#532 – The Expat Files: Living in Latin America, U.S. Influence, and Credit Card 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 today I'd like to give you a very stark example of why I and many other long-term expats believe when you live work play or hang out Off the gringo tourist trail again I'm emphasizing off the gringo tourist trail, which is about 95% of Latin America. By the way

[00:47] There's no danger of big brother intruding on you at least never in the way you're experiencing it now up in the first world Now I can blather on all day about the feeble half-ass attempts I see when governments down here try to institute big-brother policies They're always trying to follow in the footsteps of the first world the US of course I could start by telling you that in the last two or three years US embassies all throughout Latin America and I suppose throughout the world have been putting on Conferences at four-star hotels in the big cities in Latin America Where else would slimy US diplomats and embassy ass wipes choose to blow your tax dollar? But at four and five star high-end international resorts such a sacrifice, huh? And they get casualty pay for that too. So why all these US government-sponsored seminars lately glad you asked that question

[01:38] Supposedly to train the local corrupt government bigwigs as well as the local Security forces and corrupt cops get this how to recognize things like money laundering Talk about preaching to the choir, huh? And get this how to better monitor and keep tabs on their citizens all in the name of anti terrorism Of course, don't they just love to play that anti terrorism card? So as a result Latin American government buildings have started to install all kinds of security cameras as well as Sensors and walk-through metal detectors and such now that will sound familiar to you listeners up in the first world You're used to that. Remember down here. It's pretty much just window dressing In fact, I can give you the example of three identical high-rise office towers that were built

[02:25] Maybe a year and a half ago and believe me, this is highly unusual for Latin America But when you walk in you go through a metal detector first one that actually works because it's new Then you walk up to the receptionist desk and you tell her what floor you're gonna be on and what office number You hand her your driver's license or some kind of ID, then she keeps it and hands you a magnetic visitors pass That's where an alternate ID comes in real handy I don't like giving anybody in any gated community or high-rise tower at my real ID. Why give it to them? What right did they have knowing my personal dad's so for all you Photoshop users? There is a lot of possibilities Remember when you're forced to flash an ID just to get into a building complex or an office You're under no obligation to give them your real one

[03:12] Why let them put you in their database to sell over and over or use for whatever even nefarious purposes now? Note that Latins will always comply when asked for an ID like that They'll just whip out their national ID card the DPI or a settler never giving privacy a second thought However, since most gringos don't have a DPI or national residency card any kind of ID I mean any kind of ID will do even a library card It's the gringle advantage, you know and funny enough most of that high-tech first world surveillance stuff That now is little by little being installed by third world governments Surprise surprise is coming down courtesy of US government donations grants freebies and gifts Which is only part of the reason why after usually six months or so the cameras are dropping offline one by one

[04:01] The hard drives and backups crash and burn and when it comes to things like metal detectors Like car alarms going off in the daytime people get so used to the buzzer sound that they just don't pay attention to it anymore or They find a way to walk around the detector and sometimes the authorities just unplug it The fact is I've seen walk-through metal detectors in government buildings that were disconnected But everyone still waltzed right on through so yes big brother has landed sort of but he's abandoned his post and is on an extreme Manana time now before I give you another couple examples. I should give you a little background I think most of you by now have heard of the United fruit company That was the big fruit company down here in Central and South America back in the 1930s 40s 50s and beyond It was a first world politically connected conglomerate that was so big it actually owned

[04:51] Politicians and hold governments in Latin America. They paid bribes to Banana Republic governments and got everything they wanted But not forever in fact if you know your history You'll know some civil wars in Central America especially have been fought over the fact that United fruit company brought huge swaths of productive land Some from governments and some from indigenous locals who could barely read and write So in effect tens of thousands of poor Latins and indigenous people were legally swindled out of their land titles because corrupt government bureaucrats went along with it not to mention the locals Really got ticked off when they found out the United fruit company had bought gigantic tracts of government land at only a few cents an acre in other words corrupt bureaucrats Are there any other kind sold off the patrimony of their countries for pennies on the dollar?

[05:41] So in the end the peasants and the squatters Revolted and thus became the root cause of so much civil unrest in the last 50 or so years anyway That said the United fruit company has a very bad name in Latin America When you mention it people kind of scowl and you know what they're thinking in fact one time I was at a college graduation party, and I heard a Latin guy yell out Why those lying thieving raping sociopathic bastards now the topic was the United fruit company? But later on I found out he was talking about the Clintons now these days the United fruit company Doesn't really exist anymore was broken up a long time ago now You've got dole and Chiquita bananas and others you do see their trucks on the road in their containers at the ports by the way I don't quite get that name Chiquita banana

[06:27] You know it means tiny small or little bananas in Spanish all I can say is it's a good thing first world Americans Don't get it. I mean come on suppose the sign at Walmart were translated into English Step right up get your tiny bananas here well Let's just say not very good marketing, huh who'd buy that slogan in the super sized first world Oh, but remember if you go to one of the big markets here in Latin America You will find tiny little bananas some of those are about as big as your thumb And they taste about five times better than any banana you'll ever have up in the first world now Let's see that would be reason number five thousand two hundred and seventy six why you just have to get your boots on the ground So anyway nearly all Latins and expat gringos are in agreement that in the end the United Fruit Company has a terrible legacy

[07:14] However, if you talk to any halfway intelligent civil engineer You'll find out that they laid down the initial infrastructure for most Latin countries the roads the bridges in the railroads They built piers and ports and dredged harbors to where before there was only mud dirt and jungle They did all that of course to get their pineapples and bananas and produce to first world markets No, they didn't do it to increase the standard of living for the average Latin They did it for commerce and all those massive bridge and road and pier building projects took place in the 30s 40s and 50s And it took 20 or 30 more years for any semblance of infrastructure to come to the rest of Latin America the parts that weren't intimately connected to the agricultural regions so between 1950 and about 1980 very few significant infrastructure projects went on in Latin America

[08:04] Unless some do-gooder first world country like the US Sweden or Japan or South Korea came in and donated money and technical assistance For example, if you took a ride down the pan-american highway from California through Mexico Guatemala El Salvador all the way down to Panama and Costa Rica You'll see some very excellent construction work and some beautiful bridges etc and when you do it you can almost always count on the fact that it came from some kind of first world grant or a donation from a country like Japan and you know In fact, I pulled up to a number of bridges and have taken photos of the little donation plaque That's always mounted somewhere nearby saying this road bridge Whatever courtesy of a donation from the country of Japan or Taiwan Singapore Austria or Norway

[08:50] However lately I've seen some very nice road works projects and bridges where said bronze plaques and VIP Hydrocephalic statues have been stolen and presumably sold for their scrap value And by the way, somebody please tell me why do all the Latin commemorative statues in public spaces and parks and in museums have Oversized heads can't figure that one out. No one who's normal looks like that in real life, but I digress. Where were we? Oh, yeah roads and infrastructure In fact, you will see some very beautiful very up-to-date modern infrastructure projects, but you'll see some real crap, too Often a beautiful concrete road will go for 10 or 20 miles and suddenly you're on a dirt road and often enough You'll see a beat-up old rusted sign that says caution

[09:37] Construction ahead for the next 20 or 30 kilometers whatever improving your country Thanks to your government working for you yet as you drive along you'll see there is no construction and there hasn't been for perhaps years So definitely their governments are not working for them. In fact, they're not working at all Meanwhile the beat-up rusted science will persist saying that there's a road construction project underway when there really isn't So anyway, just the other day I was checking out one of the big Central American newspapers and on the second page There was a huge article talking about what they claim is one of the biggest bridges in all of Central America It's called Puente, which means bridge, Belize, which means Belize. Yes, we're talking about Belize So as it turns out construction started on it in 1951

[10:25] designed by a German architecture firm in cooperation with guess who the United Fruit Company and Steel that came from the United States now This bridge is really huge and it's a very long span It's been through a number of big earthquakes too and is still standing a testament to German engineering and American steel I guess so it was built 65 years ago way before steel came by way of China however in 2010 just six years ago a team of international engineers came in and did some analysis and found the bridge was Totally unsafe and need to be completely reinforced So immediately the government that would be the Guatemalan government because that's where this bridge is located on the road to Belize By the way, which is why it's called Puente, Belize

[11:12] So in 2010 grave defects were found and well over a million dollars in columns and reinforcement Trusses were ordered. Anyway, you got to know the Germans really know how to design things because this bridge was made to handle 12,000 vehicles a day back in 1950 and now routinely that bridge carries 600% more than its designed load. In other words each day more than 70,000 vehicles cross that bridge and by the way back then the heaviest trucks and trailers were 1 third to 1 half the weight of the heaviest ones today Bottom line that bridge has been stretched beyond its limits by a factor of six for dozens of years now Oh, and by the way in 2010 when that first world engineering committee did the analysis and said it had to be shored up immediately

[12:00] They claimed that an earthquake of 5.8 would likely take the bridge down So then you might ask why were they checking out that bridge in the first place if it hadn't fallen yet It'd been through many earthquakes. Well, that's because on February 23rd 2010 there was a five point six earthquake that rattled the bridge something fierce In fact people have photos of the bridge swaying and pieces of concrete and steel breaking away and falling into the valley But still the bridge held. Okay, so why am I bringing this up? Well, like I said before I'm looking at the second page in a big Latin American newspaper dated February 1st 2016 now Here's the unbelievable part all those metal reinforcement beams and columns that were ordered in 2010 Guess what? They found them riding away in a large warehouse at one of the ports

[12:50] Seems when they came in on the container vessel in early 2011 they immediately went into a storage warehouse where they've been ever since So definitely any sane person would ask how'd that happen? Well, the check for the government's second and final payment bounced and there the steel trusses and support members have been sitting Forgotten in a warehouse for the past five years now back to that earthquake thing since then since 2010 when the bridge was considered unsafe to drive over turns out on September 19th 2011 there was a 5.8 earthquake and the bridge held up and on November 7th 2012 the was get this a 7.4 earthquake and

[13:35] Again, the bridge held. Oh, it was shaking rattling and rolling. All right, and pieces did fall off again So then you have to ask if it wasn't reinforced as planned. Why didn't it come down? Well first world structural engineers are saying because that particular earthquake even though it was a 7.2 Massive. Luckily, it was of the vertical kind In other words, the earth went up and down if it had been the horizontal type earthquake Which would have been a 50-50 chance it would have come down So that time when the big one came the bridge won the toying costs So now I'm sure you're wondering how did that repair job get completely overlooked if not forgotten for over five years Well, my friends, this is Latin America, you know, they did order the material it did end up at the port

[14:21] They put it in a warehouse a checkbox and five years later the owner of the warehouse not knowing what the material was Decided he was gonna sell it for scrap Which led to an investigation of just what the hell the stuff was and discovered it was just another government bureaucratic screw-up as usual with funds going missing as usual now I know a story like this is gonna scare the hell out of a lot of people up there in the first world Who've never been down to Latin America? So let me explain what's really happening here As I said earlier in the broadcast you could drive through Latin America and see all kinds of beautiful brand new roads and bridges Almost always donated or funded by some mindless first world government or organization now I ask you where do you think they put those brand new roads and bridges that are donated from places like Singapore in Japan?

[15:09] They put them in places of high visibility and high-end traffic You almost never see brand new first world high-tech bridges or roads donated by Finland or Switzerland Way out in the boonies where people are still using mules to plow their fields But you do see that kind of first world construction in high-end areas where there are modern new malls business areas Construction and development so most often the roads and bridges leading to those developments are first rate In other words, don't be put off by that story I just told you as far as that bridge goes If you were to stand right in front of that bridge and started taking pictures You'll see rickety junks and age-old trucks and chicken buses Rumbling over that thing blowing huge clouds of smoke and note that particular bridge connects to old

[15:56] Unsavory zones or districts that I never recommend gringos or expats hang out live in or do business in Remember here in Latin America like it is everywhere else. It's location location location So bottom line gringos and expats rarely use that bridge at all Why because it connects to unsavory districts So why would you ever want to use that bridge unless of course you're a $5 a night backpacker because that's where those flea bag Joints will be so then what's really happening here? Well, it's obvious those lazy ass bureaucratic government slugs don't give a damn about that bridge They'll wait till it falls unless of course the Swiss or the Austrians or the Danish people jump in with a donation The truth is they'll have to be a disaster a huge calamity before anything really gets done

[16:42] And that's when foreigners and do-gooder agencies will step in with the checks But even so almost none of that money will ever get there really now. You're thinking Johnny. You're way too cynical How can you be so sure about that well? How about this one this week the former president of El Salvador just died he was 56 years old his name was Francisco Flores and he was waiting for trial why because during the last big earthquake in San Salvador He's accused of diverting 15 million dollars of aid to earthquake victims to his own personal bank accounts And now that he's dead no more trial and the money well It's in his family or his mistress his hands now, isn't it? That's how it always is down here So when you hear of a big earthquake or a landslide do not

[17:28] Contribute to an agency if you're gonna help come down here and hand it to the people personally Meanwhile if you live work play and or hang out in areas that are Recommended for gringos and expats you'll find the bridges and roads and infrastructure just fine Once again because that's where the money the development and the action is in fact if anything you'll find in those upscale areas There are a lot of infrastructure and road work projects in fact too many Therefore a lot of traffic jams too, but back to that giant Puente Belize bridge now I've been in not a Guatemala for the last 26 years and I've crossed that thing by car I'm guessing maybe five or six times. So was it taking a chance? Well, I didn't know till now that the thing was so dangerous We're talking 25 million vehicles crossing that thing every year. So I guess you're thinking from now on

[18:18] I'm probably gonna avoid going over that thing, right? So in my case in the last 26 years I've driven over it about once every three years. So in three years, I was one in about 75 million vehicles That drove over it. So in fact, you've got better odds of winning a powerball lottery than crashing and burning on that bridge But as for the other people who travel that thing every single day look out again statistically speaking so far It's been 100% safe But the day will come and it will collapse and people will die and I'll bet you There won't be a single gringo in that accident Why because we almost never go across that thing you get the point So sure Latin America has a lot of bad neighborhoods in a lot of bad districts And that's where you'll find the most neglected infrastructure, too

[19:05] But as gringos and expats stay far away from those places We know better just like you know better than to hang in Harlem or East st. Louis or East LA Well for that matter the south side of Chicago old vomit sold stomping grounds Oh, and by the way, I actually do vividly remembered last time I drove across that police bridge Must have been five or six months ago It really stuck in my mind because there was a traffic jam at the time on the bridge and a guy walked right in front Of me started cleaning my windshield for a couple of nickels. You know the drill He leaned his chest up against the window and his t-shirt said in English, of course, because you know, that's the fad now Cleveland Indians, so why wouldn't that moment stick with me permanently at that time? I had a vivid memory of reading an article that said a Native American tribe was preparing a lawsuit over the so-called

[19:58] Offensive name I guess after a hundred or so years of being linked to a famous baseball team like that They think the word Indians is now an insult and you know what when I hear about lawsuits like that It makes me so glad I don't live up in the States anymore. I'm telling you. Okay changing gears a bit now I noticed recently in all the big Latin newspapers Countries are starting to pass credit card legislation Now if you remember a couple of shows ago, I was talking about having credit cards here in Latin America Turns out one of the big differences and having a visa or MasterCard down here Is that the interest rates are out of this world up in the States probably? 25 years ago. I remember they passed credit card legislation That capped the yearly and monthly interest rates and all that came about because of pressure from consumer groups up there

[20:46] Well note that there are no consumer groups to press down here in Latin America Not any organized consumer group that anyone's actually heard of anyway There's a big lag time and it will come of course, but it's not here now So without that kind of organized pressure, how come these consumer credit card laws are showing up in various Latin countries? Well, the simple fact is that nearly everyone here who's got a credit card is feeling the pinch worse yet According to credit card company officials themselves There are more people maxed out on their cards than people who are not and the worst offenders seem to be the very wealthy the people Will have six or seven credit cards and flash them everywhere Yep, people down here are still impressed by that and there's a big fat segment of that wealthy class We call scumbag politicians and their wives and families who are also heavily indebted and maxed out on their credit cards

[21:38] So you see when Latin American congressmen are debating interest rate ceilings on credit cards There are always more than a few first-hand examples on how some of their own family members have been caught in that trap I'll tell you there's no better way to get Congress off their asses down here than when some nasty businesses happening in their own backyard So anyway little by little all Latin American countries are starting to pass interest rate caps According to an article I'm looking at right now, which comes from a Panama newspaper The majority of Latin countries do not have credit card ceiling laws yet And the ones that don't have credit card interest rates that range from 50 to 100 percent a year Whoa, that is from 4 to 8 percent a month And it says the proposed new credit card interest ceiling laws will limit the interest rate on a credit purchase

[22:29] So that the buyer will pay no more than double the initial purchase price of the product Well, that's good news, huh? You buy a TV for 400 bucks put it on your credit card and it's marvelous to know you won't have to pay any more than Double or 800 bucks for that thing in the end. Then the article says according to Bunko Cred-o-matic which is one of the biggest credit card processing outfits in Latin America After all is said and done the active interest that a person pays on average where there are no credit card ceilings is 13.12 percent all month That's when all the extra charges and fees are added into the equation and it says in the paper in Spanish Of course that the big stores are Understandably upset the hotels the hardware store chains the tourists industry

[23:19] Why because they believe that when these credit card limit laws come into effect the credit card companies won't take it lying down They'll just add extra charges to the merchant who by the way in Latin America Already pay between five and six and a half percent on all charges that come through on plastic So again my advice when you do come down to Latin America hook up with the bank and get your credit card Use it only for emergencies and cash withdrawals from ATMs And for those of you listeners out there who've sent me emails saying well I always pay my credit cards off every month, so I don't get that interest charge well look out down here Even if you pay off your balance every month you still get nailed with all kinds of charges You're never gonna be able to figure out even if your Spanish is pretty good so bottom line get a credit card

[24:07] You'll need one especially if you're traveling and you need a rent a car and most times you think you need one when you check Into a hotel too right well not true if the hotel desk asks you for a credit card Try this one out on the front desk person. I use it all the time Just say something like this my credit cards not going through or I don't have it with me Whatever how much cash deposit do you need get this 25 years? I've been traveling throughout Latin America I've been in every single country And I've never used a credit card at a hotel desk to either reserve a room or have them swipe it for possible extra charges Just ask how much cash deposit do you need in fact? I remember a half year ago or so at the hard rock hotel in Panama while everyone else in the check-in line was handing over

[24:54] Their credit cards for a swipe. I asked how much cash Do you need for a deposit and she said 200 bucks easy as that turns out all hotels have an unstated cash deposit policy All hotels outside of vomit land that is oh and by the way if you have a credit card here in Latin America Even if you never used a thing they'll take a three or four bucks surcharge out of your account every month Just for the privilege of having it so even if you never use your credit card at all It'll probably cost you 40 or 50 bucks a year for the privilege of having it sit in your wallet unused But at least then when you get your monthly statement You'll be able to sort of read it because there won't be any purchases just scurrilous nickel and dime fees and charges Oh, and by the way unlike credit cards up in the States down here

[25:40] You're not automatically covered or off the hook for charges that aren't yours or if someone steals your card and starts making purchases in fact I know some credit card companies give you a two three or five hundred dollar sort of Deductible of something bad happens like you get your card stolen and someone starts using it Or for example if Russian hackers get a hold of your number and suddenly you find you've bought a container full of iPhones And they were shipped to Vladivostok So with most latin credit card companies you have to pay the first two three hundred or five hundred bucks if something like that happens Kind of like a stop-loss limit which rightfully scares gringos and expats to death Which is why latin credit card companies offer a separate kind of insurance for an additional couple of bucks a month So if you suddenly find extra charges on your statement like caviar blow-up dolls butt plugs

[26:29] Whatever you won't be on the hook for a cent because you've bought that insurance So as you can see latin credit card companies nickel and dime you to death So do I suggest just sign on for that insurance? I say yes Because like I said in a past show every single latin person down here has had problems of some sort with their credit card and has Faced extra charges multiple fees and of course monthly billing statements that are just so convoluted They don't understand and if it's nickel and dime stuff They just give up in the end and pay and we're talking about native Spanish speakers here Well, here's something I've been meaning to mention We have April Fool's Day up in the states. They have an April Fool's Day in Latin America, too Only it's not on April 1st. It's on December 11th and its name is quite PC

[27:15] It's called the day of the innocence via the innocent days So if next December 11th you get a phone call and someone says guess what the entire US Congress and the executive branch have been infected with a brain-eating virus What's there to say? It's old news South of the border 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 if you want me to help you sort out your own Latin American plans schedule a one-on-one Consult with me just send an email and let me know at the expat files at gmail.com. No spamos