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The Daily Reckoning | Monday, June 21, 2010 BP's bossman cops a congressional smack down, Time to "get outta Dodge?" - reckoners' opinions on expatriation, Plus, Bill Bonner on the Inner Beltway scourge and the rapacious feast of the zombies... In Search of Freedom Why more and more Americans are living their lives outside the US Joel Bowman Yielding the floor to his fellow reckoners... Today we turn the editorial duties over to, as Bill likes to call them, our "dear readers." Last week, in a two-part series titled "Ten Benefits of Expatriation" we asked for your views on the debate on the topic of expatriation. Of course, there are myriad arguments on both sides of the aisle, not the least of which being mounting state and federal debts, the moral corruption of the welfare/warfare state and the increasing scope of Inner Beltway busybodies into the everyday lives of honest, hardworking individuals. (If you missed the provocative series, you can read Part I and Part II here.) More and more, therefore, freedom-seeking individuals are beginning to seek their freedom abroad. They are renouncing the citizenship they once held so dear, uprooting their lives to sow the seeds of their own liberty in far off lands. As Eric Fry, our editorial director, phrased it: "When confronting these vignettes of modern American economic life, some folks merely shrug their shoulders and say themselves, 'Hey, it ain't so bad. Life is still pretty darn good here in the US of A.' Other folks, still a distinct minority, offer an opposite perspective. 'It's time to get out of Dodge,' they say. "But we'd like to hear what our dear Daily Reckoning readers have to say on the topic," Eric continued. "We'd like to hear about the virtues or flaws of the American economy that you have experienced first-hand. Tell us about the personal successes America has nurtured, or about the potential successes the American system may have impeded. At the same time, feel free to share first-hand experiences - good or bad - from any other economy around the globe. "This exercise is designed to elicit helpful insights from our unique group of readers. So please refrain from hyperbole or gratuitous America-bashing. Instead, please offer first-hand accounts that may shed valuable light on the American economy past, present and future." And so, without further ado, here is a selection of your fellow reckoners' opinions. Please enjoy... [Note: We have deliberately withheld the names of our guest contributors to protect the freedom they are working to defend and uphold.] The Daily Reckoning Presents Getting Outta Dodge Guest Editor Edited by Eric Fry and Joel Bowman Were I without family ties, I might consider expatriating to one of the quiet, out-of-the-way towns in Central- or South America that I drove my VW bus through in 1977-1978. Spending a year and a half living life at a slower pace and speaking in a second language was world view- opening for this California born American. Through it all, I met many wonderful, amazingly generous people. Unfortunately, I also saw a lot of grinding poverty and misery. I finally lost count of how many times I stared into the barrel of a loaded submachine gun held by an edgy 19 year-old soldier at some border crossing or roadblock. My experience was life-changing, and made me appreciate the blessings of life in the United States - such as they were then. Thirty years later, I am not sure what I would feel coming home from such an adventure. I am saddened that governments at all levels have completely lost self-control. I am distressed that corporations now find it more profitable to pay off politicians for special subsidies and protections than to compete. I am depressed that Americans now walk away from commitments and belly up to the entitlement bar without any compunctions. We have spent the last forty years eating our seed corn and frittering away our wealth on trifles. I am having great difficulty facing my young adult children with the news that their lives will be harder than mine has been...that college might have been a waste of time and money...that funding my granddaughter's college savings fund may be an exercise in futility...that saving and deferred gratification were cruel jokes that a manipulated stock market, zero interest rates, and future inflation will render worthless. My family is here, so I'm resigned to remaining here to see whatever fate delivers. I feel strongly that we're close to the tipping point, after which collapse is inevitable. While a real, final dot.gov crash will make for very hard times, in the end it may be the only way to break the fever that is killing the country. Perhaps then we can dust off the Constitution and rebuild. -------------------------------- I enjoyed reading the "The Persistent Myth of American Economic Dominance" as I enjoy reading many of the articles on dailyreckoning.com. Anyway, it was asked, in this article, for us to share our stories with you on "Getting out of Dodge." I went down to Chile in 2008 with the idea of just vacationing and learning Spanish. I found to my surprise that Chile is a great country and an economic power in its own way. It has low government debt, etc. Anyway, I found a job with a tech company making about 15% less than I was making in the US, but my money went so much further. I was able to buy a 2-bedroom 2-bath condo with all the amenities and 24/7 security for about $120,000 US dollars. There was also no income tax. Basically you just pay a 19% sales tax on everything. It was just so simple to live there. The government left you alone and expected you to work for what you got. They also have a privatized retirement plan where you pay 12.5% of your check to a company who manages your stock portfolio for you. Then you pay 7% for your private medical care comparable to US health care. It was nice to never have to fill out any tax forms and to keep roughly 80% of my paycheck every pay period. My wife and I came back to the US after a few years there to give my wife, who is Chilean, the experience of living in the US. I think what I learned from my experience in Chile is there are lots of other countries who understand much better the importance of freedom and keeping government intrusion to a minimum if you want a healthy economy. -------------------------------- My wife and I recently expatriated. We are fortunate that although we were both born in the USA, due to accidents of birth, we hold passports of EU countries allowing us to live and work in the EU freely. Getting a foreign citizenship (and passport) is essential prior to expatriation; this is totally legal in the USA and you do not have to forfeit your US citizenship as a consequence. However, very few will be able to get a foreign passport so easily. The hard way is to live in a new host country for a long period of time and apply for citizenship. Some countries are rumored to sell passports, but this smacks of fraud and I'd be very suspicious of the utility of such a passport if push came to shove. A better way is if your parents or grandparents were foreign born, to check out whether this could entitle you to a grant of citizenship. Germany for one, grants automatic citizenship to children of German nationals born abroad (until recently this only applied to German fathers, not mothers); this is the best way possible since your foreign citizenship is not something you have to apply for - you already have it and perhaps are just not aware of it. Ireland grants citizenship to grandchildren of Irish nationals regardless of where born, but genealogical proof is required. Expect these rights and programs to become more limited or even to vanish over the coming years, so your readers should investigate the opportunities as soon as possible and avail themselves quickly; there is no downside to having a foreign passport 'at the ready', and it makes international travel much easier even if you do not expatriate. We thought long and hard about giving up our citizenships, but in the end we could fathom no logical reason for hanging on, other than blind inertia. As your article points out, the US government has made it very difficult on expatriates in many ways and it's hard to justify blind loyalty when your own country treats you like a criminal. The act of expatriation is disarmingly simple and quick, but best handled by an attorney in a foreign country who specialized in this. You have to be living overseas to do this, and you have to have a foreign passport otherwise you would become stateless, and as a result the embassy people won't let you renounce your US citizenship. -------------------------------- If there were a poll on the issue I think eighty percent of Americans would want to stay put, while twenty percent would pack for an offshore destination. I don't think the issue is as clear-cut as staying in the US or leaving it. Staying or leaving is a shadow issue cut in half. Half the problem is that too many of those who would stay - regardless of how unlivable the US becomes - are confessing apathy and resignation to the rapacity of a government that considers itself too big to fail. The other half of the problem is that those who would choose to leave the US would be confessing to surrender of all hope for the US. The only ones who seem to know where they want America to go are the Progressives, the Socialists, the statists, and the one-world control freaks, who, if floated head to toe, would form a gooey bridge from Brussels through Ivy League campuses to the White House and Congress. The real issue is for Americans to realize that America has been hijacked by the most cynical and diabolical crowd ever assembled in Washington, DC. After that realization dawns, we must re-dream America. We must not settle for pretenders representing us in our nation's top offices. We must re-claim, renew, and reorient America. That's the issue. -------------------------------- I would leave next week if I could liquidate my rental portfolio and personal residence that fast. I'm fed up! I think it will get much worse. If I don't leave soon, they may not let anyone out of the country at all. It's sad because I just found the perfect place to live in the US. -------------------------------- I can only share a perspective of a small business owner. We are a manufacturing company with approximately 25 full time and 8 part time employees. We have been in business 26 years and my sons represent the third generation. I do not expect business to be easy and we don't mind working hard. But I don't understand this feeling that I get from the current administration that we are the enemy. I would repent if someone would tell me what I have done wrong. Hugh Smith Of Two Minds recently quipped that one would have to be insane or a masochist to hire an employee in America. I wonder how long we can remain insane enough to keep this up. -------------------------------- A few years ago I lost my job of 31 years at a mid-size bank, and, to carry me over to retirement, I took a job as a store cashier. It was my trip to the real world. I live and work in Cleveland and the clientele flowing through our store daily is enough to give one pause. A large number of customers are on the food stamp card. Or, as I prefer to call it, the Junk Food Card. The big game is for two people to live together - one with some income and the other drawing unemployment or welfare (or even both drawing welfare). It is very common for food card purchases to consist entirely of pop, candy, ice cream, etc. Then out comes the big wad of cash for the beer and cigarettes. With most of these people it seems very likely that they have no inclination to work at all, and gaming the system is how they wish to live. Then there are the folks drawing disability. Most of them look quite healthy enough to be working - maybe not at a job they had been doing previously, but still capable of gainful employment. Many of our other customers are older people on fixed incomes. People who are working steady jobs are in the minority. The problem here is obviously that the failure to maintain entitlement programs - which truly cannot continue to be funded given today's local, state, and federal government deficits - will almost certainly result in anarchy. The thought of where Cleveland will be in a few years is absolutely frightening. Making things worse, the intelligencia has all fled the city, leaving opportunists to run the government. Every week the news reports are highlighting another local politician that is under investigation for fraud in office. I don't think I'll be moving to a foreign country, but I'll definitely be selling my house in Cleveland and moving to some small town somewhere that has all the amenities I require - with more favorable demographics. And I can understand that moving to a foreign country could be an even better alternative in the long run. So, basically, I'm all for "getting out of Dodge"! -------------------------------- I left the mortgage industry in 2003 and started a stone masonry business. My clientele are wealthy and still spending money. They are moving further out into the countryside and a few are building hardened shelters under their homes as well as installing generators with over capacity propane storage, chickens, gardens, trout ponds, orchards, and enough land to isolate and hide the operation from passersby. A one to one and a half hour ride to town is not out of the norm. They are not all retirees. My employees, friends and family are involved part time (full time, 2nd shift) in food production. We pasture raise broiler hens, beef, pigs, and vegetables. Canning and dehydrating is back in vogue. We are preparing for the worst hoping for the best, raising children, and trying our best to stay in God's grace. Regards, The Daily Reckoning Readership, for The Daily Reckoning Joel's Note: Thanks to each and every one of you who wrote in with your own thoughts and/or experiences. We'll have more mailbox material in tomorrow's edition. Watch this space... From Hulbert's #1 Ranked Advisory Letter Over a Five-Year Period... Even if Gold hits $2,000 by the end of this year... here's a hidden way you can get in for less than one cent per ounce Over the next two years, you'll witness the greatest surge in gold prices in market history - at least 119% above where gold sits today, as I write this. But even better, I've just discovered a way for you to sneak into the soaring gold market for next to nothing, with what I call "penny-per-ounce" gold. That is, doing this is a "backdoor" way to own as much of a position in gold as you like... for the equivalent of paying a single cent per ounce. Bill Bonner Tony Hayward Before Congress: No Sympathy for the Oil Man Bill Bonner Reckoning from Baltimore, Maryland... Poor Tony Hayward. The man was devoured by zombies last week. Now that we've figured out how history works, we're begging to see the forces of history at work all around us - an eternal fight between the zombies and the producers. We're surrounded by zombies. They are all around us. Tort lawyers. Bureaucrats. Politicians. Welfare slaves. Chiselers. Layabouts. Whiners. On the way to work, on the Washington beltway, there are so many lobbyists, we have to put up the windows and lock the doors. But let's look at the economy for a moment. Today is the longest day of the year in the northern hemisphere. That means the year is almost half over. Stimulus measures are winding down...joblessness is creeping up again. Houses seem to be getting ready for another tumble. David Rosenberg: There is no denying the renewed decline in the US residential market, and this transcends the end of the tax credits - the sector is fundamentally weak. Moreover, demand has not reacted to the latest downdraft in mortgage rates and homebuying intentions are, in a word, moribund. The National Association of Home Builders (NAHB) housing market index sagged from 22 in May to 17 in June - a three-month low. Buyer traffic receded from 14 to 16 but the real story was the four point collapse in the "future sales outlook," to 23 from 27 - it hasn't been this low since the depths of the recession back in March 2009. We ran some regressions and found that the "future" component does indeed have the best "fit" with both housing starts and new home sales - the latter is set for a renewed 10% in coming months, to a 600k annual unit rate, and the latter by 30% to the 350k level, which would [be] very close to the all-time low of 338k hit in February 2010. Ouch! Hey, don't say we didn't warn you. It's a Great Correction, not a recovery. Stocks began last week with a swagger...but by the end of the week, they were barely crawling forward. Gold ran up day after day, adding another $9 on Friday. It looks as though it is aiming for the $1,300 mark. Meanwhile, the zombies are gaining ground. Last Thursday must have seemed like the longest day to Tony Hayward. "Congress mauls BP chief," is the way The Financial Times put it. Mr. Hayward was confronted by a panel of zombies in Congress. They chained him to a rock so the members of the energy committee could take turns feeding on his internal organs. For 7 hours, the BP CEO was asked the same questions, over and over again. No matter how many times he was asked, the answers were always the same. No, he wasn't an expert on the bonding properties of sub-sea cement. No, he wasn't there when the rig exploded. No, he didn't know exactly what went wrong; he was waiting for the results of the experts' inquiry, along with everyone else. But the zombies didn't really care about getting to the bottom of things. They were going for the jugular. And the right arm. And the liver. From the reports we've read, Mr. Hayward held up pretty well. He played his part. He did not wander from the script. He remained calm as he was dismembered. His voice did not quake or complain as his liver was removed. The politicians on the committee, meanwhile, were disappointing. Even for zombies. Hayward was the straight man. The zombies had the TV audience on their side. They should have made us laugh and cry. But for all their theatrical skills they seemed unable to do more than summon up a worn-out look of mock indignation. Like a man who wants to get rid of his wife and then catches her in flagrante delicto; their outrage seemed more stagey than authentic. Neither Hayward, nor the leading zombies, Henry Waxman and Bart Stupak, will win Oscars. Still, they mostly performed as you'd expect. Hayward said what he had to say. His tormentors feigned profound concern for the fishes and fowl, the flora and fauna of the Gulf area, not to mention the oilmen idled by Barack Obama. What disturbed us was the crowd reaction. There was a time when Americans had a sense of fair play. At least, we'd like to think so. In a fight between a group of zombies and a real producer, their sympathies should be with the oil man. After all, when they drive into the filling station, it's not the Congressional Record that they pump into their fuel tanks. And when they heat their homes, it's not tort lawyers whom they look to for fuel. Gasoline is valuable. They know it. And they know that someone has to get it. In fact, so keen is their demand for octane, and so high is the price, that the producers are lured farther and farther away from dry land. No one would drill a mile below the water for oil unless a lot of people wanted it badly. Sooner or later, one of the rigs was bound to spring a big leak. You'd think the public would have more sympathy for the people who risk their lives and their money bringing oil to market. And more thoughts... "Have you seen this?" asks a colleague. "Bill Gates, Melinda Gates and Warren Buffett are asking the nation's billionaires to pledge to give at least half their net worth to charity, in their lifetimes or at death. "Can you imagine what these people will do with all this money ($600 billion) if they stop trying to make a profit with it and start trying to improve everyone's lives? It'll be no small wonder if I'm still able to breathe without the help of all the bureaucrats and billionaires, after they start throwing all that money around." It's just more evidence of creeping zombification. Rich people are acting like the government; handing out their money...turning otherwise sensible and hardworking people into rent-seeking parasites. And here are more euro-zombies: June 18 (Bloomberg) - Sophia Constantinidou works as a teacher in a private school in Athens. She also has a more lucrative job: remaining unmarried. The 52-year-old gets 400 euros ($496) a month from the Greek government, part of her late mother's state pension. Under the current system, Constantinidou qualifies to receive the payment for life as the only surviving child of a deceased civil servant, provided she doesn't tie the knot. "It's not that I didn't want to get married," Constantinidou, whose mother died 20 years ago, said in an interview. "But after I turned 40, I realized I wouldn't be getting married and that thankfully I had this." Regards, Bill Bonner, for The Daily Reckoning ------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com Yankees Seek Tax Refuge in the Deep South Forbes Magazine tells us that people with money are on the move – from the North to the South. Why? Taxes. Cost of living. Lifestyle. Judging from what we’ve seen in the Maryland suburbs, it’s not surprising that people are moving out. It’s surprising that anyone is left... The Slow Decay of a Healthy Economy It’s June in Florida Euro Declines on a Sea of Bankruptcy and Paper Promises Do you ever get the feeling that you are in some kind of weird dream, where someone is holding a pillow over your face so that you can’t breathe, and you can dimly hear your children asking, “Is he dead yet, mom?” and I am thrashing around and yelling out, “No, I’m not dead, you morons!” but nobody is paying attention? Me, too! The Correlation Between Morons and Government Debt Insufficient Silver to Supply China’s Growing Demand How Vietnam Consumes 10x More Gold Than China Many Asian countries have strong affinity for gold, with Vietnam apparently at the top of the list. On a per-capita-income basis, Vietnam consumes twice as much gold as India and 10 times that of China. Vietnam’s gold market has blossomed in response to a lack of confidence in the country’s currency, according to a story in yesterday’s Financial Times... 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