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Our November 30, 2005 Newsletter:
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More layoffs in the US automobile industry.  The Dominican Republic for Residency and Citizenship?   Civil Crisis in the wealthy nations?
John Schroder - Author of The Ascot Advisory News Letter Bulletin and Numerous Expatriate  Articles
IN THE NEWS:
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FORD WILL CUT 4,000 SALARIED: White-collar workers marked for layoffs starting next year - By Michael Ellis, November 19, 2005
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Ford Motor Co. will cut about 10%, or 4,000, of its white-collar jobs in North America next year, mostly through involuntary layoffs, as part of a sweeping cost-cutting plan to be unveiled in January, the company told workers in an e-mail sent Friday.
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http://www.freep.com/apps/pbcs.dll/article?AID=/20051119/
BUSINESS01/511190321

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GENERAL MOTORS SLASHES 30,000 JOBS - November 21, 2005
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DETROIT (Reuters) - General Motors said on Monday it would cut 30,000 North American manufacturing jobs and close a dozen plants as it struggles to compete with fast-growing rivals led by Toyota Motor.
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http://news.scotsman.com/latest.cfm?id=2278292005
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SILICON VALLEY'S CALL: SMARTEN UP, AMERICA! By Robert Hof,
November 17, 2005
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Yet they also mentioned a host of other challenges that they believe are threatening the U.S. We are falling further and further behind in innovation, said Doerr. He reeled off six problems that he says will cause the U.S. to lose leadership in technology and innovation if they aren't addressed: a neglected educational system; insufficient research and development; a lackadaisical push for high-speed Internet access or broadband; an anti-free-trade attitude; poorly organized health care; and the absence of a plan for lessening U.S. dependence on foreign energy sources.
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http://www.businessweek.com/technology/content/nov2005/
tc20051117_777271.htm

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AMERICA:  THE UNEDUCATED - A new study warns of a slide for the U.S. as the share of lower achievers grows, November 21, 2005
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But now, for the first time ever, America's educational gains are poised to stall because of growing demographic trends. If these trends continue, the share of the U.S. workforce with high school and college degrees may not only fail to keep rising over the next 15 years but could actually decline slightly, warns a report released on Nov. 9 by the National Center for Public Policy & Higher Education, a nonprofit group based in San Jose, Calif. The key reason: As highly educated baby boomers retire, they'll be replaced by mounting numbers of young Hispanics and African Americans, who are far less likely to earn degrees.  Because workers with fewer years of education earn so much less, U.S. living standards could take a dive unless something is done, the report argues. It calculates that lower educational levels could slice inflation-adjusted per capita incomes in the U.S. by 2% by 2020. They surged over 40% from 1980 to 2000.
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http://www.businessweek.com/magazine/content/05_47/b3960108.htm
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EDITORS NOTES:  As Alfred E. Neumann would say:  What me worry?  This demographic trend is both important and dangerous at the same time, as it presents the case of higher wage earners currently paying into the social welfare system being substituted by lower wage earners paying even LESS into the system than those they are replacing. 
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CHINA AND CHILE: SOUTH AMERICA IS WATCHING - The two nations' trade accord is a landmark for China, whose thirst for raw materials is fueling the boom in Latin economies - by Geri Smith, November 18, 2005
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China signed its first-ever free trade agreement with a non-Asian country on Nov. 18, choosing Chile, a nation that it dwarfs in geographical size, population, and economy. The pact might seem like a lopsided deal between Goliath and David, but tiny Chile is an experienced and nimble Free Trader that could help China get used to the complexities of negotiating and maintaining workable trading relationships.  Their ties are likely to be watched with great interest by the rest of Latin America, whose current economic boom is due largely to China's huge appetite for iron ore, oil, and soybeans. Chinese companies have been investing in steel making, mining, and oil ventures in the region.  The two countries took less than a year to negotiate the accord, which immediately eliminates tariffs on 92% of Chile's exports to China and 50% of the products that China sends to Chile. The pact does not cover services. Bilateral trade, now around $6 billion annually, grew 64% last year, making China Chile's second most important trading partner after the U.S.
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http://www.businessweek.com/bwdaily/dnflash/nov2005/
nf20051118_8302_db016.htm

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RISING PRICES HIT FIVE YEAR HIGH: Led by natural gas, consumer costs up 3.5 percent in Puget Sound area - News Tribune staff, November 17th, 2005
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Price inflation in the Puget Sound area has surged to its highest level in five years.  From October 2004 to this October, consumer prices rose 3.5 percent, the Department of Labor reported Wednesday.  That's the steepest increase since 2000, when prices rose 4.2 percent in a similar period year over year.  The price hikes - seen in a range of products including alcohol, gasoline and medical care - were in sharp contrast to the past three years, when inflation simmered around the 1.5 percent level, Labor officials said. In an area that includes Tacoma, Bremerton and Seattle, consumer prices rose 1.7 percent in September and October, the department said.  Biggest increase: The cost of natural gas rose 13.2 percent locally in October alone, and is now 17.2 percent more expensive than in October 2004.  Medical care: Up 4.1 percent in the past two months, and now 4.6 percent above the aggregate cost a year ago.
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http://www.thenewstribune.com/business/story/
5338383p-4834073c.html

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EDITORS NOTES:  Remember that little thing called inflation we were talking about in previous months?  Guess what - its here, and you can partially thank the US Federal Reserve for printing all that extra paper money in order to ward off deflation.  Sure, higher petroleum costs only add fuel to the fire, but the printing presses have been running full blast long before Hurricane Katrina.  Where do you think the US housing bubble came from?  Now they are raising interest rates to ward off the inflation THEY created.  Gold anyone?   
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GOLD FUTURES RISE ABOVE $500 ON DOLLAR, INFLATION CONCERN
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Nov. 29 (Bloomberg) -- Gold futures in New York rose above $500 an ounce for first time in almost 18 years after the dollar fell the most in more than seven weeks versus the euro, increasing bullion's appeal as an alternative investment.  The dollar fell more than 1 percent against the euro yesterday after an industry report showed U.S. home sales in October fell more than analysts expected. Gold has jumped 15 percent this year, outperforming the Dow Jones Industrial Average and the 10-year Treasury note.  That was quite a decline for the dollar and that's driving gold prices to rally, said Ron Cameron, a metals analyst at Ord Minnett Ltd. in Sydney over the phone.  It's all happening. From a technical point of view, gold could reach $525 in the next month or so.
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http://www.bloomberg.com/apps/news?pid=10000101&sid=aZl4po
MvPIos&refer=japan

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VISA HURDLE COSTS U.S. CASH FROM WELL-HEELED CHINESE TRAVELERS:
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Nov. 18 (Bloomberg) -- Two women from mainland China walked into the Ermenegildo Zegna menswear salon on Manhattan's Fifth Avenue clutching Gucci and Fendi shopping bags.  They walked out with two blazers, two cotton shirts and a wool sweater, their purses lighter by $4,000 in cash.  By now we know the Chinese buying power, says store manager Franco Salhi. We understand they're richer now, and they travel more and spend more.  U.S. merchants and travel-industry officials wish they were seeing more of these visitors. As China's growing economy creates a new middle class, more Chinese tourists are venturing beyond Asia.  The U.S. though, is missing out on billions of dollars of this business, travel-industry officials say, because Chinese tourists find U.S. visa rules more restrictive than those of other western countries. In New York alone, tourism is a $24 billion industry, providing about 300,000 jobs and $2 billion in local and state taxes.
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http://www.bloomberg.com/apps/news?pid=10000080&sid=aB0kca
WawWeI&refer=asia

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ARNAULT'S LOUIS VUITTON OPENS FLAGSHIP STORE IN CHINA - By Parmy Olson, Forbes Magazine, November 18, 2005
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LV--the monogram of Louis Vuitton not only denotes luxury, but now also the dramatic economic transformation of China. Thirteen years after opening its first store in the country and making a profit along the way, Louis Vuitton has just launched its 12th and largest, flagship store in the capital city Beijing. The three-level, 17,000-square-foot shop sells goods ranging from a $360 woman's coin purse to a $200,000 made-to-order gold watch.  The opening comes amid aggressive expansion by foreign sellers of designer clothes, luxury cars like Lamborghini and other goods targeting a Chinese elite that has profited from two decades of economic reform.
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http://www.forbes.com/2005/11/18/lvmh-vuitton-china
-cx_po_1118autofacescan09.html

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THE ECONOMICS FUELING THE FRENCH RIOTS - By Michael Mandel
November 7, 2005
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It's becoming quite clear how unsustainable a system is that actually fosters sky-high youth unemployment -- and not just in France.  Could the riots in France spell the beginning of the end of the European economic model? So far the unrest, which started in a Paris suburb and has now spread to more than 300 French towns, including Orleans, Nantes, and Rouen, has been mainly attributed to religious, ethnic, and immigrant issues.  Yet the outbursts were supercharged by an economic system that not only tolerates but actually fosters sky-high youth unemployment. In September, an incredible 21.7% of 15- to 24-year-olds in France were unemployed, compared to only 11% in the U.S. and 12.6% in Britain. France isn't alone -- other European countries, such as Belgium, Spain, Greece, Italy, and Finland -- also have persistent youth unemployment rates above 20%.
Such sky-high levels of idle youth are a by-product of the welfare-state mentality that's still pervasive across much of Europe. The idea is that government's main role is to provide a safety net for the population, in terms of jobless and health benefits. Generating growth and creating jobs takes a distinctly lower priority, resulting in high unemployment, especially among the young
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http://www.businessweek.com/bwdaily/dnflash/nov2005/
nf2005117_3364_db039.htm

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FRANCE BURNS FOR ITS SINS: The deaths of two teenagers ignited the Paris riots, but it was discrimination, high taxes, and a moribund economy that guaranteed an inferno
By Carol Matlock, November 7, 2005
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It becomes easier to understand how Clichy-sous-Bois became the epicenter of a wave of rioting that has rocked France for the past 10 days. Years of misguided economic and social policies have created a deeply alienated underclass in the land of "liberté, égalité, and fraternité." Now, it is starting to explode.  While discrimination has fanned the flames, the underlying problem is the French economy. Growth has hovered at around 2% for several years, and this year it's only about 1.5% -- far too low to create jobs for young people entering the labor market. Indeed, 23% of French people under 25 are unemployed, vs. 15% in Germany and 12% in Britain. In immigrant neighborhoods, the unemployment rate by some estimates tops 50%.  HIGH TAXES, LOW GROWTH.  True, France's generous welfare state cushions some of the pain. But it doesn't ease the bitterness of people like Karim, who laments that the good life is permanently beyond his reach. Moreover, the welfare state contributes to the slow-growth economy.
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EDITORS NOTES:  I have been very surprised by American Press lately, whom I thought would be delighted to see the French in trouble and concoct even more negative news stories.  I mean, they even went so far as to change the name of fried potatoes from French Fries to Freedom Fries in the past, and when you change the name of a very common American fast food item - that tells you something.  But, maybe, just maybe they see what I see and are keeping mum on the subject (lest these same problems start popping up in America).  Which is to say, I think there is a much larger and looming problem here, and not something unique to France but rather ALL the so-called democratic welfare state nations.  France is even more interesting though because in terms of the social welfare benefits, they really make the Americans look like misers in this category.  So, if France cannot win the war on poverty and quell social tensions considering all the welfare free-bees, including nationalized health care (which the US does not have) then what does that say about possible outcomes for the USA?  I think we have already seen a part of it in regards to Hurricane Katrina, which also like the situation in France, was an unrelated incident that lit the fuse to the ticking time bomb that exists regarding the poor population.  Meaning, in the case of both the incidents in France and Louisiana, the common thread is not religion (Muslim) nor immigrant country of origin (African) but rather poverty and the fact that the welfare state simply does not work and has NOT resolved all the social problems that it claimed it would.  It has been reported that the current unemployment rate in France (in general for the whole country) is about 10-percent, but unemployment among the Muslim and African immigrants living in many of the poor neighborhoods is as high as 40-percent.  This is a notable statistic as the unemployment rate in the US during the Great Depression was supposedly about 25-percent, before all these social welfare programs came into existence in the 1930s.
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In addition, I would wager that the situation is going to get worse.  In the US, the problem you have is the slow disappearance of the middle-class.  While some have made money and have moved up the ladder, so to speak, there are those that have fallen back and have now become new members of the working poor.  The unbelievable record high number of personal bankruptcies in the US is one telling statistic.  However, both in the US and France, the problem would seem to be the loss of low skill level manufacturing jobs (which usually paid better than service industry jobs) and the lack of sufficient education to allow such people to go into another profession (note the previous comments about well educated higher wager earners retiring and being replaced by lesser educated, lower wage earners in terms of the social welfare system).  US Vice-President Dick Cheney insinuated people could sign up for E-Bay in the past as a new way to earn income.  However, is that a logical solution for millions of people that cannot afford a home computer and probably have no idea how to use it anyway?  Which is to say, the US government is saying: OK - you lost your factory job at General Motors, now go out and get an education so you can do something else in the so-called new economy.  In theory it sounds good, but is it practical for this to become reality for millions of people?
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One of the real problems and reasons for the growing unemployment is the loss of manufacturing and even agricultural industry (more so in the US than in Europe, where agriculture is highly protected and subsidized, a bone of contention still today in terms of so-called fair trade practices).  In fact, this trend of exporting jobs to low wage jurisdictions started in the early 1980s, NAFTA only made offshore manufacturing even easier and more profitable for US manufacturers (and even with NAFTA, the jobs ended up in China anyway, making the Mexicans especially highly perturbed and why the poor Mexicans continue to swim across the Rio Grande at midnight).  The result has been a previously wealthy exporting industrialized country that currently is a service economy - - that for the most part exports only a very, very small fraction and is reliant on the domestic consumer (in the US, 75-percent) for the vast majority of economic activity (rather than making money via exports).  And for the most part, the situation is pretty much the same in Europe as well.  Of course, the other problem is much lower economic growth (if any), no jobs for a larger percentage of the population (because all the jobs went to China, India, etc.)  - - AND an ever more costly social welfare state that these governments can really no longer afford to pay for.  In short, a recipe for disaster, which some people are starting to realize.  Are the resultant social tensions we are seeing coming to the surface (Hurricane Katrina in the US and riots in France) just isolated events or the shape of things to come as we continue down this road?       
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In any event, this is not about the poor per say, but instead a commentary about why socialism simply does not work (Europe has had more than 50 years of it and the US, more than 70 years).  There have always been wealthy people and poor people, dating back to the Roman Empire.  I had suggested in writings years past, that the former communist nations have turned to capitalism to save themselves from the failures of totalitarian socialism (China is a blatant example).  I also asked the question: What will the capitalist social welfare democracies turn to in order to save themselves?  Will they turn to a totalitarian police state to quell all the related social unrest that is showing signs of emerging?  Will they raise taxes or simply print more funny money to pay for it all?  Will the wealthier citizens of these countries end up living in armed gated communities and accept loss of liberty in exchange for government protection?  One thing is for sure, things have changed are continuing to do so.  Like it or not, China is the new world economic super-power and its citizens are the new rich.  The fact that Louis Vuitton now has 12 NEW stores in China, selling US$400 coin purses and US$3,000 handbags is a luring testament to this, and even more telling that such new stores were NOT opened in the US or Europe.  Poor people usually cannot afford US$3,000 pocketbooks, so if a large enough number of Chinese women can now do so and you cannot - what does that tell you?  Also, it has been reported that Ford and GM just announced another round of layoffs adding up to about 34,000 people now out of work in North America - yet new car sales in China are growing at a rate of 25 to 30 percent annually.  In the US, they need to just about give the cars away, and even still, that is not working.  We are witnessing a new world order for sure, but not the kind the politicians had been promoting.  The question remains: where is this all going and what are the industrialized democratic social welfare states going to do?   What is life going to be like for the average Joe (or Josef in Europe) 5, 10, 20 years down the road?  Could it be true that the standard of living in actually going down (and becoming more costly) in these former wealthy industrialized nations AND the standard of living and wealth going up in the third world?  Just ask Louis Vuitton where the money is.         
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READERS WRITE IN:
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John, Thank you for the information. I am convinced of the advantages of offshore asset protection. Now I have to convince someone else that Dominican Republic banking is safe. I am sure you are familiar with the idea that many Americans have that foreign banks are not safe. I have been to Dominican Republic several times, and have been impressed with the country. One question that I do have is concerning medical care and health insurance. Do you have any information or references to what a good heath insurance police would cost in the Dominican Republic. I ask this because I know this question will come up in my discussions concerning this manner. Thank You so much.  You have provided me a wealth of information.
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EDITORS REPLY:  With regards to medical care in the Dominican Republic, there are some excellent private clinics and hospitals in the country, and they really are not all that expensive either in comparison to US health care costs.  Private medical insurance is also available from a number of health plans or insurance companies.  The last time I checked, the monthly premiums were equal to about US$100 to 150 for the best family coverage policy. However, I usually suggest that clients find a doctor, hospital or clinic that they like first and then ask what insurance carriers they work with.  Clinic and doctors may be affiliated with some insurance plans, but not all of them.  For this reason it is a good idea to sort of work backwards and find the doctor first, and then check out the different insurance plans associated with the doctor (or clinic).  By the way, there are some excellent dentists in the country as well (with very modern equipment and offices) and the fees are a fraction of what they are in the US (plus reasonable insurance cover is available for dental also).
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ANOTHER READER WRITES:
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Hello John - Glad to see more and more citizens waking up to the current situation.  One thing I would like your column to clarify for new readers is the passport issue.  While the DR is great for living etc., the passport is another issue.  The DR passport is worthless for U.S. citizens to travel with. I know there are a few exceptions but as a rule, no visa and with the recent corruption scandal of DR citizens traveling with fake diplomatic passports the situation will only get worse.  The bottom line, the money charged for the passport is really not worth it.
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EDITORS REPLY:  Well, I do agree with the living comments with respect to the DR but I beg to differ very strenuously on the passport issue.  I travel exclusively on my Dominican passport and I have never had a problem (I am a naturalized Dominican Citizen, which tells you that I do put my money where my mouth is) and with regards to visa free travel for holders of a Dominican Passport, the list includes: Japan, Taiwan, South Korea, Argentina, Chile, Brazil, Bolivia, Uruguay, Ecuador, and Peru (there are more, I am just naming a few).  However, it is true that the holder of a Dominican Passport does indeed need a visa to visit the EU member nations, and the US and Canada as well.  However, just as a side note, it is very interesting that Americans need a visa in order to visit Brazil whereas Dominican Citizens do not.  So, there is an example of where Dominicans can travel to a certain country visa-free (and Americans need to go down to the Brazilian consulate, wait in line, pay the fee, etc.).    
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In addition, I have an American client that just finished up the process and picked up his new Dominican Passport last week (he was recently naturalized) and I went with him to one of the consulates for a visa (to a country he wishes to travel to that does require a visa for holders of a Dominican Passport).  He was given a tourist travel visa - no difficulties.  So, there are rumors, innuendo and then again there is fact.  And in regards to requirements, cost and waiting time for other kinds of processes in other countries, the process in the Dominican Republic is certainly less costly, less restrictive and quicker.  If you would prefer to spend US$75,000 or more in order to become a naturalized citizen (and obtain a passport) from say Dominica (another English speaking island in the Caribbean, not to be confused with the Dominican Republic) or if you prefer tie up US$200,000 in Panama simply to apply for residency status, then please go right ahead.  I for one, do think that this is quite a bit of money to spend, but to each his own.  By the way, I have nothing against living anywhere else, but to say the Dominican Passport is less attractive than say a Panamanian or Honduran Passport is just not accurate.  A US Passport does offer extensive visa free travel options, but then again how much do you pay in taxes every year just to have it?  Also, being American is no ideal profile when traveling to many places in the world, or when even trying to do something as simple as open a banking or investment account.
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Also, on the issue of visas, I think part of the problem is that since Americans and Canadians can travel visa free extensively, that there really is a great deal of misunderstanding about what a travel visa is (and the related process) simply because they have no experience getting or applying for one.  Which is to say, that many countries put a process in place to control the flow of visitors to their country for a variety of reasons (Some nationalities need a visa in order to visit the Dominican Republic too, for example BELIZE, which in general is often touted as a good passport for certain visa free travel aspects yet holders of a Belize Passport would need a visa to enter the Dominican Republic).  In the case of nations that require a visa of Dominicans to travel to their country, the entire point is to stop someone that might have other than a legitimate tourist intent in terms of the purpose of the visit.  The US of course requires visas for just about the entire planet, but that is another topic for another day (and of course roughly 800,000 enterprising Mexicans and other people from Central America simply swim across the Rio Grande, so visa or no visa they are getting in, which is also another topic for another day as well).  In any event, if you fit the profile of someone that might be likely to travel with the purpose of staying inside the country illegally (as an illegal immigrant versus being a tourist) then chances are you will be turned down for a visa.  Who most likely fits this profile?  Someone that fits this profile is a person with no job, no bank account, no house, no car, no children and other social ties.  Also, young women 35 years old or less are especially scrutinized because if the previously mentioned items apply, the assumption is that such a person might be looking to stay and work illegally as well (often enough in the worlds oldest profession).  But, with that said, if you are an average person with a stable job, a home, a bank account then probably you will not have a problem.  Also, since it is usually younger people rather than older people that might be more likely to have an interest in considering illegal immigration, I would say that older persons are usually granted visas without too much fanfare as well.  So, in terms of applying for a travel visa successfully, it all depends upon who you are (and your profile), but the process itself is not rocket science really and not that big of a deal as you might like to think. 
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This brings us to your comments about what you read or what in fact is the case with these Diplomatic Passports you are referring to.  Diplomatic passports are granted to government officials presumably for the purpose of facilitating travel to another country on official business.  As such, IF there is a visa requirement under normal circumstances for the holder of a regular or normal passport then the benefit of a Diplomatic Passport usually is that the visa is not required or is waived.  Now, what you read involved a case or situation whereby a number of people were given these passports, presumably in exchange for some financial remuneration, that in reality were not truly entitled to have them (they were or are not government employees or government officials).  However, the passports themselves were NOT fake documents, as you incorrectly stated.  They were however given to some people that should not have had them, that is or was the problem.  Of course, such persons would want such a passport because they can travel to Europe for example without a visa, whereas holders of a regular passport would need a visa.  So, what could be the result of this going forward?  For sure, anyone with a Diplomatic passport going forward will be more heavily scrutinized, but that has nothing to do with the vast majority of regular people that have a regular or normal passport.
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If you do not feel the process of becoming a naturalized citizen in the Dominican Republic is of value for yourself, so be it.  But that does not mean it is not of value for others or nor is it true that ALL Dominicans have difficulties traveling with such a passport.  Once again, for the person that fits the negative economic circumstances I mentioned earlier in terms of applying for a visa then in such a case, yes it will be very difficult for such a person (no job, no money, etc.).  Otherwise, we have many clients that live in the Dominican Republic, that have become naturalized citizens - and have traveled (some extensively) without any problems.  I do not mind anyone disagreeing with me (or even someone holding a different opinion than my own also), but there is a major difference between fact and rumor or personal opinion.  I do not know why there is such incorrect information floating around regarding the Dominican Republic (not just the DR, but the same can be said about many other places as well, including some incorrect rumors someone recounted to me regarding Panama as well).  On a similar note, 500 years ago everyone thought the world was flat and believed it even though none of these people ever traveled in order find out for themselves.  It was not until men such as Christopher Columbus actually made the trip and proved this theory incorrect.  I think the same applies to some of these crazy things or rumors supposedly believed as fact in the current conventional wisdom, when the reality is, this is not so.  Another incorrect rumor involves dual citizenship as some people believe that in regards to both the US and the Dominican Republic that dual citizenship is not permitted - which is also false (it is legal and permitted).
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ANOTHER READER WRITES:
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John - I found your citizenship newsletter article interesting.  If you get a Turks and Caicos Islands residency, you would be applying for UK citizenship, as you probably know by the way.  From the reader who wrote about Panamanian citizenship, I would highly doubt that they don't permit new Panamanian (US expats) passport holders to still hold their US passports.  Where would be a good source to check this?  What countries do you know of that still have economic citizenship? From my research, only 2 countries still really have economic citizenship programs- St. Kitts and Nevis, and Dominica in the six figure cost range...is this correct?  Also, does the Dominican Republic have good visa free travel?
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EDITORS REPLY:  In the case of the Turks and Caicos Islands, it has a formal status of a British Overseas Territory.  In the past (prior to 2002), citizens of the island were deemed to be a British Overseas Territories Citizen with a different and unique passport accordingly (and were NOT British citizens), and in fact they still are.  Having citizenship status from a British Overseas Territory does not grant you the automatic right to live and work in Great Britain nor visit unconditionally either (no visa).  In addition, citizens of Great Britain cannot automatically live and work in a British Overseas Territory necessarily either (and in fact enter the TCI with a UK passport, which ONLY allows them to stay as a tourist for up to 30 days) and must apply for a visa or apply for residency there accordingly for longer stays.  On May 21, 2002 new legislation went into effect in the United Kingdom granting British (UK) citizenship to citizens of British Overseas Territories, BUT not all citizens of British Overseas Territories may have been eligible to obtain British Citizenship (there were some litmus tests involved).  However, in such cases where British Citizenship was granted, Citizens of the Turks and Ciacos would NOW hold dual citizenship and of course two passports (one as a citizen of a British Overseas Territory and a new passport as a British (UK) Citizen).  In addition, persons born between 26 April 1969 and 1 January 1983 to mothers who, at the time, were citizens of the United Kingdom and Colonies through birth in the British Indian Ocean Territory also acquired British citizenship automatically on 21 May 2002.
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If you are applying for residency in the Turks and Caicos this has absolutely nothing at all to do with Citizenship.   Applying for residency is one thing and later on applying for citizenship yet another.  Because you are granted residency, this does not automatically mean you will obtain Citizenship later on.  You must apply, qualify and be granted citizenship as a separate and distinct process unto itself (but do not hold your breath as they do not like to naturalize foreigners for citizenship in the Turks and Caicos).  However, should you have legal residency in the Turks and Caicos and should you apply for naturalized citizenship there, AND if you are accepted - - then you would be become a naturalized citizen of a British Overseas Territory (and not a British Citizen or Citizen of the UK by default, which was granted to persons BORN in the Turks and Caicos).  Remember there are some litmus tests that apply to the May 21, 2002 legislation and there are in fact some people with citizenship and passports from the Turks and Caicos (as a British Overseas Territory) that do NOT have and are not eligible for British (UK) citizenship.  For more on this see the following link:
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http://www.fco.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerate
/ShowPage&c=Page&cid=1013618138355

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On the topic of economic or instant citizenship programs, I have heard that Grenada did away with their program under pressure from the US Government.  Dominica (not to be confused with the Dominican Republic) did have a program in the past, they stopped it for a while under pressure from the US Government, and have now started it up again but INCREASED the cost to some ridiculous amount (the amounts I heard was US$75,000 up to US$100,000).  In fact, the Prime Minister of Dominica was pressured in the past by the US Government NOT to accept any US citizens that might have an outstanding tax issue with the US (and suggested they check with the IRS first before processing any Citizenship Applications coming from Americans).  As far as I know, St. Kitts and Nevis do have a similar program with a similar price tag.  With regards to visa free travel for holders of a Dominican Passport, please see my reply to the previous question above. 
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ANOTHER READER WRITES:
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John - I continue to be fascinated by your knowledge on so many things - hence this question:  What is your approval rating for retirement residency in Mexico (Mazatlan, Guadelajara, Puerto Vallarta).
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EDITORS REPLY:  Well, I appreciate the vote of confidence, but I would not profess to be an expert on all things or all jurisdictions.  I really am not that familiar with the residency application or naturalization process in Mexico, but I do have a few American clients that are retired to or live in Mexico.  From what I hear from them, they seemed to be pleased or enjoy living there.  The only comments I have heard is that real estate prices have jumped dramatically in recent years, especially in American expatriate enclaves such as Jalisco.  Also, I do know that foreigners cannot own waterfront or beachfront property directly in their own name (they must form a Mexican Trust or Corporation), which I have mixed feelings about personally.  The other thing my American clients have told me about the enclave they live in is that the US Consulate is very, very nice to them at tax time.  The folks from the US consulate travel all the way up to Jalisco around March or so, set up a few folding tables, and hand out all the tax forms to the local American Expatriates living there.  Of course, it can be almost impossible to get in touch with them the rest of the year, or when you have a problem, but tax-time - they are right there to lend a hand.  Isn't that nice of them?
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However, as I have stated numerous times in the past, deciding on a place to live or retire to, really is a very personal choice.  Many clients often ask me: What is the best country?  This is hard to say, because what amenities or issues are important to me or someone else may not be the case for yourself.  So, I would say visit the place you are thinking about, talk to some of the locals living there, investigate real estate costs, costs of living, tax issues and anything else that may be of concern to you.  In other words, make up a personal check list of ten or twenty key or important items and see what country scores highest on that list.
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ANOTHER READER WRITES:
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Dear John - Received your last newsletter, thank you.  Regarding my interest in the Dominican Republic, I am looking for a place to call home and invest in! After numerous trips to Costa Rica, I have written it off, I have been to Panama once and plan to go back in Jan.2006, love what they offer in their Pensionado program, like their real estate pricing, like the fact that they seem to go out of their way to make it easy for you to invest in the country and excess to government officials is the easiest of any of the country's I have visited. With that said, I love the Dominican Republic and wish the government officials could see the opportunities I see and would begin pass legislation to compete with Panama! I could go on, but I'm sure you've heard the same speech before!  The area I like is the north coast specifically the Puerto Plata area. I have been to the DR on five different trips, staying as long as three weeks at a time. I will be going back and staying in Puerto Plata for 10 days the end of this month. The information I would like, is can we make the changes that D.R. desperately needs for me to entice my friends and investors to come buy, live, invest and play in D.R.?
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EDITORS REPLY:  Thank you for your letter.  Well, on the issue of the Dominican Republic, I have quite a few clients that do NOT want to get the word out so the place does not become over-run with Americans as Costa Rica or Panama has.  I suppose it is a double-edged sword in terms of a country wanting some degree of success and then what other results that might bring (higher prices for real estate??).  Costa Rica of course has had some very notable success with its residency program for retirees in the past, and of course Panama has copied it, to some extent.  Will the Dominican Republic ever adopt such a thing?  The topic was brought up in the government about 4 or 5 years ago, but obviously did not go anywhere.  On the other hand, what is currently in place is really very attractive and uncomplicated (in terms of requirements) so I wonder really if it could become any easier.  As I have stated before, there seems to be quite a bit of misperception and negative rumors regarding the DR and I really do not understand it.  You read a letter from someone that said he thought Dominican Citizenship was not a good idea, but why?  Because he heard from a Dominican girlfriend of one of his buddies at a beach bar how she could not get a visa (remember, no job, no money, no assets, no visa).  So, based upon that, he formulates this negative opinion (which I am living proof, is not true).  But this is just one example of rumor or incorrect information that is ingrained for whatever reason.  On a similar note, a woman from the US telephoned me a while back and asked about food.  Food I asked?  Yes, she said.  Do they have supermarkets in the Dominican Republic?  I asked, what do you think?  Oh, someone told me they sell goats hanging by rope from a palm tree.  Well, I said, you can probably find that out in the countryside on occasion, but I can assure you in Santiago and in Santo Domingo, they have great big supermarkets - sometimes bigger and fancier than the ones in the US.  In fact, they have Ms. Butterworths pancake syrup, Orville Redenbacher's Gourmet popcorn, Green Giant canned vegetables, Lenders frozen bagels and the personal all-time favorite of my Dominican wife's teenage niece - Heinz Ketchup (she will accept no substitutes but Heinz - and that after having grown up with the local brands).  Teenagers - what can you do?  In any event, the point is, people have to come and see for themselves, but despite what you tell them, they still may not.  You say you have been to the country five times already - so obviously you did not have such a terrible time the first time you visited, or obviously you would not bothered coming back (and certainly not four more times).  Just like poor old Christopher Columbus, who was warned not to sail away (least he fall off the flat part of the earth, never to be seen again), you have friends that think you are crazy because they would rather believe the crazy things they have heard instead of taking stock of your own personal experiences.  What can you do?  Maybe it is a blessing in disguise that many Americans have such a misaligned assumption about the place.  Maybe it means there is more opportunity for your-self and less Americans running around.
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ANOTHER READER WRITES:
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I have read your story on freedom and this is exactly the feeling I have down here in Europe and Yes - Yes - Yes:  I not only believe you but I also am able to tell you this is very true and not only in US also in EU - And I am fed up with it.  I feel affected in my honorability, my freedom and all democratic principles.  I know by being a lawyer.
But what can one expect if world politics are done by (just fill in for yourself the blanks!).
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EDITORS REPLY:  Thank you for your letter.  Without going into a diatribe, the only thing I can say is that ALL the so-called modern industrialized wealthy welfare states have some of the same problems.   Americans might think some of the trends or events in Europe have nothing to do with the US and maybe even vice-versa.  However, I will say there is more beneath the surface than above it and more in common as well.
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ANOTHER READER WRITES:
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Mr. Schroder - I sell Real Estate and offer other services in Puerto Rico.  Recently, I have been getting more and more requests for information and aid of the type you offer. Real Estate here in Puerto Rico is also going way up, and some folks are ready to cash out. Also, the recent and severe instability of PR politics and economics has begun to level the playing field between the RD and PR in terms of peace-of-mind based decisions.  I am also looking at some other locations, among them, Bocas del Toro, Panama, Curitiba, Brazil, and as a remote possibility, Santiago de Cuba, Cuba.  But for various reasons, the Dominican Republic is looking much better as a location than it did 10 or 15 years ago.  I am still concerned about high levels of firearm ownership and high levels of violent crime, and if those trends continue, that could wreck a good thing. If Leonel Fernandez can reverse them, or other powers that be, then great. I am currently researching just where the crime in the DR occurs, so as to advise potential buyers of the situation.  I am fluent in Spanish and would most likely be seeking and finding a property for myself in the future on my own, as I have been in PR for 26 years, know lots of Dominicans here, know RE, know home quality, etc.  I am also interested in the banking details and shall study the expected impact of rising oil and food and transportation costs upon DR inflation and other factors that may affect CD interest, monetary value against the dollar and euro, possibility of changes in banking policies under US pressure, etc.  Any information you would care to forward or to consider treating in your excellent newsletter that addresses the items in the preceding paragraphs would be greatly appreciated.
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EDITORS REPLY:  Thank you for your letter.  I have seen a large number of Puerto Ricans relocating to the Dominican Republic over the years, and my guess is for the same reasons as clients from other places.  Obviously for Puerto Ricans, there is a common language and common culture so the transition is that much easier.  On the topic of crime, I do not think the country as a whole is any more dangerous than Puerto Rico or many other places in the US for that matter, and in fact from my own personal experience, find the Dominican Republic to be safer.  I have heard the situation in San Juan for example has gotten better, but I certainly remember being warned not to walk around the San Juan (Puerto Rico) Colonial District even in broad daylight and personally witnessed a purse snatching at about 3:00PM in the afternoon.  In contrast, I have never had this experience in Santo Domingo.  Crime exists anywhere there are people and of course there is usually more crime in cities than in rural areas.  However, the golden question is: Is there more crime in the Dominican Republic, less crime or about the same in relation to where you are living at the moment?
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I have to disagree with your comments regarding gun ownership.  I think when you allow individual law abiding citizens the right to bear arms and defend themselves (plus both their own family and property) then in such a case you are on the right track as a government.  Hans-Hermann Hoppe authored a book called THE MYTH OF NATIONAL DEFENSE and it is an interesting read on the subject.  In general, he claims that when the government denies the right of individual citizens to defend them selves, and wants to be the monopoly provider of security - you have a case whereby the costs go up and quality of services go down.  Not only that, you also open the door for abuse and the potential for diminished civil liberty when the government knows the population is unarmed (and helpless).  Let us face reality.  Gun laws or no gun laws, the crooks are going to get their hands on guns regardless.  When the population also has guns, then they have a fighting chance.
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I have no problem with that and in fact, I think it far less expensive and a far better idea for individual citizens to defend themselves, and be supported by the law in this regard.  I honestly have to question any government that refuses to allow citizens to defend themselves (claiming that the society should become passive sheep allowing the officially sanctioned security forces, example: police, to be the ONLY protection racket in town).  Because the result of this has been, that the police cannot be everywhere (and in truth it is almost impossible to expect this also) plus the costs in terms of tax support for even more police is far greater than a gun license and pistol.  The counter argument to this by the socialists and liberals is that the average citizen cannot be trusted with responsible gun ownership (just as they argue individual citizens cannot be trusted to save for retirement and thus MUST contribute to a social welfare program operated by the government via forced obligation).  However, if you think this is the case or is in fact the truth - then believe me, you have a more severe problem in society than a few crooks.  Why?  Because the government is in effect telling you, that you as an individual citizen are an irresponsible idiot that cannot be trusted with your own welfare.
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I apologize for honing in on this one specific topic, but I think in general it ties in to a more general overall misunderstanding of people that supposedly come from a more modern, more developed, and wealthier jurisdiction.  The claim or argument is that things are worse in the Dominican Republic (and other developing markets for that matter), but are they really?  Here are some statistics comparing Puerto Rico versus the Dominican Republic:
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A news article from January 2004 regarding Puerto Rico states the following:
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PUERTO RICO HOMOCIDE RATE CLIMBING - The toll gives this island of 3.8 million a homicide rate more than three times the national average. In a cycle of death fueled largely by the island drug trade, more people are killed here per capita than in any U.S. state. Homicide numbers for the island exceeded those of major U.S. cities such as Chicago, which with 599 killings became America's homicide capital, and New York with 596.  The bloodshed has continued into 2004, with at least four slayings reported on New Year's Day.
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http://www.mcall.com/news/nationworld/puertorico/
all-calderon0105,0,5145513.story

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Article from Puerto Rico Herald - August 2004:
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With a homicide rate more than three times the United States average and public outrage mounting, the lame duck Governor apparently felt forced to make the move. So far this year, the island was victim to over 800 felonies, an increase of 11% more than a like period in 2003. During each year of the Calderón Administration, the murder rate had either increased or stayed the same and, at the time of the Guard call-up, that grim statistic was 30 deaths higher than at the same time last year. According to the FBI, more murders per capita take place in Puerto Rico than in any other state of the union.
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http://www.puertorico-herald.org/issues/2004/vol8n33/Poll0833-en.shtml
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Some Other Statistics:  The average per capita income in Puerto Rico is about US$17,000 per person.  The average per capita income in the Dominican Republic is about US$6,500.  This means that on average Puerto Ricans are in theory three times wealthier than Dominicans.  However, it is estimated that about 50-percent of all Puerto Ricans earn less than US$10,000 per year AND about 43-percent receive food stamps (social welfare assistance).  Dominicans do not know what food stamps are because such a thing does not exist.  But more interesting is the relation of crime versus income (wealth).  Puerto Ricans are roughly three times wealthier than Dominicans (according to per capita income statistics) YET Puerto Rico also has a Murder Rate than is anywhere from 1.5 times (16 murders per 100,000 - so says one group of statistics) up to more than double (25 murders per 100,000 - so says some other older statistics) the rate of the Dominican Republic (anywhere from 8 to 10 per 100,000 depending upon the statistics you look at or use).  So, regardless of what statistics you use (the higher or the lower) Puerto Rico still has higher levels of crime and far MORE murders per capita than the Dominican Republic.  However, Puerto Ricans have a higher per capita income than Dominicans AND extensive social welfare in place with a good portion of the population tapping into it (43 percent of a population on food stamps is a very, very shocking statistic).  So, the questions remains:  How is it possible a supposedly wealthier jurisdiction with social welfare programs such as Puerto Rico (social welfare meant in part to solve the problem of poverty and in theory curtail crime as well) has MUCH higher murder and crime rates than a so-called poorer country like the Dominican Republic?  By the way, not to pick on Puerto Rico, you should take a look at another US territory that it even worse than Puerto Rico - The US Virgin Islands.  The USVI is possibly THE murder capital of the Caribbean - Ja, Mon pack your Kevlar vest when making beach resort hotel reservations.
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