion, the window is closing.  There is quite a bit of talk these days about prohibiting dual citizenship for US citizens (currently dual citizenship is legal and permitted, as it is in the Dominican Republic and many other nations also).  The current media and political comments (and controversy) surrounds Mexicans with dual nationality (US and Mexican Citizenship) but the issue will apply to US citizens that have or might be seeking dual nationality in the future.  Are they really that worried about Mexicans with dual US citizenship, or is this really about putting even more barriers to leave?  It is very odd that they seem to be letting everyone in, at least illegally, with no problem at all - but getting out, at least legally, would be seem to be a hurdle (or certainly could be so going forward).