#1170 – The Expat Files: Financial Risks, Environmental Issues, and Life in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came out to play and now I wonder Hello there all you ex-pat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started Hey, you know with all the craziness going on with the markets and the financial sector historic inflation insurmountable sovereign debt practically every country technically bankrupt I bet you wonder what's going on with the banking sector in Latin America

[00:46] Well, you know, it's always been the case that if you're dealing with a local funny money in whatever Latin American country You can get really high rate CDs For example, just checked out a few banks in five different Latin countries and in the local funny money You can get usually around a 12 to 15 percent interest rate for a one-year CD Sounds good, right? Maybe even great because it's one of the few investments that beats inflation or seemingly So since the so-called official inflation rates around eight to nine percent, right? However, anyone who's got half a brain who's done any investigating at all Will know that the real inflation rates around double that just go to shadow stats comm and you'll see how the real

[01:31] rate of inflation is calculated the way they used to do it from around 1920 to about 1996 if you recalculate today's inflation using the old stats they use for what 80 years It's about double what US economists say it is today. Yeah, right the science of economics It's not a science. It's a black art. Don't get me started Economists, please all they're really qualified for is naval gazing and cleaning toilets at the Greyhound station But you knew that already, right? Anyway, I just checked out a few banks in five different Latin countries with their own funny money Ones that don't use the US dollar and I found you could get one-year CDs paying up to 15% interest in the local funny money Of course, they always have a dollar denominated CD at the same bank They got a boat local funny money and funny money dollar CDs with one month three month six month or one-year terms

[02:23] And I'm finding that a lot of these banks will pay seven and a half percent interest on a one-year CD in US dollars and some of them allow you to put down as little as a thousand bucks Think of it. Imagine being able to get seven and a half percent interest in a US bank. That'll never happen You're lucky to get a percent and a half In other words, if you're up in the states and get a bank CD you're gonna get killed by inflation no matter what you do though much less so if you take out a CD here in Latin America denominated in US dollars inflation still gonna nick away at you But not nearly as bad as up in the states So then if you've got some idle cash laying around do I recommend it? Hey, that's your call But I wouldn't do it never long-term anyway Now if you have some loose cash laying around just sitting there and you don't want to put it under your mattress

[03:10] You could put it into a 30-day or 90-day note and keep rolling it over then you're always pretty liquid as for me I'm not comfortable with going out any farther than three months a year would be nuts. Just my opinion here That's my comfort zone and about the local funny money CDs at 15% man awful tempting, right? We all know how the dollars getting gouged by inflation Problem is most local funny monies are getting hit twice as hard Fact is in Latin America There are only two or three countries out of the 20 whose local funny money has held its own against the dollar over the past 10 or 20 years and one of them happens to be Guatemala that gets out it all seems to be a mystery Why do some Latin American funny money currencies lose value against other currencies so quickly year-over-year? I mean look they all have huge debts to the IMF the World Bank the US and China

[03:59] They've all got their own printing presses running to just like the US though Not at hyper speed like Venezuela, and we know what happened to them the question I'm asked all the time is why does the cats out Guatemala's funny money hold its value against the US dollar for 20 years and Columbia a country with its own manufacturing base much greater GDP and all that a much richer country in general Their pace was lost 60% against the US dollar in just the last 10 years Yet the Guatemalan cat cell over the last 10 years has lost less than 3% against the US dollar That's a 60% devaluation for the Colombian peso versus three or less than 3% for the Guatemalan quetzal That means if 10 years ago you went to Guatemalan bank bought a Guatemalan and CD

[04:45] Let's say for a thousand bucks in quetzals the local funny money currency and kept rolling it over every year at 15% Interest and at the end of 10 years flipped it back into US dollars It have turned that initial grand into 4,000 bucks And if during that time the annual inflation rate was 2% a year And it was about that if you averaged it out over the last 10 years Excluding these last few months where inflation has zoomed. It's gone crazy Anyway, your rate of return on a grand over 10 years at 15% with 2% inflation would still be 3,300 bucks or 3.3 times the initial investment. That's a 330 percent return Now if you would have taken out the same kind of CD in Colombia using Colombian pesos 10 years ago

[05:32] Figuring 2% inflation per year if you flipped it back into dollars at the end of 10 years your final balance would be 1320 bucks. So if you'd had that 10-year CD in Colombian pesos, you'd have come out 25% wealthier based on 2% inflation However, if you'd had that 10-year CD in Guatemala and quetzal is either come out 330 percent wealthier a huge difference almost like winning the lottery But in the end, it's just the luck of the drawl kind of like gambling because nobody knows which Latin American Currency is gonna dump harder than the next one, which is why for me anyway I'd never put money into a long-term CD in any of the local Latin American funny money denominations Though if it's only for a month to three months that could work that way if you see the currency starting to take a big

[06:20] Hit you could pull it out quickly without a penalty. Oh, and remember, this is key Never do business at a Latin American bank that has a branch in the US You know why right because if they do have a branch in the US like for example Lots of Scotia banks down here in Latin America City Bank to stay clear of those That means if someone has a judgment against you in the States and you're using Scotia Bank or Citibank or another bank That's got a branch in the US Might be back home. You're involved in a bankruptcy divorce proceedings You're caught in an ongoing lawsuit or IRS problem Doesn't matter a judge or just a phone call from the IRS could lock up your bank account But that can never happen if your foreign bank does not have a branch in the US The only way anyone can lock up your foreign bank account

[07:07] If it doesn't have a US branch is to get a court order from a judge in your foreign jurisdiction That means who's ever going after you has to come down hire some Latin lawyers and present their case to the judge all over again And it's got to be in Spanish and all the documentation has got to be translated into Spanish, too And of course as you know in Latin America, well, maybe you don't cases drag out for years Even simple civil cases can get postponed five or six times before the judge makes a decision By the way, just a few weeks ago asked a Latino lawyer friend of mine who has been practicing at least 25 years He's got lots of gringo clients. I would say at least a hundred I asked him how many times a gringo's bank account has been locked up due to a court order coming from the states In other words, they'd have to go through that rigmarole of sending lawyers down hiring Latino lawyers to translate all the documents

[07:57] Etc. Etc. He said he only knew of one case in 25 years Was a drug and money laundering case a really big fish too, and it wasn't a client of his other than that He said just for regular gringos and expats coming to live in Latin America He doesn't know of a single case But back to this business of getting high interest rates on CDs in Latin American banks The point is don't go drooling over those high interest rates. They're real. All right It's just that so many gringos are enticed by that high interest rate bait that they know they could never get in a bank Up in the states a lot of them feel so lucky such a thing exists They charge right in six months a year or two even five I say the gain ain't worth the pain the pain of the stress you get Worrying about the currency fluctuations in the state of the local economy

[08:44] Just look at Argentina about every ten years it falls into a complete economic black hole if you had a nice high Interest rate US dollar CD there when it came to term you to get your dough from the bank But government banking laws say now you can only pull out two hundred US dollars a month. See what I mean Just saying and now with new international economic catastrophes on the horizon and practically every country I'd be in the lesson client to lock up any dough in a bank CD By the way, did you know that the Federal Reserve those slugs responsible for the economic train wreck that's unfolding right now Did you know that since they're so disliked in the media now, they've got such a bad reputation with the public They spent over a million bucks to hire a PR and image consulting firm

[09:32] If anyone needs an image makeover besides hunter Biden's dead who could also use a brain transplant, too It's the Federal Reserve. Yeah, you know, there are image consulting companies out there that promise 101 ways to polish a turd Well, guess what? They started polishing the turd with a new touchy feely Federal Reserve website It's called about the Fed meet our economists sounds so warm. So welcome me So leave it to Beaver and if you look at that site, they've got a picture and resume of all 400 loser PhD shit for brains economists on the payroll So if you want to see a mugshot of all the incompetent asses Responsible for the economic implosion and all that inflation send me an email the expat files at gmail.com

[10:19] And I'll send you the link The question is would you want your face prominently displayed on the website of an organization? That's such a miserable failure I'd be ashamed and embarrassed. Oh, well, I guess these days all government and quasi government slugs get participation trophies All right now From the po folks have po habits department. Lizzie sends me this email from California She says Johnny you talked about how poor folks have poor habits And when people from poor countries come to America, they bring those habits with them You're right in Latin America and Mexico at least littering is a way of life If you like the outdoors like I do littering, it's one of the poorest of bad habits I'm a surfer and I've surfed up and down the Pacific coast of Mexico

[11:07] Unfortunately, I get to see the worst of it you mentioned on one of your shows how people leave litter in the streets on buses How previously empty lots suddenly turn in to add hot garbage dumps How during the rainy season streets and gutters are suddenly filled with all manner of floating junk food bags and plastic bottles Johnny as a surfer I get to see surf and even swim through people's accumulated garbage Sometimes it even rubs up against me. It's disgusting It breaks my heart to see how people leave piles of junk on beaches, especially in the days after a holiday weekend When working-class Latino City folks have an extra day off and they hit the beaches She says I can't tell you how many times my heart sank when I've been on my surfboard Watching empty bags and styrofoam plates swirl by if you're a snorkeler. It's even worse

[11:55] It's sad to look down on the seafloor to see coke cans and plastic bottles half submerged in the sand She says very few restaurants or food vendors unless they're gringo or European owned use Biodegradable containers because either the show expensive or just unavailable or no one cares Tupperware styrofoam plastic bags and plastic bottles are part of Latino culture But in their defense if there is such a thing I've done Mount Everest to didn't get to the top But I tried all the way up as you get close to the summit There's plastic bottles and garbage wedged in the crevices to something to write home about ancient Pepsi and coke cans at 20,000 feet There's my rant Johnny. Keep up the good work Hmm. All right be Johnny here Lizzie

[12:42] You'll be glad to know I'm doing my part to save the planet as hard as it was to make the change I have an exclusive user of paper straws now Where's my participation trophy? By the way, paper straws are a complete failure when it comes to spitballs, you know Lizzie I say that as a joke, but you know your surfboard any surfboard It's made of the synthetic materials fiberglass laminated wood petroleum-based glues and petroleum-based polyethylene coatings and how about your sandals are they made out of tree bark or hemp Nope, mostly plastic, right? Just like your belts shoes and purses and your iPhone made by slave labor in China. Look it up I suppose you bike everywhere instead of taking a bus that was also fabricated in China It's got petroleum based seats floors doors steering wheels windows Lizzie

[13:30] I'm not picking on you in particular. But in reality, we're all a bunch of hypocrites. Aren't we? Sure, we all got to try to do our part But sometimes the worst of us are the ones that squawk about it the most like Decaprio Bono and the rest of those Hollywood idiots telling us to separate our garbage while they fly around in Learjets Though Lizzie I'm totally with you on the garbage pollution thing and how po folks bring their po habits Everywhere they go now in this email Lizzie sent me a link to a very interesting article Oddly enough it talks about woke journalists in the States when they get down to Latin America to do a story Especially when they're reporting on illegal immigration caravans and all that stuff over and over again They fail to mention the elephant in the room

[14:16] Them mounds of trash illegals leave behind as they move their caravans from country to country They do the same thing when they end up in the States. Let me read part of this to you It's entitled the Mexican littering habit. It starts out The Mexican cultural trait of littering is well known to everyone except American journalists The truth about the rampant littering problem of Mexican illegal immigrants mostly slips out in the non-traditional media You'll see it in the comment sections of hiking blogs. For example, they're a hotbed of unfiltered reporting Then it says after Labor Day weekend one hikers blog reported in one Southern, California Canyon alone they'd never mention which one but it certainly looks like East Fork in the San Gabriel River in the accompanying video

[15:02] Had upwards of 30,000 pounds of trash left behind in that one three-day weekend Etc. Etc. Then Lizzie says I'm a hiker too and I see it all the time She says I have friends and have acquaintances who have farms on the Mexican, California border They tell me if they don't go around weekly or monthly picking up all the garbage themselves That whole swath would look like a dump she says you can even see mounds of garbage appearing and disappearing on Google Maps and When those mounds disappeared you think it's the illegals doing the cleanup Wrong. If you think in a million years they clean up after themselves pop another peyote button. Why don't you? Anyway, Johnny, she says you can read this on your show, but please no last names

[15:47] I don't want to get canceled fired or flogged for simply telling the truth Alright Lizzie, thanks for that now as from my opinion about all the garbage here in Latin America It's ugly and it's an eyesore, but it's not getting worse little by little it's getting better You know as these countries get wealthier and people are pulled up out of poverty You'll notice that is if you're down here with boots on the ground The middle-class neighborhoods have less garbage strewn around than the poorer neighborhoods and the wealthy neighborhoods Have less garbage than the middle-class neighborhoods And it's not just because wealthy neighbors have gardeners to pick up things even the empty lots and streets and gutters are much cleaner That means there's less and less garbage thrown around in public spaces, too The reality is as much as wokesters might hate the phrase poor folks have poor habits facts are facts

[16:38] And it's a fact as the general wealth of a country increases. So does their environmental IQ By the way, I just read another sickening article on a popular mechanics. I used to subscribe to that as a kid I'd get popular electronics, too It was always the budding engineering types us young kids interested in taking radios clocks and carburetors apart and making bombs, too We're the ones who would read popular science popular mechanics and popular electronics. Oh And can I say this call me a sexist call me a dick, but here's another fact I never met a single girl whoever subscribed to popular mechanics or electronics I'd like to see those stats that could send the wokesters over the edge thing is I'm really surprised these days

[17:24] They've got enough subscribers to keep them in business. They're still out there. I'm surprised I would have thought the internet and antisocial media would have wiped them out of existence Anyway in a new article from popular mechanics the title of the article bad news for earth Rainwater is no longer safe to drink Thanks to plastics The article says recent studies conclude drinking rainwater could negatively impact human health around the world It says remember when you were a kid and it was fun to tip your head back during a rainstorm Open your mouth and drink the drops. Well, you shouldn't do that anymore That's because you'll be ingesting way too many particles of perfluoro alkyl and polyfluoro alkyl substances Known as PFAS forever chemicals according to the study earth's rainwater is officially past its safe zone for plastic contamination

[18:16] Hmm in that lovely it says according to the August 2nd 2022 Journal of environmental science and technology the atmospheric Earth's PFAS Human toxicity boundary has been exceeded at this point It says these forever chemicals are all over the globe and have seeded the atmosphere most importantly They don't break down in the environment Not for hundreds of years. It says based on the latest u.s. Guidelines for PFO a's in drinking water Rainwater everywhere would be judged unsafe to drink and though industrial world people at his first world people don't often drink rainwater Many billions of people around the globe drink it and it supplies many of our drinking water sources After all rainwater on mountaintops eventually ends up as fresh water in lakes

[19:06] It's a long article, but in the end it says sadly, there's evidence that FPO a's Forever chemicals in rain and fresh water likely cause cancer in humans. By the way I always recommend if you buy or build here in Latin America You should always collect rain water just to have an extra supply in your sister And in case your subdivision neighborhood or municipalities Well, our water source goes on the blank or is down for repairs Now the way I've got my system set up if I have to use the rainwater It automatically detects a loss of pressure and kicks in it gets diverted by its own separate pump to the tubing in the house What ends up as drinking water goes through my three-stage? Filter under the kitchen sink and those three filters take out everything including micro plastics and those forever chemicals

[19:51] So I'm covered. How about you? Even though it's a scary thought and the media is just now reporting on it all the rainwater in the world is contaminated That means all the animals the big game in the forest drinking from the rivers and streams to they're saying now the whole food chains Contaminated we always think of pure crystal clear water coming from mountain streams as pure as you can get it And what about all the plants? They're absorbing all that stuff, too I know I know a lot of you are thinking I've got enough to worry about I don't want to hear about that crap out of sight out of mind right and Now for some more bad news an email that just came in from Bert who says you were dead right about Costa Rica Johnny I tried it for a full year, and I'm leaving he says Johnny if you're a freedom-loving capitalist leaning towards libertarianism

[20:38] You won't like it there. It's not much better than the United States It's lagging just a little but catching up fast He says don't be confused when Americans think that Costa Rica is a place to hide from Government regs and rules woke social progress or socialism itself many Americans are of the opinion You can go down there and just kind of fade into the surroundings Disappear live a nice calm unfettered life as it was in the states in the 70s and 80s Well, maybe it was like that 20 or 30 years ago, but Costa Rica has become very socialist They allow gay marriage now There are woke people all over the Facebook sites and I'm seeing more doctors who are willing to perform hormone therapy for trans individuals In fact, there are many English-speaking blogs journals and newspapers where Costa Rican doctors actually

[21:26] advertise in English they specialize in trans surgeries and hormone therapy for Non-binaries and people who don't quite know what gender they are yet What I'm saying Johnny's Costa Rica is not the place to live if you want to recapture the life you lived in the 70s 80s and 90s Costa Rica is not a good place to hide from US style social progress They're all about copying everything the US does including vaccine mandates Then he says when I came down to Costa Rica I did find a nice little group of like-minded Americans living in Costa Rica though They're all changing their mind about Costa Rica to everyone's disappointed almost all of them are in agreement that they selected Costa Rica based on a couple of nice vacations a Big motivator was that most people spoke English

[22:11] She didn't have to have Spanish to get around But now after being down here a while a couple of years for some of them and seeing reality They wish someone would have told them that nice vacations are not good indicators of how life will be When you really move there thing is Johnny I told him there is a guy out there in the ether a guy who does Podcasts who's been telling people that for years a guy named Johnny But some maybe most new BX pads have forceful personalities and therefore are stubborn Once they've moved to a Latin American country, they hear about other people's mistakes, but don't learn from them They reinvent the wheel and make those same mistakes themselves I'm guilty of that too, or I wouldn't be in Costa Rica. Love the show Johnny signed Burt PS because Costa Rica has a border with Panama I've been back and forth to Panama six or seven times the people the common people are revolting. They are pissed off

[23:01] They're not happy campers talking to Americans in Panama They don't want to go out of their houses because there's a shortage of gas They want to be stuck with an empty tank No matter what you might read in the blogs expats are very worried Especially property owners bragging about how prices have been skyrocketing lately Well, the word is that expats are getting very restless in Panama as for me. I'm looking at a plan C It might be Guatemala Salvador the DR. I don't know. I promise though. I'm never going back to the states I hope going to your seminar will help me with that decision. I'm saving my colognes. Hope to see you there Alright, thanks for that Burt Funny thing about most expats, you know, a lot of us are curious damn the torpedoes straight ahead chance takers We don't lean on other people too much. We make our decisions and live with them good or bad

[23:48] That sort of explains why so many people move to Mexico and Costa Rica despite the dire warnings I guess it's like buying a car if you always like the look go for example a Range Rover or a Jeep Lexus Volvo, whatever some people just buy because they like the idea of that car They like the look of it. Even when they check out consumer reports and find a Range Rover has a terrible repair record They don't listen they buy it anyway, because that's what they always wanted. They had their heart set on it. Nothing will dissuade them So they get it and it looks nice in the driveway But they end up using the four-year-old Honda Civic to run errands. By the way, I'm looking at a chart that just came out It's called the most expensive cities to live in Latin America and the Caribbean for 2022 Put together by a site called Statistica.com

[24:34] Now this might shock you but the top eight on this list I'll name them according to the website Statistica are more expensive than living in the average big city in the US number one Nassau Bahamas number two San Juan Puerto Rico. Yep more expensive than the average city in the US You can bet the Bitcoin and crypto guys are sort of responsible for that number three port of Spain That's in Trinidad and Tobago. Well, we don't talk about them much. They're out of our wheelhouse not in Latin America Anyway, number four shocker Panama City. We're just talking about that, right? number five Havana Cuba We all know why that is right because they got two Currencies there one for tourists and one for locals and tourists get gouged to the bone number six We're talking about the most expensive cities and in the Caribbean and Latin America

[25:22] Kingston, Jamaica number seven. No surprise San Jose, Costa Rica number eight Para Maribo That's the capital of Suriname By the way, if you ever been to Suriname and I've been there once it's loaded with Dutch people who come for vacation the gamble It's loaded with casinos. I don't recommend it not to live anyway. It's so small and there's so little to do you get bored in three days What do you expect the whole country's only got around? 600,000 people. All right, the seventh most expensive city in Latin America and the Caribbean Montevideo Uruguay number eight Santiago, Chile So did that info sway you any as for me? None of those places would be on my plan B list There are many more negatives besides the high cost of living

[26:09] Anyway, Burt mentioned earlier that he was saving up his colognes, you know That's the Costa Rica funny money to come to the next seminar Well, the good news is I've got my seminar signup page ready to go Just go to expat plan B comm for all the info and signup details And remember if you sign up before September 15th about a month away now You're in on the early bird discounts get $500 off the regular price and of course for you repeat offenders We've always got those you know the drill you get a thousand dollars off the regular price Oh and just to repeat the dates the seminar will be from Saturday, November 5th through Friday, November 11th I hope to see you there. It'll be great fun And finally an email from longtime listener Jerry in California. He says Johnny I don't know why you're so anti-mask. I

[26:58] Kind of like masks myself because you see when I'm out in public and I see someone wearing a mask It's like the scarlet letter a badge saying I'm a moron. I'm not very bright I'm a follower who believes everything the idiots in government. Tell me a mask also says I've been triple even Quadruple vexed. I can't wait for the next jab The thing is Johnny when a person's not wearing a mask you have no idea if he's a moron or not You can only guess I for one would rather know for sure so all you idiots out there keep wearing those masks Alright, thanks for that Jerry. I couldn't have said it better myself You've been listening to the expat files living in Latin America If you need some help with your own plan B We can schedule a one-on-one phone or Skype consult just send me an email the expat files at gmail.com

[27:44] And if you want to get on the waiting list for my next week-long expat insider seminar in Central America Where you're guaranteed to get a two to five year head start on your plan B Send me an email the expat files at gmail.com