Our farm in Ecuador.
Even during its recent high levels US property is generally very cheap compared to real estate in many cities abroad. This has created several curious situations.
Attractive parts of the US are being priced out of the common man’s budget because of the global economy. I have seen this happen in Naples, Florida where we lived. Buying pressure has been created almost entirely by outsiders and very much in part by buying pressure from wealthy overseas buyers.
When the US dollar falls, this reduces the international value of US real estate, and overseas buyers swoop in. This will force middle class Americans to move to less expensive areas such as Bucksnort, Tennessee. See garyscott.com/international_investments/international_investments_99.html
Our farm in North Carolina.
60 million baby boomers will begin to retire in just a few years. Many of their pensions and social security will be severely squeezed by inflation, leaving these people with one of five options.
#1: Keep working
#2: Move to less expensive areas within the US
#3: Export their retirement
#4: Live in near poverty
This is why I also believe in Ecuador. Imagine this. 60 million boomers will retire over the next 20 years. We boomers are the most spoiled group of consumers as a demographic class that has ever existed on earth. We were promised the world. We were given the world. Now the magic is about to disappear.
Assume that 10% of these will decide to move to less expensive countries. That’s 6 million people. Where is the most likely place to go? Eastern Europe offers great potential but are long distances from the US.
Canada is out…too expensive and too cold. Most people will head south.
Mexico stands to be #1, but prices there are rising quickly and there is a lot of anti-gringo sentiment. After all there have been numerous Mexican-American wars. The building of a fence across the border will not help either. Yet it’s still probably the place that will benefit the most due to location.
Cuba. When this opens it will be the best. A great place to buy when you can assume there will be no negative political circumstances.
The low end Caribbean is also good except for those darn hurricanes that will put lots of people off…plus many water and transportation problems and the fact that few of the islands have a real infrastructure.
Panama is good…lots of English spoken, many yanks already there, but weather is lousy if you want to be in town (hot and humid) and prices are no longer low. Ditto for Costa Rica. Central America lacks infrastructure though there are some nice gringo settlements though they are expensive. Colombia is the first nation with a progressive economy and full infrastructure after Panama and Mexico. This is a wonderful place but security will stop most from going there. If the security/drug/crime issues are resolved and image cleans up…go buy in Colombia. This will be a great opportunity.
However for now Ecuador, 3 hours and 45 minutes from the US will benefit as the first nation with a full infrastructure and really low cost of living. Argentina, especially Buenos Aries should do well also. It’s further away but BA has a very European feel.
If Ecuador gets just 10% of these 6 million Americans that leave the US, imagine what this means to this nation of 11 million. First this is more than a 5% increase in population. However look at what it means in dollars!
According to the CIA World Fact Book, Ecuador has a Gross Domestic Income of $4,300 per annum per person. That makes a total GDP of $47,300,000,000.
Imagine what happens if the 600,000 gringos have an average income of $18,000 a year per person. That adds $10,800,000,000. This is an annual income that almost equals 20% of the entire national GDP! This is one reason why Merri and I include Latin equities in our investment portfolio and are buying more and more real estate in Ecuador.
Every cloud has a silver lining and two clouds casting shade on the greenback’s value are liberal money supply and political interference to support presidential elections. The silver lining comes in the form of profits made in places where fed up Americans and Canadians decide to go when they leave home.
This is why we bought condos in Ecuador. You can see a couple more shots here.
View from front yard
Communal Gardens of condo
Until next message, may all your silver linings not be remote!
Our 2009 course and tour schedule.
Oct. 9-11 IBEZ North Carolina
Oct. 21-24 Ecuador Import Export Tour
Attend any two Ecuador courses or tours in a calendar month…$949 for one. $1,349 for two.
Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.