#232 – The Expat Files: Gun Violence, Economic Chaos, and Pool Maintenance 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 up to play and now as I wonder My thoughts ever stray 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 so let's get started Now a week or so ago We talked about guns down in Latin America and how green gringos and new expats coming down are often shocked to see guys with shotguns riding shotgun on delivery trucks like coke trucks water trucks Pepsi trucks and also guys with

[00:48] shotguns standing outside of bars restaurants discos and convenience stores Well, I hope I went into enough detail on that to satisfy your curiosity and lay your fears on that point But I never did get around to comparing the gun violence and homicide figures down here versus the crime stats You guys live with in Cleveland and the rest of the first world But thanks to Oscar one of our loyal listeners friend and previous expat wisdom seminar attendee Who sent me a recent article from Atlantic magazine now? I can give you some solid numbers on crime and homicide stats in US cities versus similar kinds of stats in Latin America and The title of this Atlantic article from January 22nd 2013 is gun violence in US cities

[01:35] Compared to the deadliest nations in the world and here's a little excerpt. I think you're really gonna find interesting Here are the article states if the city of New Orleans with a rate of 62 gun murders per 100,000 residents if New Orleans were a country It would have the second highest homicide rate in the world Then it goes on to say Detroit's gun homicide rate at thirty five point nine per hundred thousand has the same gun Homicide rate as the Central American country of El Salvador expat Eddie's stomping grounds now the article doesn't mention Eddie I just thought I'd throw that in there. You know Anyway, then it goes on to say Baltimore's homicide rate is the same as Guatemala's at thirty four point eight per hundred thousand and

[02:22] Newark as well as Miami have the same homicide rate as Colombia and Washington DC has the same homicide rate as Brazil and Atlanta, Georgia the same homicide rate as South Africa and Cleveland. Hey, how'd that get in there? Anyway, Cleveland has just a little bit higher gun homicide rate than the Dominican Republic now the gun murder rate in Buffalo is the same as Panama and Houston the same as Ecuador the gun homicide rate in Chicago is the same as Guiana Now there's a Latin American country. Most expats don't even know about in fact I've met about two people in my life who've actually been there and they were missionaries building outhouses for Jesus, you know

[03:08] Now Guiana is a tiny Sparishly populated little Latin country on the northeast coast of South America and the whole place has only got about three-quarters of a million people it's a whole country with just the population of Fort Worth, Texas and For those of you who might be thinking to expat there Since Jim Jones and his little group found it's such a lovely spot to drink Kool-Aid back in 1978 Well, just postpone that trip for a while. I will give you a heads up on Guiana in the future So stay tuned but just for your information I don't really recommend it as an expat destination for a lot of reasons But the main one being that they're very lacking in first world style health care services All the hospitals clinics and medical and dental care facilities are I'd say about 20 to 30 years behind first world standards

[03:58] so if you ever have a serious health problem, you'll have to get the hell out of Guiana in a hurry and There are a handful of other good reasons why I don't recommend the place, but I'll get to it soon So what does it have going for it? Well, the only thing I can think of right now is that Guiana's main language is English Anyway back to those homicide rates. Now, here's one that'll really surprise you Phoenix, Arizona's gun homicide rate is actually a bit higher than get this Mexico and the homicide rate in Los Angeles slightly higher than the Philippines and Boston well the murder rate there is just slightly higher than in Nicaragua and New York City Well, it's just slightly higher than the homicide rate in Argentina and I could go on but you get the idea now at the conclusion

[04:49] Of this Atlantic article the author says quote the sad reality is that many American cities have rates of gun violent nations in the world unquote Now if any of you out there want the link just send me an email and I'll pass it along now naturally every author has a bias and as you read this article you get the feeling that this guy is advocating much more gun control to solve the gun homicide problems in the states and That does seem to be a very hot button these days, doesn't it? So how do I feel about it? Believe me. I get asked that question all the time. Well, basically, I've always been a libertarian with a progressive bent In fact, expat Eddie calls me a bent libertarian

[05:34] And I've heard all the gun arguments on both sides just like you have I'm sure and as for me I don't want to get into prolonged gun conversations since it's like the abortion issue You can never really change anyone's mind, but I'll sum it up like this. Just imagine this scenario suppose a 100-pound woman just discovered that a 200-pound crazy drunk guy has just broken into her house a Sharp tongue and a call to 9-1-1 is just not gonna make it So you can go ahead and give your girlfriend wife or mother a whistle in a can of mace and hope for the best And that's fine. But just don't take away their right to have a gun if they want But let's get on to other things now in the last few shows You know I've talked a bit about the decameron thing and I'd be remiss if I didn't tell you I've gotten a few emails from

[06:25] People basically telling me to shut up about it They want me to lay off because the whole idea of being able to retire in luxury on Basically a half a social security check seems to be grading on a lot of people who are stuck on that first world Treadmill and can't get off for love or money and as one guy explained it He said Johnny when you talk about the decameron deal. I just want to lay down and cry Sorry about that. I shouldn't laugh about that. It's not really that funny is it? Anyway, it seems the more I talk about it The more it seems to depress certain ex-pat wannabes who don't see a way to get off their treadmill up north But the thing is in actuality It should be a terrific incentive to jump off that treadmill like right away

[07:11] Though you know what they say you got to do what you got to do I guess it's human nature to feel a little sad when it's someone else who wins the lottery You know then again you got to buy a ticket to play which means getting off that treadmill And that's the real catch-22 isn't it so in order not to break any hearts up there or drive anyone towards the Prozac bottle I'll shut up about the decameron okay Now you know every once in a while And follower of that guy for a long long time 20 years or so to me He's always been a brilliant contrarian and very good financial analyst however You can't be right a hundred percent of the time Case in point in the last year or so when he made that big move to Argentina to start his own first world style

[07:59] Subdivision for upscale expats and wannabes well from the start. I always thought that was a big mistake Selecting Argentina that is because you know I'm in the habit of warning people away from Argentina once again It's a financial basket case surprise surprise for about the fifth time since I've been keeping track and it's about to implode again on a grand scale now admittedly I'm not as smart as Doug Casey is but I've been living down here about ten times longer than he has so I like to Think I know at least a few things about Latin America that he doesn't just from lessons learned So when you guys send me emails saying Doug Casey's really sold on Argentina and since he's got a huge Real estate investment there and is actually living part-time there himself

[08:46] He must know something that we don't know so why not follow his lead and go on down to Argentina Now in response to that I don't want you to take my word for it I want to give you some solid facts that way it won't be Johnny said this versus Doug Casey said that Instead it'll be Doug Casey said this versus Johnny's hard statistics And I like that better because then I don't have to defend myself against a guy who's got ten IQ points on me You know instead let me just read you this article that came out on February 4th 2013 and Basically it tells you exactly why you don't want to move to Argentina under any Circumstances right now at least not till after the dust settles when this latest calamity is over and who can predict that?

[09:36] Anyway after the next big blowout bubble and believe me Argentina is a bubble looking for a pin So it's anytime now anyway astute expats should be able to go there in a year or two and pick up some Terrific bargain basement real estate deals and believe me there are no such bargains now In fact, you'd be nuts to buy any real estate there barring a foreclosure or a very desperate seller And anyway when the big crash comes it's not just gonna happen to Argentina though for sure Argentina is gonna be at the head of the line. It'll be one of the first dominoes to fall So let me read you some excerpts from this article that just came out a few days ago entitled Argentina freezes supermarket prices to halt soaring inflation Chaos to follow and before I get into this I just want you to recall your econ

[10:24] 101 course back in your fuzzy-brained college days if you can and if you recall like good old Adam Smith said in the wealth of Nations when any country institutes wage and price controls or wage and price freezes That's a last-ditch effort by a government that knows financial and economic crisis is right around the corner a move like that's long been known to be a Desperate measure by governments to try to control runaway inflation and it never works ever Basically wage and price controls cause massive economic Dislocations and if maintained long enough will effectively destroy an economy Keep that in mind when I excerpt this article which by the way once again came to my attention by way of my friend Oscar

[11:13] So here it goes up till now Argentina's descent into a hyper inflationary basket case with a crashing Currency and a loss of outside funding was so far relatively moderate and controlled But all of this is about to change Today in a futile attempt to halt inflation The government of Christina cursor announced a two-month price freeze on Supermarket products this price freeze applies to every product in all of the nation of Argentina's largest supermarkets a group including Walmart Care for Kodo jumbo disco and all the other large chains and it says here the Commerce Ministry has set up a hotline for consumers to call to report any illegal price hikes by these chains

[12:05] Then the article says what consumers will certainly do is scramble into these local stores to take advantage of the Artificially controlled prices knowing very well that they have two short months to stock up Before a huge wave of inflation comes roaring back and in fact many South American Analysts are saying that it will escalate into a full hyper inflationary collapse And you might ask why price controls? Well, that's because Argentina's inflation rate now is at 30% a year Which is why Argentine citizens are desperately trying to convert their pesos into dollars or euros Get them out of the country and deposit them in places like nearby Ecuador and with all that capital

[12:52] Rupturing out of Argentina banks. That's why some months ago Kirchner slapped hard and heavy exchange controls on the currency considered by analysts to be a desperate stopgap measure and Finally the article says so to summarize first you get capital controls then a currency crisis then expectations of sovereign default then a rise in military tensions and finally price and wage controls after which all-out chaos usually follows Study this sequence. Well, the article says it will be coming to every single developed country near you in the months and years ahead so keep an eye on Argentina for a sneak preview and my take well, you know

[13:40] I've never recommended Argentina as a good place for expats to locate and I hate to say I told you so But I just hope that none of you have been drawn to the rim of that black hole like Doug Casey has and you know I could be wrong about all this, but I don't think so And here's one more email I want to get to before we move along to some other stuff and this is from Robert and he's not the only one who's Asked me about this by the way. He says Don Johnny I'm wondering how popular swimming pools are in Latin America and in particular How big a gap there is between demand and supply of the fine touches of certain pools and by that? I'm sure Robert means the high-end deluxe custom pool stuff Not those prefab jobs are those above-ground white trash vinyl liner jobs. Anyway, Robert goes on to say

[14:29] My thinking on this proceeds as usual for my own needs as to what others might need I don't like fish tank style public pools where your bacteria commingles with everybody else's bacteria I added that little bit by the way because I hate public pools, too. Yuck Anyway, he says I don't like having a load of chemicals in the water either So I come out stinking of chlorine which is a proven health hazard In fact in choosing a gym I select on the basis of whether they have a pool and how nice it is since that is my preferred form of exercise Surely in the hot areas of Latin America particularly But even in the perpetual spring areas good high-end pools would be an obvious market demand perhaps Inadequately supplied and therefore there might be room for first-world fine touches for those who can afford it

[15:20] Such as bubbled ozone makers for disinfecting rather than chlorine I'm talking about regular maintenance cleaning contracts pretty tiling a spa bath on the side and so on after all Latins might be deficient at maintenance, but would be happy to go to places that are well maintained or For the wealthier ones to sign a maintenance contract for their pool installations if marketed, right? Cheers Robert Okay, Robert. Let me go through that stuff First of all pools are very popular throughout Latin America with the wealthy set of course and yes, you're right They don't maintain them and in fact, I don't think I've ever seen a single pool. That's an absolutely perfect 100% pristine sparkling condition unless of course it was just installed last week and still I wouldn't bet on it

[16:11] The fact is even with a new pool after a couple of months There's always some mold or rod or broken or missing tiles somewhere and Latin's absolutely do not know the first thing about how to Disinfect their pools. They know of course that you have to add chlorine or some kind of chemical But once again, no one's minding the store except the gardener now Like I've said many times before a gardener is generally your jack-of-all-trades He not only cuts your grass and trims your bushes He does a little bit of everything else on the side like window glazing woodworking a little concrete some bricklaying Roof repair and the like and if you have a pool, he'll be your pool caretaker now You have to remember here's a guy with about a fourth to sixth grade education And when you hand him a couple of sacks of chlorine pellets and a water testing kit

[16:58] Well, you're already asking him to do something way over his pay grade And if he can even read the manual that came with the pump and the filter system There's no way he's gonna understand what they're talking about not that Latin's read manuals in the first place They don't but do you And that's why I guarantee that about 80 to 90 percent of the private pools in Latin America are not chlorinated correctly in fact the majority I would say are under chlorinated because chlorine costs money and When scum starts making an appearance around the tiles or an algae bloom starts to take over I guarantee that maintenance guys just gonna start dumping chlorine by the buckets in the deep end like a madman But on the other hand pool maintenance is a completely different story when you're talking about big hotels and first-world style convention

[17:46] Complexes in that case your Clarion's and your Hilton's actually have pool maintenance contracts and maintenance guys that actually know what they're doing Now as far as having a pool in the Altiplano region Well, of course all the upper class and upper middle class people have them but to tell you the truth. It's just not worth it It's like having an outdoor pool up in Chicago or Minnesota You're lucky if you get to use it two or three months out of the year And in fact, I know dozens and dozens of people in the Altiplano region who do have pools And I never see anyone swimming in them and why is that because in the day? It's between 70 and 78 degrees and at night it gets down to 50 So that pool is cold and no one I mean no one has a pool cover down here Which would completely solve that problem even in the Altiplano and why do you think Latin's don't use pool covers at night?

[18:38] Because they've never heard of them. They don't know they exist now. There's an expat business idea, huh? Though like expat Eddie says you probably could talk Latin's into getting the pool cover it's getting the gardener up to speed that's gonna be the problem and Speaking of heating up your pool if you go to the local pool supply place They generally carry everything in anything a big pool supply company does in the states At least the pool supply stores in the medium to large Latin City Zoo So you'll never have to special order anything the big stores even stock pool heaters that use propane gas and even Solar panels to heat your water if that's the way you want to go However, I don't know anyone who's ever installed a heater though

[19:23] They are available and those big pool supply places also have Ozenators and the latest in UV ultraviolet disinfection to avoid using chlorine if that's what you want All that stuff is available down here. However, I don't know of any Latin who's got a pool who uses anything but chlorine Again, it's all about that lag time effect. In fact, if you even mentioned UV or ozone to a pool owner He doesn't even know what the hell you're talking about At least that's my experience and I know a lot of people with pools down here I've actually had three of them myself and it's also been my experience that when you try to get Latin's to change the way They've been doing thing. It's like talking to a brick wall But you can bet if their next-door neighbor gets a UV system or an Ozenator for their pool

[20:12] Our man in question will run out and get one too Usually a bigger and better one and that's why it's not always a good idea to bring down a brand new product That's never been used before down here Even if it's in common use up in the first world unless Latins are already tuned in to the product by seeing it repeatedly on US cable TV or they see it in common use in first world movies or used by actors and mindless TV shows that they're addicted to and therefore want to emulate like for example if they see it on the Kardashians then they'll want to have it Generally speaking if Latins see a product enough on first world TV There'll be an instant demand for it But I'm pretty sure that's never gonna be the case with swimming pools with swimming pools

[20:58] the usual pattern is a wealthy latin builds a house and buys a pool and Immediately hands the reins over to his gardener and when something really goes wrong He calls up the pool company and they come over and fix it and a lot of times in the end It was the gardener's fault in fact I don't believe I've ever known a private pool owner who's had a maintenance contract, which is a big mistake now personally I'm not big on maintenance contracts myself. I think they're basically a ripoff but down here the way latins mistreat their possessions It's a different thing altogether, but still latins rarely sign on though. I know all the pool supply companies provide that service now the Alti Plano makes up only a small part of Latin America probably 3% or less of the landmass and

[21:45] 80% of the rest of Latin America is extremely hot and that's where having a pool can really be a gift So if you do live on or near a beach or in the lower elevations, you're gonna want to pool But I'll also point out that pools are very expensive to maintain For one thing at sea level near the coast and around the beaches with that searing Sun You've got a big evaporation problem and you'll be adding water and therefore chlorine all the time now expat Eddie's in El Salvador and he's not in the Alti Plano and he tells me that he pays over 500 bucks a year just for the chlorine tablets And then there's the electricity costs for running that pump motor because you do have to keep that thing Cycling or the chlorine will build up in certain areas of your pool. Not that I recommend chlorinating your pool

[22:33] I don't but I'm using chlorine as an example because ninety nine point nine percent of the pools down here are chlorinated So anyway, you're running that pool pump many hours a day and it's usually a one horsepower pump Which is equal to having a little less than eight 100 watt light bulbs going all the while the pump is working and Electricity is one of the few expensive things in Latin America two to three times as much per kilowatt hour than you pay in The states so for example, if you pay 25 cents a kilowatt hour here and you're one horsepower pool pump cycled for eight hours a day That's six kilowatt hours a day times 30 days times 25 cents a kilowatt hour That's 45 bucks a month just to run your pool pump and that's what expat Eddie says it costs him about a thousand bucks a year just to have a pool a

[23:21] Standard chlorinated pool that is he hasn't switched over to ozone yet either So the bottom line is this if you live in the lowlands you almost have to have a pool But you'll be paying first-world prices for the maintenance and upkeep now the other day I was at expat Eddie's house getting a dose of chlorine and he asked me about my latest expat wisdom seminar And you know, I always invite Eddie to come and he always says he will but he never shows and he has a good reason But he doesn't want me to talk about it. So I won't anyway Eddie asked me if there were any surprises at the seminar You know anything I hadn't counted on and I said well Eddie as a matter of fact, there was I Actually had a seminar deadbeat a gatecrasher a guy who showed up at the very last minute by design

[24:08] Of course who didn't pay by PayPal or wire transfer claiming he'd pay right when he arrived Well, he did arrive at the very last minute got lost in the crowd Enjoyed the seminar immensely and how did I know that because he made a point of telling me that every single day In fact, even right now. I can hear him saying Johnny. I just can't get enough of this I could listen to this stuff forever and only after the seminar was over and I realized he'd never paid for it Did I actually send him an email asking him to settle up? Actually, I sent him a few emails because he wasn't anxious to respond But eventually he sent just one little line saying Johnny I'm not gonna pay because I didn't get what I wanted out of this seminar Hmm. He didn't get what he wanted and I asked expat Eddie

[24:57] What Dan really meant by that and Eddie said Johnny what he wanted was you to pay him to come to the seminar Then I said Eddie don't laugh in a way I did pay him to come to the seminar because you know The seminar cost included four nights in very nice hotels including breakfast lunch Transportation the translator girls the buses the drivers the hotel salons and equipment that needed to be rented Basically quite a few hundred dollars out of my own pocket Which Dan thoroughly enjoyed because he told me so every day But all the while he was planning to stiff me for that too And then Eddie laughed and he said, you know, my cousin Lenny is just like deadbeat Dan Lenny's whole life is about getting over on people. He enjoys stiffing people and getting things for free

[25:47] He crashes concerts and weddings and bar mitzvahs and when he walks down to the subway He'll drop a dollar into a musician's guitar case and sneak two bucks for himself while the guy's not looking And I admitted to Eddie that I was actually warned about that at my very first seminar There are a lot of high-powered marketing guys there some who had done seminars themselves one guy Specifically warned me about guys like deadbeat Dan. He said there are some professional seminar parasites out there He said they use the fact that seminars offer a money-back guarantee to a point and you can bet that they'll always be One or two guys out of a hundred that'll do that It's a game for them and they get their kicks out of stiffing people and getting info for free It's just part and parcel of doing this seminar thing and Eddie's last words to me on the subject work

[26:38] Johnny that deadbeat Dan guy. He's a pro He was the very last one to sign up So he used that last-minute hustle and bustle to sneak through the cracks and then with your seminar in full swing He just split when he found it convenient And he said he had a deadbeat Dan at his restaurant The guy had a dead dried out cockroach in his pocket and after ordering and eating the most expensive item on the menu He snuck it on his plate Acted irate didn't pay and got up and left then Eddie said what's this guy's full name? Maybe he's my cockroach guy. I said Eddie. It's Dan drecht DRA GT that's Dan drecht DRA GT and coincidentally He's the only person at the seminar who never gave me his return flight info

[27:23] So I couldn't shake him down at the airport totally planned right and Eddie's last words to me Welcome to the club. You're no longer a virgin south of the border down Mexico way That's listening to the expat files living in Latin America coming to you each week from somewhere south of the border And don't forget you can email me on anything at all about Latin America the expat files at gmail.com See you next time