 | | The Daily Reckoning | Monday, October 11, 2010 |
- Measuring your "net worth" in things that really count,
- The road to investment opportunity...and a stunning coastline at the end,
- Plus, Bill Bonner's thoughts on the "Last Americanos" and plenty more...
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|  | | | The Inimitable Human Currency | | Self-worth, the human experience and the unavoidable voyage of discovery | |  | | Joel Bowman |
Thinking aloud from Buenos Aires, Argentina...
"One's destination is never a place, but a new way of seeing things."
- Henry Miller
What are you worth? It's a common enough question, but one seldom afforded the consideration it demands...and that you, as the object of the question, deserve. More often that not, the answer will take the form of a dollar sign, followed by a number:
"Well, including my house and car, and subtracting the outstanding amount owed on my mortgage, I'd say..."
Or...
"Right now I've got such-and-such in the bank, but my retirement nest egg is worth..."
Or...
"I don't have much in the way of savings, but I just got a nice raise, so I'd say such-and-such an hour..."
These answers are fine, though extremely narrow. Are you really only worth that number following a dollar sign? Of course not. For one thing, the value of a dollar - or a euro, peso, dirham, etc... - can, and does, change overnight. And, if central bankers around the world have their way, you may soon be worth a lot less...at least valued in the currency they seem hell bent on decapitating.
Here at The Daily Reckoning, your editors write extensively - sometimes painfully so - on all manner of subjects related to money. Our beat is finance and economics, with a sprinkling of philosophy and bad comedy thrown in to keep our Fellow Reckoners from dozing off mid-column. But money, in all its forms, is really just a means to an end, albeit a very important one. That end, of course, is freedom. Money simply happens to be one tool, one method, one key with which you can determine to lead a freer life.
When assessing your own "wealth," dollars and cents probably only account for a small part of the whole. Consider, for example, your own wealth of experience...the unquantifiable value of your relationships...the immeasurable worth of the time spent playing with your children or canoodling with your partner...the priceless tag on your "net knowledge"...the value of the books you've read, plays you've seen, of camping trips, Little League games, memorable belly laughs, barbeques in the park, etc., etc., etc...
Consider, for just a moment, the price you would be willing to put on your memory vault, brimming with experiences both good and bad, with lessons and triumphs, failures and heartaches. There is not a central banker in the world that could dream up a currency to measure your real worth. (And what a good thing that is!)
The lessons of our life and the experiences that color them come together in our mind to form a kind of currency that is uniquely human: wisdom. In the words of the great Marcel Proust, "We do not receive wisdom; we discover it for ourselves by a voyage that no one can take for us, a voyage that no one can spare us."
For many, including the largely reclusive French novelist, that voyage of discovery begins and ends rather close to home. For others, there is nothing quite so valuable as the new perspective won through extensive travel to new and wondrous lands. Every foreign culture sheds new light on our own. Every new taste, smell, custom and terrain, gives new and broader meaning to the life familiar. And every new adventure teaches us a little more about all that we thought we knew, both about others and, perhaps more importantly, about ourselves.
What's more, if you're not careful, the adventures you take abroad may even end up yielding monetary rewards...you know, for those inclined to worry about such worldly things.
In today's guest column, roving real estate investor, Ronan McMahon, imparts some of his own travel wisdom gained while on a recent trip down to Ecuador. Again, if you're not particularly cautious with these things, you may just end up making some money along the way, as Ronan explains...
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| | The Daily Reckoning Presents | | Opportunity in Ecuador | |  | | Ronan Mcmahon |
My name is Ronan McMahon. I'm a real estate investor. I specialize in hunting down real estate in the world's emerging economies. But right now, I'm looking at opportunities in three distressed markets: Ecuador, Ireland and Nicaragua.
Bill Bonner is joining me in an acquisition in Ecuador. And he asked me to share what we're doing with you. It's a plan to buy a big piece of land along Ecuador's northern coast. As you're probably aware, Ecuadorian president, Rafael Correa, recently fought off a rebellion by police officers in the country's capital, Quito.
It's too early to tell what effect the recent trouble will have on real estate prices. But one thing is certain: it will give us almost free rein to scout for bargains. Most property investors will be looking the other way right now.
The area we're canvassing is the stretch of Ecuador's north Pacific coast between Canoa and Pedernales. It's by far the country's most beautiful piece of coastline.
As it stands, accessing this stretch of coastline isn't easy. You have two options: A seven-hour drive from Ecuador's capital, Quito. Or a short domestic flight from Quito to the city of Manta, followed by a drive up the coast.
The problem is you can never tell how long the drive from Manta will take. This involves crossing the bay between Bahia de Caraquez and San Vicente...which means relying on ferries.
Some days, if you time it right, you only have a short delay waiting for the ferry. Other days, with low tides or a lot of vehicle traffic, you can easily spend four hours sitting in line at Bahia to get on the ferry.
Once you reach the best section of coast, on the other side of the bay, you bounce around on roads riddled with potholes. It can be a bone- shaking ride.
All of this is changing. A new government infrastructure plan calls for:
- The construction of a bridge across the bay from Bahia to San Vicente.
- Road upgrades along the entire coast, as part of a coastal highway plan.
- A new coastal road to link Quito with Pedernales. This makes our favorite stretch of coast the closest beach area to Quito.
The bridge across the bay at Bahia is nearing completion and will open soon. It will cut out the need for car ferries...meaning you won't face any delays driving up the coast from Manta
Meanwhile, work is progressing on the highway upgrades between San Vicente and Pedernales. Only a small number of stretches are uncompleted.
These upgrades are part of a government plan to make the entire Ecuadorian coast drivable. This modern highway has already made a huge difference in driving times and comfort along the coast. The new coastal road from Quito to Pedernales is complete. All that's needed now is a date in the president's diary when he can officially open the road.
The new road will cut the drive from Quito to Pedernales in half - to three and a half hours. This means that more of Quito's residents...and foreign tourists...can come here for weekends and vacations.
The best piece of land along this coast is close to Pedernales, where the new highway from Quito hits the coast. This land is perfect for development. It's like a cut off bowl. Views from all angles are of the ocean. The land is perfect for the development of a resort.
This video I took will help give you a sense of the terrain. Every inch of the 350 hectares of oceanfront is developable. There is scope to do high-density development in any part of the land. (The flat land at the bottom of the bowl is a perfect spot to put resort amenities such as golf or tennis facilities.)
Ecuador's first big resort on the north coast opened late last year. It's just over an hour north of here. I've stayed there. The first part of this project is a Decameron hotel. It was full when I was there. All Ecuadorians.
The land I'm looking at is far more beautiful than where this resort is located. And it will also be easier to get to from Quito when the new road opens.
This property is just one example of what's available to investors who look beyond their own shores. Buying real estate in emerging markets is risky. So it's not for everyone. But the rewards can be considerable.
Regards,
Ronan McMahon,
for The Daily Reckoning
Joel's Note: When Bill fist started International Living, some thirty years ago, it must have seemed a crazy idea to many Americans. "Who would want to move out of the US?" folks must have asked themselves at the time. "Why would we want a holiday home or investment property outside of these borders?"
Well, three decades of gross governmental mismanagement later, many are asking the opposite questions. "How CAN I get at least some of my assets out of here?"... "How CAN I protect my wealth and enjoy the good life without Uncle Sam breathing down my neck?"
Want to live the International Living life? We suggest you start where Bill did, right here.
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| | | | Bill Bonner | | The Last Americanos | |  | | Bill Bonner |
Reckoning from Paris, France...
A disturbing bit of news emerged on the 29th of September. Meg Whitman's campaign for governor of California was body-checked by a damaging news report just weeks before the election. It was alleged that she had someone in her employ who had not fully complied with all the laws of this great Republic...someone who toiled in her very household, in her home, near her hearth, in the very bosom of her vie familiale. Right under her nose, in other words. And it turns out this person was neither a card-carrying Democrat, nor card-carrying Republican. In fact, that was the problem. She had no card at all.
Let's touch on the financial news briefly and then we'll return to the story at hand.
The Dow rose 57 points on Friday. The dollar fell, with the euro now trading at $1.39.
Gold did what gold always seems to do: it went up. It's currently trading hands at $1,345 an ounce.
Is this the final blow-off in the gold market? Probably not. In fact, it looks to us as if gold is ready for a correction. The last stage will come. But maybe not for a while.
Meanwhile...back in the Golden State...
The Associated Press reports:
Whitman denounced the allegations as a "baseless smear attack" by Democratic challenger Jerry Brown in what has become a dead-heat race five weeks before the election.
The central issue is whether Whitman knew about a letter that the Social Security Administration sent her in 2003 that raised discrepancies about the housekeeper's documents - a possible tip-off that she could be illegal.
The letter is the foundation for claims by former maid Nicky Diaz Santillan that Whitman and her husband knew for years she was in the US illegally, but kept her on the job regardless.
For two days, Whitman forcefully denied receiving any such letter and said she fired the $23-an-hour housekeeper last year immediately after learning she was illegal.
Revelations about the illegal housekeeper have also thrown Whitman's carefully managed campaign completely off track and opened the door for Democrats to accuse her of hypocrisy.
"The essential fact remains the same," said the husband, "neither Meg nor I believed there was a problem with Nicky's legal status," the husband said. "The facts of this matter are very clear: Ms. Diaz broke the law and lied to us and to the employment agency." Shame...shame...shame. What were they thinking? Were they thinking at all?
We don't know if there's been any progress in the case. But from what we know so far, it appears that the Whitmans had a woman in their employ who gave good and faithful service for nearly 10 years. Then, when they discovered that her papers were not in order they dropped her like a dirty dishrag.
It is illegal to knowingly employ an illegal immigrant. That is a shame too. On both counts. It's a shame you need the permission of bureaucrats to travel, live and work where you please. It's a shame the employer has been turned into an accomplice.
There are far too many greasy laws and far too many people ready to obey them. If the Whitmans had had any sense of integrity or loyalty they would have kept poor Nicky on the payroll. Then, when the scalawags in the press found out about it they could have answered honestly: so what?
But one after the other, the candidates, the governors, the preachers, the radio talk show hosts - the sinners confess their crimes, ask forgiveness, and claim rehabilitation. They sniffle. They cry. They admit their transgressions and misdemeanors. They whip themselves like penitents... Then, life goes on.
But what are the crimes? One falls from grace because he has fondled a stewardess on an airplane. Another has had a fling with an Argentine. One has wiggled his foot in a provocative manner in a public lavatory in Minnesota. Another has used drugs. And more than a few have slept with people other than their spouses.
What would you expect? They are only human. Barely. They are politicians and exhibitionists who enjoy making a public spectacle of themselves. They like their lofty positions in front of the media. They may enjoy their fall from grace even more, provided it keeps their names in the paper.
How we miss the old timers who had the courage of their predilections! To a politician from the great state of Louisiana the following story is attributed:
He called a press conference to reply to allegations that he was spotted consorting with a "known prostitute."
Holding up the accusing newspaper, he said:
"It says here that I was seen coming out of the Central Hotel at 6 o'clock in the morning after sleeping with a known prostitute. Well, I can tell you that every word of this allegation is a lie.
"It wasn't the Central Hotel, it was the Downtown Hotel. It wasn't 6 o'clock in the morning; it was 7 o'clock. She wasn't a known prostitute; I never laid eyes on her before in my life. And we didn't sleep a wink."
But the present generation of political figures is as spineless as the public itself. We live in a nation of sheep led by jackasses. We stand in line to be searched by airport goons, when we know perfectly well we have no intention of blowing up anything. We meekly fill in census forms...separate our garbage...and obey the speed limit even when there are no cops around.
Even so, turning out a trusted servant, merely because she has run afoul of the paper checkers is low and unforgivable. There must be some especially hot corner of Hell set aside for such people.
Besides, illegal immigrants are to be treasured. They are the last real Americans. Like the first ones, they brave hardship and danger to get here. The first immigrants crossed unforgiving seas in small barques. The last cross a hard border, patrolled by drug gangs and border police. Like Puritans, they come without passports...without work permits...with nothing more than the shirts on their backs and a desire to work. They worship their own gods, and otherwise ask only to be left alone. Do some turn to delinquency, felony and voting? Of course, they do...they're only human too. But most get along passably well without the benefit of US social welfare legislation, democracy or larceny.
Most show up with no money in their pockets; instead, all they have is their scraps of paper or cheap cell phones...with the telephone number of a cousin in Houston or the address of a friend in Los Angeles - just like the immigrants who crowded into Baltimore, Philadelphia and New York in the 19th century. And like the first immigrants, they cannot sit their fat derrieres down in a cushy government job...nor even ask the assistance of welfare agencies, food stamps or other giveaways. Every contact with the white-skinned "gringos" is as dangerous and repulsive to them as contact with the red men was for the original settlers.
In Arizona, apparently, they can be stopped and asked for their papers at any moment, without cause or provocation. In other states, they need to be careful too...lest they be stopped for speeding and the secret gets out.
Nor can they claim minimum wage, race discrimination, disability, union scale, priority parking, unemployment compensation or any of the other chisels and hustles available to homegrown labor. The illegals have to earn their way.
So raise a glass. Raise a hat. Raise a voice. Say "gracias" to these...the last real Americanos.
Jerry Brown is right; Meg Whitman deserves to lose.
Regards,
Bill Bonner,
for The Daily Reckoning
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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 atjoel@dailyreckoning.com
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| |  |  |  | A Tojo Moment
“This week, Tokyo’s central bankers rediscovered a modicum of their old mojo,” The Financial Times told the world on Wednesday. Typically, the FT reports the dialogue correctly but misunderstands the plot action. But we can correct the sentence with a single capital letter. For what they really discovered was a modicum of their old Tojo.
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Just this week an inevitable milestone came to pass, the Federal Reserve surged ahead of Japan as the second largest owner in the world of US debt... second only to China. Of course, the funds used to generate that massive debt position have only been made possible through the smoke and mirrors of quantitative easing.
Consumer Deleveraging to Topple the Commercial Real Estate Market
Avis Budget Group (NYSE:CAR) — A New Stage of Avis-Dollar-Hertz Drama | |
| | The Daily Reckoning: Now in its 11th year, The Daily Reckoning is the flagship e-letter of Baltimore-based financial research firm and publishing group Agora Financial, a subsidiary of Agora Inc. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas. Published daily in six countries and three languages, each issue delivers a feature-length article by a senior member of our team and a guest essay from one of many leading thinkers and nationally acclaimed columnists. |  |
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