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When is it so bad that you must leave the country? And where do you go?

Posted by John Reed on

Copyright 2012 by John T. Reed

Since Obama got reelected, I have received a number of inquiries about whether we should flee the country. We should prepare to. In order to leave, some other country has to let you in. At present, that is generally not a problem. Most countries give you a 90-day tourist visa automatically. But if and when America gets hyperinflation, I expect Canada and maybe some other countries will require Americans to prove they can afford to support themselves while they are in Canada. You can see a lengthy lists of reasons why tourist visas are not granted at various web sites. Economic refugee is not on it per se but such a reason for coming might violate a number of listed reasons like:


• cannot prove to have strong ties to their current country of residence [anymore]
• intends to reside or work permanently in the country
• does not have a legitimate reason for the journey
• has no visible means of sustenance
• is applying on excessively short notice
• fails to demonstrate intent to return (for non-immigrants)

As Hurricane Sandy just well indicated, you need to plan ahead including Plan B and Plan C and so on about how you will get to an embarkation point to leave the country: airport, seaport, train, vehicle crossing. People in NY and NJ may have wanted to leave the country as Sandy approached or after it hit, but many have been unable to leave their homes or neighborhoods, let alone get to a place from which they could leave the country.

Then you have to pay for the trip and be going to a country that will allow you to enter. U.S. dollars may not work for buying a ticket when we get hyperinflation. And the current normal tourist visa rules may be changed because no country wants economic refugees, especially those with nothing but worthless U.S. dollars to support themselves.

I wrote this article some moths before the Obama reelection and have now read through it and updated and improved it where appropriate.

What is serious enough to warrant fleeing the country?

I think you leave the U.S. when one or more of the following happens:

• The federal tax rate that applies to you is so high that it is cost effective to move to a country with a lower federal tax rate. If your state tax rate is the problem, move to a lower-tax-rate state. Make sure you first check all the legal ways to lower your income tax burden—like ceasing to make enough income to be in the offending bracket until they lower the rate in the future. For example, see my book Aggressive Tax Avoidance for Real Estate Investors. While it is true that you must pay U.S. federal taxes no matter what country you live in, there are details like the Foreign Earned Income Exclusion and the foreign tax credit and not having to pay Social Security tax, etc. Check with an accountant who specializes in American expatriates. In other words, in many cases you can lower your tax rate by moving overseas. I am not talking about renouncing your U.S. citizenship in this article; only about physically leaving the country.

Intolerable price controls. If you sell products or services, and federal price controls reduce your profit to an unacceptable level, or force you to sell at a loss, it may be cost-effective to move to another country where you can sell those same goods or services for whatever price you want. This would not apply to rent controls on immovable objects like rental properties. Also, if municipal (common with residential rent controls) or state (I have never heard of these in the U.S.) rent controls are the problem, you can move to another state or municipality to avoid them. Federal price controls—used in the U.S. during World Wars I and II and in the early 1970s—have always been temporary. It is possible that the country to which you move may already have or subsequently adopt its own price controls, but that is not likely if there is no simultaneous war or hyperinflation for both countries.

Goods that cross international borders are generally exempt from price controls although they might be subject to tariffs. So even if both the U.S. and the country to which you move have price controls, exports from that country to the U.S. would probably be exempt from both the U.S. and foreign price controls.

nonavailability of basic human needs, namely:

nutritious, varied food

needed medicine

medical care

one or two day-time rooms that have a temperature above 67ºF and below about 73ºF and a sleeping room that is about 67º to 70ºF and possibly with certain humidity depending on what temperature/humidity you need to sleep well (typically achieved by a combination of outdoor climate and artificial heating or air-conditioning—in some parts of the U.S. there is no need for artificial heat or air-conditioning because of mild climate)

electricity (If this is not available or too expensive during hyperinflation, check to see if you can obtain it adequately from solar, wind, a generator, batteries, geothermal, or hydroelectric power within the U.S. before you leave the country)

physical safety (at present, you can probably find an adequately safe location within the U.S. and do not need to leave for this purpose, but there have been countries where the only safe place for certain persons or groups was outside of that country, e.g., Jews in Germany in the 1930s and 1940s)

Draft for an immoral war when age and gender make you or your dependent child eligible for it (I favor a draft. See my article on the arguments in favor of a military draft.)

Pervasive corruption (At present, you can generally find an adequately uncorrupted place to live within the U.S., but when U.S. conditions and federal laws make it impossible to be honest, you need to move to a less corrupt country. The combination of hyperinflation, price controls, capital controls, financial repression, rationing, and anti-hoarding laws almost always corrupts the entire citizenry of the country in question—by making it impossible to live if you comply with the laws—and the U.S. will be no exception to that if and when we get hyperinflation. The diary of Anna Eisenmenger who lived through Austrian early 1920s hyperinflation makes this abundantly clear—including her family members who died apparently of malnutrition and lack of heat in winter.)

Loss of freedom This relates to the U.S. Bill of Rights and other freedoms that Americans now have. If these are taken away, you should leave the country, but make sure the country to which you are going has the freedom you seek. For example, freedom of speech is restricted in many countries that you probably think of as free. The freedoms of Americans are reduced on virtually every business day. Each new law or regulation moves a behavior that you used to decide on your own into the category of things where some bureaucrat has already made the decision and you must comply with that bureaucrat’s decision. In general, the U.S. has fallen from 1st to 10th in the Heritage Foundation Economic Freedom Index. See also these other freedom indices. The notion that the U.S. is the world’s paragon and gold standard of freedom is out of date. For some freedom restrictions are based on municipal, county, or state laws. In those cases, you can move to a more free U.S. state and do not have to leave the U.S.

• Inability to make a living or get an education The book The Right to Earn A Living will disabuse you of the notion that the U.S. is the freest country in which to make a living. For example, it is very hard to own a taxi in most U.S. cities. If that is your chosen occupation, you may need to leave the country to acquire that right. Many Americans leave the U.S. in order to attend medical school. Within the U.S., the number of medical schools is artificially held down. Although Obama care is about to decimate the health care industry so perhaps the biggest possible mistake would be to be going to medical school now.

Persecution At various times, certain groups have been persecuted in various countries including in the U.S.—blacks, Asians, Mormons, Communists, etc. If it were me, I would leave. Lately, federal and local governments within the U.S. have persecuted, or suggested they were getting ready to persecute, groups like “the rich,” smokers, gun owners, businesses, bankers, investment bankers, prostitutes, marijuana sellers, etc. Same countries may refrain from persecuting such groups and otherwise be more attractive to you if you get persecuted here.

• Needed lower cost of living But you would need to make sure that the place to which you are moving truly has a lower cost of living than the cheapest place in the U.S. for the things you feel you need in a home and neighborhood. I recently read and reviewed the book How to Retire Overseas: Everything You Need to Know to Live Well (for less) Abroad. I was surprised that the book failed to make the case that you could find a lower cost of living overseas at all. The cheapest place they recommended was Chiang Mai, Thailand where the author said a house cost “as little as $100,000”. You can do better than that in Florida. Or many places in the U.S. especially if you live in an RV.

• New law prohibiting you from leaving the country I do not want to live in a country that says I cannot leave. Such laws are called exit visa laws. Fascist Italy and Nazi Germany required exit visas. So did the Soviet Union and the like.

I would hope the U.S. would never do that. But the tax excuse for an exit visa discussed below seems to say that the U.S. is too much like those evil countries. Just as people buy guns when new gun control laws are threatened, I would be inclined to leave the U.S. if some law preventing me from leaving were proposed. In general, the U.S. has never had any such laws. But they are now talking about not letting people leave until they make sure you owe no income taxes. Since the IRS can probably quibble with almost every tax return in America, that would appear to be a Nazi-like exit visa law.

Section 40304 of the [proposed] legislation [SB 1813] says anyone who owes more than $50,000 to the Internal Revenue Service may be subject to “action with respect to denial, revocation, or limitation of a passport.”

The bill allows for exceptions…in cases when a tax debt is currently being repaid in a “timely manner” or when collection efforts have been suspended.

However, there does not appear to be any specific language requiring a taxpayer to be charged with tax evasion or any other crime in order to have their passport revoked or limited — only that a notice of lien or levy has been filed by the IRS.

This law strikes me as obviously unconstitutional. The Fifth Amendment to the United States Constitution provides: [N]or shall any person . . . be deprived of life, liberty, or property, without due process of law . . . .

Section One of the Fourteenth Amendment to the United States Constitution provides: [N]or shall any State deprive any person of life, liberty, or property, without due process of law . . . .

Also, obviously any such accused person should be able to post a bond covering the amount in dispute and be able to leave the country. My legal knowledge is not enough to know for sure but my impression is you cannot restrain people’s freedom to move based solely on a civil matter. A State Department Fact Sheet on line about revoking or suspending a U.S. citizen’s passport says it can only be done pursuant to a criminal court order that says the person in question is prohibited from leaving the U.S. and from possessing or applying for a passport or a felony arrest warrant.
 

Is non-payment of taxes a felony? Tax evasion (intentional violation of tax laws) and filing a false tax return are felonies. In that case, a jail sentence is possible so the preventing you from leaving makes sense because leaving might enable you to avoid your prison sentence. But I see no legal basis for preventing a U.S. citizen from leaving in a non-felony tax dispute. The above quoted bill can only be valid if it complies with the Constitution and it appears not to because of the lack of any possibility of a jail sentence being required.

The Universal Declaration of Human Rights, Article 13, part 2, proclaimed in 1948 that “Everyone has the right to leave any country, including his own, and to return to his country.”

Not only must get out of the U.S.; must be allowed INto the other country

Also, the issue may come from the other side of the border. For example, if the U.S. government turns the U.S. into a hyperinflation disaster area, and Canada is not, the Canadian government may find it necessary to close the border to U.S. tourists on the grounds that they are economic refugees and that country of 34 million people cannot absorb 325 million U.S. economic refugees. Neighbors of Austria and Germany generally prohibited Austrians and Germans from entering their countries during the early 1920s hyperinflation. The wall keeping you in can be built on either side of the border. The effect is the same.

Joining relatives in the foreign country

Non-availability of a stable currency If you want to be a law-abiding citizen, as I do, it appears to me that you cannot remain in a country without a stable currency. Having read a number of first-hand accounts of hyperinflation in various countries including throughout the 20th century and in the 21st, I assure you that a stable currency is as necessary for daily life as water or food or shelter unless you live on a subsistence farm where you grow all your own food and heating fuel.

Remember that you do not leave the U.S. just because one of these things happens here. You leave when one or more of those things happens here, and you have located a country to which you can go where that thing is not happening and there is no offsetting negative thing there that would make you worse off there on balance. Since the negative things above are so bad, and there are 205 other countries to go to, you will probably find at least one that is net better. But don’t jump out of the frying pan into the fire.

NOT good reasons to leave the country

My oldest son had a college friend who just hated George W. Bush. He left the country after graduation in 2003 because of Bush being president. So where did this genius go? He joined the Peace Corps.

Did that get him out of the U.S.? Oh, yeah. He went to some third-world country. But think about this. The Peace Corps is a U.S. government agency. Those are all part of the executive branch of the U.S. government, which was headed by George W. Bush throughout this kid’s time in the Peace Corps. I worked for the U.S. government for a while—as an Army officer. Whenever you went into battalion or higher headquarters, they had a framed photo of the commander in chief on the wall. I’m guessing they do the same in the Peace Corps administration buildings around the world.

Obama is a piece of crap. He hates the U.S. and its constitution and the majority of its people and its way of life. It is painful to watch. But moving out of the U.S. to get away from that is an extreme and dumb overreaction, akin to, say, losing 6,600 military personnel to avenge 3,000 who died on 9/11.

I have a better idea. Turn off the TV. Cancel your subscriptions to periodicals that cover politics and government policy other than those that directly affect you. And stay in the U.S.A. until one or more of the events listed above forces you out, and you have a better place to go to. But do not go to the other extreme like the Jews in 1930s Germany who refused to leave no matter how bad it got.

How can I stand to live in California?

People wonder why I can stand to live in California with Nancy Pelosi and Barbara Boxer and high state income taxes and almost no chance to get a concealed carry permit and earthquakes.

Uh, it’s beautiful—both weather and scenery. The climate is extremely mild. The sun shines ’most the time and the feeling is lay back. Palm trees grow and property taxes are low. Drivers are nice. I have never laid eyes on Pelosi or Boxer. The low property taxes compensate for the high state income taxes. I do not want to carry a loaded gun around. I always live in homes where the structure is A-1 earthquake proof and the location is the same—generally high ground. We lived on Russian Hill in the city in a high rise, on top of a hill in Moraga, and 625 feet up the side of Mount Diablo now.

And you Americans who live other than in California are nuts. Every time we leave the state, we call it a California-appreciation trip. If the Northeast and Midwest were clothing, you would give them to Goodwill. The South has oppressive heat, humidity, mosquitoes, hurricanes. The Southwest—where two of our sons went to U. of Arizona—is too hot in the summer no matter that it’s a “dry heat.” A summer breeze there feels like somebody put a fan in front of an oven. The Northwest is too wet and maybe more liberal than California in many ways. Fly-over country has all that continental climate—too hot and humid in summer and too cold in winter. I thought Alaska must have great scenery so the cold would be okay. Then I saw it. I prefer California scenery and the Anchorage climate was Seattleish when we were there. Hawaii, I can’t complain much about.

My point is this is a great country in many ways that Obama and Pelosi and so on have no influence over. They are turning it into a disaster with regard to a coming two-year or so bout of hyperinflation. And it may emerge from that as the new Soviet Union if the free-lunch crowd wins the argument about what caused it and how to fix it. But perhaps more likely is we will go back to more self-reliance and economic freedom. Foreign countries have their own problems and they are mostly worse than the current U.S. with regard to the aspects of the U.S. that are now driving many Americans up a wall.

Are there times when you need to leave the country? Yes. That is the point of this article. Is unhappiness with incumbent political parties one of those reasons. Nope. Ignore that crap. If you would leave the TV off and stop reading about politics, you would find the U.S. is a very nice place for a lot of reasons. Moderation in all things, including leaving or staying. The attitude that the U.S. is always the greatest and that bad things like hyperinflation cannot happen here is goofy. You need to think about what should cause you to leave, plan for it to the extent that you can, and not get carried away emotionally in either direction.

How do you get out of the U.S.?

At present, you can walk, fly, drive, or take a train or small boat to Canada. That word drive is especially important. You probably have one or more cars and you would probably like to have a car in Canada. There really is no other country you can drive to other than Mexico and I am not confident that is a good idea. Can you rent cars in other countries? Generally, yes, but it is expensive compared to your free-and-clear U.S. car. And in many less developed countries, driving is so crazy many Americans have to hire a driver as well as a car.

At present, you need no papers or permission to enter Canada as a tourist, but you have to leave the country after 90 days. If you don’t, you’re an illegal alien.

What, me!? you say. “I’m not an illegal alien. I’m an American.” Uh huh. And in almost every other country, after 90 days, you become an illegal alien. Really. Now you know how the Mexicans feel.

So what do you do after 90 days or six months depending upon the country?

Leave the country, sport.

Stay longer? Or keep moving?

You can ask for permission to stay a while longer, and you may get it, but you may not. There are a number of ways to get permission to stay longer and to become a Canadian citizen. For a guy my age—69—virtually the only way to become a permanent resident or citizen of Canada is to have a job offer from Canada or a close relative who is a Canadian citizen. So I declare the various ways to get permanent residency or citizenship beyond the scope of this article. There is plenty of info online about all that.

So where do you go if the U.S. is still screwed up? New Zealand. Switzerland. Sweden. Uruguay. All sorts of places.

Do they have the same tourist visa deal—just show up and you can stay 90 days? Generally, yes. Australia requires a $20 pre-approved visa, called an ETA, that you get online, but it seems pretty much automatic unless you are some sort of criminal.

Can you just keep going from one country to another and stay for 90 days in each? As far as I can tell, yes. You need to research each particular country but I have looked at a number of them and that seems to be the deal.

Could you leave Canada on the 90th day, spend one night in the U.S,. then go back to Canada for another 90 days?

I’m not sure. I could not figure that out at the Canada web site. Maybe a reader will enlighten me. Generally, if you are there more than six months, I think they expect you to pay Canadian taxes. Not sure about that.

A reader replies:

Hi John,

Regarding the idea of re-entering Canada as a tourist after 90 days, you would be likely turned away around the 3rd try. At least that's the experience I've heard from multiple people. It seems discretionary, for the airport staff to evaluate per-case.

The same is true when Canadians re-enter the US too often. And Australia.

Even with a permanent residency application pending, you have to scoot.

Actually the most effective way is for a spouse to take a university course, and the other is free to work.

Hope that helps,
Simon

If you renounce your U.S. citizenship, at present, you may only spend 90 days per year in the U.S. So the question is do other countries have maximum amounts of days per year that you can be in their country in addition to requiring you to leave after 90 days?

No more than six months in a 12-month period

In New Zealand, Americans are from a visa-waiver country. That means we can just show up and stay 90 days. The New Zealand web site says you have to leave after 90 days but that you can stay for a total of six months during a 12-month period. So I guess you can come and go as much as you want as long as you do not accumulate more than six months in New Zealand before you hit the anniversary of your initial arrival there. They, like Canada, will consider and may approve your request to stay longer.

So it sounds like you could go to New Zealand for 90 days, then Australia for 90 days (with an ETA) then go back to New Zealand for another 90 days, then Canada and so on.

British Commonwealth

One of my West Point classmates renounced his American citizenship and became a citizen of Canada. Canada is part of the British Commonwealth. The British Commonwealth countries seem to let their fellow commonwealth folks stay longer than non-Commonwealth folks like us Americans. So you might find it feasible and desirable to get a British Commonwealth status from one of the many Commonwealth countries. It is really quite a long and surprising list. And some seem to be relatively easy to get permanent resident or citizenship status. Here is the list of British Commonwealth countries. The privileges of residents of the various Commonwealth countries are not uniform with regard to the others, but the general idea is you are a privileged character compared to, say, an American, when you travel among your fellow Commonwealth countries.

Here are some general comments on which countries are part of the Commonwealth: a whole lot of Caribbean islands like the Bahamas, Barbados; former colonies not named the United States of America like Canada, Australia, New Zealand, India, Bangladesh, Singapore; some Latin American countries like Belize; a number of African countries; some South Pacific islands like Nauru; Mediterranean Islands—Cyprus and Malta. It appears that permanent resident and/or citizenship in any of them gives you some entree into the others. So if you are going to seek a second citizenship/passport, which is probably wise, the British Commonwealth passports seem more valuable for travel flexibility than most.

It used to be said that the sun never sets on the British flag. Well, it does now, but it still never sets on British Commonwealth countries.

Retirees are welcome in some countries

Some countries court retirees. According to the book How to Retire Overseas, Panama, Uruguay, and Maylasia offer special deals for retirees seeking long-term residence. Maylasia is a member of the British Commonwealth. So it looks like you could go to those countries and just stay as long as you wanted. Uruguay sounds somewhat appealing in that there are only four countries in the western hemisphere that have 7 or better Transparency International lack of corruption ratings: U.S. Canada, Chile, and Uruguay. Uruguay is between Argentina and Brazil on the Atlantic coast of South America. Its capital and main city is Montevideo. I may visit there to check it out. I already checked on the Net but you really have to go there.

In general, at present, it looks like you can leave the U.S. and spend pretty much full-time abroad as long as you change countries every 90 days. You may be able to spend a whole year abroad splitting your time between just two countries if their rules are like those of New Zealand. At most, you would need three countries if New Zealand was one of them. If you can stay for 180 days in Canada, that country and New Zealand would cover the year.

There are 206 countries in the world at present. The U.S. is one so that leaves 205 to visit to get away from possible intolerable conditions in the U.S. What is the best one? It is a matter of taste, season, cost, visitor visa rules in effect at the time among other issues.

I would think Canada is the default choice for Americans, if they will have us. In the event too many Americans wanted to go there, I expect they would restrict entry on tourist visas. Other countries might feel it necessary to also restrict American economic refugees from a U.S. hyperinflation, but they would probably adopt such rules months or years after Canada did. The farther the country is from the U.S. the fewer Americans you would think would want to go there to get away from U.S. hyperinflation.

Australia and New Zealand are nice, but really far away and expensive to travel to. It is not really possible to travel farther than from New York City to Perth, Australia without leaving earth. It is fairly expensive to fly from the U.S. to those countries, suggesting the tourists in question would be affluent—generally desired by all countries. So I would not be surprised if those countries never had to restrict Americans from coming there even during a hyperinflation episode.

The next closest countries after Canada would be Caribbean islands. They vary. Check out each one you are interested in. Only two Latin American countries have Transparency International lack of corruption ratings comparable to those here in the U.S.: Chile and Uruguay. I have never been to either but they sound reasonably nice. There are two Caribbean islands in the TI top twenty—Bahamas and Barbados. But I did not feel comfortable in Barbados and I have never been to the Bahamas. I read that the Bahamas has drug and racial trouble history. Barbados is 80% African; Bahamas, 85%—generally descendants of slaves. I am not qualified to draw conclusions on either, but I did have those two concerns which readers not familiar with those places should look into before they decide to move there for an extended period. Both are British Commonwealth. Grand Bahama Island is only 70 miles from Rush Limbaugh’s house at 1495 North Ocean Boulevard in Palm Beach, FL.

You can access Australian, Canadian, and New Zealand bank accounts from almost anywhere in the world

I have put money in savings accounts in Australia, Canada, and New Zealand and urged readers to do the same. But neither I nor my readers need to be in those countries to spend money in those countries. You could stick your Westpac Australia ATM card in a machine in Montevideo or Santiago just as easily as in Sydney, although you would have to pay a 3% currency conversion if you were not in Australia. That may be cheaper than the airfare to Australia, although the airfares to Chile and Uruguay are no bargain either.

I hope some readers who are more familiar with the Bahamas, Barbados, Chile, and Uruguay will enlighten me.

The bottom line seems to be that getting a second citizenship and passport would be wise. As far as trying to plan for a specific country now, I will probably fiddle around with it, visit some of the possible countries, research others, and so on in the next several years. Become more knowledgeable about your various options and keep up to date with this dynamic field—long-term foreign tourism.

If and when you make the move out of the U.S., there will be many variables relating to the countries in question, your resources, season, climate, vehicles, and so on.

Scale

Americans are used to living in one of the biggest countries in the world in every sense of the word. I surmise that you would have an “I don’t think we’re in Kansas anymore, Toto” moment going to almost any other country.

New Zealand, for example, is about the same size as Colorado and has about the same population. Auckland is similar in size to Denver.

Switzerland is about the same size as Tennessee and has a similar population.

Incomparable

Canada and Australia are not comparable to any U.S. states because each is huge geographically and has a relatively small population that is strung out along their southern border. Physically, both Canada and Australia are about the same size as the U.S. Population-wise, Canada is about the same as California and Australia is about the same as Texas or New York.

When one of my roommates came back to the U.S. after a two-year tour as an exchange officer at the Australian pentagon he came first to my home in California. We needed to go to the supermarket. When we did, he marveled at the variety of each product. He had forgotten what a cornucopia the U.S. is. He said in Australia, they would have two or three types of toothpaste, but not dozens like here. That was 30 years ago, but the math is still the same. The U.S. has 315 million people; Australia, 23 million. It simply does not make the same economic sense to have as many varieties in a country with less than 10% of the population. Also, as an American, I expect you would find even less variety with regard to what you were used to. Not only fewer toothpastes, but they do not have your favorite. I saw an online discussion group for American expatriates in Australia. One woman said she missed American comfort foods. I remember no such problem during my 7-day R&R from Vietnam there, or during my two weeks plus there in 2013, but I can see how it might happen if you were there for an extended period.

I do not want to criticize these countries. Just to warn you they are not the U.S. True, you can find McDonalds and KFC in most countries nowadays, but even those restaurants tend to be a little different abroad. McDonalds breakfast in London only has some of the choices they have in the U.S. Rome and Swiss McDonalds have shrimp or “chicken & shrimps” as they call them on the Swiss McDonalds web site. (Memo to McDonalds Switzerland. I know you guys speak English far better than I speak German, but in English, the plural of shrimp is shrimp.)

When I visit other countries, I get a sense that their roads and vehicles and sometimes trains seem to be miniature versions of the Americans’. Some things I have read say that Americans are freaked out by the narrowness of roads in places like Switzerland. I was just there for the first time in June 2015 and it freaked me out. If I lived there, it would probably take me a long time to get used to driving there. Others say Americans almost never drive in the crazy-by-our-standards places like India, Vietnam, etc.

For a prolonged stay in New Zealand, it looks like you need a car. They have not been big on mass transit there. They drive on the left and the steering wheel is on the right side of the car. Sydney, Australia, on the other hand, sounds like a place where you could stay for 90 days and rely on mass transit and cabs.

Australia and New Zealand are reportedly both big on lack of central heat and building insulation. They have a mild climate, but it’s not that mild. The high temperature today (8/5/12—their dead of winter) in Auckland, is expected to be 57ºF with rain. Minor issue, but I cite it to disabuse you of the notion that every single thing is better in countries that are not run by Obama/Reid/Boehner. No heat or inadequate-by-U.S.-standards heat on a 57º rainy day does not sound like any fun. A guy from Ireland once told me the thing he had the most trouble with in the U.S. was central heat. He could not stay awake in the afternoon in American office buildings with central heat when he first moved to the U.S. He was used to Ireland where I guess they see less need for heat like in New Zealand.

I do not think the time has come quite yet to leave the U.S. permanently. But I do think the time has definitely come for you to move your savings abroad into foreign currencies in foreign banks. Putting money into foreign currencies but leaving it here in U.S. banks is an utter waste of time. It will be confiscated by the U.S. government and forcibly converted to U.S. dollars at a crap exchange rate.

Secondly, I want you to start visiting other countries that you think you might want to live in for extended periods if the U.S. triggered any of the criteria I listed above.

I believe the hyperinflation will last six months to two years, but I am not sure its end will make America all better. It may have turned socialist.

90-day tourist visas forever

Can you live forever outside the U.S. on 90-day tourist visas? I see no reason why not. The Wall Street Journal recently had a feature article about an American couple who was doing just that. Article about 30- to 90-day stays abroad They sold a big house in CA and were living in one-bedroom apartments abroad, but otherwise, were living a similar enough lifestyle. This takes a certain amount of money. You don’t have to be Bill Gates, but middle-class Americans will probably have to be rather ingenious about living cheap to pull it off.

Of course, if you can find a way to make a living in the country in question, it should be similar to living here. But generally, foreign countries do not want you roaming around their country looking for a job—to the point where they will forcibly put you on the next plane back to where you came from if you answer “To look for a job” to the question “Why are you visiting our country?”

Your homework assignment is to place savings abroad, come up with Plans A through D for getting to the airport or whatever departure point in the event of hyperinflation, inability to get gasoline, or an open airport, or an entry visa for the country in question.

I sense that many of my readers are uncomfortable with foreign countries, bank accounts, etc. I understand. I was, too, before I forced myself to get into it. But I simply went to Vancouver, Canada after making an appointment with a banker there based on a referral from a Canadian friend of my wife’s. I opened the account, looked around expecting something bad to happen. It did not. I doubled the amount in the account. Still nothing bad happened. Then I did it in New Zealand and Australia. Now I laugh at my readers who are still timid about it and my former self. Now, to me, having a Canadian bank account is Tannaz Alesafar, my BMO banker. Australia bank account is Caden at Westpac, and my Kiwi bank account is Andy.

When someone expresses fear of opening, say, an Australian bank account my reaction is, “What, You’re afraid of Caden!? He’s great!”

I have also been to Vancouver three times now. I know where I want to stay (Vancouver Club), to buy a Sky Train card at YVR and go to the Waterfront or Burrard Street stations. I know where to get a McDonalds breakfast or a view supper and where the nice walk along the harbor is. I know the shopping street with all the outdoor stores. Granville Island. And I have been to a bunch of restaurants and hotels in various places including Victoria—a long ferry ride away and Whistler, a train ride north.

It’s not quite home, but I have sort of marked my territory there and feel like I’m back when I go there. I expect to accomplish the same in Sydney and Auckland when I go there. But until you do, I can understand how you might find them intimidating, far-away places with a strange-sounding names.

Just do it.

Get out!

When I read books about hyperinflation, I found myself writing in the margins, “Get the hell out of this country!” again and again as I read about the ordeal of trying to find food or fuel or medicine in a hyperinflated country. I wanted to reach through the pages and the years and take the people of that time by the lapels and scream at them, “What are you doing!? Why don’t you see that you have to get out of here right now!?”

So now I am doing the same to you—in advance.

The U.S. is almost certainly heading for a horrid episode of hyperinflation. It will be worse than the Great Depression, It will wipe out the value of U.S. dollar-denominated assets, pensions, bonds, etc. and, if accompanied by the usual sister laws—capital controls, price controls, rationing, and anti-hoarding laws—it will be impossible to live here.

Get your money out of U.S. dollar-denominated assets (see my various articles about foreign currency at www.johntreed.com/headlinenewsarticles.html) and get ready to get yourself out of here if the need arises.

Make sure you have an unexpired U.S. passport

Oh, and if you are a U.S. citizen, make sure you and all your family members have unexpired U.S. passports. If you are a citizen, you are entitled to one. But you have to apply for it and pay for it and wait for it. You do not want to be doing that after the ’flation hits the fan. To travel from the U.S. to any other country, you must have a passport. If you are only a citizen of the U.S., that means a U.S. passport. If you do not currently have an unexpired U.S. passport, apply for one immediately! http://travel.state.gov/passport/passport_1738.html

Here are excepts from an email I got from a former American who is now an Australian:

John,

I have lived in Oz [Australia] for over 30 years (ex West Coast US), and have family in the US (instant comparison on state of play, costs, etc), plus get back regularly. A couple of updates on your info regarding the Great Southern Land:

Lack of central heating is old news. Houses since the 1970s will have both heating and cooling, but just not "central heating" … more likely reverse cycle aircon [?] now. You don't have to be hot or cold. Many of the coastal cities are indeed very like your location in California (eg, we would average 1 frost per winter here in Adelaide). Houses here are a bit smaller, but on the plus side, when the kids jump up and down in the middle of the living room, the whole house doesn't shake like in so many "ranch style" spreading mistakes I have been in of US construction. Building standards are still a bit higher than in my past and recent experiences in the western and central US (I avoid the rust belt as much as I can). Insulation in homes here, however, is trivial to non-existent … great minds and all that.

Regarding lack of product range, again, this has improved consistently from the past … I quit counting types of toothpaste at the store this morning. If you can't get what you want, order it off the internet … the first $1000 comes in customs free (except a few items like car parts), and things get here pretty fast now. There are specialty stores selling "US goodies" here as well. Put another way, there is no longer anything I really want that I can't get here or get delivered here. Again, on the opposite side of the equation, Oz has major cultural diversity, so there tends to be a greater range (by far) of European foods and other goods than readily available in the US (ie, in the supermarket). I find this a plus.

Most US folks will initially conclude that "cost of living" is very high in Oz, as food will appear much more costly (ie, maybe almost double for some things). The key point is that when you compare total cost of living at a comparable standard, its pretty much a wash now. In Oz, you earn more in general for the same job, take home more, and so can pay more for the same things. Again, circa 70's, cars and electrical gear were much more expensive here, but this gap has closed considerably. I will leave you to look at some of the indexes of "quality of life" and standard of living, and there isn't much in it. Many don't seem to get this (or much else in life).

In my experience, for reasonably intelligent US folks moving to Oz, the "culture" and collective differences will be a (smallish) shock for the first year. There will be good to great things, like beaches and many natural resources with few people; as well as [disadvantages]. Having worked and travelled much of the world; I've chosen to stay in Oz which has had a lot of "family" benefits (eg, far fewer drugs, gangs), but nowhere is perfect, the US most definitely included.

When the US trainwreck happens, I'm not convinced post-hyperinflation/depression, that it will "rise from the ashes". With 300million people and limited resources, many may find that "going home" isn't a wise option. Hence, I think your readers need to take a bit longer perspective on things, even if the acute issues (eg, hyperinflation) appear resolved.

And, like you, my disappointment with the US people concerning the Obama second coming is extreme. The nation seems, collectively, to have lost the principles of greatness … and it is perfectly happy in that decaying state. Gad.

"going home" referred to how I think many people will view the advice regarding the period of hyperinflation … like the "snowbirds" who would flit to Hemet (Calif.) each winter … then return to the NW for the summer/good times. I agree that what comes after hyperinflation is an unknown, but also view the US as likely to be more like England, post WW2, ie "has been." My guess is that many who leave the US, particularly for Oz and NZ, won't necessarily want to return just because the currency has stabilised. China (having worked there a bit) has also told a lot of lies about its economy (and much else), and I believe with suffer greatly with the US trainwreck. How both of these falling giants will impact Oz is difficult to predict, as these are second order effects --- and my current focus.

Separately, I escaped from poor job prospects in my field under Reagan and figured I'd be back to the US some day … but the incentives have been strongly the other way.

"nice places to live." What I have said about Oz is just one person's view and experience (one data point). You might point your readers at some of the various international "liveability" indices, where Oz seems to rank OK. At least this way people can figure out what attributes they personally value and choose an appropriate comparison:

http://en.wikipedia.org/wiki/Livability_ranking

As to relative cost of living, again relative to local earnings, it seems to me that the cost of living for Joe Average (noting that neither of us are Joe Average) has increased in the US relative to other parts of the world. As I said, I first hit Oz in 1977, and it was much more expensive relative to the US; now, there isn't much in it. There is a cost of living comparison website which I think is likely to be of some value to yourself and your readers, for comparing various options:

http://www.expatistan.com/

As an example, San Francisco appears to be 5% more expensive (ie, "a wash") relative to Adelaide. I'd be doing more homework before moving, but at least it is a first cut.

I also said that US "comfort" and other foods were available in Oz. Here is a website that provides such goodies. Yes, not as cheap as in the US by far … but it seems to be 10,000km away as well. We have cheaper sources for much of what we want, but it is a last resort.

http://www.usafoods.com.au/

If you or others want to get a handle on the actual cost of food here, the website below is the online site for one of the two major supermarkets in Oz, much food is actually cheaper in NZ than in Oz, go figure). Prices are per kg, as we have learned to work in 10's like much of the rest of the world, and pissed off English king's feet, knuckles, and other such trivia back in 1967.

http://www2.woolworthsonline.com.au/

As I know you have much interest in real estate (as does my father, who did very well in that field, and was the original reason I stumbled on your website, as one of the few who espoused similar wisdom), below is a website which lists properties for sale in 3 Oz states/territories, so that you/others can get a feel for home/rental prices by area (eg, Sydney is insanely high, Tassie, lowish). Many actual listings will also validate the "aircon/heating" issue. Note that if you use the "research" tab, you can look up historic sales since about 2000 to see trends in areas over time. Prices will generally appear higher than in the US for comparable properties, and I have written about differences in quality (eg, brick homes with tile roofs which don't require replacement, well, ever). We also still have negative gearing, which increases values a bit as you know. Finally, many in Oz own homes (rather than having a never ending mortgage). One of the positives of life here is that there is (currently) no tax on sale of your principal residence after being in it for 12 months (ie, no tax on inflationary increases, real increases, improvements, etc.) so many use this as a retirement investment. Just for interest.

http://www.allhomes.com.au/

RE: Oz citizenship. I also went through this process (twice actually), so have more than a small clue. Oz is currently "importing" vast numbers of Chinese, Indians and Filipino.

Oz, historically, loved to get folks from the US. Fact is, I don't know of anyone without criminal convictions, who didn't get in. My best guess is that your entry point (justification) is "business visa" as, from memory, there is no age limit. So you are going to create an AustAsian growth centre for your books and products (into the great, untapped Asian market, rah rah), way to go!

http://www.immi.gov.au/media/fact-sheets/27business.htm

Note that the 4 year "provisional" thing gets you through the door … I doubt very very much if you would get turned away anywhere along the line. US ties to Oz are strong, and they don't piss with them. They tell you all sorts of negatives to see if you will back off; but if you keep going, you'll find a way and the bureaucrats won't stop you. My experience and many others.

John T. Reed


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