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Visit to Australia and New Zealand

Posted by John Reed on

Copyright 2013 by John T. Reed

In March, my wife and I went to Australia and New Zealand for 16 days. I was unable to update my web articles during that period, so I posted a bunch of Facebook posts about it. Here they are in chronological order because many of you are either non-Facebook users or Facebook haters.

March 5, 2013
I am in New Zealand. Nice people which is really the main issue as far as hyperinflation is concerned. Nice as in not spending trillions more dollars than they have and nice in confirming observations from afar that they are honest, trustworthy and not likely to take advantage of Americans financially if there was a financial crisis here.



I was short 40¢ when I bought some stuff at the local store this morning because I had nothing smaller than a $20. “Pay me next time,” the owner said. And so I did, on the way to Whitianga later in the day. “What’s this for, love?” she asked when I walked in and put 40¢ NZD on the counter. Then she remembered and recognized me.

My first time here ever. Everyone says it’s beautiful. Is it?

I have only seen Auckland and the Coromandel peninsula. I would say it is very much like the counties around San Francisco one of which I live in. What I think people are really trying to say is that it is unspoiled and very sparsely populated.

I grew up in Wildwood, NJ, a seashore resort. I am now in Whangapoua, a beach village. Whangapoua’s topography is more interesting than Wildwood’s, but otherwise it would be hard to say one is more beautiful. However, Wildwood is in the U.S.’s most densely populated state.

In the summer, because of zillions coming down from the Philadelphia area—more populous than the entire country of New Zealand, it is hard to find a space for your beach blanket.

This morning, on the Whangapoua beach, I saw nobody at all, then just one person. I lived year round at Wildwood. Beauty-wise, Wildwood in winter looks about like Whangapoua in fall (March in the southern hemisphere is the equivalent of September in the northern.)

I got counted in the 2013 New Zealand census. Why? They count everyone who was in the country on March 5th, 2013—tourist, business visitor, citizen, whatever!? I arrived on that date.

Had some business to do with my bank in Whitianga. Very professionally handled. You might wonder if a bank in a relatively small country bank is somehow less than a U.S. bank. Not that I could tell and my experience has been that my bankers in Australia, Canada, and New Zealand are more attentive to service than our American bankers. The Whitianga branch manager here was no exception.

One more thing. Hi, to my new Whangapoua acquaintance, Tim.

March 6, 2013
An unexpected fact about New Zealand: it seemed everywhere we went that had background music, they were playing the songs I played in the mid ’60s when I was a top-40 format disk jockey on KDET radio at West Point. Beach Boys, Beatles, Ricky Nelson.
The only variation from that was once when I found myself the lone customer in Snapper Jack’s Takeaways & Ice Cream restaurant on Albert Street in Whitianga eating my $6 fish and chips, drinking my 300ml $2 Coke, and listening to their speakers playing “Born in the USA” (Springsteen ’84).

It may seem trivial, but it sort of exemplifies the overall kiwi feeling like my being reminded of the 1955 gas station scene from Back to the Future by retail service in NZ.

March 6, 2013
When he was in 10th grade, my son Dan went to China on People-to-People student trip. He was in Beijing the night Hong Kong reverted to Chinese control. He said it was the longest flight of his life and that was how he felt when he had not yet even gone half way. That was exactly how I felt going to New Zealand for the first time Sunday.

It is a 13-hour flight from San Francisco. On the TV at your seat, you can choose a channel about the flight where they show the location of the plane on the globe. It is excruciating to watch.

It was actually not my first time going across the Pacific. I did it in 1969 enroute to Vietnam, but planes back then could not make it all the way across the Pacific on one tank. We departed from Travis AFB in Northern California and refueled in Hawaii and Guam—three successive coast-to-coast duration flights—no big deal.

Enroute to Hawaii, on the day before Thanksgiving, we asked the stewardesses if were going to get turkey dinner on the plane. “Yes, tomorrow.” We got the same answer from the HI-to-Guam flight crew. But when we asked the Guam to Vietnam crew about Thanksgiving dinner, they said, “That was yesterday.” My plane never had a Thanksgiving 1969. I now have also never had a March 4, 2013.

March 7, 2013
In How to Protect Your Life Savings from Hyperinflation &
Depression, 2nd edition, I added a chapter on storing necessities and living off the land. By living off the land I am referring to having a suburban or exurban home that is off the grid, not being some hermit in the woods eating grubs.

Here in New Zealand I have been staying with one couple—Americans—whom I became friends with at Harvard Business School. Last night we walked down the beach to have a lovely dinner at the home of another of my HBS section mates—a native and lifelong kiwi (New Zealander). (A section at HBS is a group of about 85 students who are the same classroom all day every day the first. You get to know each other very will.)

The homes here are noteworthy along my off-the-grid lines. Mind you I have only been in two homes here—both beach homes that probably rank in very high percentiles price-wise.

They get their water from the roof—downspouts deliver it to tanks under the house. They also each have a bore (well). My kiwi friend said, “There are two schools of thought on water purity here. One says you can’t get any more pure than rainwater—and the fact that it runs over sea gull poop enroute to the holding tank does not change that. The other is that nothing purifies water better than it running through nice white sand—even though we use that same sand as part of our septic system.” But just in case, they also have a UV (ultraviolet) sanitizer and a filter to remove solids. Nice to know.

One self-reliance weak link is they are reliant on electricity to pump the water and they get their electricity off a traditional grid. But I like their Plan C alternative. As you walk along the beach, you keep having to wade through fresh water streams running out of the nearby mountains into the ocean. Backpacking stores sell pumps that convert surface water to potable water.

If I were living here I would look into a manual back-up pump and a back-up generator probably powered by propane.
Heat comes from a wood-burning stove or fireplace plus portable electric space heaters. They have no air-conditioning. They open all the doors and windows all day. No screens. At dusk, they close all the doors and windows because mosquitoes come out. They are attracted to lights and CO2 (exhalations) so you have to keep them out.

Essentially, the kiwis are doing what I advocated in my book when I said the best way to buy all the HVAC you need for the rest of your life is to buy a home where the climate is mild. NZ is that, plus the houses are designed to let the residents take maximum advantage of the cooling sea breezes. I am doing laundry today—and drying it on a clothesline.

My kiwi friend has been coming to this beach since he was a small child. His mom used to make him catch fish for dinner.

The off-the-grid self-reliance here is not so much a politically-correct posture as a by product of sparse population. Putting a utility grid in a tiny beach resort does not make economic sense. Thus wells and septic systems and and wood-burning and natural cross-ventilation and fishing for food. We can learn from this and/or avail ourselves of this-already-in-place life style on a 90-day tourist visa to NZ.

March 7, 2013
I investigated apartments in Whitianga, New Zealand today. I set a budget of $1,500/month USD for a one-bedroom apartment. I did not worry about furniture figuring we would deal with that ad hoc. In NZ, they quote rents by the week not month and in NZD, not USD. $1,500USD/month = about $435NZD/week after adjusting for the fact that there are 4.3 weeks in a month and converting USD to NZD.

$435NZD/week is way more that you need to rent a one-bedroom apartment in Whitianga, a nice beach town east of Auckland (summer population of 30,000; winter, 6,000). You would think there was a seasonal rent differential. I am told that renting over the Christmas-New Years holiday period is a pain and more expensive, but that otherwise there is no seasonal rent differential.
Apt #20 at Sovereign Pier in Whitianga is a furnished 2-bedroom unit at the top of a shiny new, three-story, garden apartment complex. It overlooks a canal full of cabin cruisers. They have tennis courts, pool, spa, gym. $330NZD/week—more than $100NZD below my budget.

Crow’s Nest Apartments 3BR, 2 bath, furnished, private courtyard, overlooking bay and marina. $330NZD/week.
These appeared to be among the nicest apartments in town. When you convert to USD, the rents are even cheaper than they look in NZD. So if all you need are a full complement of stores and restaurants within walking distance as a refuge from US hyperinflation, and you can afford $1,000 to $1,500USD/month, Whitianga, NZ will take care of you just fine.

One fine point: If you are old, you pronounce it as it is spelled. But if you are young or politically correct, you pronounce it Vitianga because that’s the way the Maoris want it pronounced. They are roughly the NZ equivalent of American Indians. You’re velcome for my pointing that out to you.

March 8, 2013
I saw the Milky Way the other night from Whangapoua beach. I don’t remember the last time I could do that. Maybe on a cruise ship—but the have their own lights. Maybe in the Grand Canyon in 2011. Maybe since I was in Bunard in Vietnam in 1970.
New Zealand has no monopoly on lack of city lights that prevent you from seeing the stars. I am moving to Auckland today and expect those city lights will prevent stargazing. And I assume that there are many places in the U.S. that are far enough out in the boondocks to see the stars.

But the ease of doing it here was yet another manifestation of my having “gotten away from it all.”

My Kiwi friend saw my post where I spoke of NZ’s partially off-the-grid lifestyle. He commented that Americans seem to have more of an attitude of total domination over nature. We make every part of a home 71º at all times. New Zealand sort of regards that as being beyond the point of diminishing returns when you can more or less achieve the same result with far less effort and cost by opening windows or putting a sweater on.

That is what we did in the U.S. when I was a kid. In America’s defense, I would note that NZ has a very mild climate; the U.S. has far more extreme weather. (Yesterday’s DC and Midwest blizzards were so bad they even made the New Zealand evening news.) Also, the highly competitive, U.S., free enterprise markets mean businesses constantly trying to invest a better “mousetrap” to one-up competitors.

The coming financial crisis will force Americans back to basics to an extent. Kiwis, even the most affluent ones, are already there.

March 10, 2013
Back to Auckland. I attended the Auckland Blues-South African Bulls Rugby game today. Similar stadium to a U.S. football game. No cheerleaders like U.S. (there was a female dance group at half time but I did not quite understand who they were or what they were about). No band or fight song that I could discern. Some funny halftime competitions like you would see at a minor league baseball game or sometimes at an NFL game but probably not at a major college football game.

It was a day game which I am told is extremely unusual for New Zealand rugby. Stadium seemed about half full. The crowd was attentive and appreciative of good play by the home team, and booed something—either official’s calls or non-calls or poor play by the home team. I was not sure which. But unlike a U.S. football game, the crowd seemed not to have any sense of influencing the game.

U.S. football crowds see themselves as—the twelfth man. They see themselves as being able to inspire the team to greater efforts—often to a decisive degree. They usually feel they can will their team to victory and transmit that to the players via their cheering. And they are correct about that. The crowd is sometimes decisive in U.S football games at the high school college, and pro levels games, very often a factor. U. S. football coaches often have loudspeakers blaring crowd noise at practice all week when they are getting ready to play a loud team away.

The 1980 Winter Olympics in Lake Placid, NY were a good examlpe. the U.S. crowd seem to will an upset victory over the Soviet Union by chanting “USA” ferociously over and over. See the movie Miracle and various documentaries.

The Blues fans, however, seemed passive, a little like a golf crowd, only “commenting” after the event in question was over—enthusiastic and loud, but too late to influence the outcome, reactive, not pro-active. The Auckland paper the following day made a similar comment explaining that early mistakes discouraged the fans and quieted them.

March 10, 2013
Got a tour of Auckland today. By car with stops at various volcanic hill tops. I have not yet dug into the apartment rents but it seemed pretty certain that you can probably get whatever you need in this large, very nice city.

Auckland has a strong WASPish feel. As an American, I was struck by the absence of blacks or Latinos. The number of Asians is about what you would see in California. There are more Pacific Islanders here. The Anglo New Zealanders seem very much the descendants of the British that they are.

It’s not just the people. It’s also institutions like elementary and high schools and churches. Sort of preppy.

Auckland is a city of hills and harbors. In that it is reminiscent of San Francisco and Vancouver, WA.

As with my impression of the Coromandel peninsula, I think those who wax poetic about Auckland’s “great beauty” are a bit off target. It is very pleasant and congenial and nicely maintained and laid back and low key. It’s scale is human rather than the intimidating giant skyscrapers one finds in New York or Chicago. The traffic is human size. It seems eminently livable.
It looks even better, so far, as a refuge from U.S. hyperinflation than I expected.

I also suspect that many who speak of “beauty” are really taking about weather. I have only been here a week, but other than some light rain the first evening, we have had Goldilocks weather: not too hot, not too cold, just right. Low seventies.

Growing up in NJ, I knew that the lower latitudes had higher temperatures than NJ, and higher latitudes had cooler temperatures. But I did not know until I went to the American West that other areas had lower humidity. The Northeast and Midwest are stinking hot and humid in the summer. The Southeast is off the scale in that category. But the West is far more comfortable humidity-wise. The Pacific has places with pleasant humidity and trade winds that ameliorate humidity. I think people from the Midwest and Northeast are sometimes mistaking low humidity and trade winds for natural beauty.

You should look up the weather in places that interest you because it is important but does not show up well in mere photos or most casual discussions. Many higher latitudes have dreary, overcast weather that is literally depressing. Avoid those.

March 11, 2013
I am told the South Island of New Zealand is beautiful. Probably. I have not been there and am not going on this trip. Not of professional interest to me. The southern part of NZ is cold and windy among other things.

Re food: food seems to be perceptibly more expensive here, except for fish and chips. It costs $6 NZD sometimes here—about $5 USD, and is the size of a pancake and about an inch thick. Taste is about the same as U.S. Fries are the same. With everything else, the portions are smaller and the prices higher. Although they do not tip waiters in Australia or New Zealand which ameliroates the price diferential.

Saw my first black and Latino here today. Each a woman about 30, each good looking and well-dressed enough to be a fashion model. The black woman may well have been a model. I saw her on the street. The other, from Colombia, was a real estate lady.
In the U.S., you often see blacks, and to a lesser extent, other “disadvantaged” minorities, deliberately antagonizing whites, e.g., hairstyles, tee-shirt messages, a minority deliberately walking slowly in front of a car driven by a white after a light has turned green glaring at the white daring him or her to do anything about it.

In my albeit brief time here, I can see no such thing. In spite of almost no blacks or Latinos Auckland is very racially diverse. But I detect no permanent rage by any group against any other. Everyone seems to have better things to do. In America, we accept permanent black, Latino, and Native American racial rage as an ambient, given. It was not like that before about 1965 and apparently still is not like that in some countries.

I am glad to report that I have confirmed Numbeo.com international cost of living numbers with regard to New Zealand. You can, indeed, rent a 1 BR city centre apartment for less than $1,500 USD/month. It is typically a section of a hotel where they do not make up your bed daily and they require at least a 6-month lease. Move a little ways out of city center, and you can apparently get a more normal apartment for that price. Hotel suites tend to be a bit small for extended stay living.

I now have two NZ bank accounts. Relatively easy to do when you are here compared to trying to do it long distance. Why more than one? This country has no deposit insurance.

March 12, 2013
Arrived in Sydney, Australia yesterday. Big contrast with New Zealand and the US. This is a big city like Boston or Philadelphia. Also, Australia's current prosperity is palpable. Workers bustling everywhere: setting up tables for the day's business, operating floor cleaning machines.

If you wondered if America was really doing as well as Democrats claim, come look at Sydney or, I'm interpolating here, Singapore or Dubai or Hong Kong---or DC which is prospering by sucking the life out of the rest of America.

There is a phrase in real estate investing---deferred maintenance. In Sydney, they are maintaining. That's what much of the bustle is. In America, out of fear or lack of money, they are deferring---waiting for Obama's next law or Congress's next spurt of five months or so of governing or the next unemployment or GDP figures or the next Obamacare reg. America is waiting. Australia is working.

The couple sitting next to me to the train from the airport to the city was British, but live about forty miles from me and knows a family we were close to before they moved away from the next street from us. Our young waiter last night had an accent. He is Russian, has a degree in economics. He and I spoke a bunch of Russian and discussed economics in relation to US money "printing."

Last October, I wrote about my attendance at my 35th Harvard reunion. I said I was able to stay at the Harvard Club of Boston and the Buckingham Athletic Club in Chicago on that trip because those are reciprocal clubs with the Marine Club of San Francisco. I am a member of that. Criterion is that you must have an honorable discharge from the U.S. military.

I said then that the Marine Club was the best kept secret in that city because of the reciprocal clubs deal and the roof top restaurant and Club hotel. Upon further review, I think maybe all U.S. vets who travel in the U.S. or the world should join it, regardless of whether they live in the San Francisco area. $125 a year. I am now in the Royal Automobile Club of Australia---another reciprocal club. It is at 89 Macquarie Street in Sydney. Google map that. As with most reciprocal clubs, it is extremely well-located, venerable, relatively inexpensive, and nice.

March 13, 2013
When I last visited Australia on R&R from Vietnam around Labor Day (in the US) weekend in 1970, Australia made two distinct impressions on me. 1. A high percentage of their ads tried to convince people to buy stuff because it was popular in America. 2. The whole place seemed like America, only about 15 years behind the times. Absent a desire to get out of Vietnam and spend time with females other that Vietnamese maids, I thought Australia was a long way to go just to see people who made purchase decisions based on what Americans thought and who were recreating the America of 15 years before.

So how many ads have I seen this trip arguing that you should buy something because Americans like it?

Zero!

And is everything 15 years behind? They generally seem a bit more modern than the US.

The problem here is a high cost of living with some exceptions. As in New Zealand, fish and chips are cheaper or no more expensive than in the states. Yesterday, in Auckland, I deliberately ate at McDonalds to get a comparison. Filet 'o fish sandwich, fries and medium Coke were $5.15 NZD which was about $4.35 USD. The fries and fish were identical to the US versions. The Coke was Coke Zero which I have never been able to get in a U.S. McDonalds. Also, what they called a medium was what we call a small in the U.S.—and no free refills.

Today, at a Sydney McDonalds, I got a large (our medium) Coke and 10 chicken bites: $7.50. Later, I saw a local fast food place selling fish and chips for $7.95 and that included a salad and drink! These prices are all AUD which cost about $1.06 USD each.
Is thriving Sydney evidence that Australia is a better country than the U.S? Keep some perspective. Oz has 22 million people; US, 317 million. US is third largest by area; first in arable land area. Australia's recent prosperity stems mainly from selling its natural resources to China, which, in turn, is prosperous from selling formerly cheap labor to the US.

My multi-flag strategy is the correct answer. Oz is better in some ways like the metric system, low debt-to-GDP ratio, indexed capital gains; worse in some like high prices, $21 minimum wage; and different but not necessarily better or worse in others like driving on the left. (They also walk on the left and arrange their escalators accordingly. Their revolving doors go clockwise.)
The multi-flag strategy means you try to use each country for those things where it is the best country. As opposed to trying to find the one best country.

March 13, 2013
My wife and I had to wait for a big shot motorcade to go past at an intersection in Sydney around 2PM today. My wife wondered who the big shot was. As the big shot's car went by. I noticed it had a flag. "Some African guy" I said.

We had supper at 360 Dining, a revolving restaurant on top of the Sydney Tower. For most of our two-hour pre- and post-sunset revolutions, some burly Africans wearing suits with label badges fussed around next to our table accompanied by head-shaved, sort of paranoid, suit-wearing Anglos who had similar lapel badges and who talked into their hands a lot. I figured they were some sort of secret service of Australia.

Finally, an older black guy and his wife sat at the table next to us. Everyone was extremely deferential to him. He seemed to have a large entourage, but they sat at other tables. The various black and white guys in suits with lapel badges remained standing nearby on all sides.

I was starting to think if all these guys who were talking into their sleeves thought this was some sort of dangerous situation, what the hell were my wife and I doing sitting right in the middle of i!? There were no other diners within about 20 feet.

After I paid my bill, I motioned my waiter over, furtively pointed to the black big shot, and asked, "Who is this guy?"

"The President of Mozambique."

Jesus H. Christ! I am here to consider Australia as a possible refuge from mere hyperinflation, trying to have a nice meal and get a tourists' orientation to a new country, and I end up sitting next to a possible assassination target surrounded by guys who are packing in a country where hardly anyone has a gun!?

March 14, 2013
America has an obesity epidemic. Australia does not. (Some Australians told me it does, but not in the Central Business District of Sydney where I stayed.)

America has a lot of fat people who talk the fitness talk by ordering salads and carrying water bottles. But they do not walk the walk. Who do they think they are kidding? They're fat.

As far as fitness is concerned, Aussies appear to talk the talk, walk the walk, jog the jog, pedal the bike, and pack the backpack. A large percentage of people are apparently waking to work---long distances---like across the Harbour bridge. I walked up there myself to the south pylon this morning. Many pedestrians and joggers on the east side of the bridge. The west side only allows bicyclists and there were many there as well.

Experts have what I call X-ray vision. They see things that laymen do not see when looking at the exact same thing. I am a real estate investment expert. My X-ray vision in that area notes the following. I see very few retail vacancies in Sydney. And no signs of excessive residential or office vacancies (now leasing banners and specials). I see few construction projects which---from an investor's standpoint---is a good thing.

Laymen might regard developers and investors as the same. No. Laymen buy and own existing buildings. Developers build new ones, thereby lowering the value of existing ones. We investors sort of regard developers as drunken sailors who will build a building whenever they can get a construction loan----regardless of the need for the building. In Sydney, the drunken sailors seem to be held at bay at the moment.

The streets here are very crowded with pedestrians well into the evening. This appears to be a 24-hour city. Some cities turn into ghost towns---and bad neighborhoods----around five PM, like Atlanta last I heard. Others, like San Francisco, claim to be 24-hour cities, but try to find a restaurant that's open around Market and 2nd after 6PM. Fisherman's Wharf, North Beach, Cow Hollow, and the theater district are still open after hours, but you'd better be careful elsewhere after 5PM.

I assume there are parts of Sydney that roll up the sidewalks at 5PM, but not anywhere that I have found. Downtown Sydney is crowded and bustling morning, noon, and evening. Don't know about after midnight.

24-hour citydom is, not necessarily all good. It can be noisy, and is invariably expensive.

We met with my banker Caden Blumenthal at Westpac yesterday. (cadenblumenthal@westpac.com.au) He confirmed what my Web research seemed to indicate before I came: to stay within a $1,500 USD/month budget on a one-bedroom apartment in Sydney---about $350 AUD/week to translate it into OZ terms---you have to live in the distant---40-minute or more commute to downtown---suburbs. He also gave me some subjective comments on the nature of many of those towns---stuff that is hard to get from the Net.

There are several things that you can probably get off the Net, but they are hard to get off that way and much easier to figure out if you are in the city in question in person. They are: apartment interior size---Web photos rarely show scale; neighborhood safety and amenities; traffic problems; neighborhood ethnic make-up. It is politically correct to say that is irrelevant. Bull!

Once, one of my college roommates and I were looking for an apartment near an Army base where we were stationed. The agent noticed us looking at all the blacks there and volunteered, "Yes, it is a mixed neighborhood." I said, "I don't think it's going to be mixed until we move in."

At least one study found that in America all races are generally okay with 50-50 neighborhoods, but hardly anyone of any race wanted to live in a neighborhood where they were part of a 20% to 30% minority and certainly not a minority of one.
My oldest son Dan played on the football team at Columbia in Manhattan. Some of his teammates refused to fill out the roommate compatibility questionnaire alleging they could "get along with anyone." You should also note that Columbia is predominantly a Northeast regional student body but college football players are recruited nationwide.

Some wags in the housing office apparently decided to teach the players in question---who probably never even had a sibling roommate----a lesson and assigned them to the male-only floor of the otherwise co-ed freshman dorm. That meant the male-only floor had two kinds of people: football players from places like Texas---and orthodox Hasidic Jews. Dan, who filled out the housing compatibility form, found the players from the all-male floor constantly wanting to hang out in his room on a co-ed floor. The only used their floor for sleeping and studying.

If you still insist on being politically correct about being the only infidel in a Muslim Sydney neighborhood, I suggest a short-term lease initially.

March 14, 2013
Perhaps the best way to explain Australia and Sydney as a USD hyperinflation refuge to Americans is to draw an analogy to U.S. cities.

According to Expatistan.com, Sydney is the sixth most expensive city in the world (after Oslo, Geneva, Zurich, London, and Tokyo). The most expensive U.S. city is New York which is 11th in the world. So think of Sydney as Manhattan.

If a foreigner on a budget wanted to escape to the U.S. on a tourist visa, what would you tell him about choosing Manhattan or another place? Obviously, Manhattan ain't for people on a budget.

Are there some parts of Manhattan that are cheaper than others? Uh, yeah, but you probably don't want to live there.
If you insist on being within striking distance of New York City, maybe Orange County, NY. It has been made famous by Orange County Choppers on the Discovery Channel---Paul Senior and all that. When I was a freshman in college, our head cheerleader used to start his pep rallies with "Good evening citizens of Orange County." Orange County is the home of West Point. Can you get to NYC from there? Absolutely. We cadets did every time we had a chance. Could we poor college students enjoy visiting the city if not living there? Yes, but it is a skill you must acquire.

In the 1960s, it involved going to Tad's Steak House, Governor's Island officers club (no longer a military base), staying at hotels that offered deals for cadets, etc.

So what is the Orange County, NY of Sydney? Don't know yet. I'm working on it. Maybe Katoomba. It's 68 miles west of Sydney. West Point is 50 miles north of NYC. A quick search indicates you can get a 3-BR home for $350 AUD a week there so maybe that's farther out than you need to go. But you get the idea or '"ideer" as Paul Senior would say.

March 15, 2013
My wife and I ate supper tonight at the Sydney Cove Oyster Bar. It's not some famous place recommended by guide books. We just walked out of our extremely well located hotel room intending to find a restaurant within 100 yards or so. The Oyster Bar just happened to be the first with a table available. There must be ten or more similar outdoor waterfront restaurants along the east side of Sydney Cove.

I could not get over what a spectacular setting it was. Within about 150 yards was the Sydney Opera House, a half dozen extremely busy ferry terminals with ferries constantly zooming in and out like bees attending a hive. The water was a couple of feet from our table. The promenade was full of people. Initially a huge cruise ship called the Marina was docked across the cove from us. It left just before we arrived to eat. Within a mile was the lit-up-at-night high rises of Sydney, the iconic Harbour Bridge, the lit-up high rises of North Sydney—the area where we Americans had our hotels on R&R during the Vietnam War was across the harbour from up as was the retro Luna Park amusement park as if it had been parachuted in from Coney Island 1905.

The Sydney Cove Oyster Bar was the sort of setting they try to imitate in Disneyland and on the Vegas Strip, but this Sydney tableau is real. The weather was Goldilocks: just right, even after dark. For unknown reasons, the light on our table did not attract a squad of moths as it would in most other places.

On October 19, 1965, I had a date at West Point for homecoming. The sky was clear blue, leaves at peak color, cadets immaculate in our seemingly tailor made uniforms. The grass football field was other-wordly perfect. My date took this all in and said, "This is surreal. I feel like I've left the real world and stepped into a movie screen." I felt that way tonight.

There are many such places in our otherwise 99% drab world. My home state of California has many of them. Life is too short not to experience them.

March 15, 2013
In addition to their idiotic $21 per hour minimum wage, Sydney has stupidly high prices for almost everything. Sydneysiders think they died and went to heaven when they go to the U.S. in terms of shopping. You are already in the U.S. Appreciate the low prices there.

For example, a Ralph Lauren polo shirt: $129 AUD (about $138 USD), $160 NZD (about $136 USD), and $75 USD at Macy's for Men in Broadway Plaza in Walnut Creek, CA---no sale or outlet price involved. There are a number of reasons to come to Sydney, like AUD-denominated savings accounts and a mild climate. But shopping sure as hell ain't one of them.

March 15, 2013
The toaster at the Royal Automobile Club of Australia free continental breakfast has a button for toast, one for "crumpet," and one labeled "a bit more."

Melbourne Australia is getting a desalinization plant, but apparently Sydney has plenty of water. Our shower nozzle is about a 6-inch diameter circle with a bunch of sizable holes in it---something you would have to go to a museum of the 1950s to see in the US. The toilet seems to use about five gallons per flush rather than the "green" low gpf ones now required by law in the US.

March 16, 2013
There are three perspectives on the high cost of living in Sydney. 1. If you live and work here, and you are paid more to compensate for it, whether by market forces or government COLA, it is a wash.

2. If you are a tourist or retiree, the incremental cost of living here may be just a manifestation of the market value of the desirability of the climate, views, etc.

3. Or if you are a tourist or retiree, you may just be in the wrong place because you are being overcharged. My grad school friend here said the AUD is overvalued and that causes the place to be expensive to foreigners. Australian retirees have Australian savings so that is a wash. I do, too, now, so it is a partial wash for me.

Arguably, a crude way to determine whether a currency is overvalued or not is the Economist magazine’s Big Mac Index. They say a Big Mac was $4.20 and is the Economist’s standard for proper valuation. On that index, an Australian Big Mac is $4.94 indicating some overvaluation, but not as bad as Norway at $6.79 or Switzerland, the highest, at $6.81. New Zealand was below the U.S. at $4.05 indicating that currency is a bit undervalued.

Of course, these are averages. That means there are places in those countries where you can do better. For example, right now, the cheapest gas by state in the U.S. is in Wyoming at $3.01; most expensive, $4.35 in Hawaii. The national average is $3.645. That means the lowest is $3.645 - $3.01 = $.545÷$3.645 = 15% below the national median and the highest is $4.35 - $3.645 = $.71 ÷ $3.645 =19% above the national median. That means you can probaly get a 100% - 15% = 85% x $4.94 = $4.20 somewhere in Australia—same as the U.S. average.

Whatever perspective you take, the multi-flag approach is appropriate: do what you need to do in the best state or country to do it. Australia and New Zealand are NOT places to buy consumer goods and Australia is maybe not place to buy real estate. The US is best for each of those it appears.

March 16, 2013
On Saturday, March 16th, a grad school classmate who is a longtime Sydney area resident took us to some suburbs that he thought would fit our arbitrary budget of $1,500USD/mo ($350AUD/week). They were Ryde, West Ride, Dundas, and Parramatta. We had lunch at a sidewalk cafe in Parramatta.

These are about 14 miles west of the central business district of Sydney. They are on the Sydney CityRail commuter train system which is quite modern and slick. The rush-hour commute time from Parramatta to Circular Quay (CBD main stop) is 38 minutes.
I would describe these suburbs as nice enough, not prestige addresses. In contrast, Milsons Point would be prestige---walking distance to the CBD. One 1BR apt there with a view of the famous Opera House across the harbour was renting for $460 AUD per week. More common in Milsons Point are $600 to $800 a week rents. But also on the main street across from the train station was a restaurant offering fish and chips for $5.95 AUD (about $6.35USD).

My multi-flag strategy would have you buy your fish and chips meals in Australia or New Zealand, but wait until you get back to the states to buy your Coke.

If you google Parramatta et al, and select map and street view, you can virtually walk the same streets we were walking yesterday. To understand what you are looking at, compare it point by point to your current home town: climate, population, commute time to work, distance to the nearest big city, and so on.

For example, at 3PM today, the weather in my hometown of Alamo, CA was 67 F, humidity 44%, and wind at 13MPH, clear just before spring. In Parramatta at 3PM; 72F, 36%, 31 MPH, clear, just before fall. Climate would be a better read than a weather snapshot. Parramatta averages daily highs of 54F to 74F year round; Alamo, 45F to 72F, so Parramatta is a bit more mild and warm. Parramatta has almost twice as much annual rain.

March 16, 2013
My Australia classmate suggested I consider an Australian city way outside the major metro areas. In particular, he suggested Toowoomba where he has relatives. (Ignore the funny name. Half the towns in Australia and New Zealand have funny names.)
Toowoomba is 79 miles west of Brisbane (2.1 million people) which is the capital of the Australian state of Queensland. There is a train between the two cities twice a week. In relation to the continent of Australia, Toowoomba is located about where Virginia Beach, VA is, but Australia is closer to the equator than the US.

Toowoomba has about 131,000 people and is 439 mile north of Sydney. Are the rents lower there than in Sydney or its suburbs? Oh, you betcha. Check this out for almost my $350AUD/week budget: 1/14 Cottesloe Street, East Toowoomba. It is not one-bedroom one bath; it is 3 BR, 2 baths with 2 garage parking spaces with a view. $360AUD/week.

I looked at six pages of search results and it was hard to find any apartments renting for $350AUD/week, and none of those were 1BR---all 3BR.

Average annual lows to highs are 53F to 73F. Toowoomba is at 2,300 feet elevation which makes it cooler than its latitude would suggest (same relative latitude as Miami); 53% average annual humidity.

March 17, 2013
The partial formula for coming to Australia or New Zealand as a refuge from US hyperinflation appears to be roughly as follows. Pre-position rainy-day savings here in the currencies of Australia and New Zealand. Bring as much clothing and electronic goods as you can with you because, although you can buy most things here, they are probably more expensive here.

Local media seem unsatisfactory. You should probably have a iPad and subscription to the digital Wall Street Journal and an Apple TV so you can watch US TV via the Internet.

Use a tourist visa. It appears that you can stay in New Zealand for up to six months per year as long as you leave the country after 90 days then come back. For Australia, you may be able to stay longer but again needing to leave the country briefly every 90 days. Would it be better to be a citizen or have a temporary or permanent residence permit? Sure, but I doubt it is worth the cost and hassle if you are over about 40. Remember, I expect the US hyperinflation to last 6 months to 2 years—followed by absolutely no inflation. Tourist visas, and the fact that there are over 200 countries, ought to take care of 6 months to 2 years.

The cost of living is too high in Australia, although you can lower the biggest component of that cost to a low level by living 45 minutes or more from the central business district of the biggest cities like Sydney or Melbourne or by living in cheaper cities like Adelaide or Toowoomba.

The cost of living is lower in New Zealand than Australia and the housing is relatively cheap to rent but purchases are still too expensive in New Zealand. So although Australia, Canada, New Zealand, and Swiss francs are still the best places for your rainy-day savings, you may find it is less costly overall to LIVE in lower cost-of-living places like Argentina or Vienna using your AUD, CAD, NZD, or CHF ATM card during U.S. hyperinflation. You would incur an extra currency conversion cost doing that, but that may still be cheaper overall than paying the high prices in Australia or New Zealand.

I had an argument with an Australian businessman the other day. He accused me of planning to come to Sydney to avoid paying my share of U.S. taxes to help my country; ditto with regard to my investing in Australian real estate rather than US real estate again putting my own interests ahead of those of my country. Say what!?

First, he does not know what he is talking about. The U.S. is one of very few countries that tax the income of their citizens worldwide every year no matter where they live. There are some technical issues about getting a credit for taxes you pay to a foreign country so you do not pay twice, but there is no U.S. tax advantage with regard to an American living abroad.

Secondly, I am NOT investing in Australian or New Zealand real estate. I own a home in the U.S. and my son Dan just bought his second home in the U.S. with my blessing, urging and occasional help. I think Australian and NZ real estate are overpriced and if they won't let me stay more than 90 days, what the hell would I buy a home in Sydney for?

Put your rainy-day savings here (I am in Sydney at the moment). Maybe rent a place to live for six months here during U.S. hyperinflation, but do your real estate buying in the U.S. Hyperinflation does not relate to hard assets like real estate; only to dollar-denominated assets like savings. The U.S. is probably the best place on earth to own real estate right now, especially if you have a fixed-rate mortgage.

March 17, 2013
Stores in Australia and New Zealand are part familiar, part unknown, and part huh!? I was just in one where I saw M&Ms (familiar), Tim Tams (Australian cookies), and Kelloggs' Rice Bubbles (known as Rice Krispies in the U. S.—but no mention of snap, crackle, or pop here). Across the street is a Hungry Jack's which looks extremely suspiciously like a Burger King—down to the Whopper on the menu. They have Burger King in New Zealand, but not in Sydney.

Last night we had supper at Doyle's seafood restaurant in Watson's Bay. Highly recommended in guide books and by a friend. You typically go there by ferry which takes 25 minutes and is nice for the novelty of it. But you probably have to go back to Sydney by bus as we did because the last ferry out of Watson's Bay leaves around 7 which was our reservation time. The bus stop is a bit creepy dark and directions to it are not evident.

I had a $19.90 AUD prawn cocktail that was described as being special in the menu but was ordinary. You can get a better one for $9 I believe at the Brass Door in San Ramon, CA, a local family restaurant, albeit one that has not been around since 1885 like Doyles.

My wife got some Thai dish that she liked. I got Dory fish and chips. $43AUD. Totally ordinary—middle school cafeteria cuisine. The fish and chips at the Long John Silver chain in the US taste far better and probably only cost about $7.95. The Royal Automobile Club where we stayed and the Sydney Cove Oyster Bar served a vanilla ice cream I liked so much that I asked for the brand name. It is Serendipity. Never heard of it in the US. Doyle's, staying in character, served an ordinary vanilla ice cream. Save your money and time.

I'll give you a food recommendation that you will not find in the guide books and that reflects my non-frou frou, practical tastes. There is a food court for local office workers at 50 Bridge Street in Sydney—it actually is entered from Young Street about 100 feet from Circular Quay which is the Grand Central Station of Sydney—and ferry terminal. I had a grilled, not fried, fish and chips and Coke Zero for $11AUD at Costis. Costis is not the only restaurant there, there are a half dozen others. Sort of snobby (no McD's) yuppie fast food with great variety, super service, many tables at which to eat, and great value by Sydney CBD standards.

Extra bonus. It is full of well-dressed, attractive, young office workers. I was not at all surprised when I noticed my napkins were printed with an ad for a local match-making service. I expect there are many more such in the CBD. Stand on the corner at noon and see where the throngs of office workers go to eat. These food courts all seem to be hidden inside buildings that look like all offices. Part of the high-prices problem I have had is being a tourist and not knowing where to find the restaurants and stores where locals buy.

Doyle's supposedly has a view. You gotta be kidding me! Spectacular water views are the norm in and around Sydney. Doyles' is one of the lamest. The CBD is visible, but tiny at about 15 miles away. Otherwise, it is just a harbour beach with no waves.
We are off to Auckland again tomorrow.

March 19, 2013
When I arrived in New Zealand on March 5th, I reported here that the 13-hour flight was a God-awful ordeal. Now I have come back the other way—with tailwinds not headwinds—and the clock says it took less than 12 hours. Couldn’t prove it by me.

Next time, I will be trying to find ways to ease the pain like stopping in HI or upgrading to a sleepable seat. Life is too short.
I flew Air New Zealand to Auckland and back with a side round trip to Sydney, also on Air New Zealand although I booked the Sydney trip on Virgin Australia. I compared all four possible routes: RT to Auckland with side RT To Sydney (the cheapest), RT to Sydney (longest big flight) with side RT to Auckland, clockwise one-way trips to each city and counterclockwise one-way trips to each city (would have avoided one Tasmanian Sea flight)

Flight to Auckland was nice enough considering, but the one from Auckland to SFO was less so. Black specks of something kept falling on me throughout the trip apparently from the ventilation system. I could dust them off my head, face and clothes about every 15 minutes!?

Flight to Sydney and back was cattle car. Nothing was free but water. First, they would not let us process at all because ANZ got from Virgin that my wife was “Mr. Margaret…” They said that gender did not conform to her passport. Took about 40 minutes for Virgin to correct that in the airport.

Also, I paid Virgin for two extra check-in bags but they did not bother to tell ANZ. Fortunately, I carried all my paperwork and was able on both legs of the Sydney flight to prove I had paid for two extra bags.

Hard to avoid flying for trips Down Under, but I am willing to consider alternatives. Extremely unpleasant ordeal.

March 20, 2013
If you try to break up the flight from SFO the Auckland or Sydney you sort of have to fly to Honolulu then Fiji then to Auckland or Sydney. That’s 5 hours SFO to HNL then 6 hours HNL to Fiji then 3 hours to Auckland or 4 hours to Sydney. Flying from Sydney to Auckland is about 3 hours and 30 minutes. 14 to 15 hours total but a chance to sleep in a real bed (that you have to pay extra for) every 24 hours. There is also some sort of chance to sleep in a better than economy seat on the plane—also extra. I have not looked into the incremental costs of the extra stops or sleeping seat on the plane. Stopping in HNL and Fiji would make a 13-hour flight last three days—assuming you could find a flight out the day after you arrived in each location.

March 22, 2013
During our visits to Australia and New Zealand my wife and I were often asked if we were American, never if we were Canadian. There even seemed to be a bit of delight on the part of the Aussies and Kiwis about our being American as if they had found a dollar on the street. I don’t know why.

A young couple behind us on the flight from SFO to Auckland had Canadian flags sewn onto their backpacks. After the prior discussion here about that, that it reflects not pride in Canada but eagerness to tell the world, “We’re not American,” it pissed me off.

For one thing, if they don’t want to be mistaken for Americans, why not fly to Auckland from Vancouver, Canada where they charge very high airport fees? Or Mexico City? Why sully themselves with our American soil or getting on the plane at an American airport as Americans would.

March 24, 2013
God bless my iPod. It continued to work throughout my 13-hour flight from SFO to AKL and back. My only friend at about 3 in the morning standing next to the toilets in the airplane staring at the walls. It did run out of juice between AKL and SYD—apparently I neglected to recharge it in New Zealand.

My Mac laptop, however, only lasted a few hours each trip. And in coach on Air New Zealand, you cannot plug into the plane to recharge.

I bought two Aus/NZ to US plug adapters for the trip: one with two prongs and one with three. It was not enough. Both my wife and I needed the three for her hair dryer and my laptop. And we each had cell phones and iPods to recharge needing the other. One a one-night layover, which we had the last night in NZ, that’s not enough adapters. They only cost about $5-$9 each.
The Aus/NZ outlets or power points as the Kiwis call them, remind me of the face in the famous painting Scream (http://www.tripadvisor.com/Travel-g255055-c120179/Australia:Power.And.Appliances.html) You gotta watch those damned Aus/NZ outlets. SOBs are 240 volts. That can kill you more efficiently than US 110 outlets. In Aus/NZ, each outlet has an on/off switch in the upper outside corner. You should turn it off before you plug in, then on. Before you pull the plug out, turn the outlet off again, then take it out. Scary.

John T. Reed

Here is an email I got from an Australian:

Hi John,

As an Australian who has lived in Brisbane all my life I enjoyed reading your view on Sydney.

You are right that real estate costs are very high here, and I agree living in a regional centre which is close to a capital city is a good balance of lifestyle and cost without having to live in a rough area on the outskirts of a big city.

Toowoomba is a nice town although you would definitely need a car - there are also many beautiful historic houses there if you are into that sort of thing. Ipswich is probably a better option as it has regular train service and is much closer, and rents are similar to Toowoomba, maybe slightly higher.

For Sydney I would suggest you look at a regional town like Gosford or Wollongong rather than Parramatta - train service is still reasonable but Western Sydney is regarded as being fairly rough and you are stuck out in the suburbs rather than near the coast.

If you were to live near Brisbane I'd suggest the either Ipswich or Gold Coast - around Burleigh Heads where you can get apartments for under $300 per week: http://www.realestate.com.au/rent/in-burleigh+heads%2c+qld+4220/list-1?activeSort=price-asc.

Living near Melbourne I'd suggest Ballarat (although it can get fairly cold, doesn't really snow though). Quite beautiful historic town due to the many gold rush era buildings.

For a younger person or couple (under say 35) I would recommend staying in Student accommodation - my father has a couple of houses in Brisbane he rents out to students - he converted them to 6 bedrooms which is the maximum you can have without being classed as a boarding house in this area, and rents rooms to foreign students for around $200 per week which includes all furniture and utilities. (He has found local tenants too much hassle) [Reed note: in the U.S. this would be illegal discrimination by national origin]

Because it is like living in a big share house I wouldn't recommend it for a mature couple although I don't see how it would be too much of an issue for those who know what they're getting into - double bedrooms are more around the $300 mark. This would be a good option for someone looking to stay 6 -24 months as you don't incur a lot of startup costs with utilities and furniture and there are plenty of opportunities to socialise with educated people from a range of different backgrounds who live in the same house.


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