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The Daily Reckoning | Tuesday, July 3, 2012 Giving up your US citizenship: As crazy as [insert metaphor here]... How the unthinkable has come to be completely “thinkable”... Plus, Suzan Haskins on a beautiful (and often underappreciated) South American haven... Prepare for Departure Why More and More Americans are Abandoning Their US Citizenship Eric Fry Reporting from Laguna Beach, California... In November, millions of Americans will trudge to their local polling places to cast votes in the hope of improving their lives here in the USA. Between now and then, a few hundred Americans will vote with their feet in the hope of improving their lives outside the USA. Last year, nearly 1,800 Americans surrendered their citizenship. In a nation of 300 million folks, 1,800 émigrés is hardly a rush for the exits. But the recent trend is, nevertheless, intriguing. As recently as four years ago, only 200 people checked out of America for good. Back then, surrendering US citizenship would have seemed as unthinkable to most Americans as declining a free vacation to Hawaii to pay for a vacation in Newark. It would have seemed as crazy as: ...giving away a brand new Aston Martin Zagato to buy a used Buick Le Sabre. ...surrendering your membership at Augusta National in order to start playing Augusta Municipal. ...trading away an original Van Gogh painting for an original Peter Max poster ...refusing a date with Mila Kunis in order to watch re-runs of her animated counterpart, Meg Griffin, in Family Guy. ...abandoning a beachfront mansion to live in your car. Giving up citizenship would have seemed as incomprehensible as...go ahead, create your own metaphor. Bottom line: Surrendering US citizen was absolutely unthinkable. But not anymore. Now it is “thinkable,” albeit still relatively rare. The absolute numbers are still tiny, but the trend conveys a very large message: Discontent is on the rise. Increasingly, the used LeSabres and Augusta Municipals are winning the contest. And probably not because they are so alluring, but rather because the “Aston Martin” is starting to sputter like a used moped and “Augusta National’s” fairways are starting to sprout more weeds than its deep rough. To be clear, your California editor remains an American citizen with a valid American passport...and no pending petitions in any American embassies to surrender his citizenship. His observations, therefore, are not personal...but they are heartfelt. When Americans begin abandoning the “Land of the Free” to seek greater freedom elsewhere, it is time to sit up and pay attention; it is time ask yourself, “Why? Why are they leaving? What’s wrong?” Is it just a “tax thing” or are other forces in play? Is it because folks don’t like: ...drones watching their every move while the mow their lawns or skinny dip in the pool with their spouses. ...enduring a political “ethic” that increasingly declares, “What’s yours is mine and, if not, it ought to be”... ...suffering financially for behaving responsibly, while Wall Street bankers reap rewards for behaving irresponsibly. ...cohabitating with an NSA that builds mega-spy centers in the Utah desert to eavesdrop on their phone calls with Granny or their steamy chat messages with a significant other. ...living in a land that increasingly seems to be saying to would- be democracies around the globe: “Do you need a Constitution? Why not take ours? We’re not using it.” [Thanks, Jay Leno]. Who knows the exact reason why 1,800 Americans chose to leave last year — nine times as many as left four years earlier. Certainly, each one of them had their reasons. But like a corporate insider that sells his own stock, there’s one thing you know for certain about his motives: he is not selling because he believes the stock will go up. Maybe he doesn’t believe the stock will go down, but no one sells a stock they believe will go up. Likewise, Americans who bail on their country may not think things are going to get any worse any time soon, but they clearly do not believe things are going to get better. So far, the pitter-patter of footsteps heading for the exits is barely a murmur...but the murmur is getting louder. You don’t have to surrender citizenship, of course, to enjoy the delights of a foreign land. Two years ago, your California editor toted his American passport all the way down to Uruguay and back...just to see what this South American country was all about. He did not learn very much during this visit...other than the fact that no country on earth serves a better steak. (Tie goes to Argentina). But Suzan Haskins, contributing editor toInternational Living, offers a few additional observations in today’s guest column... The Single Best Reason to Feel Good About America’s “Collapse” What could possibly be the good news about America’s next financial meltdown? I urge you to watch this eye-popping video. You’ll see why the years ahead could actually be the richest, happiest, and healthiest years of your life... not just in spite of the impending new financial crisis, but because of it. If that seems strange to you, click here to see why for yourself. The Daily Reckoning Presents I’ve Been Totally Wrong About Uruguay Suzan Haskins Sitting beneath the canopy of a chic new restaurant overlooking therambla, a jazzy cumba on the sound system softly keeping time with the ebb and flow of the waves beyond, I nurse a cold mojito and watch the sun slowly drop into the vast Atlantic Ocean. I have to admit that I’ve been totally wrong about Uruguay. I didn’t expect to like it as much as I do...I figured it would be just another South American country struggling to catch up to the First World. I could not have been more mistaken. In many ways, Uruguay is more developed, more civilized andmore advanced than the countries to its north. Pride is apparent and a squeaky clean affluence is everywhere. For instance, just now, a giant SUV with a teenage boy at the helm rolls by, music blaring...I call it “happy music,” nice and light, none of that gangster stuff. He stops at the crosswalk to let two blond teenage girls and their mother pass by, loaded with shopping bags from Gucci and Ferragamo. These are just the bags I can see. Sure, this is Punta del Este, where the moneyed set and celebrities come to show off their taut and tanned bikini bodies during the South American summer months of January and February, but I’ve been all over the country by now — to the big city and the small towns and to even the wild west beach frontier of Rocha, as far as the Brazilian border. And everywhere I’ve gone, I’ve seen this same politeness, this same quiet confidence and civility. Everyone, it seems, knows that Uruguay is onto something. They’ve got it figured out. Yep, spirits are high here. And why not? Uruguay is one of the most economically developed countries in the hemisphere (one of only two countries that did not go into recession as a result of the late- 2000s financial crisis.) People have good jobs, and income levels are well-distributed, which means crime is low and personal safety is high. The government is stable to the point of boredom. And it’s clean. This may be what surprises me the most, having traveled Latin America for more than a decade now. I don’t know of another country where the city streets and highways, the shops and restaurants, the rivers, oceans, beaches are as tidy and attractive as they are here. Pride does that, and Uruguayans have a lot to be proud of. Is it any wonder that locals who once left the country in search of opportunities overseas are now returning home? It’s also easy to understand why Uruguay is becoming ever more popular with foreign retirees, especially since they can live well here without breaking the bank. Don’t get me wrong, Uruguay is not the least-expensive place on the planet. It’s a First-World country, after all. But still, expats say they live well here for $2,000 to $4,000 a month. And that includes costs for a first-rate health care plan. (Just $75 a month covers everything, one 60-something expat told me.) To truly get away from it all in Uruguay, you head east from Montevideo along the coast to the department of Rocha. Here you’ll find some of South America’s most beautiful...and last, vast stretches...of undeveloped beaches. Yet you’re still within three hours of the international airport in Montevideo. And you’re just an hour, mas o menos, from trendy, celeb-friendly Punta del Este with its all-night discos and sparkling casinos. There are, of course, some notable destinations along this coast. You just can’t keep a good thing to yourself these days, and more and more summer vacationers are coming to Rocha every year. The largest towns of note are La Paloma and La Pedrera — and they’re but a few blocks of shops and restaurants. And the farther-flung hamlets of Barra de Valizas, Aguas Dulce, and Punta del Diablo attract a crowd looking for an even-more laid-back experience, with a bohemian informality that’s distinctly South American. (Uruguayans have an easy charm and a knack for low-budget creativity, and Rocha’s villages are so nonchalantly thrown together, in fact, that part- time chefs open restaurants in garages, lean-tos or on the front porches of village homes.) Summertime — January and February in particular — is definitely where it’s at. In Punta del Diablo, especially, young people of all nationalities throng the tiny village center with its hostels and makeshift cafes. To finance their travels, some sell jewelry, wind chimes and smoking paraphernalia or take performance art to the limits. (One acrobatically inclined fellow spent hours balancing on his head on a wooden box atop a spindly chair.) Temporary nightclubs that spring up here and there don’t even open until 3.00 a.m. and party-goers straggle home long after the sun comes up. Handwritten posters advertise trips to nearby Cabo Polonia and its sea lion colonies, about half a mile off the point. If you were to live in one of these small towns, it might be a lonely winter. However, some people, like expat Brian Meissner, who built and operates the most popular boutique hostel (my room has a private bath, fireplace and balcony) in Punta del Diablo, says winter is a good time to stoke the fireplace and take long walks on a beach you have all to yourself. “You can pretty much do what you want to do in the winter,” he says, “because nobody else is really around.” By the way, should you want to give it a test-drive, rental prices in Rocha are very affordable. As elsewhere along the coast, you’ll pay less during the low season and you can negotiate a low year-long lease. A good house, with two or three bedrooms should go for $600 to $700 a month on a long-term lease. A contract for several months just for the low season can be negotiated for even less. And should you want to buy, you’ll find prices more affordable in Rocha than any other part of coastal Uruguay. I found a 6,000-square-foot lot positioned in such a way that you get wowsa views of the ocean from both front and back, priced at just $48,000. I have explored every inch of this surprising country. From its world-class city...to golden beaches and seaside resorts...to the lush interior and authentic colonial towns. On my last visit, I brought a film crew. Take a look: Regards, Suzan Haskins for The Daily Reckoning Editor’s Note: Suzan and the rest of the crew at International Living are keenly aware of a variety of burgeoning opportunities all around the world, and as such, we’re constantly checking in on their latest updates and travel reports. In addition to the wonderful video she’s provided above, we were recently alerted to some insights of her colleague (and frequent DR contributor) Ronan McMahon. Ronan follows real estate trends with the potential for profit — in Europe and beyond — and shows you exactly where and how to position yourself for gains. He explains how, specifically, you can gain an “insider’s edge” right here. ------------------------------------------------------- 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 The One Retirement Plan Obama Can’t Touch If you’ve already retired, or want to retire soon, I urge you to watch this video presentation before we have to pull it down. This “Secret $200 Retirement Blueprint” shows you step-by-step how to grow a monster-sized nest egg with a little time and a tiny grubstake. Click here to watch this video presentation now.