Episode Summary
In this episode of The Expat Files, Johnny Mueller delves into the political climate and violence in Latin America, contrasting it with the first world. He discusses the recent assassination of a governor in Argentina, viewing such events as a form of justice due to the corrupt nature of politicians in the region. He explains that political violence in Latin America is often due to intense competition for power and a patronage system, where politicians control jobs and contracts. He contrasts this with the first world, where political violence is usually attributed to extremists or personal vendettas, and where there is more transparency in government spending and contracts.
Johnny also discusses the lack of transparency in military contracts in the first world, particularly in Latin America, and highlights how political corruption and kickbacks are common in government contracts. He shares a story from his Colombian architect friend about how contracts are often awarded through backdoor deals and kickbacks, with the expectation of a 20% cut to a shell company or individual. He also describes the violent nature of political competition in Latin America, citing examples like the killing of mayoral candidates in Guatemala, where political opponents use hired criminals or threats to eliminate competition.
The episode continues with a discussion on the disparity in wages between government and private sector jobs in Latin America, emphasizing that government jobs often pay significantly more. Johnny touches on the political implications of such jobs, including the potential for corruption and the influence of patronage. He then shifts to a personal anecdote about an expat named Eddie who buys a late model car in Salvador, only to face the consequences of owning such a vehicle in a region where it can attract unwanted attention. The segment ends with Eddie's girlfriend taking him to a local market where she shops for clothes at a fraction of the cost compared to Western prices, highlighting the economic realities of life in Latin America.
Johnny reflects on how such incidents are more common in Latin America than in the first world, where cars are seen as sacred and people are more protective of them. He also discusses the challenges of parking in Latin American cities, where parking spaces are tight and drivers often have poor parking habits, leading to frequent car damage. The segment transitions to a discussion about cultural differences in car etiquette and behavior in Latin America, particularly through the lens of Johnny Mueller's experiences. Johnny recounts how Eddie, a friend, reacts to car dings by dinging back, often with more force, and how this behavior is influenced by cultural norms. Johnny also reflects on how expats generally loosen up about first-world habits like car care and punctuality when living in Latin America. However, there are exceptions, such as Eddie's strict adherence to car etiquette and Johnny's frustration with bad drivers and vehicles without lights.
The episode continues with a discussion on the importance of having a local currency account for expats living in Latin America. Johnny recommends opening a passbook savings account with at least $500 or $1000 in local currency, noting that banks within a country typically have similar exchange rates, so there's no need to worry about being ripped off. He also mentions that expats can open accounts with dollars, which will be converted to the local currency at the bank's rate. Johnny highlights that expats don't need to worry about their references being checked, as banks don't typically verify foreign references. He suggests using a lawyer's address and references to get a debit card for use in ATMs. Additionally, he notes that having a lawyer can help set up a bank account and that many first-world banks, like Citibank and Scotiabank, have expanded into Latin America, offering expats the option to bank with these institutions instead of local banks.
In the final segment, Johnny discusses the trust that Latin American populations place in first-world banks, despite their own banking systems' failures. He highlights the irony that when a first-world bank like Citibank operates in Latin America, it can take advantage of the region's trust in these institutions, even as the local banking systems fail. Johnny suggests that Citibank may have used the U.S. government's bailout money to target Latin America, exploiting the region's trust in first-world banks as a 'gringo advantage.'
Topics
Political violence in Latin America, Patronage system in politics, Contrast between Latin America and the first world, Corruption and transparency in government, Military contracts and transparency, Political corruption in Latin America, Kickbacks in government contracts, Violence in political elections, Government vs. private sector wages in Latin America, Political corruption and patronage, Economic realities and consumer behavior in Latin America, Expat experiences in Latin America
Chapters
00:00:00 Opening 00:01:03 Political Violence and Justice in Latin America 00:02:53 Why There Is High Violence Against Political Figures 00:04:43 Lack of Transparency in Military Contracts 00:07:34 Power of Government Positions in Latin America 00:08:11 Violence in Political Elections 00:09:19 Government Jobs and Wages in Latin America 00:09:38 Political Implications of Government Positions 00:11:37 Eddie's Experience with Owning a Late Model Car 00:15:17 The Incident with the Toddler on the Car Hood 00:16:34 Cultural Differences in Car Behavior 00:17:12 Parking Challenges in Latin America 00:18:15 The 1990 Nissan Station Wagon and Its Dings 00:19:40 Expat Life and Loosening Up on First-World Habits 00:21:14 Financial Safety in Latin American Banks 00:22:12 The Need for a Local Currency Account for Expats in Latin America 00:22:16 Opening a Passbook Savings Account with Local Currency 00:22:21 Loading the Account with Local Currency 00:22:25 Opening a Local Currency Account with Dollars 00:22:28 Conversion of Dollars to Local Currency 00:22:32 Similar Exchange Rates Across Banks 00:22:36 No Need to Worry About Being Rip-Off 00:22:40 Minimal Difference in Exchange Rates 00:26:24 The Lack of Online Investigation by Latin Americans 00:26:26 Recurring Bank Failures in Latin America 00:26:44 Citibank's Potential Bailout and Expansion in Latin America
Transcript
Automatically transcribed from the original recording; names and wording may contain errors.
[00:03] Hi everybody, I'm Johnny Mueller and you're listening to The Expat Files, living in Latin America. The show that tells you what it's really like to live, work, play and or retire in Latin America. I tell it just like it is, not the version they give you in those glossy travel magazines, or the picture they paint for you in those international traveler websites, where they're only trying to sell you something. What's it really like for expats living in Latin America? Well, it's time to take off those rose-colored glasses and find out. So let's get started. Let me start this off by being a little politically incorrect again. Now I'm just reading in the newspaper today that down in Argentina, while celebrating at a New Year's Eve party, one of the governors down there just got shot in the head and killed. Now I'm sorry that stories like that don't make me feel the least bit bad.
[00:51] In fact, you might think I'm kind of a feelingless sociopath when I say that every time I hear of a political assassination or an attempted murder of some high-up government official down here in Latin America, I actually kind of get the feeling that some kind of justice has been served. Because I know all about these politicians down here in Latin America, and I know about the ones in the first world too. And one of the big differences I do see is that when there's an assassination up in the first world, or an assassination attempt, it's usually perpetrated by some kind of nutcase. Some guy that's been in and out of institutions, involved in a cult or taking psychoactive medications like, well, Hinckley and Squeaky Frombe, for example. The exception to the rule being the Kennedy Brothers, and nobody knows what really happened there. But that one looks surely complicated and politically organized, if you ask me, and a million other people.
[01:37] Anyway, up there in the first world, when somebody takes a potshot at a political big wig, you usually find out he's some kind of extremist nutcase. The exception, of course, being if the guy's wife or mistress takes a potshot at him. You know, crime of passion and all that, and that can happen to anyone. Anyway, the thing is, down here in Latin America, when someone takes a potshot at a political big wig, it's almost always orchestrated by someone who's been pissed off in an opposing party. Because you see, there's such heavy duty fighting for political power down here, and the stakes are so high, from presidents down to small town mayors, that people in power, especially when the elections are on, get bumped off all the time. In fact, I was just reading that in Nicaragua, during the past election cycle, there were 31 reports of attempted murder involving medium and high-level politicians, not to
[02:22] mention so many hundreds and hundreds of death threats on politicians' personal websites and on personal smartphones, that nobody can possibly keep track of those. So as far as Nicaragua's election cycle, quite a few big-time politicians did take a hit, with seven of them ending up wounded in the hospital and three of them killed. And me, when I read about that stuff, I don't feel a bit of pain-guilty remorse at all, because, basically, these guys are such lying, thieving, unsavory slime, that it's really hard to dredge up any feelings of humanity for these guys. And why is there such a high level of violence against political figures down here? Well, it's because from the mayor on up, through the higher positions like governor, vice president, president, cabinet members, the parts of government that these guys control are a 100% spoils and patronage system, kind of like Tammany Hall a hundred years ago in
[03:11] New York, and big machine politics as it was practiced 50 years ago in Chicago. What I'm saying is, down here in Latin America, if you're mayor of a small town of 50 or 60,000 people, you control all the municipal jobs within your voting district. That could be 100 to 200 people. When you get in, you can kick out everyone that you don't like and put in all your own guys. And who are those guys going to be? Your friends and your family, and all the people you might owe favors to. That's exactly how it works. I mean, these guys have the power to give out municipal jobs, police jobs, firefighting, street cleaning and municipal water jobs, teaching jobs, municipal worker jobs, clerical jobs. They even appoint local judges, which means if any of the mayor's buddies or family gets picked up by the cops or hauled in front of a judge, well, you know the outcome, right? And that's on a mayorial local level.
[03:59] Now imagine if you're governor and you've got 30, 40, or 50 little towns like that in your district. That means you control a few hundred jobs yourself, including all those roads and infrastructure jobs and the contracts let out to maintain and build new ones. And down here in Latin America, there's virtually no transparency. Up in the United States, you can get on the web and look up a government site and find out where they're spending the money, where the work is being done, where the contracts are going and who's getting them. And not to say there aren't a ton of pork barrel and sweetheart contracts going out to friends and family up in the first world. I mean friends and families of governors and department heads up there. We know that happens up there all the time, too. But a paper trail exists up there that you can follow. And a lot of news reporters dig that stuff up. And then it ends up in the newspapers around 60 minutes and everybody knows about it. But one place in the first world that there is virtually no transparency is in the military.
[04:48] Those billions and even trillions in military contracts that you and I or no reporter could ever see because they're protected under secrecy acts and under the umbrella of national security. Yeah, and that's a license to steal billions, even trillions. And that's why anyone who looks at the way the Pentagon does business, well, if you've been down here in Latin America a long time like me, you realize that's exactly how Latin American governments do business, too. Whenever you see some big infrastructure project, you never know how that contract got let out. You'll never be able to find out at all. You just can't. And the story I like to relate is the one my Colombian architect friend told me. He told me that all throughout Latin America, when his company installs a water treatment plant in the traditional way through a bidding process in a private sector, well, it turns out most of the time, the sewage treatment plants that he puts in in a private subdivision
[05:36] or at a hotel or a tourist site, it's a regular bidding process and three or four or five companies will get the specs on what's supposed to be done and everybody will submit a sealed bid. And then the developers of the subdivision or the hotel or whatever will select the bid that they want to go with. That's the way it's done in the private sector. It's an open bidding process. But he said there's two problems that he often encounters when he's dealing with bidding on projects in the public sector and if and when the job is put up for bids. And often it's not at all because the contract goes to an insider, a family member, a friend of the mayor or governor or vice president or who's ever got final authority on signing off on who gets the contract. Well, my friend, the Colombian architect, says when there actually is an open bidding process on a sewage treatment plant, which is what his company sells and installs, when
[06:22] it comes down to the final decision of who's going to get that contract, often he'll be sitting in a room with the usual suspects, the companies that have been getting those contracts all the time, year over year. And now let's say the good old boys, the usual suspects aren't necessarily going to get that contract automatically like they did before because there's a new mayor or new governor in the office who controls who gets that contract. And when it's a new situation like that with a new governor, mayor or bureaucrat that controls the contract, the whole purpose of that little meeting is for that governor or mayor to find out who's going to give them the biggest kickback under the table. And my architect friend said it's customary that when they cut you the check for the actual job, you got to check back to them for 20% of the total contract. So if it's a million dollar project, whoever they award that contract to has to kick back
[07:10] $200,000 to some storefront business or shell company or individual. And when that kickback check gets cashed, it usually ends up in an offshore account somewhere. And my architect friend told me, if you don't kick back some money to these guys, you just will never get a government contract. That's just the way it is. And you might as well not even submit a bid. So I hope you're beginning to see just what kind of power these guys in Latin American government have. It's the end all to everything to get elected to one of these medium or high level government jobs. So as you can imagine, the fighting and the competition between the candidates is fierce. I mean, these guys play dirty tricks on each other that you just couldn't imagine up in the first world. And for example, this year in Guatemala, it was a huge election year and about five or ten candidates were killed along the way. Most of them mayoral candidates.
[07:57] And believe it or not, one of the candidates was actually machete to death in his house. And the guy that macheted him was a deranged poor campasino who admitted later on that, well, he was paid a couple of hundred bucks by a member of the opposing party to do it. And that's the way it goes down here. The political opponent that's out to kill somebody in the other party or scare the other guy so much that he quits the race, well, they never really get their hands dirty directly. They pay some down and out campasino or some known criminals to do the threatening of the killing. And oftentimes, some bad guys will just kidnap a daughter or a son or a sister or a brother. And that's usually enough to get a guy to back out of the race for personal reasons, which sounds a lot nobler than I'm backing out of the race because my opponent says, if I don't, he'll kill my daughter. And when you do see in the paper that some big time candidate is backing out for personal
[08:46] reasons, it's not unreasonable at all to assume he's had some very serious death threats or they've actually kidnapped somebody from his family already. But most political kidnappings never hit the papers because the kidnappers don't like publicity and they'll often kill the hostage if there is. So just know this, Latin Americans take their political candidates very, very seriously down here because for some of these guys, it really is a matter of putting food on the table, whether your candidate gets the job or not, because just imagine if you've been on the gravy train for four years, working out a sack job for the government, doing practically nothing and making two or three times the average wage of the guy in the private sector doing the same job. Well, if your guy or your party doesn't get in for the next four year cycle, well, you're guaranteed of one thing. You're out on the street, man, and the new guy who gets in has got a buddy or a family
[09:33] member standing right in line to fill your shoes and get your bloated paycheck, of course. And about those paychecks, remember in a past show, I told you that all the government jobs in Latin America compared to equivalent private sector jobs, well, government jobs pay at least two times as much as the average private sector job. And of course, you know, government jobs, they're make work jobs and nobody breaks a sweat. And if you do look like you're working up a sweat or putting in a pretty good day's work, chances are your coworkers will tell you to slow down, which is why down here, everyone wants a government job. And even better, everybody wishes their cousin, uncle or brother had some kind of position of power in government because that's how the family and friends get on the gravy train. And just imagine for a minute, if you're a mayor or a governor responsible for filling
[10:18] two or 300 patronage jobs, imagine all those people and families that are beholding to you for those jobs and all the troops you can marshal up if you need them to muster up public support for this or that, or to just hit the pavement and get out the votes in general when election time comes, which brings me back to that politically incorrect statement I made that I don't feel one drop of humanity or remorse when I read or hear about a political hack who's been shot or killed. And you might think I'm the rottenest guy in the world for admitting this, but sometimes it actually gives me a warm, fuzzy feeling. It's nice to imagine that in some odd cases, karma actually exists. And by the way, about that Argentinian governor that got whacked on New Year's Eve, well, some insiders are saying that it's a crime of passion, that his wife did him, but I don't believe that. Instead, other insiders are saying that it has something to do with the fact that he
[11:06] was a key player in some recent negotiations with the Chinese when they came in and spread around more than a billion dollars in his province alone to secure some mineral and grazing rights from the government. Hmm, let's see now, a 20% kickback on a billion dollars? That works out to a cool 200 million dollars in somebody, guess who is pocket? You think that kind of dough might be worth killing somebody over, where in certain neighborhoods in Buenos Aires, you could get yourself killed over a blackberry? Anyway, expat Eddie checked in with me the other day and told me a very cool story. Now listen to this, a couple of weeks ago down in Salvador, he just bought himself a late model car. Now, Eddie should know better, he's been down here a long time. He knows what happens if you own a late model car down here, but he's still got that first
[11:52] world car Jones and he just can't shake it. You know, when he was a teenager back up in the States, he had muscle cars and took the motors apart and put headers and big daddies and tweaked carburetors on his cars and all that, and was into scooping the loop on Fridays with that muscle car like so many other American teenagers back in the 70s. So anyway, Eddie, on the urging of his Salvador girlfriend, bought this late model car. And like I told you before, Eddie can never say no to a pretty girl. And a couple of weeks ago they were out Christmas shopping, and they parked that car right in front of a big clothing store. And it's not in a shopping mall, but in a real busy middle class area of Salvador, an area known for having dozens of back-to-back women clothing stores, all with rows of mannequins out front dressed in the latest fashions, and all those fashions about half of what you'd pay in the local malls, which makes him a tremendous deal about 25% of what you'd
[12:41] pay up in the first world. And I know Eddie's a cheapskate, what they call a taconio down here, but when he has a girlfriend or a wife, I think he does absolutely the right thing. When it comes to birthdays, holidays and Christmas and stuff, he says, look, I got $300 right here, let's go shopping, for you, for Christmas. So guess what? All the girls in Latin America, the middle class girls that is, the girls that end up taking the bus because they can't afford a car, anyway, these girls know where to shop. They don't go to the high-end shopping malls, those are for tourists and rich people. Middle class girls like to browse the high-end malls, but they never shop there, not when they're spending their money. So Eddie says, here's $300, spend it anywhere you like, and guess where she takes them? Right to the place where the best deals in fashionable women's clothes that can be found in all of Salvador, one of those special little neighborhoods and areas that us expats never
[13:30] find out about till we've been living down here a couple of years. And Eddie says when she was done shopping, she had about seven bags with about 30 pieces of clothing. So everything she bought, from pants to shirts to blouses to shoes, cost about $10 US each. And Eddie says a lot of it was even brand name stuff, but you never know if it's real or pirated, at least a guy doesn't know. But we all know women have an infinitely better eye for that sort of thing. Anyway, like any red-blooded first world guy, Eddie hates shopping with women. So he went to the little outdoor restaurant across the street from his car, he sat down for a few hours, had a few beers and did some people watching. And by the way, people watching is one of my favorite things to do too. It's an expat's privilege and one of the few pleasures in life that's free, besides the beer and the coffee. So anyway, Eddie's sitting across the street from his car, and it's a pretty busy area,
[14:17] so people are coming and going, jaywalking, stopping, talking, people walking up to him because he's a gringo sitting in an outdoor cafe, they figure he's got money, they try to sell him some fruit or some pirated CDs, anyway, he's people watching. So Eddie's in the midst of all this, all the while keeping his eye on his brand new car which is parked across the street in front of a popular clothing store, and this 30-something lady with two kids, holding what looked like a two-year-old in her arms and leading a four or five-year-old boy by the hand across the street, and she's walking slowly right towards Eddie's car. Now, Eddie's keeping an eye on his car anyway, because we all do that when you've got a brand new car. It doesn't matter if you're in Denver or La Paz, Bolivia. When you've got a brand new car, you're a little bit preoccupied about it when you park it. That's only natural. So this lady's walking towards Eddie's car, and what she's trying to do is get to that
[15:04] clothing store, so she slips along the front side of Eddie's car between the other car parked there, and she stops because her phone rings. Now, she's holding the phone in one hand, and the kid is squirming in her arms, and she can barely hold him. So what does she do? She stands him up on the hood of Eddie's brand new car, and she turns her back on the kid, and she steps up on the sidewalk and starts having a conversation on the phone. And meanwhile, the kid's pissed off because Mom just let him go. She just abruptly separated him from the comfort of Mommy's bosom, and now he's standing on this car, jumping and putting on a little tantrum. And Eddie, sitting across the street at the restaurant, jumps out of his seat and starts waving his hands at the kid jumping up and down on the hood of his car. And nobody on that side of the street is paying attention to Eddie because people are coming and going and walking, and there's a lot of street noise.
[15:50] And there's a good amount of vehicular traffic going by, too, because on the next corner, there's a stop-and-go light, and the cars are piling up, and Eddie can't get through. And after 10 seconds or so, when Eddie finally did make it to the other side of the street, and he yelled at the kid to get off his car, and the lady turned around, and ever so slowly picked up the kid, took him off the car, and gave Eddie a look that kind of said, I'm sorry about that, but you know how kids are. And she made a quick apology, grabbed her kids, and went right into that store. And Eddie's hood was nice and scuffed, and well, after that, it just wasn't a brand new car anymore. Now, up in the United States, if a woman did that, put her kid down on a hood of somebody's car, and it wouldn't matter if it was an old or a brand new car. We all know that up in the first world, a car is an extension of you, and it's kind of a sacred thing.
[16:36] You don't mess with somebody's car. Well, if it was your car, and you caught somebody in the act of doing that, that mommy would be looking at an insurance claim. And surely, if you own that car, you'd be thinking, this woman's just gotta be white trash, since no middle class American would ever think of doing that. That would be just way too, well, white trash. But it takes a while for a first world person who's been down here in Latin America to figure out that you just can't have a nice car down here. It's virtually impossible. If you park it in a secure parking lot, I guarantee you're gonna get a few door dings. That's inevitable, because the actual parking lot widths for cars are smaller than they are in the first world, so they can pack more cars in. And the majority of Latins, with their basically junky cars, that are already peppered with their own parking lot dings,
[17:22] well, these guys don't care about their cars, so they just fling their car doors wide open when they get in and out of those cars, whether your car's six inches away or not. And sometimes, believe it or not, Expat Eddie and I play this parking lot game. We pull up into a guarded parking lot, where there's an empty space on either side of us, and wait there for a few minutes till a car pulls in on either side of us. Then Eddie and I make a little bet. We know we got about a one out of four chance when that guy gets out of his car that he's gonna fling his car door open and whack ours. And it all depends on what kind of person is driving that car. If it's an old codger or a guy in a nice new Range Rover with practically no dings, well, you can give a lot better odds on the fact that he probably won't nick you. But if it's a young adult or a kid getting out of the back seat, you can almost guarantee you're gonna get whacked.
[18:07] And you can almost guarantee you're gonna get whacked when the guy's got a really crappy car. And when Eddie's driving his older car, the one he uses for the restaurant business, the 1990 Nissan Station Wagon, which has more dings than there are stars in our galaxy. Anyway, when we play that game in the parking lot with that car and someone dings Eddie and we're sitting in the car, Eddie always flings his own door open and dings him back pretty hard, about three times as hard as they did it usually. Though he's careful not to do it when the guy that dinged him is an evil looking guy with tattoos on his face. But in the places that Eddie and I go, we don't see many of those guys, that's for sure. But you'd be surprised when Eddie dings him back, and I have to admit I've done it a few times myself. But I only do it to ladies and old people who I know can't fight back. Anyway, when you ding them back, they're always so surprised,
[18:54] like what did you do that for? And they'll give you a shocked and sometimes dirty look, especially if they have a late model, pretty nice car that doesn't have too many dings in it yet. And believe it or not, most of the time they won't say a word to you, they'll just give you that deer in the headlights look. And when they do say, what did you do that for? Eddie always says something like, where I come from is very bad manners to scratch someone's car. And that's why your car looks like a piece of excrement. And he uses the colloquial Spanish term for excrement, which packs a lot of punch down here. So that's what happens when you violate Eddie's car etiquette. And even down here in Latin America, where every expat eventually loosens up, gets less stressed and less anal retentive about things he or she obsessed about up in the first world, like cars or lawns or good old first world punctuality.
[19:40] Well, after a year or so, every expat starts loosening the reins on that kind of stuff. And believe me, when you do, you feel better for it and it makes you live longer, really. But there are always one or two things even an expat just can't let go of. And for Eddie, it's the car thing. And for me, it's crappy drivers in general and vehicles without headlights or taillights. And I can still work myself up into a bit of road rage when I confront things like that. But if you're a first worlder with a car fetish like Eddie, and you just have to have a nice new late model car, well, you're better off leaving it at home most of the time. Take the 10 year old station wagon, at least when you're in the big city, unless you don't mind parking your car, going into a bank or a commercial center and coming back out and seeing two or three people leaning on your car and using your trunk as a tabletop for their lunch.
[20:27] Now, that's happened to me seven or eight times since I've been down here. And usually to get these guys motivated enough to get away from your car, you actually have to get in your car and start the engine. It's not at all like the first world. If someone happens to be leaning against your car, which almost never happens up there except in the ghetto. Anyway, if you do catch some kid leaning against your car and he spots you walking towards him, he'll usually take off like a scared rabbit. Unless you're in the ghetto, of course, and then the guy might ask you for some money or put on an attitude. But down here in Latin America, there's absolutely no stigma attached to leaning or eating or changing the diapers of your kid on the hood or the trunk of a complete stranger's car. So if you're going to come down here to Latin America and buy a car, get used to it. Now to change gears for a bit, pun intended, I like to talk about something that comes up in emails every once in a while.
[21:14] People want to know if it's all right to put their money in Latin American banks. And if they do, they wonder what's a safe amount to limit their exposure if there's a bank run or a failure. And I know I talked a little bit about this in a past show, but I'll go into a little more detail. Now, I never recommend that you put a lot of money down here in a Latin American bank, even though now all the Latin American banks have US dollar accounts and deposit insurance. And that wasn't the case some five or 10 years ago. And people always ask me about the local currency too, since if you're in a country that's not on the tourist track, they're going to use the local currency. And most businesses just won't accept dollars. Or I should say it's not that they won't. It's just that they don't know the current exchange rate because they rarely see dollars. And they're a little afraid of what they don't know about US currency. They think it might be counterfeit because so many of them have been stiffed
[22:02] with their own counterfeit bills in their own currency. So off the tourist trail, a lot of these people are just reluctant to take dollars. Though, some will. But you can't count on it. And yes, because you do have to have at least some local currency to live down here, I do recommend that you get a local passbook savings account down here at least. And load it up with maybe $500 or $1000 of the local currency. And yes, you can open up a local currency account down here with dollars. They'll just convert it to the local currency at the day's bank rate. And usually all banks within a country have about the same exchange rate. So you don't have to worry about one bank ripping you off a few cents over another. There's just not that much difference. And all you need is your passport to open up a passbook savings account down here. And of course, you'll fill out some forms and all that.
[22:48] And the forms will ask you for references and all that stuff. But believe me, when you're a foreigner opening up a passbook savings account, no one's going to bother to check your first world references back in Cleveland. So if you really want to fly under the radar, you could probably put Darth Vader and Santa Claus down as a reference and you'll still get your passbook. And by the way, if you have a passbook in the local currency or even in dollars down here, as long as you have an address and a business and a personal reference from someone within the country, they'll give you a debit card that you can use in every ATM machine. Then you could pull out both the local currency and dollars if you want. And that's what's so nice about hiring a lawyer down here. Even if you're living in a hotel, which isn't a permanent address and the bank won't like that at all. And that'll probably get you rejected as a candidate for an ATM card. But if you have a lawyer, he'll let you use his business address
[23:34] as your mailing address for the bank. And he'll write you a personal and business reference, exactly the stuff the bank requires for you to open your account, to get a debit or credit card, or even a checking account. And once you hook up with the lawyer, there's even better news, even though there's always someone at the bank who speaks English. If you have a young lawyer, not an old fart that's said in his ways, nine times out of 10, he'll be glad to go down to the bank with you and spend an hour or two with you setting up your bank account, your debit or credit card, and even a checking account if you like. And I've had a young lawyer do that for me in five different Latin American countries, and guess what? Not once was I ever charged for it. Because you see, lawyers down here believe, once they've got a gringo or first world person as a client, you're going to bring them a lot of first world business, and they have in their mind, through the gringo advantage
[24:20] that I talk so much about, that first worlders are wealthy, they pay on time, they do a lot of business, so that involves lawyers, and they pay in US dollars. And in regards to that, they're usually right. All except for the rich gringo thing, because their definition of rich is our definition of middle class. And the other news about banks down here, and depending on your point of view, this could be good or bad. Well, a lot of first world banks have finally landed down here. In fact, they're everywhere now. Citibank alone has over a thousand branches down here in Central America alone. What they've done in the last two years is they've come down here and bought up literally hundreds of tiny little corner banks, Latin American banks, changed the equipment and the logo, and now they're all little Citibank branches. And that, expat and expat wannabes, is your too big to fail taxpayer bailout money at work.
[25:08] What didn't go into the pockets of the executives as bonuses came down here to Latin America. Some very smart first world Citibank guys figured out the fact that not one Latin in a hundred thousand knows anything at all about Citibank's part in the great financial bubble and derivatives collapse that started in 2007, 2008. They had no idea that Citibank was absolutely bankrupt, got bailed out by taxpayers and now is set to fall again when the next shoe drops and Latin Americans have absolutely no idea what really happened up north and they don't really care because the effects of that financial catastrophe haven't really hit down here in Latin America yet in a big way. But it will because there's always a lag time. Anyway, so Citibank's are down here all over the place. So are Scotiabank's and a lot of other first world banks.
[25:55] So guess what? You don't have to bank with a Latin American bank at all when you come down here. You can stick with a first world bank like Citibank. And believe it or not, in those two short years since Citibank came down here due to the gringo advantage, the popularity with Latins has spread like wildfire since they love everything in anything first world. And no Latin would ever think to Google Citibank and see just what kind of a pathetically criminal organization it really is. That's just not on the radar with anyone down here. They're consumer dunces. They never go on the internet to investigate anything. All Latins know is that every once in a while, just like clockwork, their own banks fail and thousands of depositors never get their money back. So when a first world bank comes down, they switch because they believe being first world, everything about it just has to be better. But you know, the way the twisted banking system is run up in the first world,
[26:44] I have a sneaking suspicion that if you do put your money in Citibank down here in Latin America, when the next huge international banking crisis occurs, whether it's triggered by Greece or Italy or the Euro collapse or a war between Iran and Israel or a nuclear disaster or another terrorist attack, well, I have more than a sneaking suspicion that the Fed will bail out Citibank and all the too big to fail banks again. But what I find still so ironic is that Citibank took that bailout money and found a brand new market, a market with 500 million gullible Latins. And in their own way, just like I've been talking about on all my shows, they're using the gringo advantage. They've caught on to the fact that Latins trust first world banks a hundred times more than they trust their own, which in effect is the gringo advantage on steroids.