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Thinking About Diversifying Internationally

A little known fact among North Americans is that a growing number of their fellow citizens is getting a second passport and giving up their U. S. citizenship.  Harper’s Magazine reported that in 2002 there were 403 people who chose to cease being citizens. The number has been increasing and last year, 2011, almost 1800 people severed their relationship with the U.S. according to a list published by the IRS. Some analysts think that figure is under-reported.

And yet, considering the population of the US and the fact that an estimated 3 million to 6 million U. S. citizens already live outside the U.S., this is not a spectacular figure.  Many people with no intention of giving up citizenship already have residence and live in another country. But Gerald Celente, trends analyst, editor of The Trends Journal, predicts that this trend has only begun. He foresees a growing wave of people leaving the U.S. as time goes on and as opportunity appears to be going offshore.  The same applies to  our potential immigrants from the UK and other parts of the world.

Are the people who are leaving poor, destitute folks? No, they are among the finest, most productive and intelligent citizens. Many are professionals or successful business people—stockbrokers, lawyers, teachers, engineers, medical personnel, IT professionals, publishers.  It is my privilege to be personally acquainted with some of them who are already here.

Is it possible that the United States might put up barb wire to keep their productive citizens at home? We don't think so. But other actions that might be as effective.  

What about approaching the issue from the opposite direction—by gradually putting so many requirements on financial institutions regarding U. S. citizens that most cease to accept Americans as clients?

In the case of Uruguay, several years ago the U.S. threatened that if Uruguay did not comply and ignore their bank secrecy laws, the U. S. would deny them access to U.S. banks and worse, would embargo the little nation. Embargo is, of course, an act of war. In other words, they would destroy this small country.

Uruguay agreed to the demands, of course. I was in Uruguay at the time and I reported on these events.  In so doing, I looked for an article in English from the U.S. media to document these facts for English-speaking readers. I could not find a single U.S. news media source that reported that Uruguay had been threatened. All news items merely stated that Uruguay had agreed, and had been removed from the "gray" list.  The reports were true--just left out some critical details. A reader would never question if there was more to that innocent story. 


Uruguay banks agreed--and almost all of them refused to accept U.S. citizens as clients. Some U.S. expats with bank accounts--even in Europe, were notified to remove their money because their accounts were being closed.  These banks explained that the U.S. reporting requirements made serving U. S. citizens too costly for them. 

Years ago, I used to wonder why more people didn’t leave Germany before WWII. After all, couldn’t they see the writing on the wall? Then I found out that they could leave--they just could not take their money.  It is interesting that some saw what was coming and left early when it was easy. Argentina and Chile have large populations of descendants of the people who came here during that period. Others, who waited until it was otherwise too late, were creative enough to put their money into stocks, took possession of the certificates, burned them and left the country with nothing. And what did those creative people know? You can replace "lost" stock certificates. Interesting that many Argentines of that era reported seeing German submarines beach in the shallow water off Argentina shores and their occupants come splashing ashore to take refuge here. I am told that it is possible at times to see one submarine still lying just off shore in the south.

But many had no possibility of exit.  It is difficult to take up residence in another country if you have no money.

Along the line of banks refusing accounts to Americans, a reader wrote me this past week to tell me that it is too late now, no bank will accept U.S. citizens.  I was happy to write back that, while it is true that things are changing, there are many banks that still serve U. S. citizens. For example, the national bank, Banco Republica, in Uruguay, serves Americans. They do comply with U. S. reporting requirements.  Well . . . ALL Uruguayan banks comply, of course!  Only most just happen to have no US citizens to report on. Imagine that!  

This is one reason for holding a second citizenship if possible. I once applied to a European bank for an account. They assured me that yes, they welcome U. S. citizens. So I filled out all the paperwork they sent, provided verified I.D., sent it all by courier and waited for my account to be opened. Two weeks later the bank representative phoned to tell me they were so sorry but they do not accept U. S. citizens any more. Then the caller added, “When you get your Argentina citizenship we hope that you will contact us again.”

A second citizenship provides options you do not have otherwise. For those who are wondering, a second citizenship does not affect your U. S. citizenship. In fact, if you want to give up your U. S. citizenship, you have to go through a whole procedure of filling out an application and being approved by U. S. government entities. You dare not do it for tax reasons. If you do, or if they assume that you do, the answer will be no.  Further, there is now talk of withholding one-third of unrealized gain on the value of what the expat owns as an “exit tax” if he or she elects to move assets to another country. President Obama recently suggested the exit tax be on anything over $600,000. So there may well be a cushion there--for now—if in fact it becomes law.

In fact, the Foreign Account Tax Compliance Act (FATCA) that begins to take effect January 1, 2013, will withhold one-third of the amount taken out of the country. As I understand this, it is a safeguard to be sure that all tax on the money has been paid. You are supposed to be able to get a refund when you file your income tax return if you did not owe the money.  But here is the inconvenience of that. Suppose you come to Chile and decide to buy a vacation home for the price of $100,000. Once this takes effect, you will need $130,000 in order to complete the purchase since the bank will withhold $30,000 of the amount you send to Chile. But then if you take out $130,000 to buy the property, that changes the figure. You will need in the neighborhood of $140,000 in order to buy a $100,000 property.  The date for this to take effect was originally January 1, 2013, but setting up the system to do the paperwork is so involved that the banks just may not be able to do it by then and so the actual procedure may be postponed until 2014. At this point I don't think it has been decided. Also, if you are dealing with a "compliant" bank, supposedly this rule does not apply. But there are complications. If the bank makes a mistake and does not withhold the amount when they should have, then the bank is responsible for the amount that should have been withheld. But  . . if the bank mistakenly withholds your money when they should not have, and it damages you financially, you cannot sue the bank for the damage. They are protected.

Please remember that we are not accountants here so if you are in a situation where this could affect you, we suggest to be sure that your accounting professional is familiar with these new laws and regulations and can advise you. We are striving to understand all of this ourselves, just as you may be. You can read official government information about FATCA at: http://www.irs.gov/businesses/corporations/article/0,,id=236667,00.html. We are not even certain that all the procedures and requirements have been decided yet.  Our point here is just to be sure you are informed that regulations are becoming ever more cumbersome and onerous as time goes on.

We also notice the plan being put into law now is to withhold one-third until tax returns are filed. AND we notice that the proposed exit tax is also for one-third. Coincidence? I hope so. But I, along with the banks, do not get a warm fuzzy feeling from all this. 

Add to this the fact that some countries have been raising requirements for residency and citizenship. It is not only people from the U S. who are emigrating here. People from the U.K. and even Spain are seeking refuge in South America. This is causing understandable concern among our governments here. They fear that a large influx of immigrants will put a strain on school systems, the medical system and other parts of the infrastructure. Plus they are concerned about too many immigrants changing the culture. Argentina raised their requirements a couple years ago and my Argentina attorney tells me he hears talk about doing it again. Uruguay recently changed some of their requirements as well.  Previously you could gain permanent status by just showing up in the country to apply. Recently it was changed to require that the applicant be present in the country

Gerald Celente is quoted as saying that you can forecast the trends by looking at current events. By that standard, current events seem to indicate that moving assets outside the United States is likely to become more difficult in the future than it is now. Second citizenship is still within reach of most people, but combined with the actions with banks, we think we see an emerging pattern of which it seems worthwhile to take note. 

Some financial advisers say that the first logical step would be to bank in more than one country, even if our plans are to remain in our home country.  But since cash in any fiat currency is risky these days, storing precious metals is another option. If you are interested in storing metals internationally and would like some leads as to possible facilities, write to us and we will pass on to you whatever knowledge we have here. We make no commissions and we are not financial professionals and always recommend to consult your qualified financial adviser. But we are happy to pass to you whatever information that we have.

And of course acquiring a vacation home or retreat in a place that you like is another option.


We encourage your comments. 
 Copyright Arlean Kelley 2012 All rights reserved
___________________________________________________________________________________

If you know anyone who might be interested or benefit from these posts, we sure would appreciate if you would pass it on to them.

We encourage your comments. If you think we can help you with anything, don't hesitate to email at newsfromlatinamerica@yahoo.com. If you would like to receive email notices of future posts, send us an email with "subscribe" in the subject line. Likewise, if you decide that you want to cancel your subscription, just email with "unsubscribe" in the subject line. We will miss you, but we understand.

A Day at the San Telmo Feria

This week we made a foray into San Telmo for the weekend feria (market) and decided to bring you along!

At one time San Telmo was the uppity neighborhood of Buenos Aires. I love it there although the ambiance of Palermo, where we are located now, is far better. San Telmo is the true historical area of Buenos Aires. The old city itself. Many of the streets are irregular old brick. Some still have the old streetcar tracks buried to the rim in the brick, evidence that Buenos Aires was moving up in the world at that time.

Since San Telmo was the hoity-toity part of town at one time, the old buildings are impressive with deteriorating elegance--an abundance of fine old wood and marble. Historically this is the part of town where independence was won in Buenos Aires. The major part of that battle took place on Calle Defensa, one of the streets where we will go today for the feria.  But on that memorial day of yore, while the men of Buenos Aires defended the city from the streets, the women and slaves were on the rooftops pouring boiling oil and water on the invading army.

Today San Telmo is peaceful. The street feria that we decided to visit again was populated by crafts people, antique dealers, importers selling items from China, vendors selling food, and actors who make the street their stage, hoping that you will be willing to reach into your pocket and donate for their performance.

This market this week was huge--it went on for blocks and blocks--maybe miles. We stopped a long way short of covering it all. The neighborhood is a very popular area for tourists, partly for the quaintness and partly for the historical aspects. You can see the brick street in this photo. This one is pretty good, but some are so broken up one has to be sure of one's footing when walking.

San Telmo was populated by the very wealthy until the last of a series of yellow fever epidemics in 1871, which took the lives of 500 people in a single day in a population that usually experienced no more than 20 deaths in a day. It is supposed that the yellow fever came from soldiers returning from Paraguay who brought it with them to Buenos Aires. Not only did San Telmo lose population from the fever, but from people fleeing the area for Palermo, Ricoleta, Belgrano and other parts of the province--and of the country.

San Telmo borders La Boca, which is a less than secure part of the city--but also historically interesting. (Some day we may take you on a trip to La Boca!) For the brave-of-heart San Telmo would be an interesting place to live. But the insecurity (as they call it in Argentina--in the U.S. we would just call it "crime!") does spill over into San Telmo.  But I don't hesitate to wander around there in the daytime. And I have wandered around at night, without incident.

This is not a statue, though they will amaze you with how long they can stand totally motionless. Not the flicker of an eyelash, although we did talk to this one and saw his eyelids slit as he peeked out at us. But barely. And he kept a straight face and did not move otherwise. You will see the collection can at his feet. I carry small bills to contribute because these people add so much interest. I like them! They are creative in the characters they come  up with.

And here we have a puppeteer entertaining the crowd with his story.

A customer buying some hand-made flowers from a vendor. They would hold a pony-tail, attach to a dress as a corsage, etc. Here again, you can see the old brick street under their feet. Notice the coats. It was not a warm day.

When you reach the central plaza you find it full of vendors. These are mostly under tents.

In addition to the open market, there is a huge building that must have been the early version of a shopper's mall in old San Telmo.

It looks a bit shabby today but it is easy to imagine it in its days of glory. This building is open during the week and features many small stores. Like this one. See anything interesting? It appeared to be antiques.

What about this one? Anything look interesting here? Again, antique books and paintings.

And here we have one of the many remaining landmarks of life in San Telmo in the days of long ago. This old brick church. Can you imagine the stories that church could tell us about the people who lived here in the days of her youth?

This will probably be the last day we will see a feria like this one until spring. As you know, seasons are reversed in this hemisphere and as Spring comes to you in the north, Fall is arriving in our part of the world. Buenos Aires has a very mild climate but a pretty nippy wind had picked up before we decided to leave. Also tourist season comes to a close as Winter sets in here, but they sure were there en mass today as you can see!

Well, leaving old San Telmo, we end our fun in the old city. Going home to Palermo and a hot cup of that organic coffee I keep telling you guys about. If you were here I'd offer you a cup too!

Hasta luego, mis amigos, from Buenos Aires, Argentina.

Copyright Arlean Kelley 2012 All rights reserved

___________________________________________________________________________________

If you know anyone who might be interested or benefit from these posts, we sure would appreciate if you would pass it on to them.

We encourage your comments. If you think we can help you with anything, don't hesitate to email at newsfromlatinamerica@yahoo.com. If you would like to receive email notices of future posts, send us an email with "subscribe" in the subject line. Likewise, if you decide that you want to cancel your subscription, just email with "unsubscribe" in the subject line. We will miss you, but we understand.

FUTBOL

I made the most amazing discovery yesterday. No, not about South America this time--about me.

I like futbol. Lest you misunderstand, that isn't FOOTball . . . I am a long-time hater of FOOTball.

FUTbol is what folks here call soccer. Some of our long-term readers will recall the mania that hits Montevideo whenever Uruguay plays on their home turf. Everything shuts down--even things that normally never shut down. The streets clear out as everyone watches the game somewhere--at the stadium, at a sports bar, or at home on TV.  (Uruguay Battles Brazil on the Futbol Field.)

After the game, the plaza is full of people and the air is full of confetti.

I never paid attention to the game itself. Only to the people. I have not seen the kind of dedication to futbol in Argentina that we witnessed in Uruguay. But I know that the love of futbol is alive and well in Argentina.

So why the difference in my attitude?

For one thing I never saw any point in FOOTball. Half the time you don't know where the ball is. Some guy has it under his arm and they are all running. The point of the game seems to be who has the biggest, baddest players that can also run the fastest. The one skill seems to be the ability to kick an egg-shaped ball over a goal post.

FOOTball, in my family, made it impossible to have a real family holiday. The men in the family loved FOOTball. And when does the US have major football games? Why on the major family holidays, of course. We would manage to have a big family dinner before the men all gathered round the TV for The Game. At one time I thought well, if you can't beat 'em, join 'em. So I learned about FOOTball, how it works, pretended interest and sat and watched it too. Which only proved that my original analysis of the game was correct.

Then, true to family tradition, my brother played FOOTball in high school. I went to some of his games, of  course, but only because it was my darlin' brother--a real demonstration of self-sacrificing love on my part. His games were even more boring than normal.

My brother was big . . . strong . . . fast . . . and determined. Consequently, he was good. So good that the local sports writer for the major Florida daily, the Miami Herald, nicknamed him--"The Crusher!" No kidding. He got plenty of write-ups as The Crusher.

In all my life growing up there, I never saw them nickname a particular player before. Consequently nothing ever happened on his side of the field. The opposing team always took the ball down the other side. After all, who wants to try to carry a ball through the territory of a guy that even the Miami Herald nicknames the "Crusher?" I'll tell you who--nobody.

It used to irritate him that he seldom saw any action.

So how could someone with such a long-standing feud with FOOTball be won over by FUTbol? 

Here's how!

My favorite Buenos Aires restaurant shut down for a few weeks and completely remodeled. When it opened, there were large screens on the walls whereupon they display . . . soccer games.

Well folks, I discovered that futbol is different. If you don't like it now, you might find yourself also captured by this Latino-beloved sport when you get here. For one thing you know where the ball is at all times. It is normal--round--and mostly white. Not only do you know where it is--you are constantly surprised about where it goes.

For example: There are players all over the field--some in red, some in blue. One guy in blue has control of the ball, running like crazy, all the while kicking the ball, with perfect precision, ahead of himself. A whole group runs after him and the ball. Reds and blues together. Then the guy in blue hauls off and kicks it clear across the field to where about ten more guys, some also in blue and some in red, are also running and--while our first guy is running and kicking--he manages to know exactly who is across the field from him, and that ball goes all the way across that field right to the other guy in blue. How they do that is totally beyond me.

And, if necessary, while running, he can kick the thing into the air, over the heads of the opposing team--right to his man on the other side. I sit watching them with awe! It's like magic!

Plus they argue with the umpire. Here most of the people are Italians. If you know Italians, you know that when they are upset, their arms operate at roughly the same velocity as their mouths. Even though you have no clue what they are saying, their disagreement with the umpire is a show within itself. You will laugh!

Yes, folks, I'm a futbol fan. Now to find out if they have games on family holidays. But knowing these people and how they are about family, I think the futbol game would have precious few viewers. I have not yet placed futbol in the priority list in Argentina. I'm too new at this. I'm sure you will remember the priority list in Uruguay--family, friends, futbol, then work. I'll check that out here.

Thank you for joining us! We hope for you a wonderful day! And we hope to see you soon . . . in South America!

Copyright Arlean Kelley 2012 All rights reserved.

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If you know anyone who might be interested or benefit from these posts, we sure would appreciate if you would pass it on to them.

Also, we encourage your comments. If you think we can help you with anything, don't hesitate to email at newsfromlatinamerica@yahoo.com. Send us an email too if you would like to be added to our mailing list. Likewise, if you decide that you want to cancel your subscription, just send us an email with "unsubscribe" in the subject line. We will miss you, but we understand.

Buying Real Estate in Central and South America

Today we decided to explain, not legalities, but a few idiosyncrasies about negotiating to buy real estate here that I think you are unlikely to read elsewhere. At least I didn't. I wish somebody had told me this ten years ago. It is easy to understand why expats are frustrated with getting things done in South and Central America. In some ways this market operates similarly to the U. S. and Europe, but in some ways it is very different. I think you will see that, insane as it might seem to a newcomer, it does have a certain logic.

We recommend doing your research, deciding what country seems best for your situation, moving to the area, renting, and living there for a year or so before buying. We know that this is not always possible. Some of you can only come with the idea of establishing a retreat for your family and then you need to return to your home. But we think that ours is the best plan if you can do it. Here are the reasons.

First, you almost have to live in a place for a while before you know if it really suits you or if another area is better for your situation. 

And then there are the idiosyncrasies of the real estate market. In parts of the world with which most of our readers are familiar, a seller would never set a sale price for real estate and then raise it after he or she has a buyer. But in this part of the world, they sure will. In fact, it may well be part of the strategy.

This doesn't happen all the time, but it happens often enough. It will frustrate you and challenge your patience unless you understand it. There is a different sales psychology here. 


For the purpose of illustration, let's say you have found something you like. You have negotiated and reached an agreement on the price and terms. Ah, you think, it's a done deal, right?


Not necessarily! It is common for the seller to raise the price mid-stream. I have personally had them, not just go up, but double the price after we reached an agreement. And of course I didn't buy. I left town in disgust and shook the dust off my feet! That was back when I didn't understand how deals are often made here.


And then there is the counter strategy. Let's say that you are the buyer. You and the seller have reached an agreement. It appears to be solid. But a few days after you reach an agreement, you contact the seller to say that you have thought more about it and have decided to reduce the offer.


Think of the psychological effect. Maybe the sellers have been trying to sell for a year or two. They are relieved because they think that they have a deal. Mentally they may have even begun to spend the money. And here you are reducing the offer. You are getting away . . . maybe!


If the drop is not too ridiculous, the sellers may not want to take a chance on losing you--a real, live buyer. Or they may. It probably depends on how they perceive the market and their personal situation. But the point is that you just never know until the deal is closed.  You are still negotiating, even though they thought it was over.


For these reasons, it can take a year to negotiate an equitable real estate price. Here is a good example of how it often goes. A friend who lives in Uruguay had been trying for some time to buy some commercial real estate that she liked in the downtown area. She would negotiate for a while, the owner would not agree to her offer, or vice versa, or they would have an agreement and he would change at the last minute and my friend would cease negotiations.


A couple months later he was back making a new offer, more negotiation, until no agreement could be reached and the negotiations again ceased.


I was in her home visiting her when the bilingual person who was helping her with the negotiating came to the house to say, "He has agreed to sell. This time I think he means it." My friend could hardly believe it. But I accompanied her to the closing and it did, indeed, close on schedule. But it took almost an entire year to achieve it.


This is not unusual in our experience.


Here is another interesting idiosyncrasy of real estate sales here. These people are not very trusting--even of banks. You don't take a cashier's check to the closing. No! You go to your bank and get the cash and take that to the closing. A closing can take all afternoon or--who knows--all day depending on the size of the purchase, because they scrutinize every bill, hold it up to the light and scrutinize it some more before it is accepted. 


In light of all this, it is not difficult to understand why it's better to decide where you want to settle, move there, rent, and go about your life. Stay cool! Look for real estate for sale that you like, be careful not to fall in love with any of it, so as to keep yourself in a strategic mindset, and do as my friend in Uruguay did. Eventually you are likely to get what you want.


In another example, one real estate purchaser we know in Uruguay had reached an agreement with the seller and then returned before the closing and lowered the offer. The sellers accepted the new offer. In that case there were four siblings who wanted to sell. All were living outside Uruguay and the building was vacant and needed repairs. Therefore, they were all motivated sellers.


Too often when there are several siblings, you might as well look for another property. Many of these people have such strong family ties that when it comes right down to it, if you have several owners who are family, one of them will not be able to bear to see Grandpa and Grandma's home sold outside the family. One person we know in Argentina has several aunts and uncles who, along with her mother, have tried repeatedly to sell real estate they inherited from the grandparents thirty years ago. Each time there was a buyer, one of the heirs would decide they could not bear to go through with the sale. They finally decided that it will not get done until the dissenters all die and leave it to the next generation and hope that none of the great grandchildren share the emotional ties with the real estate. In this case, only one of the owners still lives in Argentina. Therefore the burden of looking out for the property falls on her alone and she really would like to sell. But until all are willing to sell, nothing is going to change.


Many exchanges here are what we would consider normal. For example, in 2004, during Argentina's last financial crisis, one of my family members walked into a real estate office in Bariloche, Argentina, and bought a small apartment overlooking Lake Nahuel Huapi with no negotiation. He paid $14,500 at that time. Incredible. But it was during one of Argentina's worst crises. The Argentina peso had been devalued through inflation, leaving many middle class families in poverty, whereas the dollar at the time held fairly stable value. Prices were ridiculously low then. I could have bought a two-bedroom apartment in Bariloche at that time, also overlooking the lake, for $60,000.


Bariloche is one of the prime ski resorts in Argentina. One might compare it to Vail, Colorado. Those prices are unheard of except in a crisis. They tell me that two-bedroom apartment now would run about $130,000, which illustrates the reason for timing your buying right in Argentina. This is not as dramatically true in other South American countries as it is in Argentina.


Uruguay, for example, has an excellent banking system and more stability. In fact, it is currently the dollar that is falling against the Uruguay peso. But Argentina's crises usually do affect their neighbors as well--only just not as much. For those who are interested, there is a crisis in the making right now. Argentina has a financial crisis every ten years, give or take a year. Everyone who lives here knows it. Savvy investors do not buy when the recovery has reached a peak. Like now. They wait for the crisis.


Argentines invest in real assets. They have little faith in banks and they invest in what we would call hard assets, not fiat currencies. But normally they do keep their money outside of Argentina in other currencies and wait for the crises.


Crises involve risk. We tend to be afraid of the risks. But at the same time, crises also offer opportunity. There are likely to be fantastic opportunities ahead. We need to look for opportunity.  And as with all investments, knowing our markets is primary.


This is a primer on the psychological factors that are often at work here when buying real estate. We do believe that there are good buys in just about any market. It just takes more dedication--or more good luck--to find them.


In a later article we hope to give you a bit of a run down on the legalities of buying real estate which, in our opinion, are pretty straight forward. There are a few cautions, as there are in any investment. As usual, we will try to flag some of them for you. 


We encourage  your comments!

Copyright Arlean Kelley 2012 All rights reserved.

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If you know anyone who might be interested and benefit from these posts, we sure would appreciate if you would pass it on to them.

If you think we can help you with anything, don't hesitate to email at newsfromlatinamerica@yahoo.com. Send us an email too if you would like to be added to our mailing list and you received this from a friend (if you received it from us you are already on our list). Likewise, if you decide that you want to cancel your subscription, just send us an email with "unsubscribe" in the subject line. We will miss you, but we understand.

What's It Like to Live in Buenos Aires?

Palermo in Buenos Aires

If you had told me ten years ago I would be living in South America today I would have laughed.

My neighbor in Florida bragged for years that he was moving south  . . wayyyyy south. Then my son began suggesting that I do the same, as he intended to do himself, he said.

I did laugh then! WHY in the world would I do that? In fact, why would anyone do that? When I thought of South America, I thought of bamboo huts and dirt floors!

Strange things do happen. Today I live in Buenos Aires and I love it. 

So what's it like living in the capitol city of Argentina? Buenos Aires has a personality! I have seen writers try to describe this city and I think that it can't be done. One writer compared it to Montevideo, Uruguay's capitol city, in this way:  "Montevideo is more European than Europe. It is laid back and tranquilo. But Buenos Aires vibrates!"

Buenos Aires is a city of culture, from elaborate tango shows all the way to opera. If you like polo, that is here as well. Some of the best restaurants you will ever find are located in Buenos Aires. Although I consider them mostly Italian, you can find just about any ethnic food that suits your fancy. I used to brag about the low prices here, but with inflation really heating up now, eating in a restaurant costs about the same as it did in the U.S. the last time I was there--about 2009. When we first came here in 2004 you could buy a steak dinner, without drinks, for $5.00. But for now, that time has passed. I say "for now" because Argentina has a crisis approximately every ten years and things get very cheap. After that, the economy begins to recover. In time, inflation starts heating up again as they head for the next crisis.  It is possible we could see $5.00 Argentina steak dinners again.

People from Buenos Aires are called Porteños--a take off from the fact that B.A. is a major port city. Porteños (Port-TEN-yos) are for sure a different breed. I sometimes wonder if they ever sleep. My friend, Luisa, lectures me that I live in Argentina now and I should learn the culture of Argentina. She tells me I don't need as much sleep as I think I do. She is a forestry engineer. She says, "I stay up until 1 or 2 a.m., sleep 4 or 5 hours and go and work in the woods all day."

                                                     Buenos Aires on a Rainy Night

In fact, if you feel up to a walk at midnight in my part of the city, you will see the restaurants are still busy serving dinner. If there is a party or a meeting, it will usually begin at 9 p.m.

When I lived in Bariloche, this made more sense since everything shuts down about one in the afternoon and does not open again until four or five o'clock. Restaurants don't open again until eight! THEN they stay up half the night. But that is after the afternoon siesta.

As far as I can tell, Porteños don't even siesta!

One of the things I like best about Buenos Aires is the fact that there are three organic grocers that I know of--there could be even more--that allow me to order online and who deliver to my door. The cost is about as much as buying groceries at the supermarket in the U.S. in 2009, the last time I was in the States. The quality is far better here. Most, if not all, of the food is produced in La Plata, just outside Buenos Aires, so it is very fresh when it arrives. It isn't necessary to pay huge prices for grass-fed, non-medicated beef here, since most of it is grown that way. I can't say the same for chicken. We were warned that Argentina has taken up the U. S. methods of farming chickens, using hormones and bringing them to market in just a few short weeks. Here, if a woman has had breast cancer, her doctor will tell her not to eat chicken because the hormones cause cancer. You in the United States might want to pay attention to that warning. I suspect you are not likely to hear it there.

As always, I am most interested in the people and the culture. Argentines are a proud people. I honestly think that they really do consider themselves superior. But I don't find it offensive. It may be because it is so tempered with their generous supply of friendliness and camaraderie, and their courtesy and respect.

There are negatives. If you live here, you are likely to experience episodes where you remember fondly the level of customer service you experienced back home. That service is decidedly missing in many cases here. There is little effort to make things convenient or to save time. For example, if you receive a package, you can't go to the local neighborhood post office branch to pick it up. You have to go to the central post office, take a number and wait, sometimes half the day--depending on the number of people who arrived ahead of you. Along that same line, I don't know if it has changed in Bariloche, but when I lived there, not many years ago, you went every month to the power company, took a number and sat down in the waiting room and waited for your number to be called. When it was, you went to the window and paid your bill--in cash. Not much is done with checks here.

And they don't seem to think ahead. Therefore, you have to do a lot of extensive research to get good information, and even then you might not find out something you really wish you had known until it is too late to avoid extra expense and frustration. This, with all of our thoroughness, we have been unable to avoid at times. This is what we hope to help you to avoid as much as possible.  And it is not unique to Argentina!

For example, I hired a professional firm to handle my residency because I wanted to be sure everything was done right. But it took me an extra year to get my permanent resident status because the professionals handling it for me neglected to tell me such a simple fact that I had to be full time in Argentina that last year. If I had known, I certainly would have been here. Since no one told me, I spent too much time across the river in Uruguay, just three hours away. These people did a great job with all the legalities and making the whole process go smoothly. I can't say enough good about them on that score! Plus they were always courteous and responsive. But that one act of thinking ahead was missing. It doesn't happen all the time, but it does happen. If you are from the states it will put your own sanity in question unless you can adjust and accept the mindset here. Life does go on--normally--in spite of it. I hope I am preparing you ahead of time.

And don't even think about suing. Which is another whole subject.

If you are negative and critical, you won't be happy here. Also, your attitude will show and the response you receive might become even more sluggish than usual. A positive outlook, as in all of life, can make a big difference. That doesn't mean you never complain. And you certainly do not allow yourself to be cheated or treated rudely. The squeaking wheel still gets the grease here as elsewhere, but attitude counts.

       Seacat (one of the ferry boats) at the dock

Argentines who are traveling don't normally sit quietly in their seats and read or type away on their laptops, minding their own business. I recently took the ferry that runs between Montevideo and Buenos Aires. It is a pleasant, three-hour trip by water across the Rio de la Plata. The ferry is huge. It has several levels to accommodate both people and vehicles. It has comfortable padded seats, almost like an airliner, a cafeteria bar and other amenities.

Do you think those people sit comfortably and quietly for three hours? No way! The boat is hardly underway before they are on their feet, gathering in groups, joking, laughing, talking. You'd think they were among old friends. We have noticed the same behavior in another travel situation on the train. They have their maté gourd and a metal straw they call a bomba, short for bombilla (bomb-BEE-zsha). The gourd is filled to the top with the maté leaves. Then they pour the hot water over the tea leaves and drink the maté through the metal straw. Meanwhile, they carry a thermos of hot water under one arm and continually add hot water to the tea leaves.

Beef is not the only thing that is almost a ritual here. Maté is the same. I have had several Argentines who, when learning that I am not a tourist but living in Argentina, grinned and said enthusiastically, "And do you drink the maté?" The whole thing is very social and they pass the gourd around and everyone sips from the same straw. I have seen them go so far as to offer a sip to a vendor who was passing down the aisle selling snacks. He joined them momentarily in their maté before moving on.

Argentines are knowledgeable and proud of it. (I think about the only thing they are not proud of is their government!) I once sat beside an Argentina businessman on an airliner out of Bariloche. This man was talkative, as is typical. We had an enjoyable conversation all the way to Santiago, Chile. He spoke very good English and had an amazing grasp of world history and world politics. I was impressed by his knowledge, and I said so. He said, proudly, "Any street cleaner in Argentina could tell you the same things." I really doubt that but when my Spanish is good enough I may just strike up a conversation with a street cleaner and find out!

It goes to the point where I caught a glimpse of an Argentina woman's refrigerator once on which there was a sign that said, in Spanish, "Argentines are the most beautiful people in the world!" I do think they are close to being right on that. Some of the most beautiful people in the world were born and live right here in Argentina!

Recently I had my eyes checked by an ophthalmologist. In my opinion, he is a top level physician. My appointment cost the equivalent of $84.00 US and my glasses were about $60.00 US, for those who are interested. If I had wanted to take advantage of the free medical care, I could have had the exam free at the public clinic. I do not put an extra burden on Argentina to pay for my medical care, since I am able to pay for it myself--but for those who need it, or even those who just want to take advantage of it, the service is available. Anyone can get care. They ask no questions beyond what they need to ask. And the care, in my experience, is very good. One of my Argentine friends has even had successful eye surgery at the public clinic. Many affluent Argentines do not mind taking advantage of the free care.  This friend who had the eye surgery is an engineer. I am impressed by the absence of what I call the "god-complex" in the physicians here. They tell you what they suggest and ask what you want to do.

In the ophthalmologist's office, I was the last patient of the day and the doctor sat for an hour just chatting with me. He loves his profession. In fact, if you come to Argentina I will be pleased to recommend him. He goes to the U.S. frequently for seminars and professional meetings.

During the conversation he said there are many things he likes about the Americans and a few he does not like. One of the things he does not like is that Americans are so PROUD!

Well that time I DID laugh. I didn't even try to hide it. How typically Argentine!

I said, "Now this is interesting! An Argentine is calling Americans proud?! Hohohohoho!

He grinned broadly and said, "Well yes, it is true that we are proud. But we are proud of our individual accomplishments. With Americans they are proud of, 'The Country! The Flag!'" And therein lies the difference.

 God bless you all and we hope to see you soon . . . in South America!

Copyright Arlean Kelley 2012 All rights reserved.

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Planting Flags

Casa Rosada - The Pink House - Argentina's
Version of the White House

                                             According to Dean Harry Schultz, the way to live your life involves the following:
                                                             - Money in one country
                                                             - Citizenship in a different country
                                                             - Body in another country where neither your citizenship nor money resides.
                                             I have resisted this sage advice from Harry for many years knowing that the day might come when his
                                             genius proves true. That day has come. Seriously consider this advice. --Jim Sinclair            

Those who grew up in the United States, the UK, etc., have enjoyed an amazing level of financial and personal security.  We had stable banks and well-regulated markets and brokerage houses. We had low levels of corruption.  It is difficult for most of us to think that could change.  “Normalcy bias” is alive and well. But all empires change in the course of history.  And others rise. Thus it has always been and thus it will be again.  I am sure that many people in those empires were convinced that “it can’t happen here.”  

Serious political and economic change always brings with it both risk and opportunity. Here at Four Flags Journal, in our attempt to mitigate against risk, we take our basic plan from Dean Harry Schultz.  Mr. Schultz, years ago, saw so clearly into the future that he proposed “planting flags” in order to reduce risk. What did he mean by planting flags?

It has been stated another way—don’t put all your eggs in one basket. 

His strategy was to have your citizenship in one country, your body in another, and your bank account in another. We have chosen the four flags model, but different people elect different levels of flag planting according to their unique circumstances.

Schultz proposed having more than one citizenship. Further, he advocated living in a different country from the one in which you hold citizenship. He said that when governments are in financial crisis, citizens are seen as cash cows to be milked. But if you are a guest in a country, you are likely to be treated as just that—a guest.  As we have seen in the more “developed” countries, it is certainly not the banksters-turned-politicians who bear the consequences of their own bad behavior.  It is the everyday citizen.

Schultz also believed you should bank in yet another country.  In that case, it is not so easy for a third party to freeze or even confiscate your savings through a lawsuit.  It can be done in some cases, but it is complicated and expensive. Next is to have your business structure in a low or non-tax jurisdiction—not necessarily in your country of residence or citizenship.

This will give you an idea of the thinking behind Harry Schultz’s financial recommendations.  Of course for a retired person living on a pension, with no significant assets, this idea might have little value. And yet a second passport can benefit that person as well. But for a person with significant assets, Mr. Schultz may well have had a strategy worth considering.

Some of you, we know, are readers only because you are interested in visiting South America. You like reading about our life here. Others are interested in living in the Deep South—South America. We understand that those readers have many things to consider.  For that reason, we have decided to include some analysis of economics here as we see them, from time to time, as well as other nuts and bolts of living in a country other than the country that you know so well.  However, many U. S. and U.K. residents already feel that they are living in a country other than the one they knew so well—and they haven’t even moved!

Some of us began our move to the south six or eight years ago and have hit some snags and disappointments along the way just from lack of reliable information. Things change in the world all the time so we cannot guarantee that what we observe today, even, will be the same tomorrow. But we hope that at least we can put up a warning flag in front of some of the pot holes along the way.

One word of caution.  We notice that different countries are tightening their requirements for immigration. Argentina raised their financial requirements two years ago and our attorney tells us that there is talk in the government offices about tightening even more. Uruguay recently raised their requirements as well. Even if you are not ready to make a physical move yet, you might want to consider ways to begin to diversify assets. We suspect that, as time passes, there will be fewer choices.

We are on a great adventure and so glad you decided to come along, whether you consider joining  us in person, or just sharing our site.  God bless you all!

If you have friends that are interested in living in this part of the world, we would appreciate your sharing our posts with them. And as always, we know your interests may have changed. You can always just send us a reply entitled “Unsubscribe.” We will be sad to see you go, but we will take you off our mailing list.

Arlean Kelley 04/06/2012 All rights reserved.

Chipa!

By Christie Hagerman, Asuncion, Paraguay

Photo by Camille Hagerman

Next week everyone will be eating chipa for Semana Santa ("Holy Week," the few days before Easter). It's a type of bread that gets eaten as breakfast, snack, whatever.
Yesterday I met a 13-year-old boy on the bus who attends school from 6 till 11 a.m. while his mom is making chipa (pronounce it CHEE puh).  Then he takes the bus and a basket full of Mom's chipa to a town 30 miles away--almost two hours on the bus in high traffic--to sell at stop lights.  Every single day.  Well, he stays home on Sunday, but you get the idea. 

Thirteen years old, did I  mention? 


His basket is a round, flat one, about 2 feet in diameter. He stacks it high with chipa and balances it on his head. He told me he's never had it fall off his head, but I'm not sure he'd admit it if he had.  ;)

CHIPA TRIVIA:

Along the main roads of Paraguay, especially where there are bus stops, you'll find folks weaving through traffic, waving cars down or climbing on the buses to sell chipa.  You're driving in the middle of nowhere on a long road to the next town and, out of the blue, there's a chipa gal on the side of the road, flagging you down--like the Paraguayan version of a drive-thru. 
People who sell chipa are called chiperos (men) or chiperas (women).  The chiperas, unfortunately, have a shady reputation, and being a chipera is looked at as the worst sort of job.  I've heard parents using that job to harass their kids about an education, saying something akin to our "What!?  You wanna dig ditches all your life?"


Chiperas on the roadside wear special uniforms to identify them, usually a very short skirt, a white apron, and pantyhose.  They are the only Paraguay women that I ever see in pantyhose/stockings.
Men seem more likely to have the big basket on their heads, balanced on a rolled-up hand towel.  The chiperas usually carry them in a more traditional basket with a handle.


Sometimes chipa is shaped into various things, although I haven't figured out yet why they make the  animal shapes.  During Holy Week, sometimes you find chipa shaped like a palm branch.
At ungodly early hours, small trucks with camper shells make their way through all the  neighborhoods, their beds stacked full of chipa.  They use loudspeakers to announce their arrival.  Many of them blare out that they are selling chipa barrero, supposedly a bigger, better version.  Imagine being woken from sleep before sunrise by a man in a truck just outside your window at about a million decibels of sound, screaming, "CHIPA BAREEEEEEEEERRO!  BAREEEEEEERO!" 

If you are speaking in Guaraní, the word CHEEpuh becomes sheePAH. 

Here's the recipe, although further from the city, I've noticed that people make it without much cheese and form it in the shape of a doughnut, unless it's a roadside stand.  It's harder in the doughnut shape, and the cheese makes it SO yummy, so I prefer this recipe, shaped into dinner rolls or long oval rolls.  Give it a try!

Chipa Recipe:

250 grams of pork fat (or butter, Crisco, etc.)
500 grams of soft cheese (Mexican works well, if you can't find Paraguayan cheese)
8 eggs
1 cup milk
1 tbsp salt
2 tsp anise seed
1 kg mandioca, yuca, or cassava starch
Mix the fat, the cheese, and the eggs.
Dissolve the salt in the milk, then slowly add the starch, followed by the anise seeds.
Knead the whole batch till it's nice and smooth.

Form either ping-pong sized balls or donut shapes and bake 15-20 minutes at 350 degrees (slightly less for the donut-shaped ones), until the outside is browned a bit and kinda crusty.  The inside remains SLIGHTY doughy, so don't try to cook it dry. 

Eat 'em while they're warm because they are gooey and soft inside.  If they get cold, the crust can be quite hard to bite.


It's baked in a brick oven (tatakua) here, but if you don't have one in your backyard, oh well.  Just use your electric oven and pretend it's a tatakua.  I won't tell.


If you want to follow Paraguayan tradition, make up a whole slew of these and take them to all your neighbors for Holy Week.  Just do it after the sun rises, and refrain from yelling, "CHIPAAAAA!" please.
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Our thanks to Christie Hagerman for allowing us to reproduce her great insight into life in Paraguay. If you are interested in knowing more about the Hagerman family, Ken, Christie, Camille and Caroline are missionaries in Paraguay. Their web site is Hagermans On a Mission, http://hagermans.blogspot.com.ar/p/about-us.html. And if you try the Chipa! recipe I hope you'll let us know.
All right reserved 04/01/2012 Christie Hagerman