#300 – The Expat Files 300: Financial Instability, Immigration Scrutiny, and the State of Mexico

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 Hello there all you expat 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 Now I don't know if you've been keeping count, but I have and this is my expat file show number 300. God 300 Huh, you know I often get emails from people asking me when I'm gonna package up all my shows now 300 and

[00:45] Cross-reference the topics to some kind of index and I've always thought yeah Well, good luck with that right since I just can't seem to stay on topic for more than 20 seconds You know though my detractors might call me the attention deficit king I prefer to call my style of delivery stream of consciousness radio Hmm stream of consciousness radio. I like that sounds rather zen ish, you know, is that a real word? Who knows? Anyway, I was talking about people who asked me about packaging my shows with a very detailed index now that would be cool considering 300 shows consists of 150 straight hours of expat files radio. That's a lot of material and would be a hell of an index, huh? Anyway, I am thinking about doing that now

[01:31] of course the hardest part of all is gonna be putting together that index and cross reference and luckily a very good friend of the Show living up in the United Kingdom has offered to start putting together the index So if in the process of doing that he doesn't get carpal tunnel or brain fatigue The whole project actually might come to pass. Don't worry. I'll keep you posted and Next I'd like to mention that my upcoming expat wisdom Latin American insider seminar is all arranged It's gonna be in January 2012 about three months from now and I'll have the full details up on the expat wisdom website in a couple of days and All you guys and gals on my early bird list the ones that sent me emails way in advance Asking about the seminar. Well as promised you'll be getting that info pack before anyone else does and now here's a little bit more

[02:19] Disturbing news for all you expat wanna bees and gonna bees that are still up in the first world now as you guys and gals know already the United States is completely broke and all the US government is doing is printing money and Buying back their own bonds because the rest of the world just does not want to finance the US debt black hole anymore In fact people in the know are already predicting that the US government is gonna start financing their debt with private pension plans just like certain other desperate countries have done already and of course uncle Sam'll have to raise your taxes and The only way they'll be able to do all that is if you remain in the country where they can keep tabs on you your money Your pension plan and your finances and as you probably have seen in the news lately more and more US citizens that is normal middle-class American citizens and not just the high rollers are

[03:11] renouncing their US citizenship For tax reasons and to get out from under the thumb of Big Brother and though the numbers might not seem that large to you The fact is there's been a 300% increase in people denouncing US citizenship in just the last six months And here's what's gonna happen within the next year and in fact It's happening already any American citizen that travels out of the country for any reason or any length of time will be thoroughly questioned by US immigration authorities about your trip in general and You'll be asked about certain personal matters, too For example, you'll be asked exactly where you're going why you're going there which hotel or residence you're staying at how much money You're bringing with you Of course including which credit cards you're carrying which banks they were issued from and even your credit card limit and get this

[03:58] they'll ask you to write down the names address and phone numbers of personal and business references if you have plans to meet people in the country or countries that you're visiting and Here's something that's really ridiculous If you're divorced and have underage children They'll actually ask you if you're current on your child support and or alimony payments And they'll do a check on you to see if your US state and federal taxes are current and that you've not missed any Filings and why do you think the US government wants to lay all that crap on people who? Want to go out of the country for a vacation or a visit? Well, it's one way to gather more info on you Second just the thought of going through the third degree like that is gonna keep a lot of US citizens at home So just know that your uncle Sam does not want you to leave for any reason at all and that all the databases are

[04:48] Being linked up. So when you're at the airport or purchasing an airline ticket Immigration will even know if you have any unpaid moving violations or parking tickets Which believe it or not is reason enough for them to put a crimp in your travel plans and that's just the beginning of the interrogation process you're gonna have to go through in the next year or so and If you don't believe it's in the works I can tell you a few immigration stories already that'll scare the pants off of you The fact is five or six gringo vacationers not gringo expats I'm talking about gringos just on vacation have told me when they flew back to the states Immigration not only took their computers and smartphones away from them for like a half an hour to an hour And what do you think they were doing with them? They downloaded everything, of course They didn't tell them as much but why would they take them right? Not only that they asked these folks who were simply tourists on

[05:38] vacation in places like Panama Columbia and Nicaragua where they'd gone which hotel they stayed at and if they were down there doing Business and two of these gringos that were on vacation in Panama said they were down there checking out real estate and timeshares golf courses and boat marinas and they found out that admitting something as simple as that was a big mistake and Immigration actually asked them the names of the timeshares and the golf courses and the real estate projects They were looking at and they asked them for contact names and get this they wanted to know if there were any first-world Americans involved in showing and selling those projects and unfortunately now these innocent gringo travelers are Definitely on the US immigration blacklist. They know that for sure So bottom line if you haven't made your plans to get out of Dodge yet

[06:26] You can figure that within a year or so the US government's gonna make it so difficult for you to do so You could get the door slammed in your face Oh and another thing if you get caught lying to immigration on the tiniest of things That's also a good enough reason for them to keep you in the country and I don't mean a blatant lie either You could just screw up by putting the wrong departure or arrival date on the form or even the wrong Airline carrier and that's enough for them to keep you from leaving the country In fact, I know one gringo who put united instead of American on one of his forms and they held him for two and a half Hours in Miami and he missed his connecting flight now This guy who was on business made quite a stink about it and immigration threatened to arrest him So he knows he's on the feces list. Anyway, I don't know what you guys are waiting for and why you put up with all that

[07:14] Crap, but really you've had plenty of warning and this stuff's getting worse and worse. You know what they say Defecate or get off the throne. Well, they don't quite say it like that. You know what I mean? Now I've said about that now when speaking about expats I really feel quite sorry for all you guys and gals who've moved down to Mexico and unfortunately Mexico has by far the biggest number of first world expats They say now you guys number over a million and unfortunately most of you have bought condos and properties and houses down there Which means a lot of you are stuck with a pretty big investment That's why I hear all kinds of excuses from you guys trying to put some kind of positive spin on a really bad situation And you know the thing is with all the narcos the violence the beheadings the gang shootings the extortion and the bribe and the

[08:01] Kidnappings even long-term expats living in Mexico don't quite know themselves the real story how a country that was quite nice for Expats some 20 years ago just imploded into insecurity and chaos So now by popular demand I'd like to give you a short synopsis on Exactly what's going down in Mexico and how it got there So get ready to toss away the six o'clock news version of what you think is happening in Mexico Here's the real story without the spin first Let's talk about the most famous drug cartel in Mexico the Zeta's you've heard of them now Here's what you didn't know before they were the Zeta's they were a special Mexican army Military unit brought up to the United States trained by US special opt forces No less to take down Mexican drug cartels

[08:49] Then when they got back to Mexico making their piddly government salaries about four to five hundred bucks a month They got together and said now that we got all this special training Why should we take down cartels when we could be a cartel? We're gringo trained by the gringo best We're bigger batter and better equipped than any cartel and the first place they took over was new Laredo, Mexico Which is on the Texas border now in 2006 when Calderon became president He promised to clean up the drug cartels. That was the platform He ran on now the thing that most people don't know is that Mexico has 31 states and a federal district so basically 32 departments and in 2006 each of these 32 departments were run by a

[09:35] Separate cartel small cartels and they didn't screw around with each other too much. They kept to themselves They kept their own market back before 2006. It was kind of like the Mafia The bosses had their own territory and they had a loose agreement to keep out of each other's business and everybody made money Oh sure They had turf wars like all criminal organizations do but it was violence among the drug dealers and principles in the drug operations Themselves back then the average public was rarely touched by the violence unless they lived in those crappy slum neighborhoods Where most of that stuff was going down? So anyway in 2006 Philippe Calderon the new president says he's gonna clean up the drug cartels But here's something else you didn't know in 2006 one of the biggest drug lawyers who was in jail at the time his name was

[10:22] Chapo Guzman head of the Sinaloa cartel suddenly get out of prison Some people say he escaped and others say he paid his way out and he cut a deal with the government because you see as soon as he got out he started declaring war on all the individual cartels one at a time and every time one of these little Wars started government troops would come in and capture and mostly kill off drug cartel members But never the members of Guzman's cartel the government troops would always kill his enemies the other cartel So how'd that happen now as Guzman's Sinaloa cartel got stronger and stronger government troops helping knock off his rivals Anyways, some of the other cartels knowing that started making alliances and more and more violence broke out

[11:08] now another thing you have to know is that in Mexico every department or state has a local police department a federal police department a state police department and your regular military and all of these are aligning themselves with different cartels because in Mexico where cops make three to five hundred dollars a month everyone takes bribes or as on Someone else's payroll not to mention the higher-ups the captains lieutenants the colonels the generals They get hundreds of thousands if not millions of dollars a year from cartel bosses to spread among their agents and troops Sometimes not to fight but just to look the other way So anyway back in 2006 the new president Announces he's going after the cartels in a big way and one of the orders he gave to the military was when they moved into a city or department all the regular cops would be fired because they wanted to get rid of these cops that

[12:00] Were clearly working for cartels now when you fire masses of cops all at once and throw them out on the street You create an entire class of disgruntled well-connected people without legitimate jobs For example in the case of the city of Juarez. They fired 10,000 cops at a crack so what happened then well on a grand scale these fired cops started Organizing themselves into extortion and kidnapping rings now That's when the real problems for expats gringos and tourists really began because before that it was just a drug cartel guys and occasionally The military fighting and shooting it out with each other with very few civilian casualties Local latin civilian casualties that is and almost no gringo or expat casualties since we know better than to live in those

[12:49] Neighborhoods and it's a fact that ninety nine point nine percent of gringos and expats don't hang around with drug lords and crackheads either I don't anyway when by the way though. I'm not in Mexico I could point out a few medium and high level drug guys myself the fact is almost every long-term expat I know knows where one or two of these guys live now Don't let this scare you, but you see whereas so many gringo expats like to live in upscale neighborhoods So do high level drug lords You know it's that old upward mobility thing and how can you tell a drug lord's house? Well, it's not like in the movies where there's this big gaudy Ostentatious palace with bad reproductions of Roman statues They just have nice big beautifully landscaped houses that fit right in

[13:36] But there's usually a telltale sign they're a bit heavy on the bodyguards and big black bulletproof vehicles But so are a lot of ass wipe government officials to who use their ill-gotten gains to live in your neighborhood That means a lot of times us gringos will mistake a thieving government ass wipe for a narco What's the difference right so anyway? I was talking about those tens of thousands of fired police officers in Mexico So remember there's a million gringo expats right out and living in virtually all the states of Mexico and Being that their first world gringos as usual Latin Stereotype us as having a lot of dough which compared to them we really do anyway all those fired cops in your area have become Little crime rings and the only people around with money that can't defend themselves

[14:23] Our guess who gringos and first world expats since narco's will shoot back and wealthy Mexican businessmen Have their own armed bodyguards, so if you're living in a gringo or expat subdivision You're a target if you're driving a nice car You're a target and they'll pull you over drag you out of the car Take your smartphone and dial every number on it demanding money, or they'll kill you and even if they get the money Sometimes they'll kill you too Then they'll take your smartphone and check your email and check your Twitter and Facebook accounts They'll make a study of all your gringo friends and all their photos on Facebook Especially if their kids they love to kidnap kids then guess what they got the details on everyone you hang around with too And they love it when you post your house photos on Facebook

[15:10] especially the inside of your house so they can case out the joint right on your iPhone and They love those photos you've got stored in your phone camera memory, too And you know the assaults and kidnappings of gringos and expats as a viable going concern It's pretty much exclusively a Mexican phenomena because in the rest of Latin America The government just does not gut huge swaths of a police department Oh, they'll fire a group of corrupt cops now and again or a police chief, but never ever in large numbers Mexico is the only Latin country that's ever done that and now expats and gringos living there are suffering for it now That's not to say there aren't kidnappings and extortion crimes against gringos in other Latin countries but that only seems to happen to high profile gringos who are stupid enough to drive expensive cars and walk around flashing their

[15:59] Rolexes iPods and bling bling and even then generally it's just a robbery not a kidnapping in fact in my 20-something years down here Of all the gringos I know and I know a lot of rich ones I only know of one kidnapping attempt and they didn't pull it off and the thing to know about that Situation was the fact that my gringle friend himself was a very low profile guy However, his latino wife and kid were spoiled to the limit and my stupid gringle buddy never rained them in nothing But designer clothes pink blackberries and iPods and real bling bling for them They were perfect targets and still are but you think they opted for a lower profile. Would you believe more bodyguards? Yep, gringos with money can be stupid. So anyway in Mexico, you got cartel members killing cartel members

[16:47] You got cops killing cartel members. You've got cartel members killing cops You got cops killing cops and you've got ex-cops extorting and kidnapping So basically you've got all the narcos and law Enforcement occupied with those narcos and the cops on the street and the ex-cops on the street committing their own crimes And everyone's just trying to survive and no one and I mean no one is protecting the public No one's policing the streets. No one's investigating No one's solving crimes and criminals almost never get caught and prosecuted. That's not to say the jails aren't full They are but that's a totally different story. We'll talk about that later Anyway, Mexico is what you'd call in a true state of lawlessness It's like the old west and believe me anyone who tells you well I live in Mexico and you're wrong about that my little pueblo or my little neighborhoods just fine

[17:38] All I gotta say about that is you just better stay put then have your city council Put a 40-foot fence around your town because as soon as the nearest group of bad boys Whether military police narcos or otherwise find out that you haven't been picked over yet Sorry to burst your bubble, but I hope you have a plan B because you know handguns are illegal in Mexico That's not to say you shouldn't have one I would but if you're a gringo a foreigner and get caught with one You're going to one of those jails and of course jails are tough But you don't want to go to a Mexican one and by the way the most realistic depiction of a Mexican jail I've ever seen is in that movie the gringo with Mel Gibson, so go ahead and rent it It's fairly recent and it's good good and scary that is so anyway if you have a sneaking

[18:26] Suspicion that the US had its hand in creating this drug war in Mexico You're right We trained the Zetas and we armed the Mexican military and the Mexican military Works for the narcos and around and round she goes and where she stops nobody knows Which is pretty much the same thing that happened in Afghanistan and with al-qaeda We create these monsters and now we got to live with them only you don't want to live with them So if at all possible skip Mexico, which is not to say a week in Cancun Cozumel or Playa del Carmen isn't nice these days the heavy gringo tourist spots are about the only places that are fairly well protected But just remember that Acapulco which was the number one tourist spot from the rat-pack days in the 50s to the 60s

[19:12] 70s and 80s Well, you may have caught on the news that just a couple of weeks ago 12 people were beheaded there and their heads were left Right on the street thinking about a vacation a lot of deals in Acapulco now So why is Mexico such a damn mess? Well, it's not only because of the drugs One of the main reasons is because they had the same political party in office for 75 years Imagine that imagine the Democrats or the Republicans in office for 75 years continuous Well, that's like a dictatorship and that party completely looted the Mexican Treasury now They didn't clean it out just once they cleaned it out about every five years That is every election cycle. In fact, you might be old enough to remember that in

[19:58] 1994 Mexico went completely bankrupt if I remember they called it the tequila crisis That's when that peso dropped by 50% in one week for pesos to the dollar to about seven and a half pesos to the dollar Then in October 2008 it fell another 50% against the dollar Which is one of the main reasons Mexico looks so good to expats and gringos all of a sudden your dollar went Twice as far as it did just a few months earlier So anyway, the question is how does Mexico get out from under all this chaos crime and the crisis? In other words, when will it be a safe place for gringos to live and invest again? Well, the sad fact is of all the expats and experts I've talked to who actually live down here Mexico is not gonna get better It's gonna get worse and the other question is will the Mexican infection spread south through Central America all the way down through

[20:50] Panama well according to experts There's two reasons why that won't happen One is because Mexico is the only Latin country that's joined at the hip with the United States through a border And I don't have to tell you what kind of problems that has caused in short all that revolving door illegal Immigration back and forth across the border has caused a huge permanent social and cultural distortion both in the United States and Mexico Simply because of such a vast discrepancy in Education culture and wealth you could say it's a case of the haves versus the have-nots with the have-nots on steroids and the second reason why so many expats and experts down here believe the Mexican contagion won't spread south not in any meaningful way That is is because as stated before the police departments in the rest of Latin America have not been fired and tossed on the street

[21:43] To fend for themselves like in Mexico now admittedly all police departments in Latin America are pretty worthless They're fat lazy underpaid under trained and quick to take a bribe But being a cop in the rest of Latin America is a long-term career with opportunity for advancement Promotion and a little more money on the way including an actual pension after 20 years of service So in the rest of Latin America they do have a stable police presence in every community That's somewhat responsive in its own sluggish half-ass way in other words if there's a robbery or an assault or an attempted rate They'll show up and they'll actually try to help and most cops are posted close to or in their own neighborhoods So they have a vested interest in keeping the peace since that's where their families reside

[22:31] Whereas in Mexico the cops will show up, but they'll be casing your house out, too Now speaking of Latin law enforcement you might recall that on my last show. I couldn't quite finish that story I began I started by telling you that I personally know a Latin secret service agent on his job He babysits and handholds first world and third world Diplomatic jerks that once they enter the country need to be protected and chauffeured around Basically the way he tells it his job is to ask kiss babysit serve and protect Protect pompous diplomatic jerks from what I don't know now if you ask me These jerks should have zero protection and be forced to ride the chicken bus, but no one asked me Oh, and by the way the American diplomatic corps should all be enrolled in Obamacare, too

[23:21] Don't you think now this Latino government secret service guy that I know has actually been a presidential and diplomatic Guard for more than 20 years and he makes a grand total of a thousand US dollars a month a little over three times the minimum wage here and he has a nice big house that he owns and I mean really good size for down here maybe 2,500 square feet and he's got a wife and four young daughters and like he tells me he's got no savings He lives from week to week, but he's got a car in fact two cars Basically what we'd consider two junkers one that runs and well one that runs sometimes And sure both those cars are more or less like my dad's second beater car that he let me drive when I was in high School, but a car is a car, right? Wait a minute

[24:08] I take that back since these days from what I hear up in the States from my own family No, less teenage kids are actually dictating to their parents. What kind of car they will or will not drive Excuse me, because you know those little brats have their standards, right? God, I'm glad I don't live up there Anyway about this proud Latin middle-class Secret Service guy I know that makes a thousand bucks a month and get this on that hefty salary He sends two of his daughters to private Catholic high school sure They're cheap private schools, but everything's cheap down here and about his house It's typical Latin rough around the edges, but it's fully equipped He's got a DVD player flat screen TV refrigerator stove blender microwave oven all the basics

[24:56] Including matching dog stained furniture and three baths with showers that are in slightly better condition than the bathrooms at your local Shell station now he had that house built brand-new some ten years ago And when it was built everything was in perfect condition including the bathrooms But this is Latin America and when things get grungy and deteriorate people just don't do anything about it down here There's no shame in a leaky roof a house full of mold and a microwave full of cucarachas though to us It's pretty disgusting the average Latin person doesn't even notice same thing Why Latins don't notice or complain when a guy hops out of his car whips it out and does his business in front of the whole World no matter how many people are standing around or walking by so anyway like I said my government agent

[25:44] Buddy has a nice 2,500 square foot house now if you and I had this four-bedroom house with three baths if we just Fumigated it decorated it and put about five grand into it It would be a very nice comfy and basically perfect first world style middle-class house now I'm not saying he lives in a first world style middle-class neighborhood He doesn't and I'm not saying the car or the house or the way they keep the house is up to first world standards They're not but let me tell you on a thousand bucks a month. He keeps his family of five together pretty nicely So just imagine for a second if he was a single guy living on a thousand dollars a month down here And you know I asked him that one time and suddenly there was a big smile on his face, and he said Johnny You don't know what it's like living with four women

[26:31] And you know I said Julio that wasn't the question and then he said if I was living on my salary alone I'd retire right now at 50 and then I asked him well What about retirement when you retire how much will you get a month and by the way Latin governments do have pension plans for their workers Sure They're often months behind and paying out and they're always on the brink of bankruptcy like everything else in Latin America But you see government pensions always eventually do pay out That's one huge reason why the common uneducated man wants a government job and of course private company pension plans exist But a company can just decide to quit paying out or close up shop and go bankrupt Private pension plans down here are not guaranteed by anybody That's why every uneducated dipstick in the United States wants a government job, too

[27:20] Wait a minute did I say dipstick? I must be getting soft Oops, wouldn't you know it? I'm at the end of the show again next week We'll start with a day in the life of Julio and his middle-class family South of the border Down Mexico way you've been listening to the expat files living in Latin America coming to you twice a week from somewhere south of the border Email me the expat files at gmail.com and don't forget to check out expat wisdom calm to sign up for your free Reports on Latin America. See you next time nos vemos