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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 September 2005 Newsletter:
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Dominican Republic Banking & Other Topics.  Why are the Middle Class leaving Bermuda, Australia, and New Zealand? 
John Schroder - Author of The Ascot Advisory News Letter Bulletin and Numerous Expatriate  Articles

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IN THE NEWS:
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REVEALED: WHY MANY BERMUDIANS SETTLE AND STAY OVERSEAS
By Meredith Ebbin - Bermuda Sun - August 26, 2005
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Concerns about a brain drain have been raised in a research paper because of the number of Bermudian college graduates who have chosen to live overseas - often in the same countries where they studied.  Alaina Cubbon, a 22-year-old Bermuda Government scholar who graduated from Oxford University this year with a BA in geography, wrote the paper for her undergraduate thesis.  She sought to find answers for why people would voluntarily leave a location with a pleasant climate, high quality of life, booming economy, and no overt persecution.  She said that the emigration of highly skilled Bermudians, combined with issues caused by our reliance on large numbers of foreign workers, has broad implications that need to be addressed before social problems lead to an even greater exodus.
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http://www.bermudasun.bm/archives/2005-08-26/01News02/
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EDITORS NOTES:  We discussed the idea of trading places or reverse migration in the past and interestingly enough, Bermuda has a problem too.  However, it would seem that the skilled and well-educated local citizens are leaving, and this is creating a shortage of these quality people as a result.  Both New Zealand and Australia as well also are facing the same issue, but Australia would seem to be finally thinking about a way to lure these expatriates back home with lower taxation rates - (see below).  In any event, the point is, this trend of educated middle-class people leaving the so-called comfortable and wealthy countries to go elsewhere is a phenomenon NOT exclusive to the US or Europe.  That being the case, it is very telling in terms of a more common problem in ALL of these so-called wealthy countries in general.  Or is the commonality more than just supposed wealth or industrialization?     
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BUSINESS GROUPS PLEASED WITH TAX CUT POSSIBILITY
Friday, 26 August - 2005, Reporter: Brendan Trembath
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TONY EASTLEY: For years Australia's largest business groups have been calling on the Federal Government to cut the top tax rate, arguing it would give high-income earners a greater incentive to work even harder.  While the business groups say the Prime Minister's willingness to discuss further cuts is encouraging, they'd like to know just how low he's prepared to go.  Some argue the top rate of tax should be around 30 cents in the dollar, and if it was it would help stem a brain drain of skilled workers overseas.
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BRENDAN TREMBATH: One of Australia's biggest business groups says cutting the country's top tax rate of 47 cents in the dollar would make Australia a more rewarding place to work, especially for skilled workers such as doctors, lawyers and accountants in demand here and overseas.
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Peter Hendy is the Chief Executive of the Australian Chamber of Commerce and Industry, which represents about 350, 000 businesses.
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PETER HENDY: One of the issues for Australia is skill shortages right now, and the fact is there's some one million Australians living and working overseas.  They tend to be some of the highest trained, highest skilled Australians there are, and what we want is a proportion, if we can, back, get a proportion of them back to Australia.  So one of the things that has, keeps those people overseas is the high top marginal rates we have in this country.
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BRENDAN TREMBATH: Many work overseas for the experience itself. How likely is it that a proportion would come back if the tax rate was lowered?
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PETER HENDY: Well, you're right there. The fact is that these people invariably go overseas to extend or expand their life experiences, their work experiences but what we've found, and we've done actual analysis of this issue, is that a lot of those people don't come back to Australia because of our tax system.
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BRENDAN TREMBATH: If they pay less tax and potentially spend more, what would be the benefit for the Australian economy?
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PETER HENDY: Well it'll strengthen the Australian economy. I mean, in the end the funny thing about this is that there'll be more taxpayer taxes to spend on the important things like roads and law and order and on public hospitals and things like that.
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BRENDAN TREMBATH: While the Prime Minister is prepared to entertain the idea of cutting the top tax rate, it's not as popular in the ranks.  The Treasurer Peter Costello, for example, is asked about it often at business breakfasts after he presents his annual budget.
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http://www.abc.net.au/am/content/2005/s1446486.htm
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EDITORS NOTES:  In the past, we have highlighted the popular book written by Roger Gallo titled:  Escape From America.  Roger pointed out that the best and the brightest are leaving.  For some people, this may seem like a sort of arrogant or elitist comment - labeling a certain group as being the best and the brightest of a nation.  However, the doctors, engineers, small business owners, computer systems people, and entrepreneurs are in fact the group being discussed (plus an entire laundry list of other kinds of people and professionals not even mentioned due to space limitations).  These are the skilled people that know how to do, to invent, to solve problems and in some cases to create jobs and new industries.  Education alone is not the common factor, as there are many self-made business people in this group that never even attended a college.  But who is replacing them and what kind of long-term social problems will result?  You loose a successful small business owner and you gain a man with barely any education or business experience at all.  This is not meant to be snobbish or condescending, but it is indeed the truth.  The American software engineer moves to El Salvador and starts up a new business (and the new country is glad to have him, and might even provide tax or other incentives) - and a poor man from El Salvador crosses the Rio Grande illegally so he can work as a janitor in Ohio for minimum wage.  That is the reality.  As we have said before - changing places.  The question is not why are the poor people coming, but rather why are the well educated and middle class leaving?
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THE YANQUIS ARE COMING - Petroleum World, August 22, 2005:
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In the run-up to last month's passage of the Central America Free Trade Agreement (CAFTA), the anti-globalization doomsayers were out in force with bold predictions about the final blow the deal would mean to the economies of Central American countries. Pro free traders argued just as vehemently that CAFTA was a major step in building the foundations for a democratic community of nations in our hemisphere.
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What's largely been overlooked from both sides however may have little to do with CAFTA at all. Instead, one of the biggest economic forces reshaping Central America in the coming years may be a demographic shift occurring right here in the Unites States spurred by the massive retirement of the baby boomer generation.  William Serow, professor of economics at Florida State University in Tallahassee has been studying migration patterns of the elderly for years, and believes that since the end of World War II younger, more well-off roving retirees in their 60s still instinctively seek out warmer climates in fun places like Arizona, North and South Carolina, and Florida.  According to Serow, the other key goal of this more affluent group of retirees is reducing living expenses by moving to sun-belt communities with cheap housing and lower taxes. And therein lies the big conundrum for today's boomer retirees: Just as millions of retiring baby boomers are getting ready to migrate to warmer sun-belt states, these attractive retiree destinations are experiencing skyrocketing real estate prices and property tax assessments that may put these locations out of reach for all but the most wealthy boomers.
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So, what's the significance of all of this for Central America? Tomorrow's Del Boca Vista migration won't necessarily be to the sun-belt states in the U.S. It's just as likely that a large subset of boomer retirees -- call them boomer gringos -- will bypass southern sun-belt states altogether for more affordable Central American alternatives like Nicaragua, Costa Rica, Mexico, Panama, Belize and Honduras. Most Central American countries are still only a two or three hour flight back to the states and have adequate infrastructures allowing retirees to stay in touch with friends and loved ones back home -- good cell phone coverage, broadband Internet connections, even satellite television.
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http://www.petroleumworld.com/Lag082205.htm
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EDITORS NOTES:  A publication geared towards the oil industry gets it?  Why is it that the mainstream media does not get it? 
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FEW WANT TO BITE THE BULLET:  In got-to-have-it society, runaway spending and borrowing in U.S. could unleash financial disaster.  By Robert Tanner / Associated Press - August 28, 2005
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You owe $145,000. And the bill is rising every day.  That's how much it would cost every American man, woman and child to pay the tab for the long-term promises the U.S. government has made to creditors, retirees, veterans and the poor.
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And it's not even taking into account credit card bills, mortgages -- all the debt we've racked up personally. Savings? The average American puts away barely $1 of every $100 earned.  Our profligate ways at home are mirrored in Washington and in the global marketplace, where as a society America spends $1.9 billion more a day on imported clothes and cars and gadgets than the entire rest of the world spends on its goods and services.  A new Associated Press/Ipsos poll finds that barely a third of Americans would cut spending to reduce the federal deficit and even fewer would raise taxes.
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If those figures seem out of whack to you, if they seem to cut against the way you learned to handle money, if they seem like a recipe for a national economic nightmare -- well, then, at least you're not alone.  A chorus of economists, government officials and elected leaders both conservative and liberal is warning that America's nonstop borrowing has put the nation on the road to a major fiscal disaster -- one that could unleash plummeting home values, rocketing interest rates, lost jobs, stagnating wages and threats to government services ranging from health care to law enforcement.  David Walker, who audits the federal government's books as the U.S. comptroller general, put it starkly in an interview with the AP:  I believe the country faces a critical crossroad and that the decisions that are made -- or not made -- within the next 10 years or so will have a profound effect on the future of our country, our children and our grandchildren. The problem gets bigger every day, and the tidal wave gets closer every day.
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Federal Reserve Chairman Alan Greenspan echoed those worries just last week, warning that the federal budget deficit hampered the nation's ability to absorb possible shocks from the soaring trade deficit and the housing boom. He criticized the nation's hesitancy to face up to the difficult choices that will be required to resolve our looming fiscal problems.
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http://www.detnews.com/2005/money/0508/28/A04-295403.htm
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http://www.tdn.com/articles/2005/08/29/biz/news01.txt
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Some Interesting Articles About the United States from the Economy in Crisis Site:
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WHERE ARE WE HEADED?
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Pat Choate Writes in August 2005:  Americans today have a comfortable standard of living. But how much of this is based on American owned production and innovation, and how much of this is based on accumulated wealth from 1945-1970 that is being sold or mortgaged to other countries seeking to accumulate title to our assets in exchange for the goods we purchase to maintain that standard of living?  This article reveals compelling facts concluding that this standard of living is being propped up through a false economy that is depleting US wealth producing assets and creating amazing obligations and dependencies. Unfortunately, there is no motivation to change policies because Americans have not yet run out of companies to sell and are largely unaware of their predicament.
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ARE WE BLIND?
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Repaying Our Debts With What?  How will we ever repay our debts ($400+ Billion per year internal Government budget deficit plus $600+ Billion per year external trade deficit) when we no longer have any significant trade-able, domestically owned wealth-producing industries left? How can we fund new growth and repay debts to foreign countries - - if our industries and their profits are owned by those very countries?  Our Priorities Are Distorted While we focus on changing Social Security and other programs, we do not realize that no system will work if we are not able to create wealth within our own country to fund it. The most important priority is planning for our economic health, from which many other issues will be resolved. If this country is not fundamentally capable of sustaining itself without huge imports and massive borrowings, no amount of legislation will satisfy our obligations and sustain our standard of living.
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http://www.economyincrisis.org/
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EDITORS NOTE:  I know, I know - I sound like a broken record.  However, the fact remains that the fact remains.  They claimed to have successfully cloned sheep.  Maybe we can clone Thomas Jefferson or Benjamin Franklin, and put someone in there with some common sense.  Maybe in order to go forward - we have to go back?  Maybe we have to start robbing graveyards to find some decent officials?  A morbid thought I do realize - but could it be worse?    
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READERS WRITE IN:
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Hi - I wrote you several years ago when I was looking to leave the US.  I didn't make it to the DR but did get to Honduras.  I now live four blocks from the Caribbean in a large one-bedroom home (rent US$131 per month) - my water and garbage is included.  My electric is only $20 per month and my biggest expense is my cable Internet ($60 mo).  I read with humor your recent newsletter about the guy that moved from the DR to the US and all of the things he thought you were neglecting to mention.  Honduras is very similar in many ways, but I find that being a transplant I am far more able to cope than the people here or those still in the US.  In fact for the amount of money I used to pay in house/car insurance I could have a 24 hr guard (not needed, just a point).  And as bad as I tell people the US is, as soon as I tell them Burger King pays Lps. 1,100 per day they wish for a life in the US.  There really is no point trying to convince anyone either way, (a months pay here is Lps.2,000) my paradise isn't for everyone, and one mans paradise is another mans hell.  I have enjoyed your newsletter over the years and it did help me just to know there was some way out of my problems in the US. 
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Another quick note - They way that I discovered to earn money here is that I brought my job with me.  Anyone could do this, and it is a way to earn USD from anywhere in the world.  Here is what I did: I bought a VOIP phone, searched Craigslist.com for work at home telemarketing jobs, installed broadband internet in my home and started telemarketing.  Of course that is over simplified - but certainly a way for anyone to earn a living from anywhere on earth with a computer, phone and brain.
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EDITORS REPLY:  Thanks for the letter.  Well, as you have said, one mans hell is another mans paradise.  Some of the local folks in Honduras (as is the case in the DR too) still dream about working at a Burger King in Chicago for minimum wage, and why not if that is their dream?  However, a computer, a phone and a brain you say is all that is needed to earn a comfortable living in Honduras.  You are not taking away work from the locals.  You have much lower expenses and you live near the beach.  I like it.
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You know, I have found some of the most interesting and positive minded people to be expatriates.  Which is to say, the kind of people you can stick somewhere out in the desert with a watering can and a few seeds.  Come back a few years later, and voila - an oasis.  Many people like yourself are finding a sort of paradise (for lack of a better word) elsewhere when they find a new country, and a new government that does not hassle them, regulate them or tax them to death.  Granted, there are certain problems or negatives anywhere.  However, the so-called third world or emerging nations are not so backwards as many people up north are lead to believe.  The fact that you can get access to broadband and other services in a sleepy place on the beach in Honduras is a testament to what is now available - and what you can do with it inside a country that does not seem to penalize (with regulations or taxes) someone with motivation and ability to start a new business.  To me, that is true freedom.  
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ANOTHER READER WRITES:
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First I must say that I am outright proud of your response on the most recent newsletter.  I live in Italy and I have American relatives offering to send me things.  They make these offers as if I am living on the end of the planet.  People actually live in Italy.  They do it full time and many do not depend on the USA or any other country to allow them to live in such a different place.  It just sickens me that Americans have the attitude that the USA is good, pure and wholesome and anything lese outside the US is outright crooked.

To be honest, I was a bit confused when you mentioned the interest rates available on commercial paper investments in the DR.  I figured everyone would jump at such great deals.  The few people that I have mentioned my investments too are outright scared and think that I am an idiot bound to lose all my money.  This must be true because everyone in the US is a saint and everyone outside the US is a crook.  To the point - I am interested in investing more money in the DR.  I am moving to Honduras in less than 2 years.
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EDITORS REPLY:  Well, you can see what a gentleman currently living in Honduras has to say, so you have some commentary from someone already living there.  With regards to bank interest rates, and so on, please see my complete reply to the letter another gentleman wrote below.
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In terms of information and attitudes from US citizens especially, I have found the same thing.  I often wonder or ask myself if there is some sort of intentional campaign to either keep Americans in the dark about what it going on outside their own country (and in some cases inside their own country as well).  It truly boggles the mind to encounter such a high level of inaccurate stereotypes, misinformation and downright ignorance.  It would almost seem to be a form of constant brain washing going on.  Even so-called well-educated people with university degrees make these comments also, so it is not the case of saying it is only uneducated people who hold these attitudes.
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In any event, the US probably has more laws and regulations written down than any other country on the planet.  But a law is only words on a piece of paper.  Words on paper do not transform someone into becoming an individual that is moral or ethical, nor does it automatically mean such laws will be enforced either.  It has been said before that America has lost its moral compass, and I believe there is some truth to that.  In the land of some of the strictest investment and banking regulations in the world, we have had numerous bank failures (the savings and loan scandals not too long ago, in which case the taxpayers had to bail out the banking system and the senior management in these banks went off to play golf), Enron, Global crossing and numerous other things.  The point is that if someone wants to steal your money or mismanage it, regulations or no regulations, they will find a way to do it.  More laws or regulation written down on paper are no guarantee of anything.  Of course, government checks and enforcement of certain standards never hurt, but it offers no complete guarantee either as we have already seen in the most overly regulated nation on earth.
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Not too long ago, Geraldo Rivera from Fox News was sent down to Aruba regarding the issue of the young American woman that disappeared, etc.  However, as part of his news coverage he found two American expatriates to interview.  One was an American woman who had something to do with the local newspaper and the other owned a gift shop or some similar kind of business.  In any event, Geraldo Rivera asked what the local population thought about the incident and so on.  They both said, well, you know violent crime is almost non-existent here in Aruba, or at least, we feel much safer here than in the US.  The first woman then started to say that she has to remind and warn her teenage children anytime making a visit to the US, that they need to be careful as they are not in Aruba and that the crime rate is much higher in the US.  Geraldo quickly cut away to the second woman.  The other woman also started to confirm what the first just said, adding that - Yes, I often feel very uneasy when making a visit to the US with our young pre-adolescent aged children.  Geraldo, apparently could take no more of this blasphemy and very curtly ended the interview.  I just shook my head in amazement. 
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Now let us flash forward to the current incidents surrounding New Orleans.  Some of these events as they have unfolded confirm many things I have thought for some time to be true.  Which is to say, I having been watching the news coverage from Fox News and CNN just like everyone else.  Geraldo Rivera, who curtly curt off the comments from the two American women in Aruba has incredibly enough seemed to have turned back to his previous more critical tendencies with the news coverage in New Orleans.  But some things caught my attention.  For example, one man in a seemingly middle class area of Gulfport asked the reporter THREE days after the storm had passed - where are the police?  Where is the government aid?  I pay my taxes - where is the government?  Another man sitting by the side of the road in Metarie, Louisiana (in what had turned out to be a make shift refugee camp containing 3000 people just outside of New Orleans) said - It is hard to believe this is America.  It was also reported that a woman in New Orleans saw a policeman and asked for help.  The policeman replied:  Go to hell, it is every man for himself (an exact quote according to the news broadcast).  It has also been reported by Fox News (one of the most conservative news stations in America), that anywhere from 300 to 400 New Orleans policeman are AWOL.  When the police get so fed up that they too skip town, you know something is up.  Now it is true, that one cannot paint a broad picture based on the actions of the minority.  But at the same time, I do think some of the things we have seen are indications of certain truths about American Society and the Government as well.  Which are as follows:
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The Government demands you pay taxes, and that you pay on time.  But when you need to draw on the benefits - how fast and how much is forthcoming?  How well organized is the delivery?  We know that the collection of money from you is very well organized.  Many people all think government operated social insurance is a wonderful idea, but just like other kinds of insurance (private car insurance for example) what value is it really if the insurance company stalls when it comes time to put in a claim?  This is not a commentary about the firemen, nurses and other individual citizens - but rather the government bureaucracy itself.  The Red Cross and other volunteer organizations have stepped up, but they operate from donations.  Where is the government? 
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Secondly and sort of connected, is my opinion that most politicians and government bureaucrats are worthless.  A state senator from Louisiana organized a caravan of twelve buses on Thursday September 1 to take people off the highway overpass, where they have been sleeping out in the open for more than two days (many went there to escape the rape and other violence in the doomed sports arena shelter).  That is the best a senator can do and four days later no less?  Twelve buses to rescue what probably amounted to one thousand people?  Many Americans living or traveling abroad already know what a waste of time most state department employees are who work in US consulates abroad (in terms of getting any sort of real help or assistance).  Now, the rest of the population at large gets to see it up close and personal also.  The only real and immediate tangible help has come from private citizens opening up their own homes, and some of the other private organizations as well (church organizations, etc.).  The policeman got it right - every man for him self or stated another way, you are on your own (thanks for paying our salaries though with your tax payments, we appreciate it).
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Thirdly, there is a rude societal awaking in store for the US when difficulties come calling.  This issue or event was a natural disaster, not the fault of anyone - an act of God as they say.  But, very telling is how many people behaved.  In New Orleans we have heard of many cases involving riots, looting, rape, murder and other kinds of mayhem.  BUT, in middle class Alabama many miles away from the devastated areas, police had to be called in when a gas station ran out of gas.  How will Americans behave when gasoline hits US$6 per gallon permanently and gasoline shortages or possibly even daily blackouts become a permanent way of life?  Some lunatics in New Orleans were shooting at helicopters trying to land in order to bring in food and evacuate people.  What did the pilots do?  They backed down.  If it were a military helicopter, they should have shot a missile at the belligerents.  Instead, concerned about civil rights, they cowered down and promised to send in the police to arrest these people.  Arrest them?  They should have gotten a bullet instead.  No, I must confess that is what America has become.  The lunatics are allowed to take over and run the insane asylum.  God help all the decent and innocent people living among them.  By the way, I guarantee the shooters pay no taxes, yet they get more protection from the government than the people that do pay the taxes.  Go figure.
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What can we learn from this?  Well, Thailand had a natural disaster that struck not too long ago.  How did the Thai people behave?  What were the differences between the way they dealt with it, and the way people living in New Orleans have acted?  By this I mean the people and not the government.  Was there indiscriminant looting, rapes and murder in Thailand?  Why is it that a so-called third world country perhaps has a different set of ethical and social values in comparison to those living in a wealthy, modern, well educated industrialized nation?  And also why do people sit and cry out for government help even after they witness that it was not forthcoming?  Have Americans become so dependent, helpless or so blindly entranced that they still believe in the so-called benevolence of a welfare state bureaucracy - even after they are left to die by it?
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The question has been asked - Why are the educated, small business owners, and other middle class people leaving?  Why are these people (like myself) so critical and angry?  Maybe they or we see something the rest do not.  Maybe, this recent incident is tangible proof of some problems lurking below the surface that need to be fixed, and for some reason or another- are not being fixed.  There are many people that will tell you, that those people, which choose to expatriate, are failures in their home country and that they just want to throw some sour grapes.  They might tell you these very same expatriates are malcontents or selfish tax-dodgers.  Are they?  Or is it something more profound?  Why are these people leaving the so-called comfortable and better existence promoted in these countries (Canada, US, Europe, Bermuda, Australia) and moving to places like the Dominican Republic, Panama, Ecuador, Thailand and so on?  Are these other countries really so bad off - or is there actually something that might truly be better in some ways?
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ANOTHER READER WRITES:
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Sir: I would appreciate it if you could explain why U.S. banks do not want business from U.S. citizens living outside the country.  Is this an anti-terrorism or anti-money-laundering attempt?  Or do their computers just not want to deal with a six-digit area code?  I am an American living and working in Canada, and when I contact a U.S. bank to open an account they require a U.S. address or they don't want to talk to me.  When I ask why they just reply that it's their policy.  I've got kids going to college in the U.S., and want to retire there.  There must be tens of thousands of folks like me:  why can't we invest there?
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EDITORS REPLY:  An interesting question.  There are no laws or regulations that I am aware of prohibiting foreigner or US citizen alike from establishing a bank account both in the US and many other places.  So, why is it that many financial institutions look upon every new customer as a potential drug dealer, terrorist or whatever - with the burden of proof placed upon the customer to prove otherwise?  Why is that an illegal alien is welcomed to open an account in the US with some half-backed identity card issued by a foreign consulate?  I do not know, but I have a few theories and ideas.  Of course theories and ideas are just that.  However, it does make you wonder what the long-term game plan is, if there is one.  If not that, then perhaps common sense has indeed gone out the window altogether and if that is the new status quo - Do you really want to be a part of it?
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ANOTHER READER WRITES:
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Regarding your last Newsletter:

It is always interesting to read what different people think about immigration or expatriate. Anyway, Regarding Dominican Republic I have had some real concerns, even if I like this country, and have lived there for one and half years.  Social Issues: When I was in DR in 2002-4, I had several real fears about security. Compared to Europe (I am from Germany), people in DR are more armed with harmful weapons as I have seen here. In Germany the only people who hold arms are the Police and some rough criminals, but the normal population is rather unarmed. DR has a severe problem by these armed gangs that are sometimes stopping traffic making riots and burning Tires. I was traveling to work always near to Navarrete (Santiago) and I often felt to be in danger, due to regular riots and some Gangs throwing stones to the passing Cars (I got window broke one time, and some more really hot situations).  On the other hand I see this Country as a really BIG business opportunity.  Speaking about that: if some of your customers would need some business ideas, I would be pleased to hear from them or from you. I do not even think in Real Estate nor Tourism, as I see Tourism as a bad influence for Dominican Society, and Real Estate rather not so interesting.  While working in the Agriculture-Industry near Monte Cristi (Bananas) - I discovered that Agro-Industrial Production as well as Transport Systems are so deficient, that there are the best opportunities in Modern Technology and competitive Agro Machinery as well as the whole supply chain for Agro Industry to be renovated.  Interesting also, is over all, that the local Producers need some help to be more independent from American Products for the Agro-Industry, and there is excellent opportunity for some investors, if ever you know somebody).  So what is the issue? Enormous market and business chances weighted against social decline and crime?  How to weigh this?
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EDITORS REPLY:  Well, it has been my experience, when you visit Panama or Honduras or The Dominican Republic - foreigners are always shocked to see a guard outside a supermarket or restaurant with a sawed off shotgun.  Even standing outside of Dominoes Pizza too.  The first reaction is: this place must have a terrible crime problem and must be dangerous.  I find that the crime rate is lower because of it, or at least I believe it to be so as I have NEVER witnessed and sort of problems either in Panama or the Dominican Republic (as I did in the past when living in New York).  The crooks know they might get some buckshot plus they cannot sue for a civil rights violation if they get shot while attempting a robbery.
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There was (is) a sheriff in some county in Texas a while back that ordered ALL citizens to carry firearms.  If I can find the news story on-line, I will post it.  In any event, the crime rate dropped to almost zero in the county within 30 days.  Imagine that.  Of course, Europe does have much less violent crime and half the murder rate than the US, so I know also Europeans have the tendency to be shocked at the idea of armed private citizens.  On the other hand, for Americans it is a right (or at least it used to be).  So, many Americans do not have a philosophical problem with private gun ownership - and neither do Dominicans.  In fact, neither do I.  Having private citizens carry guns is not in and of itself and indicator of more criminality.  It is however an indicator of the belief in private property and personal rights by the society.  Guns, legal or illegal, always find their way into the hands of criminals (the fact they are called criminals means they have no respect for the law and have no intent of being lawful themselves).  It is the decent honest people that are always at a disadvantage when you take away their right and ability to defend themselves.  The crooks will always have guns, and attempt to do whatever it is they want.
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Not to go off on a tangent, but I asked a Dominican Military officer that I know what the Dominican Army would do if they were faced with a similar situation as New Orleans.  In other words, what if a military helicopter was flying in food and water to an area devastated by a hurricane - and someone was shooting at them (the guys in the helicopter)?  Oh, the officer said:  First we would shoot him, then we would land the helicopter on top of him, then we would hand out the food and water to the people that were hungry and thirsty.  Sounds good to me, I said.  You guys have your priorities straight.
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In general, to answer some of your questions, I see it in the following manner.  The vast majority of our clients have not had these kinds of negative experiences, but that does not mean it did not happen to you and I do know these kinds of things can and have happened.  Periodically, certain social groups do riot to protest the price of gasoline, or new sales taxes or whatever the case might be.  However, it is not correct to say that this is a daily occurrence either.  Just as the Los Angeles riots that took place a while back, is not the daily norm in California.  It seems to me, when something like this happens in the US, we speak no more about it after the fact (and people continue to visit Los Angeles).  When something happens in a country outside the US, it is harped on as an excuse to highlight the fact that such a place is rife with constant criminality, civil disobedience and problems.  It is not the case that such things every day in either place.  Riots and rock throwing are NOT daily activities in either Los Angeles or Santo Domingo (and in both places, usually reserved to the poorer neighborhoods as well).
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However, it is true that some people will take out their frustrations in unproductive ways, or in ways that do not help their own cause.  In Panama recently, university students protested and did break some car windows, and so on.  Why did they do this? Well, they were angry with the government for raising payroll taxes on Social Security and reduction in benefits (which is certainly coming to the US very soon).  While they may have brought media attention to their cause, at the same time, they ticked off all the professional and middle class people that might have had their cars parked in the area where they protested.  As a result, instead of getting these other social groups into their corner and endear them to the cause, they pushed them the other way to some extent (the middle class urged the police to crack down even further).  So, what ends up happening is, instead of getting an ally, they get a group of people angry at them that might have even sympathized with the reasons or arguments for the cause initially.  Also, if you are angry with the government, why do you destroy the private property of people that really have nothing to do with the politicians or the government?  It makes no sense.
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In any event, these are specific incidents, but generally speaking, shocking to Americans and Europeans who are not accustomed to seeing this kind of, shall we say, activism.  In Guatemala, people burned down the house of a local mayor that supposedly supported the IMF sanctioned increases in local sales taxes there.  Was this the correct thing to do?  Well, it certainly scared the heck out of all the other politicians - or shall we say, it motivated them to the cause.  But, I of course do not approve of nor condone this kind of activity or violence.  On the other hand, I do know that Latin Americans see themselves distinctly and apart from the politicians.  In Europe and North America, the philosophy is that the democratically elected officials are of the people and they are sort of, one of us.  In Latin America, Jose Sanchez, the democratically elected politician is still an individual distinct and apart from the people who elected him.  If he does not perform properly or correctly, the people have no patience and will lash out.  I would say this is one major difference with Latin American politics.  Is this a good thing or a bad thing?  Well, for sure, as long as the people are not afraid to stand up for themselves then a checks and balance is in place in terms of those in political power and those being governed.  It would seem to some extent that in many mature democracies, the people are ambivalent or very disconnected, offering far more opportunities for the politicians to run amok without any sort of retribution.    
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What are the long-term prospects for the Dominican Republic?  Well, I would agree that there are many business opportunities to consider, and the country for certain is a growing market (or it has the potential to be as more and more people possibly become middle class economically speaking, even though the momentum has slowed).  In addition, many services or products that are lacking means that an opportunity exists also in this regard.  The period of time you mention was during the last two years of the previous government administration - when inflation was at its worst, devaluation of the currency at its worst, and prices rising incredibly from what they were before.  In addition, of course incomes or salaries certainly were not going up in tandem.  However, that was then and this is now.  The population voted in a new government and so far, it would seem that the situation has been stabilized and improved by the new government.  For this reason, I think you are not seeing these types of civil outbursts.  On the other hand, the general population wants peace and quiet and the police have responded by becoming more aggressive at chasing some of the crooks and hoodlums.  You know it is very amusing in that when you have cases of criminal acts, people abroad will say there is increased criminality and the country is a dangerous place to visit.  When the police crack down and fix the problem, then another group wants to highlight issues about civil rights and supposed police abuse.  Sometimes, you just cannot win with certain segments that want to paint a negative picture no matter what.  Also, just as in the US and elsewhere, I think the vast majority of poor people are decent law abiding people, so it is the minority and not the majority involved.  The difference in the society or perhaps to contrast the two is, that in one (Dominican Republic) the many are NOT made to suffer because of the few - in the other (US and Europe), the crooks seem to have more rights than the decent law abiding percentage of the population.                        
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ANOTHER READER WRITES:
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Dear Sir - Before I received your letter, I have visited DR for couple of days. When I talked to the local people, they said the interest rate has come down considerably since the IMF. Your email states the interest rate in the range of 3% to 24%.  1.What would be the rate for US$100,000 realistically?  Also of concern for me is the ability to move funds out of DR. The local people told me that it is so difficult to move funds out of the Dominican Republic, that local businessmen would have accounts in Miami, USA, keeping small peso account inside DR. Also banks in DR (Banco Popular for instance) would charge a fee when deposit US dollars into DR account.  2.How easy is it to moving funds?  I thank you for your information.
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EDITORS REPLY:  Well, again, I have no idea whom you spoke with, but I can reply with what my own experiences are, and those of my clients as well.  First and foremost there are NO currency or exchange controls in the Dominican Republic.  You may convert your funds between US Dollars, Pesos and Euros to your hearts content.  You may also ask the bank for CASH in either of these currencies, a bank check in either of these currencies or a bank wire transfer as well.  Which is to say, there are no restrictions and you may withdraw your funds anytime that you wish, bank wire transfer or otherwise.  Now, with that said, some banks may be more of a pain to work with than others simply because of their own internal policies or bureaucracy.  For example, one bank here tells clients that they must wait 30 days to have a bank wire transfer posted to their account.  I would not do business with such a bank.  Why?  It is tantamount to robbery as they are making money on the float with your money.  Wire transfers literally are processed in about two minutes, or better said, the funds move between two different banking institutions that fast - electronically.  What takes time is one bank reporting the transfer to the other, and the internal accounting and or bureaucracy that is attached to it.  My bank usually posts wire transfers within two business days, which is reasonable in my opinion.  They also send out wire transfers the same day IF I give them the instructions before noon.  Why is the problem with some people that you speak with?  Many people do not know how the banking system works or how international wire transfers work.  So, when one bank says it takes thirty days, they (the Dominican customer) do not know any better and think that this is the way it is.  Some banks place a 30-day hold on checks deposited to a savings account, where as other banks place only a 15-day hold.  Want to know a secret?  All checks will clear within 5 business days in most cases, but the bank is making the float with your money. 
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Another issue or point is, many Dominicans only bank with Banco Popular, CitiBank or ScotiaBank because these are foreign owned banks and considered to be safer, more stable, etc. and so on.  My experience has been that larger banks are less customer service orientated than smaller ones.  Also, because they probably have a larger share of the market in terms of deposits (because everyone thinks they are safer, or whatever) they tend to be a bit arrogant also in terms of policies and services.  Talk to a few different banks and a foreign owned bank is not always better.
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Let us talk about interest rates.  I had someone that wrote in a while ago to tell me - the US has very low interest rates and the Dominican Republic has high interest rates.  This is proof that the US is a stable, modern country and the Dominican Republic a banana republic (or something to that effect).  Well, I guess the Dominican Republic is now a modern, stable country and the US a banana republic if we use this logic in terms of today.
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In any event, interest rates have indeed come down, and in fact, they are probably lower right now in the Dominican Republic (for US Dollar Bank Deposits) than what they are in the US right now.  Interest rates for commercial paper in the Dominican Republic denominated in US Dollars are about 5 to 8 percent depending upon the issuer and amount, but bank rates are certainly lower than that.  Why have they come down?  Well, the government noticed that there was an over liquidity in the banking system earlier this year.  Meaning, the banks were flush with deposits, yet there was not enough commercial activity (investment, real estate sales, etc.).  So, what most people were doing was, they kept the money in the bank earning 24 percent tax-free, rather than investing in new equipment or buildings (if they had a business) or did not purchase any real estate with the money either (as the economic return was higher with the bank interest, than the rent they were paying).  What did the government do?  They put some economic policies in place to lower the interest rates and motivate people to do something else with it.  And, to a large extent this has been successful.  Real estate sales and activity is way up, and business investment has picked up as well.  The IMF, by the way, had nothing to do with it and I believe that current government would love nothing more than to pay them off and kick them out.  But, one thing at a time, as they say.
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So, am I very happy to see lower interest rates for my bank deposits?  The answer is of course not.  On the other hand, I understand what the government is trying to do (and has done), and I cannot fault them.  Meaning, the overall or long-term effect is positive, not negative for the economy.  It is not great for me right now personally to get less interest, but a better economy will be of benefit to the entire country in the long term.  Also, the inflation rate is now ZERO, or it was before the price of oil starting going up, but that is going to cause higher prices world-wide anyway (and not only in the Dominican Republic).  But, with that said, is it still a good idea to have deposits and investments in the Dominican Republic, and other places also?  Well, if you are concerned about certain things possibly happening in your current country (lawsuits, government confiscation, natural disasters whereby your bank floats away), then maybe having some money safely tucked away elsewhere is not such a bad game plan.  In addition, some rates, such as commercial paper investments, are still attractive in comparison to the current rates in the US or Europe (although admittedly not as high as they once were).
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ANOTHER READER WRITES:  
    
Hello - I have just returned from my first trip to DR.  I was very pleased with what I saw and will be returning with my wife in December. We will probably rent before we buy, but as it stands now, we intend to move to DR.  I have traveled much of Asia, Mexico, Central America, Australia, USA and Canada but do like the DR.  Thank you.
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EDITORS REPLY:  Thank you for your comments.
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ANOTHER READER WRITES:
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It is wonderful reading your articles, as I am hopeful person looking to relocate from New York to the Dominican Republic.  I am a native New Yorker (of Puerto Rican descent), which seeks to live in the Dominican Republic immediately upon my retirement. Why the DR as oppose to PR? Because Puerto Rico's currency is the dollar thus, it is very expensive to live there. I have visited the DR more than 12 times in the last two years and have gone from Sosua to Bavaro. I am hopeful that one day, I will retire young enough and live there. I tell you, I was really impressed with Bavaro's construction development. I don't mean just hotels, I mean apartments, condominiums, shopping and other services. One day soon.
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EDITORS REPLY:  Thank you for your letter and your comments.
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ANOTHER READER WRITES:
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Hi John - Man, once again you are right on the money in your August News Letter. It really caught my attention. How about this jerk that claimed he was Dominican and yet had the nerve to bad mouth the Dominican Republic just because he was pulling in a few bucks in the U.S.   I am pretty sure that he goes down there 3 or 4 times a year to take advantage of what this beautiful Country has to offer.  Any way John, reading you newsletter is not a problem, but printing them is. It is impossible for me to do so not because of my equipment because I have a top notch Computer and Printer including DSL and what have you.  I once talked a Computer Guy about that and he mentioned that it probably has something to do with the Format in which you right them.  Am I the only reader that you know of with this problem? Well anyway see what you can do. Thanks and continue with your good work.  Thanks Much
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EDITORS REPLY:  Well, we switched over to new newsletter delivery system a while ago (so it is not so new anymore I guess), but I have had some complaints about the way the newsletter gets formatted out on some computers (but not all).  I am not quite sure if it is a case or issue with the particular email program people have or something else.  I do know that we need to send the newsletter out as html code with the program we use (which is why we tell people to turn on the html capability in their email program).  The other option is to visit the newsletter section of the website and hopefully print it from there.  All of our newsletters from the past few years are on-line, including this one:  http://www.ascotadvisory.com/News_Bulletin/
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