#314 – The Expat Files: Venezuela’s Crisis, Uruguay’s Legalization, and Expatriate Challenges

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 Before I get on with what I didn't finish last week regarding your rights When you assign a contract down here in Spanish because after all you won't be able to read the fine print that's for sure So before we get on with that and finish it off There are a few things that just popped up in the news down here that I'm sure are gonna be of interest to you

[00:49] First you might be aware that something crazy is going on down in Venezuela Again, it's not just the two-tiered currency or the 50% inflation rate Or the heavy-duty currency controls aimed at restricting consumers from bringing dollars in to convert on the black market Which if you can pull it off allows you to buy the boulevard on the black market at quadruple the purchasing power Versus the official exchange rate of that local funny money We've already talked about that stuff in the last couple of months Well, the latest and weirdest presidential decree of all has just come down and kicked retailers in the pants And it's pretty much gutted the part of the economy that has anything at all to do with imported consumer products So anyway a couple of weeks ago President Maduro somehow thought he could jumpstart the consumer economy

[01:35] Suffering this year from a 54 percent annualized inflation rate by decreeing that all non food consumer items like washers and toasters and dryers and iPods etc would instantly be subject to a 70% price cut in the stores at the consumer level that means for example if you owned an appliance store you had to mark Everything down by 70% and even though that would ruin you because that means you'd have to sell everything below cost That didn't matter because it was an emergency government decree and for the seller There was no way around it under penalty of jail time You couldn't just lock your doors put a gone fish and sign out go on vacation and try to write it out So what's been happening in the last few weeks? Is that consumers have lined up around the block at appliance stores and such buying everything they could get their hands on at?

[02:26] 70% off and in the process maxing out all their credit cards and now the shelves are bare The products are all sold and the owners of these stores say they're not going to order new imported products like plasma TVs And smartphones where they have to change their boulevards into dollars at the official rate because you see when you buy imported products The importer for example Samsung or BMW do not accept the boulevards They take dollars euros yen or one so out of fear of another big round of inflation Most retailers are not resupplying now my Darrow's government doesn't seem to have planned on that in fact They don't seem to plan on anything as usual with Latin governments It's decision by crisis and man did they have a crisis on their hands now as one big retail chain owner says the government acts

[03:17] Spontaneously without a plan without any foresight and without any knowledge of market forces at all And he says now that his shelves are bare. There's only one thing for him to do go fishing So what does it mean for all us expats gonna bees and wannabes who still after all that might be thinking of moving to Venezuela Well, obviously you never ever want to open up a business there But like when any society crumbles, they'll always be pieces to pick up at pennies on the dollar Of course and under somewhat normal circumstances of boom and bust you could count on doing that in Venezuela at some time in the future Too however, they have the unusual situation of having all that oil So no government in the world is going to give up the kind of power that comes with that kind of income So if I was to project when we should go into Venezuela and start cleaning up, I'd say don't hold your breath

[04:07] And here's another thing that's been all over the latin news in the last couple of days Little Uruguay the only country in the world so far that's completely legalized marijuana with some limits and restrictions of course has in fact this week finalized their legislation on that and Here's how it affects the public as it turns out. The final law is supposed to go into effect around December 10th Consumers will be able to buy their marijuana Directly from pharmacies without a prescription, of course, or if they like they can grow their own Cannabis plants in their yards or in their homes and you could collect from your plants up to 40 grams of smokable bud a month Which works out to about a little less than an ounce and a half each month Now if you want to cultivate it for yourself and wait for the harvest which is about twice a year

[04:55] Meaning you're not pulling buds off the plants every month to get your 40 gram limit then you're allowed to collect one pound of bud per harvest and Since there are about two harvests a year in Uruguay That means you can produce about two pounds for yourself a year. That's for individual use now I don't know about you But even way back in my college days where I knew a few dedicated marijuana smokers even the few guys I knew that were very devoted to the stuff. I have serious doubts. They could smoke two pounds a year I take that back. I knew a few journalism art drama communications and psychology majors that back Then were constantly stoned. Maybe they could do a couple pounds a year Maybe even in a month or two But none of those seriously nerdy engineering types that I knew could believe me marijuana and higher mathematics

[05:45] Just don't mix and by the way, personally, I wasn't big on it. Not because I thought it was evil or anything It's just that I was a poor broke college student and my parents couldn't help me financially So every dime I had went into school and supplies not drug supplies school supplies and keeping my junk of a 1972 Danson going so anyway Like I mentioned in Uruguay looks like you'll be able to grow about two pounds for yourself a year Now the next question might very well be who's checking and the answer is no one This is Latin America, you know, and Uruguay is very small and lightly populated They've only got a little over 3 million people in the whole country and the local and federal Police forces have already gone on record saying they've got enough to do and don't really care

[06:32] In fact 95% of all police officials when questioned about it say they actually expect crime to substantially decrease Now president Mujica, who's the driving force behind this legislation the guy who pushed it through he agrees Wholeheartedly with the cops. However, the opposition political party has come out in press releases saying just the opposite Claiming it'll increase drug use and cause many negative secondary effects and you might ask do they have any proof of that? In other words, what secondary effects are people gonna drive slower? Seems when they're high on pot. They always do right? There's a potential problem can't have people driving under the speed limit now, can we? Anyway, what proof do the opposing politicians have that it's gonna be detrimental since Uruguay's the first and no country in the world has ever

[07:21] Liberalized pot laws like that before there are no precedents to cite Uruguay is and will be the president meanwhile 95% of the police force who deal with that stuff on a daily basis say they wholeheartedly agree with the policy But back to actually growing this stuff now If you want to produce more than two pounds a year and sell this stuff yourself be a commercial grower yourself That'll be easy enough to do by just picking up a license from your local municipality because after all the drug stores that sell this stuff have to get their supply from somewhere and That's in effect how they're gonna tax the stuff through licensing through growers who supply this stuff and the retail pharmacy outlets Enough said about that. Oh

[08:07] And just one more thing Regarding getting real American TV down here with all your favorite channels in English I mentioned that a bit on last show But I left something out if you recall I said you could get sky TV down here quite cheap it's a satellite dish company and all the cable TV channels come in Spanish as well as English meaning the usual suspects like TNT and the health channel and the history channel and all those HBO Cinemax and movie channels Too as well as all the sports channels Which by rights should be more than enough to suck the gray matter out of any TV addict However, if you're from for example, Cleveland, you won't be able to get your local channels Just your generic cable TV news channels like CNN Fox and NBC ABC and CBS Affiliates coming generally out of one big city like Miami or Atlanta

[08:55] But some gringos and expats I know like to get their hometown news Hometown meaning the nearest big city they came from up in the states For example, New York, Boston, Minneapolis, Chicago, and of course, Cleveland and yes You can have that to your local TV programming just like you were sitting back on your sofa up in Chicago Watching the cubbies lose on WGN For all you guys and gals up north who have direct TV, which has been around a long time You know what I'm talking about They also have it in nearly every country in Latin America now with free Installation and no equipment rental or anything when they offer the deals on that and they do it all the time and you pay only About 15 to 20 bucks for the basic service all the way up to well Whatever you want to pay up to a hundred bucks for everything three or four hundred channels, right?

[09:42] now I know a few gringos down here in Latin America who love sports and they have direct TV and they love to hear their Local US news programs, too. So how do they pull that off? Well when they set up their direct TV service They just specify they want the ABC CBS and NBC local programming affiliates from a particular city like New York For example, so what's the easiest way to do that since they all speak Spanish down here? And of course the contract she assigns in Spanish, too Well when you sign the contract you just plug in the area code of the region you want to receive the local affiliates nothing to it and Mentioning that contract business was a planned segue so I can finish off what I didn't have time for on last week's program So a lot of times a gringo will say to me. Hey Johnny

[10:29] I signed this contract with direct TV or whoever and I'm moving or I like another service How do I get out of that contract or sometimes? I'll hear from a gringo or expat that they have buyers remorse. We've all had that a hundred times, right? Oftentimes people especially first-world people are dissatisfied right off the bat right after they sign the contract They find out soon enough that some things not to their liking after all we North Americans are used to a certain level of service And that Latin Americans and Latin American companies have just not figured out yet Which is a big part of our gringo advantage when we start a business down here and why so many of us are so Successful after a while, but that means we suffer on the consumer end when we have to contract one of these companies to do something

[11:15] For us, so how do you get out of a contract down here in Latin America if for some reason the company does not provide the service? They promised in fact just recently I spoke to a gringo who wanted to get out of his alarm service contract He hired one of those burglar alarm services that monitors your house and your alarm sensors You know what I'm talking about when it's armed and the thing goes off They're supposed to call and respond within a certain period of time guaranteed Well in this gringo's case He says that the contract stipulates they're supposed to arrive at the house in under 20 minutes now He's never been robbed or broken into or anything But he's had a couple of false alarms haven't we all and they never made it there within 20 minutes So he figures he'll just dump them and get another service even though he signed an 18-month contract and he's on his fifth month

[12:03] Obviously, they're not living up to the terms of the contract so he figures he can just walk away from it So again, the question is how easy is it to get out of a contract down here? And you know most astute gringos know about this kind of stuff when it happens to them up in the first world Up in the states they have solid consumer protection laws about such things for example in California if you buy something from a door-to-door salesperson like Avon or Mary Kay or Amway you have a three-day cancellation period and For home loans you get a three-day cooling off period too in California That is and if you buy life disability or property insurance You've got a 10-day cancellation period now in the states as far as mail order or telephone sales

[12:49] You've got a 30-day cooling off period that is unless you've received the order already Then it varies, but you still have a return policy But here's the big one that concerns most gringos on these contracts up in the states when you close an internet or cable TV deal In most states you've got 30 days to cancel no questions asked But don't think it's like that down here in Latin America once you've signed a contract You're locked in unless it's part of the marketing promotion to actually give you a trial period like for example a week or a 30-day cancellation option and That's quite a new thing down here, but I've been seeing it more and more lately again. It's that lag time effect, right? So then the question is what if you're unhappy with that contract you signed after the fact and for example in the case of cable

[13:36] Or satellite TV companies your signal is crappy You're not getting the channels you paid for the skin tones on your porno channels aren't natural or whatever reason you happen to be Is an option as long as you haven't signed up for the monthly credit card or bank account debit plan that is Anyway, if you quit paying they'll cut your service for sure and you'll end up putting a stain on your lawyer's credit because he's the one That vouched for you, right? But will he really get his credit smudged? Well chances are no because credit reporting bureaus and services are in their infancy down here They're a good 30 or even 40 years behind credit services up in the states like TRW and bank credit reporting services and I

[14:24] Personally spoken with a few lawyers down here concerning just that because over the years They've all had clients who've walked out on deals like that Latin clients, of course because gringos nearly always pay well the story on that is the only thing you really have to worry about or the lawyer really has to worry about because he Co-signed is if you walk away from a bill that's over $200 because then the company can file a claim against him in court And this is important. So listen up Like I said credit reporting is in its infant stages down here So a guy could be a terrible risk and could have stiffed dozens of people over the years and there'd really be no way to find That out However, if you got a claim against someone of more than 200 bucks, you can't file a judgment against him in court It's their version of a small claims court, but they don't exactly call it that

[15:13] Now if you're gonna try to file a civil claim against someone Let's say you paid a contractor $200 and he never came back and finished the job And by the way, that's why you should never pay someone in advance always pay them after the job's done anyway If you're gonna file against someone like that You're gonna need your lawyer to do it because even if your Spanish is perfect You'll be chasing your own tail and wasting a couple of days of your life. Believe me. I've tried it It's no fun But anyway, if you quit paying a monthly installment for a cable company contract, for example They are gonna file against you in court because companies like that have a staff of lawyers to shag down deadbeats That's all they do. And yes, no matter how legitimate your complaints are You'll still be classified as a deadbeat in their eyes Now that means of course that the courts are totally clogged up with cases like that

[16:01] That's why it could take three to six months just to get your first hearing on the docket and because there are really no institutionalized big-time credit reporting agencies like TRW That means over the years lands have been using the civil courts as kind of a proxy for their non-existent credit reporting agencies And that's just about the only recourse there is when there are small amounts like 200 bucks or less involved So what happens when you sign one of those contracts for a monthly payment plan? If you go down to the local appliance store and buy a washing machine on time and you fill out all the paperwork And you have the references still they're taking a chance. You might walk away from the deal So what these companies who offer financing do besides charging astounding rates of interest sometimes up to a hundred percent a year is

[16:47] They send someone down to the court and check out if anyone's ever filed a non-payment claim against you now Of course because the courts are so backlogged and terribly chaotic Almost none of these cases ever get to trial in fact most of the time one or more the parties never shows up at all Basically it boils down to this No lawyer is gonna go down to court for someone wait around for four hours till he gets his turn just to collect for his Client a judgment for 200 bucks that he'll probably never get hell The lawyer's time in that case is worth probably half that but still no matter what happens in court the paperwork will get filed And there'll be a record that someone maybe you have been served for a non-payment which in a way becomes your unofficial credit report So in the end that's one way you can find out if someone's a good payer or not

[17:33] All a lawyer has to do is check the civil court records to see if someone's been accused of being a deadbeat pair Now if you try checking the court records yourself, you won't get anywhere You'll have to get a lawyer to do that since in the first place you won't know step one on how to do that not to mention everything's gonna be in Spanish and When might you need to check on someone like that well for example? Let's say you're having a contractor come over and remodel your house or put in a well or do some kind of construction for you Might be nice to know if the guy's a deadbeat because you're probably gonna be advancing him some substantial amounts of money You get the picture and obviously checking those court records is a very imperfect system But if you for example quit paying your satellite TV bill because you're pissed off about something your name If you've signed the contract or your lawyer's name will show up in those civil court records and thus assumed

[18:23] By anyone checking those records in the future to be a bad risk a bad payer or just a troublemaker and whether any of that's true Or not who knows but that's what you get in lieu of TRW and other big credit Re-reporting agencies that don't exist down here not yet, but I assure you they're coming now Once I was talking to a circuit court judge in Costa Rica The fact was I got stuck next to him at an embassy party and let me tell you there is no more boring or pompous person to sit next to at a party than a Latin bureaucrat now this judge a Fat pompous disgusting bureaucrat who couldn't stop bragging to me about his vacations to Miami and Disneyland whoopee Oh, yeah, and I might add he was very fond of passing gas too, which made this guy the perfect government employee You know Anyway, that stuff aside

[19:10] He told me that you just wouldn't believe how many people filed those civil actions for non-payment for amounts as small as 20 bucks which because of the cost of living and salaries down here works out to maybe a hundred or hundred fifty bucks if We're talking about equivalencies in the first world So that said with cases like that so totally clogging up the civil court system It's no wonder why getting an actual court date can take up to six months And then as is the way of the court systems down here the other party the party that's being filed against Has to get an official receipt delivered to their home or office or whatever by a court process server Informing the other party of the action and the upcoming court date pretty much like in the US

[19:56] Now remember these are papers being served to a person who can't afford 20 bucks to pay a creditor Which could mean they often don't have a permanent mailing address and even if they do it can be impossible for a court Messenger to locate not to mention the chances that the person is gonna be home to sign the thing for a receipt are pretty slim Most often the biggest hurdle is actually finding where the guy lives this you'll know what I mean if you come down here to any Latin big city and see how they lay these things out what I really mean is how they fail to lay their cities and towns out They just kind of take off and grow like a weed patch because you see modern city planning is not on the menu down here Yet, there's a huge lag time as usual So even if this summons does get successfully served that'll just be for the preliminary hearing to see if there's a case or not and if one of the principles doesn't show up and

[20:45] That's normally the case It'll get postponed for another couple months and that's how life goes on in a Latin civil court system So then you might ask don't Latin American countries have their own version of a small claims court Well, what Latin lawyers will tell you is that about 90% of all civil court cases are what we'd consider Small claims cases really small claims like 20 bucks and the thing you have to remember is to the average Latin American making three or four hundred dollars a month even a Two or three hundred dollar civil lawsuit claim, which would be strictly an annoyance to us something We'd never take anyone to court for that would be ridiculous Well down here to the average adult citizen 200 bucks is not small potatoes That's like two or three weeks work to the average stateside working person. That would be like two or three thousand bucks

[21:35] So in the end the bottom line is when dealing with contracts here You're gonna be confronted with them But try to sign as few as possible and try to get your lawyer to do it for you if you can And as far as having a trial period or an escape clause to get out of a contract forget about it enough said about that Now you might recall over time I talk about the fact that Latin America is a gold mine for recycling and translating in Spanish Of course old worn out seminar topics that were huge back in the states way back when for example time shares property flipping options trading no money down and bankrupt property for closure sales and all those part-time get-rich courses that were big stuff up In Cleveland back in the 80s and 90s, but completely dead in the water now But now all those worn out topics are fertile ground for any gringo wanting to come down to try to restart his seminar career

[22:26] Turns out it's that gringo advantage again and Latins buy that stuff hook line and sinker to them. It's fresh and new They never heard about the art of war before They think every old gringo that comes down here who's written a book on finance or business or housing is a guru Even if he's only sold 10 copies to his mother after all to them first world people have the Midas touch, right? Anyhow, some of these first world guys with the has been seminars have tested the waters and are making a mint Now if you remember in a recent past show I mentioned this Kaplan seminar group from the US that does tons of seminars on everything just do a web search on Kaplan and you'll see what I mean and it seems like since they've saturated the market up in the States and since they're getting sued all the time up there They've discovered the fertile waters of Latin America where for one potential clients don't investigate anything

[23:16] And secondly people and companies almost never get successfully sued and now they're down here giving seminars to somewhat clueless Latin's Somewhat clueless Latin professionals that is specifically Latin doctors and believe me Every last one of them wouldn't love to practice up in the first world, you know and live the good life What doctor wouldn't rather drive a Ferrari than a Toyota, you know the trips to Europe and the country club memberships and all that Well, that just doesn't happen when you're a Latin American doctor. Sure Latin doctors have a very good lifestyle Comparatively speaking but in dollars and cents it only works out to about a standard middle-class lifestyle up in the States So naturally Latin doctors want to come to the States, but they just can't for obvious reasons For example, they never went to an accredited first world medical school

[24:03] secondly, they don't have a visa and thirdly their English sucks and fourth and toughest of all they have to pass the medical boards at some Accredited medical school up in the States all in all almost impossible hurdles So what does this Kaplan company offer in their seminar? They promise a way to jump-start your entrance into the US as a medical specialist Supposedly giving you the fast track on how to get into the system up there and get this for busy doctors They're offering it online too. They realize that all the doctors down here would love to practice in the States and get that Ferrari they realize that young doctors down here only make about a thousand dollars a month right out of medical school and they also Realize that doctors down here like doctors everywhere have good credit and have high-limit credit cards so they can pay the

[24:53] $1,000 or so to take this surefire course where they're sure to learn those special tricks on how to become a medical Resident up in the first world and actually I don't know how much the course costs They never tell you as much in the ad they just bait you but I know it's got to be well over a thousand dollars By the way, they word it listen to this when you read this ad it says if you sign up now, haha They'll give you a two hundred and fifty dollar discount on the course. Anyway, are you starting to get how gullible Latins are even the professional class? You just don't take a course like this and automatically get a free pass the States to take the medical boards No, sir There's a hell of a lot more to it and not one in a thousand Latin doctors ever gets to see his name on a US

[25:40] Country Club membership certificate much less have a Ferrari parked in a driveway So, you know who's making out on this deal, don't you? Now, of course I'm not saying that any of this is illegal and even if it was it would hardly raise any red flags or be Prosecuted down here in Latin America. What it does is it gives every Latin doctor down here making a thousand or two thousand bucks a month Hope yep, they're buying hope just like folks who buy lottery tickets And like I said, there's nothing wrong with that Just remember two things one the gringo advantage can be very powerful and two down here in Latin America The gullibility factor is extremely powerful, too So go ahead all you expats expat wannabes and expat gunna bees if you have your own ideas for bringing down a seminar Chances are no matter how old and moldy your idea might be if you package it up first world style and tie all the loose ends

[26:30] There's a very great chance of success for you That is not the attendees in fact quite a few people are coming down here making money with ideas that aren't quite so honorable yet They still have seminars and pack them in take for example those seminar ads I've been seeing around here for the past couple of years Offering the inside track on how latin's can become Canadian citizens and the ad looks quite official Bold Canadian flag and all however It has nothing to do with the Canadian embassy and at about 30 to 50 dollars a head They just packed these seminars every latin wants to go to Canada It's their second choice if they can't sneak into the US and in the end almost no one gets Canadian citizenship But no one's running these guys out on a rail because they're not actually doing anything illegal

[27:16] They're out there selling hope again Only their target audience is the middle and lower classes making three to maybe five hundred bucks a month And they walk out of that class with some flyers and pamphlets and some internet sites and addresses though 90% of them Don't even have internet in their homes 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 comm to sign up for your free reports on Latin America See you next time. Nos vemos