In this case the cross roads came about three events.
First, two days ago I wrote the message below about the soil defense syndrome.
Second, yesterday Merri and I hiked our hacienda, Rosaspamba. Here is a shot from our front yard.
International Investments Photo # 1
We were with our friends, Carlos Tobar and Andres Cordova, who are developing Aboretto, a green real estate project in Mindo. Carlos has a fascinating background, extremely intelligent, beginning his education in Geneva (his father was a diplomat), where he learned to read and write in French. Then just as he graduated he returned to Ecuador , had to take all his exams again in Spanish which he spoke and read but had never written.
Then just as he became acclimated to Spanish his father was posted in to Washington , DC so he was rushed to the US and entered his first year of High School speaking not a word of English. Yet he went on to become a straight A student, then did six years of chemical engineering in Ecuador, before working for a huge Japanese firm (Sumitomo) before returning to George Washington University where he took his MBA Magna Cum Laude as a Fulbright scholar.
Carlos was explaining to me how Ecuadorian politics would unfold over the next 19 months or so. April 15 there is a referendum whether to have a Constitutional Reform, yes or no. If yes, then in three months another election to select a 160 constitutional assembly. The assembly then gets six months (with a chance for a one time two month extension) to draft the reform. Then there will be one more referendum on whether the people accept the reform. In other words, electioneering at its best for at least a year!
But as I sat down to finish this message, I learned that El Presidente himself was about to speak in the plaza, just 55 steps down the road.
I ambled down to square to see what I could see and everything shared in this message was there, a mediocre crowd (much smaller than what we just saw for the Easter celebrations), mostly loaded with flags. Marching music was being played through two large banks of Peavy speakers and a load of suits (except the mayor robed in his native dress) milling around in the shaded stand. Each was trying to look important, cell phones glued to their ears while the crowd was kept waiting in the hot sun. Many banners waved with the majority saying “food for all” and “credit is for all.”
International Investments Photo # 2
The military music blared. The flags waved in the still, hot air. Finally the big guy arrived. The crowds swelled, cameras flashed, music rose and the chanting and flag waving began.
President Correa is in the middle. Mayor Auki on the far right.
International Investments Photo # 3
I took my photos and left for a variety of reasons. One I was hot. The sun was boiling. I also do not think it is especially smart to stand around anywhere there are lots of guys who feel it necessary to wear flak jackets and carry loaded guns. Nor did I want to waste my time listening to the politicians and their words.
Yet this was grand! I had just written about what was going on. Here are the words that had already been laid down to send today.
Our minds tend to trust that which is familiar. We use experience as our guide. Yet during times of great change, experience can be dangerous. That which has worked will fail. Change is inevitable. Experience resists this fact.
Governments often take advantage of our tendency to trust the past. They market a form of branding. For example “American” is a brand. So too is British, Canadian, and Iraqi, Iranian, etc. Ecuadorian was the brand I was watching today.
This branding and our experience tints our view of reality. Worse this branding and our acceptance of what we are told without experience, tints our view even worse. We could call it Prejudice.
Sometimes this mindset is warped. Take for example this email I received from a reader.
“Gary , i have been reading your reports on Ecuador with great interest. but now i am extremely nervous about any investment or relocation to that region with the new president. the thought of removing the u.s. base certainly is not in the best interest of the people of that region..both in fighting the war on drugs and the revenue that the base and its personnel bring to the country. what say you”
I have a different view than this reader. I see “war on drugs” as a brand aimed at labeling lots of things, from privacy to overseas banking to carrying cash, as bad. My belief is that the loss of liberties and expense of this “war” outweigh any benefits gained for this war.
My experience suggests that the US military base in Manta is a bum deal for Ecuador . The costs to the Ecuadorian people from bad health (they spray the border with defoliants) to loss of border security. My guess was that this reader had not visited this area, had not talked to the people, nor knew the facts.
How could I explain all that? This seemed too much so here is how I replied.
“We feel more nervous about what is going on in the US than here. However if you are nervous about investing outside the US into emerging markets you may want to avoid do so. Being global is not for everyone.”
Here was the reader’s reply.
“i have investments in other countries…and yes, i am concerned about the liberal congressional delegation with their need to tax tax tax.. not wanting to close the border, and not wanting to go in and bomb all the terrorist areas. the u.s. is becoming very passive with our foreign neighbors.”
Oops, now I see the problem, this is a traditional trying to communicate with a Cultural Creative. I did not think this would go far. I replied:
“In many of my message I have outlined why I do not think the changes here will hurt foreign (and may help) ownership of property. It is my opinion that the fears are unfounded and are helping create bargains. I just started a million dollar real estate project myself. But this is my opinion after living here for 12 years. If I am right I’ll do very well. If my opinion is wrong, well too bad for that business! My thinking is perhaps best described at International Investments in Fear.
“However I do not think that anyone who does not share this belief from experience should invest more than they not only can afford, but are also comfortable losing. After all one reason for our investments is to make us feel more comfortable. It makes no sense to invest in something you worry about.”
The reader was not deferred. He replied:
“i have done some investment in belize, costa rica and italy. i currently have a problem with the countries that have allowed venezuelan president chavez to influence them and their fiscal and military policies and attitude towards the u.s. once castro dies i feel that the u.s. will open trade and i feel that will be a good area to invest in recreational actitives.”
I tried one more time and wrote:
“I am not sure if Correa is being influenced by Chavez or is using Chavez but if you have problem with this influence you should avoid Venezuela , Bolivia and Ecuador .”
The reader’s reply:
“the presidents of those three countries have definitely voiced their strong opposition against president bush and the u.s…..the u.s. should do a trade embargo against those three countries and cut off all foreign aid to them.”
I gave up here and ended by writing:
“As mentioned I think you’ll be happier elsewhere.”
“i agree, i want to invest in a capitolistic country and not a dictorship country like the three i mentioned plus iran… hell, china (even though it is a commie country) is more”
At this point, I did not feel that any further communication made sense as it was leading nowhere. Our mindsets did not mesh.
However I was reminded of the first book I wrote in the 1970s entitled “Passport to International Profit.”
One chapter there was about the “Concept Conversion Trick” and says:
“The Concept Conversion Trick begins when people agree on a good concept for working and living together. The people go to work and if the concept is good they will create a paradise. The government gives them a flag and a song. Then the government pulls the trick. The government convinces the people that the flag and song are important. Then while the people are busy watching the flag and singing the song, the government replaces the concept with a set of ever increasing written rules and regulations administered by bureaucrats and backed up by a police force.
“This trick trades people’s individual freedoms for a shiver up the spine when the song is played the piece of cloth is waved. The Concept Conversion Trick turns spirit into matter. Like trading love for a beautiful plastic doll. When the trick has been pulled and the dust settles, the people realize too late what has happened. Anyone who steps out of line is called unpatriotic or even criminal. He is swatted down by the bureaucracy or police force, crushed with overwhelming power or made an example of so others will tow the mark ‘for the good of society’. All this is done in the name of public interest.”
If this writing sounds prophetic having been written 25 + years ago, it was not. Any simple review of any previous great society shows this trick and evolution. Like the Roman Empire , things may get better for a while, then worse and then better again. In the long term, as societies age, they lose their original vibrancy and life.
Should we be surprised? Does not every single thing in this universal existence develop in the same way, vibrant and flexible while young and growing thicker and more brittle with age?
My father loved animals and worked at the Portland City Zoological Gardens. He was a really kind, gentle, fair and scrupulously honest man. Yet one of his jobs was doing the zoo’s annual budget. I recall him spending weeks late at night (on his own time) working over these budgets each year. I also remember his telling me that every year they had to ask for more money because otherwise the city government would give them less. “If we do a good job with their funds, they penalize us,” he told me.
This is how the bureaucracy and society works, millions of small units each trying to grow and spend a little more, until the whole thing swells into an unstoppable mass of self-interest. This is the universal nature to grow until the growth becomes so excessive that balance is lost!
This truth shows us the nature of mankind and every underlying force that goes from birth to continuity and then transformation. This is the way of life and if we are smart investors we recognize this and adapt.
This is why I have almost always bet against the US dollar.
This is why my business has been global for more nearly 40 years.
This is why I am so involved in Ecuador now.
My experience is that Ecuador is very democratic free country filled with sweet friendly people. My bet is that the flag waving focus on drugs and terrorists and anti US sentiment will mislead a lot of potential investors and create bargains here now. That’s where I am putting my money. Others may choose to disagree and this is exactly what will create the extra potential for those who invest now.
Take for example the wonderful property we have been viewing in recent messages. Can we up north afford a property like this?
International Investments Photo # 4
With an entrance like this?
International Investments Photo # 5
With views like this?
International Investments Photo # 6
Courtyards like this?
International Investments Photo # 7
And gardens like this?
International Investments Photo # 8
Ecuador is not a dictatorship by far. Correa may be a good influence or not. We’ll know better in a year. Even if he is a bad influence the chances of this affecting us who live here are small. That’s what my experience currently suggests.
Political talk and the emergence of realty rarely mesh. The future is always unknown everywhere, but Ecuador has a history of peace and is a far less violent nation than the US.
The great weather, the easy lifestyle, the great inexpensive organic food, the sweetness and friendliness of the people, the homes where North Americans can still afford style, the comfortable, easy going lifestyle. These are here, now and real.
Wherever you go, whatever you are looking for, rely on what you see and that which is real, person to person. Do not let the branding that the politicians spew, divide you from reality or other human beings.
Until next message, good life to you!
We are now ready to start taking reservations on the next Ecuador real estate condos. If you are already on the waiting list, please contact me now. If you wish to be included on the waiting list, please let me know at firstname.lastname@example.org
You can see these condos and more Ecuador real estate when you join Steve, our man in Ecuador, April 20 – 25, Friday to Wednesday for the Ecuador Exports Course where you can also see these condos. See Ecuador Exports Tour.
Or join Steve June 6 – 10, 2007 Weds. – Sun. for our Condensed Super Thinking + Spanish in Ecuador. Ecuador Spanish Course through Super Thinking + Super Memory
June 13 –15, 2007 Weds. – Fri. Andes Extension & Real Estate Tour in Ecuador. Ecuador Real Estate
June 19 – 21, 2007 Tues. Thurs. Shamanic Mingo. See Ecuador Shaman Mingo Tour
Attend all three courses and tours. Save up to $398! See Ecuador Tours – June 2007