For those waiting with bated breath for my assessment of Mérida, capital of the Yucatan, as a place to emigrate, it's a go. Mérida is a safe, compact, inexpensive and convenient city. You can walk most places you'd want to go, busses are about 50¢ a ride, and you can get to the beach in less than a half hour. There is free entertainment every night of the week including dance and music performances and art shows, there are also ancient ruins to explore, and significant colonial architecture to appreciate. And real estate is priced right; here's an example: http://tinyurl.com/yj3o8cg
And surprisingly, Mexico does a lot of things right in managing its economy, things the US is starting to figure out the hard way.
But I'm not the first citizen of a First-World country to think about escaping becoming an immigrant. Let's briefly look at who else might want to get off Hamster-Wheel Planet.
Way to go Reykjavik!
Do the Icelanders rock or what? They were the first First-Worlders to overthrow---not vote out, throw out---a government. Voting was roughly 98% "No" on the recent referendum to reimburse citizens of foreign countries for their losses connected with Icesave. WTF, is the Iceland government completely nuts to ask private citizens to repay greedy bastards foreign depositors who, looking for above-market yield, yet somehow assuming they were getting a riskless investment, ended up losing money. Where the hell did they get an idea like this? Oh, from the US. Iceland PTB made a big mistake though. You can't ask for a vote, you have to do it in closed sessions, and if the public finds out, ignore them. Yeah, that's right, ignore them completely. Well, if anyone is in a position to smote another across the face with a dead fish, it's the voters of Iceland and they have risen to the task. Victims Citizens have been leaving Iceland in record numbers, both to find jobs (Iceland's unemployment rate is on par with the US's) and to avoid picking up the tab for a bill they didn't incur.
As to the greedy bastards foreign depositors and rapacious ex-leaders of Iceland, Play 'em off Keyboard Cat: http://tinyurl.com/yj7p4wr
From the Heartland: More Reasons to Consider Moving
At a conference last week in Madison, Wisconsin, Marc Faber expanded his model portfolio for US investors to include assets abroad in addition to gold, farmland, and food. He feels it is too late for the US to avert financial disaster and expects runaway inflation. Mish was a speaker at that conference, too. In a debate, Mish took deflation, which he expects to be crushing, to Faber's hyperinflation. I think they're both right; runaway (price) inflation will likely run concomitant with crushing (hard-assets) deflation or, better said, will continue to.
Where Your Pesos Go
OK, back to on topic and the reasons why I really like Mérida: it's the money, honey.
Real estate taxes: As I mentioned before, real estate taxes in Mexico are near zero. However, within 50 miles of a border---as Mérida is---real property must be owned in a bank trust, which runs about $100/month; no biggie. Actual real estate taxes in Mérida would be no more than $100/YEAR, probably less. Most houses are made of stone or block so fire insurance is only needed for contents. I currently pay $16,700/year for tax and insurance vs. paying no more than $1,500/year in Mérida. This alone is plenty of reason to move.
Mexico's Messed up Economy: If you use the US economy for comparison, Mexico's not so bad off. Mexico privatized its social security system after the 1997 Tequila Crisis, so there is no overhang of ever-growing and ultimately unpayable retirement benefits that will bring on the country's financial ruin and a swarm of mad-as-hornets seniors taking to the streets in a few years. Nor does Mexico have a Medicare equivalent ... for the private sector, that is. Mexico is in a similar situation as the US with public employees and I guess we'll have to wait for the next crisis to see how they deal with them, if they do, which they've never done before. Anyway, half the Mexican salaried people have been thrown under a bus and it's a start.
It is only in this current crisis that Mexico is instituting a very limited unemployment compensation fund, which is, I'm sure, an indication of how tough they think things are going to get. However, their benefit period last weeks, not years as the US's does. No food stamps at this point either. In fact, life for the rural poor won't change much. They will continue to live off the land as they always have. For the relatively small middle class, the vast majority own their houses outright so they will not be facing foreclosure or homelessness. Mortgages in Mexico are something new and, for the most part, they have been limited to resort areas. Generally speaking, Mexicans don't have as far to fall as Americans.
Something else to keep in mind, Mexico is an exporter of oil and food; the US is a net importer of both.
I'm not opining as to whether such a threadbare social safety net is good or bad; I'm pointing out that the nuevo-émigré won't have to pick up the tab for legacy entitlements. An interesting note in saving Mérida-style: they use colonial ruins as a store of value. Because the peso is so volatile, some invest in ruins, which have no carrying charges or upkeep expenses. Odd, but I like it.
Crime: Yes, I saw the news. Carnival segued into Spring Fling beheadings in Acapulco. It does every year. As Mérdians will quickly point out, Mérida is a long way from Acapulco and the US border towns.
FYI: the number one cause of unnatural deaths of Americans in Mexico---a natural death defined as something like you were sick and happened to kick the bucket while on vacation---is motor vehicle accidents.
Terrorism: Hugely in its favour, Mexico does not have to protect itself from external enemies nor is it supporting global, occupying armed forces. These are big-ticket items.
Make Believe
Fannie Mae and Freddie Mac have been buying MBS at a clip of $20bn/mth/EACH for about a year. They are the only active mortgage makers in the US. The Fed has been taking as collateral mortgages on the books of the big banks. The mortgage market and, importantly, its losses, has been nationalized. The Fed also has been picking up the slack when there are no natural buyers for Treasury debt, which is a lot of the time. No need to go into the insolvency of the big banks, derivatives, which are growing, the shadow banking system, abandonment of accounting rules, and the like.
We have entered the realm of make believe. If we can make believe we've got enough to eat and a roof over our heads then all will be well. The ancient Mayans prophecies say that we will cease thinking of ourselves as people and if this is the case, we only have to maintain this eating-and-roof-over-our-heads illusion for another two and a half years. On the other hand, the bible predicts fire and brimstone; one more good reason to move to the land of the Mayans.
Keyboard Cat finale: http://tinyurl.com/7fkyqr
