#815 – The Expat Files: Navigating Cryptocurrency, Borders, and Expatriate Life

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 out 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 All right by popular demand today. We've got our Bitcoin and cryptocurrency update You know, there's been a big blowout in the crypto market in the last couple of months Every coin and ICO are way down from their peaks to be

[00:48] Expected for any of you who have been following the cryptocurrency markets for let's say two or three years You know is like riding a montana rusa. That's a roller coaster montana rusa I like that phrase don't know it came about in Spanish. That means roller coaster But if you break the words down, it's literally Russian mountain. How'd that happen? How'd the Russians get in the act? Anyway montana rusa, man That's what the cryptocurrency market is and you gotta be ready to strap in and be on that ride for the whole run Because it ain't for the faint of heart But let me ask you this or as a joker would say riddle me this we all know the stock markets in a huge bubble It's gonna blow out any second. In fact, it's got signs of cracking right now

[01:35] We know the real estate market is beyond overblown in most parts of the states In fact, analysts are saying the conditions are worse than they were before the 2007 2008 real estate blowout Which nearly took down the whole system really it was only saved by that very last wild card in the deck QE quantitative easing just a fancy name for the Fed printing money and adding zeros to the ledger of the too big to fail banks and institutions Meanwhile millions of Millennials Gen Xers even baby bombers. Did I say bar? Oh Collectively more than a trillion dollars in student loans and that's never gonna be repaid That's impossible and it gets worse nearly every private and public pension fund is bust or deeply in the red

[02:23] And the hits just keep on coming. So what a crypto currencies have to do with all that Well think of this for a second the other day. I was talking to a retired expat insurance broker Actually, he's in the re insurance business. You know, most people have never even heard of that the re insurance business Those are companies that ensure Insurance companies, how do you like that insurance companies have insurance against their own catastrophic blowouts that could bring them down You know big events like tsunamis earthquakes hurricanes Anyway, he was telling me something I knew already but a lot of people don't Namely that the average pension fund manager in the US is not making that six to eight percent annual return If they don't make six to eight percent annually, they bleed cash and since that 2008 2009 blowout

[03:09] They can't even park their cash in tea bills without losing a ton of money because they're only paying out between one and two percent Said they've been gambling with all that dough and putting it into guess where the stock market What do you think? It's so bloated overblown and ready to pop However, these big pension fund managers know the parties over in the stock market They're never gonna hit that 8% mark anywhere else Except you guessed it by dabbling in cryptos In fact, they haven't been hitting that 8% for years, which is why they're almost all deep in the red So behind closed doors, they're in panic mode If you've got a pension and that's all you're counting on you should be in panic mode, too And you know what they're doing is playing that musical chairs game and lately if you've noticed or you heard the rumors or have some Friends or relatives in this spot more and more pensioners are receiving notices saying they're gonna get their benefits cut

[04:00] That's the new trend. So you better get ready for it That's why as this insurance guy reaffirmed Pension fund managers are just licking their chops over the cryptocurrency market Why because for them it's kind of the last great throw of the dice where they have a good chance of saving the pension fund That's because of cryptocurrencies gigantic swings up and down or So called volatility and a real potential that's been proven over the last couple years that certain cryptocurrencies and cryptos as a group Can absolutely explode on the high side and even when they fall They don't fall and make new lows. Oh, they fall All right, but they don't seem to fall below the average of their last big run-up I like this high-powered insurance broker said you think the big pension fund guys and the institutional investors would keep well away from

[04:50] Cryptos are just way too volatile. But surprise surprise are absolutely in love with the volatility because that's how you make huge gains You can't make in any other traditional market like stocks bonds T bills money markets commodities Of course to make those huge gains You have to be on the right side of the move and so like this guy said behind closed doors every big institutional fund and big pension fund managers are holding their collective breath and waiting for the SEC that's Securities Exchange Commission's approval of these crypto financial instruments they can invest in and like the man said These big funds will test the waters by putting maybe five or ten percent of their dough into cryptos and crypto based Instruments hoping for gigantic moves in the market and right now with Bitcoin and the other cryptos way way down some of them

[05:40] 70 or 80 percent off their all-time highs of about a year ago Those big institutional and pension fund investors know cryptos have the capacity to shoot to the moon So they're dying to get in but not until the SEC gives approval and what's holding them up right now is what they call the custodial Issue who's gonna hold the Bitcoin or crypto that needs to be held in reserve To guarantee the funds exist as with any such investment vehicle You have to remember this is a brand new type of market and rules have to be invented and approved as they go along But believe me, it's coming There are dozens of firms that have applied for SEC approval and all of them have been rejected so far However, when they come back, they tell you what you have to do or what they'd like to see in the next go-around

[06:26] When you apply again, so dozens of financial firms are now working on those fixes and what are they? Hey, I don't know anything about the SEC and it doesn't really matter to me But rest assured the crypto market is nowhere from dead If you think it is it's only because you're into mainstream news and you haven't been doing your homework and you know damn Well, it's the mainstream media the banks and the governments that have the most to lose when cryptocurrencies take off again now if you're a hard asset or a hard metals kind of investor or have that distrust as you should of Governments the funny money system and the Federal Reserve and if you've done your homework and you're a student of history If you know the stories of some of the great financial Kingpins and Wizards of the past you'll hear over and over the same theme on how old money

[07:15] Retains its wealth, you know how generation after generation. They're able to pass it down Unless their kids of course totally fuck it up. You see that happening more and more these days Anyway, these guys would preserve their wealth over centuries with a system They call a third a third and a third that is shorthand for dividing your wealth into a third land a third gold and a third fine art or Collectibles, you notice there's no mention of cash bonds stocks or options. Do you that's because the value of land gold and art? Etc is its own value. No one's telling you what it's worth If you don't own it, you don't have it. It's not really yours That's the point and there's no issuer like the US government that can suddenly make your land disappear turn your gold

[08:03] into a worthless piece of metal because it's the world market that sets the actual value and price and there's no government that can say a valuable painting suddenly isn't worth it anymore and No government can print copies that aren't forgeries either. Of course, it's always possible There could be a war a dictatorship where an army can confiscate your land But they can't take your gold or your art because it's portable If you got the brains to get it out where you see the signs of bad things ahead however, nothing's without risk, but that system a third a third and a third has proven the test of time of centuries of millennia currencies and countries come and go and governments go bankrupt, but land gold of course silver to Collectibles and artwork always have value but these days in the 21st century

[08:53] Governments are so powerful. They can stop you from moving your stuff around I mean, come on try taking some gold silver artwork collectibles whatever out of a country you want to escape from big problem That's where crypto currencies come in Which is why so many people are now saying look time to revise that wealth formula a little bit Let's have it one-third land One-third art and collectibles and let's split that precious metal gold thing 5050 half gold and precious metals half crypto currencies You know the why because you can transfer the stuff around the world without anybody Confiscating taxing or stopping you from doing it You all know the positives of crypto currencies and why they exist, but you should remember one super important thing

[09:42] That is as funny money fiat currencies crash and crumble and you can't transfer them around easily anymore What are the alternatives? I mean look foreign banks to which you'd want to do wire transfers of factual cash as An expat with a plan B. They unfortunately don't want US citizens as customers anymore Because the ham fists of US big brother have made it impossible with fat kah gah IRS and US Treasury reporting requirements now you longtime listeners know here in Latin America There are some nice solid long-term Bitcoin crypto and cryptocurrency mining communities Like every Latin country has a nice crypto community simply because all Latin countries have currencies that are inflating

[10:31] We're talking about against the US dollar even though the US dollar itself is always inflating As far as Latin the country inflation in some cases just severe like in Argentina and other cases Totally out of control and in the stratosphere like Venezuela Missing it funny the biggest Bitcoin community and all of Latin America happens to be in Venezuela So what's that tell you second biggest? Argentina why because they've had 25% inflation year-over-year and this year it's gonna be 50% Could you live with that? Anyway, as you longtime listeners know it my expat insider seminars I have two very special presenters the famous Bitcoin Dan one of the earliest known Bitcoin adopters He was into Bitcoin when it was in the single digits

[11:19] Imagine a time when you could buy bitcoins for under $10 each Well, Dan and his brother were doing just that So Bitcoin Dan's on the roster and Oscar Minor also a very early adopter And one of the very early Bitcoin miners In fact, he was mining Bitcoin because it was the only coin out there now Of course, there are hundreds of so-called shit coins If not thousands the point is Oscar Minor really is the expert the go-to guy for cryptocurrency mining of any kind when it comes to the individual not the Institutional miners who have gigantic energy sucking warehouses full of crypto mining equipment So he's the go-to guy for one-on-one mining if that's what you want to get into So once again in just a few weeks at my January 2019 expat insider seminar

[12:08] The famous Bitcoin Dan will be telling you of the current state of cryptocurrency And Oscar Minor will be giving us this very learned and expert Opinion on the state of crypto mining and if it's worth it for you to get into it now or not So if you come to the seminar You'll have a chance to rub elbows and hang with these guys and you'll become friends with them They're both very approachable and love meeting like-minded gringos and expats Let me qualify that our kind of like-minded gringos and expats Not the ones who are Costa Rica Panama or Cancun bound brainwashed by outfits like international living Anyway, so you've still got time to sign up and you've even got time to kill two birds with one stone That is come to the seminar and apply for your Guatemala temporary or permanent residency

[12:55] Just go to www.the new expat.com click on Johnny's seminar link and find out all about the trip How to kill two boys with one stone and how to take that amazing four-day post seminar John Galt tour And remember if you're coming down you have to arrive in Guatemala by Friday January 4th because early Saturday morning, we're off and running So you have to arrive at our first hotel by Friday January 4th or earlier a lot of people do that They end up coming early or staying well after the seminar or forever. Just ask Captain Mango Oh, and he's always one of the mascots on our trip So you'll get to hang with him to think he's been down here for five years now By the way, he just filled me in on the fact that over that time He's lost 50 pounds or more and I asked him would he have been able to do that if he hadn't come down

[13:46] If he'd stayed back in Cleveland, he said Johnny if I hadn't come down, I'd probably be dead I'm serious. And when he said that he was dead serious, too So Captain Mango no longer resembles his namesake. That's what that Alti Plano living does to you Yep, Captain Mango is a new and better man and you could be too or woman Anyway, now I want to bring something up I'm sure you've never heard before since we're on the crypto currency topic and you know It's taking a big hit you're still in the black some way in the black anyway aside from the gains and losses and believe me Some people I know check the crypto currency charts about every hour on the hour They're addicted to watching that stuff move and others who bought in don't hardly check it at all

[14:33] And those are people who generally bought in as a speculation thinking Hey, if I lose my grand five grand ten grand or whatever It was a good try just another speculation in life that could have gone to millions or bust and truly That's the best way to look at it Whether you're investing in crypto an option a stock or your next door neighbor geeks new porno app The idea is to not lose sleep over it because you got way too much invested But definitely have something invested. So if it shoots to the moon again, man, you're on that ride I mean look take Bitcoin. There are some people really in the know who are saying in the near future It's gonna hit fifty grand a hundred grand two hundred grand a coin even more So if you bought one Bitcoin at whatever today's price is two three thousand four thousand, whatever

[15:22] That kind of investment won't kill anybody. But if it takes that huge shot to the moon, you're on that ride So it wallows in the mud for a while. Who cares? I know I know if you've got cryptos You're feeling the pain even if you bought in very low in our way ahead right now. It still hurts a little right? Human nature that said I want to tell you a little story about trying to bring cryptocurrencies across country borders That is taking a hardware wallet across borders. And yes, you absolutely must get a hardware wallet It's never recommended to keep it on one of those exchanges that's in the ether, you know, like coinbase Well, of course you can put a little in there if you have to do Transactions and stuff for a short period of time and after your transactions get up

[16:08] But don't put your mother load in an online crypto exchange or service Instead you definitely want a hardware wallet like a nano or a trezor. Now, you got to hear this story Entitled having a hardware wallet crossing borders with your crypto hidden in plain sight And remember these crypto hardware wallets just don't have the option to hold Bitcoin They have the theorem and Litecoin in a various other coins In other words, you have one of these hardware devices that looks pretty much like a little flash drive with some slight physical differences They're basically bank accounts for all your cryptos. Anyway, here goes one. Let me point out This is mostly about the trezor hardware wallet which you can get for under a hundred bucks at Amazon or directly from trezor

[16:54] I don't get any money for this. I'm just saying it's very very good However, the nano is good too. It's another brand a little cheaper Anyway, it starts by saying the trezor hardware wallet has unique advanced features That allow you to hide the true value of what's stored in your wallet from prying eyes, for example Government or TSA inspectors at borders and it all has to do with that requirement that you can't bring over $10,000 in cash or convertible monetary instruments without reporting that amount or Don't confiscate your dough. It's actually by the way proves government officials Don't know dick about crypto or the concepts behind it Because you see if your treasure wallet or nano wallet

[17:39] For example says that you have a million dollars in it and they make you give the password up and they see that You're not actually carrying a million dollars of anything across border because it's up in the ether. It's in the Internet It's not in that little device a little device only holds your passwords your keys Which allows you access to your accounts on the blockchain through the Internet and I suppose one day they're gonna throw some guy in the clink Because he's got too much money on his treasure or nano When he went through a border and he's gonna contest it in court with a high-powered lawyer And we're gonna find out how that issue plays out in court The best way to think about it is as if you're bringing a debit card across the border That's loaded up with money in a bank somewhere

[18:25] You're not really bringing that money across the border. You're bringing the access to that money across the border You get it. Yeah, but you know those border slugs and TSA and such They're not gonna stop you sticky in a room and ask you to swipe your debit card so they can see what you got In your bank account though. I wouldn't doubt that's on its way So in effect bring a crypto hardware wallet like a treasure or nano across borders is pretty much like bringing a debit card Except for the fact that governments hate cryptocurrencies Number one they hate that you have complete control of your money and they don't know what you've got your funds Outside of their banking revenue and tax system and governments are all about control. So they hate that

[19:10] Anyway, the article goes on to say your treasure or that would be your nano hardware wallet Has unique advanced features that allow you to hide the true value of what you've got stored on the blockchain and That's achieved by using what they call passphrase technology Then it says as governments worldwide expand their reach and become more intrusive each day It's only a matter of time until you're asked to declare the value of your cryptocurrency Or forced to unlock your hardware wallet at borders. That is if they find one on you. So Traveling domestically in the US you may encounter various Overzealous TSA agents even for example, if you're pulled over domestically by the police or state patrol Whatever and they find you have one of those devices

[19:59] There certainly will come a time when they're required to ask you how much money you have on your device again It's not really on the device, but it's gonna happen and that's what officials are gonna assume Anyway, the time will come when you'll be confronted and questioned about how much you have on that device Alright, let me repeat this again It's not the money you have on that device just the access to that money like a debit card But they don't seem to care about that. They think it's money because they don't know any better So in the future expect to be questioned for that matter Expect that governments will disrespect your personal privacy and your wealth and expect that they'll find more and more reasons to confiscate your wealth Now to avoid potentially being detained or denied entry into a foreign country

[20:44] It states here safeguards to avoid this have been built into Trezor and nano hardware wallet devices For our purposes. Let's talk about Trezor to access the contents of your wallet using Trezor You simply go on the Trezor website plug in your device using a USB cable when prompted You will then enter your PIN number by default. This now gives you access to your entire wallet That's how people usually set up their Trezor wallets showing the amount of bitcoins or other coins and the US dollar Estimated value for the moment. However, that's not the best scenario Is it because if in the event you're forced to reveal your password all your holdings will show up and you don't want that if you're at a TSA border stop, but

[21:32] Hardware wallet designers are a step ahead of that scenario They've added an extra layer of optional security with pass phrases giving you the user the ability to Compartmentalize your wallet and show only what you want to be shown For example, suppose you're forced to give up your PIN number and you open up your light coin wallet within your Trezor With this option you'll have wallet number one That's got its own password that you've selected and when asked by a government slug of any sort or even a criminal What's the difference? You put in the password of the account that only has let's say two light coins in it So here's how it would work. You get singled out at a border crossing

[22:18] They go through your stuff for the fine-tooth comb. It could happen to anyone could be bad luck or a bad hair day Who knows the TSA slugs then say ah a crypto wallet. What's your password? Well, you don't have to give it up, but you're not leaving if you don't They're gonna keep it. So you oblige you plug in your PIN number Then you get a pop-up box that says please enter your password now Of course previous to this when you were at home setting up your Trezor or nano You've created let's say four different accounts with four different passwords Though you can make just one or two or as many as you want and the one you open up for the government slugs is the one That has one or two light coins or bitcoins in it worth well under ten thousand dollars at least for the moment and that ends the

[23:04] Inquisition you go on your way. All right now for a real crypto boots on the ground story a US resident crypto guy It was stopped on his way from the states into Mexico at the US side of the border He got pulled aside for one of those more intensive searches They dug through his backpack and saw he had some funny looking flash drives And he admitted because he's not the lion type that it was a crypto wallet and they pulled him to a side room And asked for his password Sure thing. Mr. TSA agent. He said in fact, he said in the moment He wanted to butter the guy up and tell him he looked quite bright for a government worker Instead he bit his tongue and kept his thoughts to himself Then he thought this guy moves amazingly fast in this sweltering heat for a guy with such a humongous belly

[23:52] And such a fat ass not to mention his toe curling breath So we won't mention it but he did the right thing held his tongue and tried to force a smile Then he whipped out his computer plugged in his treasure and said sure thing. Mr. TSA agent Here's my password have a look and they did and he said what a shame I currently have one Bitcoin and as of today, it's worth only $3,500 says so right on the computer screen after that it was see you later by and he was off Well, not exactly turns out a couple of TSA guys walked in and started quizzing him about cryptos and Bitcoin You see he was one of their first Interrogation victims and he dazzled them for a while with some nerd speak till their eyes glazed over and they said have a nice trip

[24:41] So bottom line having this kind of flexibility in a hardware wallet gives you multiple options It allows different pass phrases to access different parts of your wallet in that instance The bad guy the TSA agent saw only what Lenny wanted him to see That goes for someone that might put a gun to here ahead and say give me your Bitcoin There have been cases like that before Especially on the Russian side of the planet, you know loose lips sink ships and all that Anyway, since there's really no way that anyone can prove There's another wallet behind the one you've admitted to to the attacker or the TSA Agent or the guy with a gun that your head that should be the end of it

[25:28] All right for all you listeners out there who might have hardware crypto wallets treasure nano, whatever There's another way to travel the entire world with all your crypto access and never get hung up By the way, you really only have to worry about this at all going through first world border crossings because in the third world man You know, they get chickens and coats going through. Let's just say in third world countries Crypto wallet takedowns are gonna be a long long lag time away, but I digress I was gonna tell you another way Yeah, you know when you get your hardware wallet you write down your 24 secret words or keys And that's in case your device screws up or you lose it or something you buy another one and you can reload That new blank device with your 24 words and you're back in business instantly

[26:14] So why not just travel around with those 24 keywords? Then if you need to pull some crypto out or move it around You'll have to get another new or formatted treasure or nano and reload those 24 words Now you just can't go in a Walmart or a computer store and buy a nano or treasure not in the third world Anyway, however, you can order that stuff right on Amazon from any one of those dropship companies But it'll take probably two weeks to get to you either that or you can travel with a blank one So that it has no passwords yet It's basically empty a blank slate as soon as you plug it in you can see it's game over no crypto there at all It's not even set up. So that's an option All right. There you have it a couple of ways to go through international borders with your crypto intact Now I can't say that you're not gonna be a nervous wreck if you get tossed into a room and TSA gangs up on you

[27:06] But then again these days the whole world is nervous when going through a TSA checkpoint Oh, and by the way, you can find out exactly how to set up those hidden accounts on YouTube where else oh and before we finish I'd like to remind you about my Latin American healthcare report A hundred pages of everything you need to know about getting first world health care at third world prices check it out at www.thenewexpat.com You've been listening to the expat files living in Latin America If you need some help with your own plan B, you can schedule a one-on-one phone call with me But first download my free plan B questionnaire at www.thenewexpat.com Better yet if you want to get your plan B going from right up there in the States Just sign up for my 9-hour expat essentials course get the perfect plan B blueprint by going to the expat files.com

[27:58] Academy