El Conquistqdor Francisco de Orellana

El Conquistqdor Francisco de Orellana
The Conquistador who put the Amazaon baisn "on the map"....Francisco Orellana

Wednesday, January 30, 2013

Could it be true....the new Quito airport opening February 19th??????

Ecuador capital's noisy urban airport closing 

QUITO, Ecuador (AP) -- Landing at Ecuador's capital can be a white-knuckle affair. High altitude, a cramped runway and towering volcanos nearby make it one of Latin America's most challenging airports for pilots. And the constant roar of the planes torments those on the ground as well.

That will change on Feb. 19 as Quito moves its airport to an agricultural setting 12 miles (20 kilometers) northeast of the city, joining other cities that have moved - or tried to move - planes further from people.
Mariscal Sucre airport sat amid cornfields when it was christened in 1960. Over the years, Quito grew dense around it, turning the airfield into a notoriously nerve-racking neighbor, with planes booming in and out from 5:45 a.m. until 2 a.m. without rest.

"The racket of the planes sometimes woke us at dawn," said Maria Davila, 40, who has lived two blocks from the runway since she was a child. "The windows of the house would rattle and it seemed they would shatter."

"I often thought a plane would fall onto my house and kill all my family," she added. "The airport has been a bad neighbor, a very dangerous neighbor."

There are a lot more of those neighbors than when it opened. Just about 350,000 lived in Quito then. The population has grown to about 2.2 million now.

Over the course its life, Mariscal Sucre has seen 10 serious accidents. In 1984, a DC-8 owned by the company Aeca clipped some navigation aids on takeoff and plunged onto neighboring homes. Forty-nine people were killed.

Fourteen years later, A Cubana de Aviacion Tupolev 154 failed on takeoff and slammed into the airport's wall, killing 76.

Most accidents were what the industry calls "runway excursions" - as in running off the runway. They tend to plague urban airports with minimal margins for error.

In addition to the cramped runway and nearby mountains, which force a steep angle of approach, the airport sits at an elevation of nearly 8,700 feet (2,850 meters), an oxygen-thin altitude that diminishes aircraft performance on takeoff and landing.

"You have to think ahead of the airplane a lot," said Ivan Rivera, an American Airlines captain with experience flying into Quito. "You have to be aware that those mountains aren't forgiving."

At that altitude, an aircraft must be traveling faster than normal at landing, and it takes longer to take off. And the zigzag, or corkscrew approach, can be unnerving.

Frequent air travelers, even those accustomed to the Andes' choppy air currents, can get anxious on approach to Quito, which handles about 220 departures and arrivals a day, carrying an average of 451,000 passengers a year.

Growing up with the constant roar of jets surging skyward in their midst has engendered fatalism in some neighbors.

Fernando Araujo, a 22-year-old university student, plays soccer just outside the northern end of the runway and said he's not bothered by the gleaming hulks of steel that pass just over the field.

"I'm not at all afraid. We're accustomed to the planes' takeoffs and landings," he said. "Only God knows when we'll be taken, so we're relaxed."

The new airport at Tababela is built to handle 290 flights a day and has a runway 4,100 meters (13,450 feet) long. That's nearly 1,000 meters (3,300 feet) longer the soon-to-be shuttered airfield.

Other cities in the region have tried to move airports to less troublesome sites. Honduras is planning to move most airline flights out of notorious Toncontin airport in Tegucigalpa, whose short runway and urban location make it the region's most dangerous major airport by many accounts. It was closed to commercial jets in 2008 for six weeks after a Taca A320 jet ran off the runway and into a busy street, killing five, including two on the ground.

Land disputes, however, have frustrated efforts to move Mexico City's airport to more spacious terrain further from the urban sprawl.

Tight space has led the tiny Caribbean islands of St. Barts, St. Maartin and Saba to put up with airports widely considered among the most hair-raising in the world.

Quito's new airfield, which also carries the name of 19th-century independence leader Antonio Jose de Sucre, is bordered by cropland and encompasses nearly 6 square miles (15.5 square kilometers), twelve times the area of the old airport, most of which will now become a public park.

As runway becomes grassy esplanade, a flurry of construction is anticipated nearby. The newly revised code will allow for buildings as high as 40 stories, up from the current four.

"I can't even imagine what it's going to be like without all the noise and fear," said Francisco Cahuines, whose construction supply business borders the airfield's northern end.

There will, however, be one bigdrawback.

While the old Mariscal Sucre could be reached from downtown in 20 minutes or so it will take at least an hour to get to the new airport, and no train-to-the-plane is yet planned.

Ecuadorian president warns of possible ‘CIA attack’ before elections


Ecuadorian President Rafael Correa has said the CIA may try to kill him prior to upcoming elections. Citing reports of a plot to “destabilize the region,” Correa said the threats were “credible,” given the history of US involvement in Latin America.

Correa alluded to reports by Chilean journalist Patricio Mery Bell, who allegedly passed on information to the Ecuadorian government that President Correa’s life was “under threat” by a CIA plot.

“There are many cases of [the CIA] interfering” in Latin American affairs, Correa said during a campaign tour in the coastal province of Guayas. “These are credible [reports] because this has happened before in Latin America.”

Ecuadorean President Rafael Correa (Reuters / Stringer)

The head of the US diplomatic mission in Quito, Adam Nann, responded to Bell’s claims by saying that Washington “would never get involved” in Ecuador’s electoral process.

Although Correa conceded that he believed the statements of the US ambassador, he warned that agencies such as the CIA often follow their own agenda and maintain links with organizations representing the extreme right in the countries in which they operate.
Bell first voiced his concerns for the safety of President Correa three months ago when he released a report claiming the CIA sought to “destabilize” Ecuador. He said that the threat to Correa’s life would be at its height from January 15 and onwards, as Correa applies to run for another presidential term.

“We will have to be three times more vigilant with President Correa,” Bell said in an interview with publication El Ciudadano. Bell maintained that although he was not a staunch supporter of Correa, it was his duty as a Latin American citizen to warn of the alleged $88-million CIA plot to destabilize the Ecuadorian government.

The journalist believes that this money will be divided amongst extremist anarchist, leftist and hardline conservative groups, in the hopes of discrediting Correas.

Bell claimed in his report that the main motives behind the CIA plot were the closing of the US Manta military base,  hailed as a victory for Ecuadorian national sovereignty, and the granting of asylum to WikiLeaks founder Julian Assange.

President Correa is often described as echoing the policies of Venezuelan President Hugo Chavez, especially in anti-US rhetoric. The 49-year-old economist has reduced poverty and increased stability and the overall standard of living in Ecuador during his presidency, winning popularity amongst the country’s poorest as well as the educated middle class.

Correa will run for reelection against six other candidates when campaigning begins on January 15.
Ecuadorians will vote for the next president and vice president on Sunday, February 17.

Tuesday, January 29, 2013

Ecuador Forecast to Increase Coffee Harvest as Rains Stabilize

Coffee production in Ecuador, South America’s second-biggest producer of Robusta beans, is poised to jump 7.7 percent this year as rainfall patterns return to normal, said the National Coffee Council’s lead investigator.

Ecuador will boost output to about 700,000 bags in 2013 from an estimated 650,000 bags last year, Luis Duicela, director of the technical division at the council, known as Cofenac, said today by telephone from Portoviejo, Ecuador. The year is off to a “good start” and plants received enough rainfall during their flowering stage this month, he said.

Ecuadorean producers are recovering from the late, above- average rainfall in 2012, which reduced harvests of Arabica beans and increased diseases like leaf rust, Duicela said. With a normal start to this year’s rainy season in the coastal lowlands, Cofenac is forecasting a “significant increase” in output, he said.

“We’re registering an adequate level of precipitation and a significant increase in production is projected for 2013,” Duicela said. Rains “began on time and there is a good fructification and initial development of the fruit,” he said.

A bag weighs 60 kilograms, or 132 pounds. Brazil is the world’s biggest coffee producer.

To contact the reporter on this story: Nathan Gill in Quito at ngill4@bloomberg.net
To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

Monday, January 28, 2013

The hottest Rental Market in Ecuador......

"This is insane, feels like a job interview."

I thought this week as I found myself being interviewed for the "priviledge" of renting an apartment in Quito.

Next to me was another guy who was being jointly interviewed for the same apartment.

"So why should I choose you?" The owner of the apartment asked.

As I sat up in my chair I replyed... "Well, I'm clean, quiet and pay on time."

Then she asked the other guy the same question and said OK I'll call you tonight if I choose you.

As we left other folks interested in the apartment were entering.

She never called back.

I didn't get it.

Now, I've rented in hot rental markets like San Diego, Honolulu, Madrid and China, but I've never seen a place where its so competitive to find a decent rental at a decent price.

The demand is huge.  Certainly one of the best opportunity areas to own a rental in Ecuador.

It's definitely not like the vacant, abandoned buildings in many areas of my home city, Cleveland, Ohio.

Quito is at capacity.

But I'm not surprised.

The planes to Ecuador are packed.

People are coming in droves.

The price is right.

Like one friend told me Brazil was like 10 years ago.

Now, the planes to Brazil are practically empty.

It's too expensive due to the exchange rate.  Nice country, but they've priced themselves out.

The sweet spot right now, or the rentals that get taken the quickest in Quito are the ones in the north of the city anywhere from the Mariscal/Floresta/Catolica area of Quito up until about the area of the "Y" and the Jipijapa area.

The most in-demand area is the very centric Carolina Park area near the biggest malls in Quito like Quicentro.

That's where most locals and foreigners alike want to be.

The long-term rental apartments that go the fastest are the 2 bedroom ones in the above area in the $250-400 a month range.

Literally, for decent rentals in the above-mentioned area in this price range if you publish an ad in the local paper by the afternoon you've found a long-term tenant.

Really its the quick.

And the wait is only a bit longer if your rental is higher-priced.

Now, you could buy in this area starting around $35-45k and if renting long-term for the above prices would generate a 10% annual return not to mention the capital gains the market is experiencing.

Annual property taxes for an apartment in Quito of this value usually run less than $100.  And condo fees are usually less than $40 a month, and the tenant usually pays that.

Nicer and newer 1 and 2 bedroom apartments in the same area can go for around $60k and you could command a bit more rent.

Quito rentals are hot indeed.

Dom Buonamici
Murali B&B Airport Guayaquil

With U.S. Property So Cheap, Why Buy Overseas?

By Dan Prescher
International Living.com
I just received an email from an International Living subscriber asking a question that is becoming more and more common in my inbox. To paraphrase: "With the price of real estate so low in the U.S. right now, why would anyone move abroad?"
Fair question. And if your only reason for considering a move abroad is to find inexpensively priced property, the answer is obvious…you really don’t need to.
As everyone knows, in some specific U.S. markets real estate has been eye-poppingly cheap for several years. The word on the street right now is that prices are on the rebound, but this info seems to come mostly from real estate agents themselves. Any way you slice it, if you look hard enough you can find property in the States that is priced as low as almost anywhere else in the Western Hemisphere.
But when you do the research and run the numbers for yourself, make sure your numbers don’t stop at the basic sticker price of real estate. Sticker price should be just the start of your numbers, whether you’re a pure real estate investor or you’re investing in your own long-term lifestyle, health, and happiness. The numbers on the "Recurring Expenses" side of the ledger will mean more to you in the long run, no matter how low the initial cost of a property.
If you’re looking for a house or condo or plot of land for any other reason than price alone, buying cheap in the U.S. doesn’t really accomplish much.
Your utility costs will still be higher than in most of Central and South America. Same with your property taxes, which ran me and my wife, Suzan, about $40 on our Ecuador condo for the entire year of 2011. Your medical care won’t magically become as inexpensive as it is almost anywhere else in the world. Your selection of corporately grown and transported food at the local supermarket probably won’t change into fresh produce from the local mercado.
And no matter which side of the fence you’re on, it doesn’t look like the tone of politics is going to change for you much in the U.S. either.
If you’re a straight-up investor, none of the above may factor into your buying decision. But the costs of carrying a U.S. property until it can eventually be sold into a bottomed-out market can be prohibitive. (That’s one reason pure investors still find overseas real estate so attractive. Taxes and utilities are often so low that it’s affordable to simply buy and hold. )
However, most of the folks I talk to about moving abroad are interested in just that… moving. Affordable property is a huge plus, and it’s available all over the world, but that’s just the tip of the iceberg. In fact, some of the folks I talk to have run the numbers and found that renting in certain destinations abroad is actually a better idea for their particular situations. Owning property isn’t even on their radar.
So, while it’s nice to find inexpensive property, it’s what happens afterward that makes the difference to someone thinking about moving abroad. And for most of the people I talk to, what happens afterward is all about quality of life.
That’s why I find that for most people, the question isn’t, "With the price of real estate so low in the U.S. right now, why would anyone move abroad?"
The question is, "Whether you buy or not, if you could live a happier, healthier, more stress-free life, including perfect weather and quality medical care, for half or less than you’re paying right now…why wouldn’t you move abroad?"
Of course, all things being equal, there may be compelling reasons to stay put, even if you take better quality of life out of the equation. Many people aren’t in a position to make a major move anywhere, much less outside the country. And just as many people consider it a fair trade to deal with their current situation at home in order to be close to family, friends, and the society and culture they’re used to.
Everyone makes those decisions for themselves and for their own reasons. But cheap real estate? It’s all over the planet.
The pursuit of long-term health and happiness at a price that suits your budget and weather that suits your clothes?
That should be your goal.

Monday, January 21, 2013

Germany calls in her foreign gold holdings

Buba wants her money back. (Her real money, that is.)

Earlier this week, Germany’s central bank, the Bundesbank, announced it would commence repatriating its vast offshore gold reserves, the second-largest stockpile in the world after that of the United States. Gold rose a bit after the news, but not much. It’s up about $20 for the week, still comfortably within medium-term trading range.

Really, gold? We expected more... This is big news, after all.

The folks over at ZeroHedge have been all over this story. Here’s Mr. Tyler Durden, putting things in perspective:

“[T]his is a momentous development, one which may signify that the regime of mutual assured and very much telegraphed — because if the central banks don’t have faith in one another, why should anyone else? — trust in central banks by other central banks is ending.”
Officially, Germany claims 3,396 tons of the shiny yellow metal...though only a third of it currently rests within its own borders. Almost half (45%) of the stash is vaulted some 80 feet beneath the streets of Lower Manhattan; roughly one tenth (11%) lies under the Banque de France. But now Buba wants it back. The Bundesbank will make a 300 ton withdrawal from its deposit in New York and a 374 ton, complete withdrawal from its holdings in France.

Just to reiterate that last point...Germany will withdraw ALL of its gold currently held in France. All. (of.) Its. Gold.

Now, what possible reason could the German government have for wanting to keep its hard asset currency close to home? Does it know something about the future of the euro that we don’t? Has Buba fallen out with the Feds and the Frogs?

Back in October of last year, the Bundesbank was enthusiastically making the case for keeping gold abroad, arguing that:
Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity.
So, there’s no reason to doubt the security of Germany’s gold deposits? Or to question the “key role that the US dollar plays as a reserve currency in the global financial system”? And certainly there’s no reason to make any large, sudden withdrawals, right? Again, from the Bundesbank’s October statement:
There was never any doubt about the security of Germany’s gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible.
Indeed, as recently as last November, Andreas Dobret, a member of the Executive Board of the German Bundesbank, could be heard yapping about the “excellent relationship between the Bundesbank and the US Fed.”

In a speech given that month to the Federal Reserve Bank of New York’s Bill Dudley, Mr. Dobret responded to what he called “the bizarre public discussion we are currently facing in Germany on the safety of our gold deposits outside Germany,” by calling it “a discussion which is driven by irrational fears.”

What happened to those “irrational fears,” Mr. Dobret? Did they suddenly become uncomfortably rational?

German gold reserves peaked out at about 4,000 ounces back in 1968, three years before Richard Milhous Nixon unilaterally terminated convertibility of the Greenback to gold and five years before the Bretton Woods currency exchange markets closed (only to be opened as a “floating currency regime” shortly thereafter). A piece in The New York Times this week noted that, “The end of Bretton Woods in 1973 eliminated some, though not all, of gold’s importance as a universal currency.”

It’s certainly true that pointy-headed academics were talking individuals out of gold long before this moment in time...and that folksy billionaires have continued to do so since. But we have a feeling gold is about to get a whole lot more important. Again. Historically, gold has proved itself a reliable insurance against the corruptibility of men in positions of power...positions of power that routinely attract and promote corruptible men.

“The global monetary system rests on a fragile foundation of trust,” wrote Dan Amoss in these pages on Wednesday. And when that trust erodes? When the words “full faith and credit” are emptied out and nothing is found inside them? Well, it might then be time for something drastic, something to usher in a new age for the “once and future money.”

Joel Bowman, reckoning today from Buenos Aires, Argentina

Gold And Silver Fly Out Of U.S. Mint

 January 21, 2013 by  

More Americans are becoming wise to the debasement of the U.S. dollar and destruction of the economy by the ongoing quantitative easing to infinity money printing and massive deficit spending, as evidenced by the surge in the sale of physical gold and silver by the U.S. Mint in recent weeks. They are recognizing the system is in its death spiral.

As of Jan. 15, the U.S. Mint had sold 110,500 ounces. That put it on track to exceed the 127,000 ounces sold in January 2012 and exceed the highest monthly tally since 1999.

Silver Eagles started slowly but picked up in the second and third weeks of January. As of Jan. 15, more than 5 million ounces of silver had been sold by the Mint. That had it on pace to exceed January 2012’s record of 6.1 million ounces. Demand for Silver Eagles was so great, the Mint had to suspend sales because it ran out of coins. Sales will not begin again until Jan. 28.

Gold and silver are the only true store of value. Those green paper slips you hold in your wallet are worthless and worth less by the day. It is all funny money, as evidenced by the serious discussions recently of simply minting a platinum coin and claiming it to suddenly be “worth” $1 trillion.

Gold is currently selling for about 1,690 of those green slips; silver for about 32. I expect gold to run past $2,000 per ounce in the coming months and silver to exceed $400. This will happen when JPMorgan Chase and Co. and the other manipulators crash. And how can they not, when they are trading fake silver back and forth to rig the price?

COMEX futures and options showed that full-year trades of silver were 98 billion ounces in 2011. That was a record year for silver mining, but still only 782 million ounces were mined. In addition to coins and jewelry, silver has industrial uses. The traded 98 billion ounces were all derivatives and computer clicks and are as phony as the derivatives market that exploded the market in a massive crash in 2008.

Buy and hold physical silver, as much and as fast as possible. Find a reputable local coin dealer in your area. Pre-1964 “junk” silver U.S. coins are the best buy.

Buy and store guns and ammo when you can find them. Store food and water. The year 2013 will be an adventure, but not so much fun for the unaware and unprepared.

How to Create Monsters

Created on Thursday, 17 January 2013 15:30
Written by John Horvat II

Imagine if police in a major city were to uncover a plot in which a serial killer was found to be planning to use the Internet to unleash a cult of followers who would also engage in serial killings. Imagine further, if police found as evidence an ice pick impaling a woman’s eye.

Such a revelation would be enough to dominate the headlines at least for a couple days even in our sensationalist culture. It would unleash calls for limiting the use of weapons employed in the planned crimes. It would give rise to endless commentary and futile soul-searching by those who would ask how society failed the unfortunate individuals involved. And then all would fade into the background without resolution

The above mentioned plot was not uncovered by police. It is, however, the plot of a new television series that premiers this January on Fox television. The 15-episode series called “The Following” has in its first show the image of an ice pick impaling a woman’s eye. Apparently the show would have been even grislier had not the network itself stepped in and insisted that the program conform to certain “guidelines.” The producers were asked to tone down a slit-throat scene.

“The Following” is not a particularly exceptional program; it is one among many such shows that producers hope will boost ratings. Not even the recent massacres seem to have hindered its release. For producers, it is blood and gore as usual.

Such a program should raise questions as to the higher purpose of the arts, what lessons are to be learned or what values are being imparted to the audiences. However, the media admit no high purpose to the arts they produce. They claim such programs are there to entertain or amuse. It’s just entertainment. “The Following” is a thriller that must produce thrills. In a society where the sense of horror is dulled, programs must present ever more grisly scenes to produce its thrills. Media claim they are simply following the market.

Such groveling to base instincts is not the purpose of the arts. Art used to express the spirit and beauty of a culture. Today, the arts, if they can be called such, are made to produce sensations and thrills. Arts should inspire and uplift. They now fascinate and degrade.

The object of the arts should be toward those sublime things that should serve to inspire society toward the good, true and beautiful. A culture turned towards the sublime uplifts those who would otherwise detain themselves with the purely ordinary and common. Art should draw individuals outside themselves in wonder, and so opposes the inward egoistic vices that drive people to disgrace. Such inspiration makes men capable of dedication, admiration and great feats. It ultimately leads men to God.

Modern programming does the opposite. It serves to break down the barriers that separate men from the horrors of their basest acts and instincts. It encourages and glorifies the breaking of taboos, conventions and morals. Despite denials from the media, these programs do impart a wrong message and a macabre agenda that tends to the bad, the false and the ugly.

In the soul-searching over how America has become a land of violence, people ask how it is possible that society has produced individuals capable of such monstrous crimes. Part of the answer lies in the fact that television and media have become the how-to manuals of those who become monsters.

We need a return to order.

Wednesday, January 9, 2013

How to buy a car in Ecuador

Most expats in Ecuador don't own cars.

It's just a fact that with all the cheap/frequent public transport having a car is not a "necessity" just merely a "luxury".

But several expats, maybe you too, shy away from buying a car cause they don't really understand the process of both purchasing a vehicle and what's needed to drive in Ecuador.

But it's nothing to fear and actually not that complicated.

The process to buy a car in Ecuador: 

After agreeing to terms with the seller, you're going to want to check their registration card (Matricula).  On it there will be the name of the owner and the VIN of the car.  Verify the vin by popping the hod of the car and physically checking and verify the owner by having him show you his Ecuadorian ID card (cedula) or passport.

Many in Ecuador buy and sell cars and thus are selling a car that is not in their name, all they have is an open contract from the previous owner that they are waiting to put the new buyer's name on and a copy of the previous owners "cedula".

I recommend only buying a car from the person that is the registered owner.

You can then run a check to see if the car has any unpaid leins against it or outstanding fines through the website of the DMV of Ecuador called the ANT, http://www.ant.gob.ec/index.php/consulta-de-multas AND through the website of the National Police http://www.policiaecuador.gob.ec/index.php?id=infracciones_de_transito .

All you need is the plate number of the car to do the search.

To double check you can also go to the office of the JEFATURA DE TRANSITO in your town and verify the car is really owned by the person appearing as the owner on the matricula they are showing.

With the plate number you can also check to see if the car is stolen online here.  http://www.policiaecuador.gob.ec/index.php?id=vehiculos_robados

If everything checks out and you'd like to continue with the purchase the next step is to write up the sales contract and get it notarized.  Notaries usually charge around $50 for this service.

Once you have the notarized bill of sale you can take it to the nearest SRI office (the Ecuadorian IRS) and pay the 1% transfer tax based on the value of the vehicle to put it in your name on both a national and police level.

The last step would be to go and register the car in your name in the DMV of Ecuador (ANT or COMISION DE TRANSITO).  But if the car still has a bit of time left on the current registration (you need to renew once a year) you can drive with your license (from any country), the notarized bill of sale and the registration (matricula) which is not yet in your name but still current just fine until the current registration expires, according to the Ecuadorian police.  Registration costs around $150 annually.

You will also need to make sure the car has the basic liability insurance paid required by law (the SOAT).  The SOAT insures all the medical costs people involved in a car accident may have.

What it does not cover are the cars involved.  For example, the cost of the SOAT for an $11,000 car in 2013 is $27 for one year of coverage.

Private companies like Generali also provide more comprehensive car insurance in Ecuador.  For example, to insure an $11,000 car full coverage runs about $450 annually.

So to recap, whenever you drive in Ecuador you will need to bring your license from any country, your matricula card of the car you are driving (registration), and have the SOAT card on hand.  And if the matricula is not in your name you'll want to have the notarized bill of sale or the rental contract in the car as well.

hasta pronto,

Dom Buonamici
Murali Hostal Airport Guayaquil - At only 3 hours form Cuenca and 2 from the coast, Guayaquil is your ideal jump off point in Ecuador.

Monday, January 7, 2013

Zombie Nation

It seems that Bill Bonner had lost his touch....since returning to live in the USA. But he can still roll it out........

The Daily Reckoning Presents
Zombie Nation
By Bill Bonner
Creating and sustaining a nation of zombies is expensive.

Large sections of the US population have been turned into zombies. Retirees. Medicare dependents. Food stamp recipients. Disabled people. They are not necessarily bad people. They are not necessarily dishonest or lazy. But rather than add to wealth, they consume it. And when you have too many of them, your society consumes more wealth than it produces and you are on the road to The Downside.

But the feds are not only creating individual zombies, they are also creating corporate zombies. An obvious example: “green” energy. Without subsidies, loan guarantees, tax benefits and direct giveaways, the industry as we know it would not exist. Nor would the ethanol industry in the Midwest. Nor the security industry in the Northern Virginia suburbs of Washington, DC.

The financial industry too, as we know it, would not exist either. Much of it would have been swept away in the financial storm of 2008-09. That story is well-known, but not well understood. Most people believe the authorities acted heroically, saving the nation from a depression. But what the authorities really did was to take the public’s money and give it to cronies on Wall Street in order to prevent them from suffering the losses they deserved. The government transferred nearly $2 trillion in various forms from the public purse to the pockets of the financial industry. With that kind of backing, most of the old investment firms survived. The new ones that might have replaced them never saw the light of day.

Industries need to be sustained by the government when they cannot sustain themselves. This is practically the definition of “malinvestment” — putting capital and energy into investments that don’t pay off. When an industry is only profitable with government backing it means that the industry uses resources — labor, energy, raw materials — and turns them into finished products that are worth less than the inputs required to make them. The more of these zombie industries the government supports, the poorer the society becomes.

“Rentier” is a French word that has leaked into English. It doesn’t mean zombie literally, but it describes people who have found a way to exploit the system for their own benefit — people who have legal entitlements to income streams. In other words, “rentier” describes a class of folks who contribute absolutely nothing to national prosperity — zombies.

Before the French Revolution, favored groups were able to secure special privileges and monopolies giving them the right to income. For example, the people from whom we bought our first house in France had a monopoly on the importation of tobacco from the New World. I don’t know who granted this monopoly, but typically it was the monarchy. And typically, such monopolies were given away either to appease a potential adversary or simply to raise cash for the crown by selling off a stream of future income.

The French crown was always short of funds. It found it could raise substantial sums by selling the right to earn a “rent.” It might sell the right to collect tolls on a highway or a river, for example. Or it might sell the right to collect taxes (thereby getting its own tax revenue up-front and letting the rentier deal with the hazards of collection).

Any official document needed an official stamp. Naturally, the crown sold off the right to stamp documents. If you wanted to make a business deal, buy or sell land, or get married, you had to pay the person with the stamp.

Over time, the rentier class grew larger and harder to support. More and more of the kingdom’s energy went to support what was essentially a group of parasites who produced nothing. This is part of the explanation for the French Revolution. The system became so inefficient and was made so fragile by waste that a relatively minor setback — a couple years of bad harvests — caused widespread hunger and revolt.

In modern, developed societies “rents” come in many forms. They are often granted to favored groups in exchange for political support. Old people vote, for example. Political parties seek their votes by promising ever-larger health and retirement benefits. Rich people make campaign contributions. Politicians typically grant them favors too.

By the close of 2012, there were zombies everywhere. Throw a cream pie from almost any street-corner and you were almost certain to hit one in the face. If the street-corner were in Washington, DC, you’d probably hit two or three of them.

A recent report in The Wall Street Journal confirmed that zombies don’t work very hard. The Bureau of Labor Statistics has been compiling detailed data on how people use their time. Researchers tracked how many hours people slept, ate, watched TV and worked. And guess what? They found that federal government employees put in 3.8 fewer 40-hour weeks than employees in the private sector. Here, the cost of zombification is clear: if the zombies were forced to work the same hours as people in the private sector, the government would save $130 billion a year.

Meanwhile, over in the pentagon, R. Jeffrey Smith had his eye on the zombies too:

Of the many facts that have come to light in the scandal involving former CIA director David H. Petraeus, among the most curious was that during his days as a four-star general, he was once escorted by 28 police motorcycles as he traveled from his Central Command headquarters in Tampa to socialite Jill Kelley’s mansion. Although most of his trips did not involve a presidential-size convoy, the scandal has prompted new scrutiny of the imperial trappings that come with a senior general’s lifestyle.

The commanders who lead the nation’s military services and those who oversee troops around the world enjoy an array of perquisites befitting a billionaire, including executive jets, palatial homes, drivers, security guards and aides to carry their bags, press their uniforms and track their schedules in 10-minute increments. Their food is prepared by gourmet chefs. If they want music with their dinner parties, their staff can summon a string quartet or a choir.

The elite regional commanders who preside over large swaths of the planet don’t have to settle for Gulfstream V jets. They each have a C-40, the military equivalent of a Boeing 737, some of which are configured with beds.
And then, even after they retire...the zombies keep feeding off the productive sector:
Updating a 2010 Boston Globe report that documented the practice, CREW found that over the last three years, 70 percent of the 108 three-and-four star generals and admirals who retired “took jobs with defense contractors or consultants.”

As Sen. Claire McCaskill, D-Mo., put it during a 2009 hearing on Obama’s nomination of former Raytheon executive William Lynn to become the deputy secretary of defense, “it’s an incestuous business, what’s going on in terms of the defense contractors and the Pentagon and the highest levels of our military.”
During the Presidential campaign, Mitt Romney mentioned that 47% of American households now receive some form of support from the government. In a better democracy, none of those people should vote. They all have a conflict of interest. They should admit that they find it difficult to separate their own personal interests from those of the nation and abstain from casting a ballot. Instead, they “vote their own pocketbooks” — usually coming down on the side of diverting more resources from the productive sector to their own personal consumption.

The zombies corrupt the system. The march to Stalingrad continues. And the Downside takes over.


Bill Bonner
for The Daily Reckoning

Saturday, January 5, 2013

Uncivilized Investing

By Dan Amoss
Uncivilized times call for uncivilized investments.

Charlie Munger, Warren Buffett’s partner in crime at Berkshire Hathaway, told CNBC recently, “I think gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939, but I think civilized people don’t buy gold. They invest in productive businesses.”

In a way, Munger is correct. Gold is uncivilized in the sense that it functions best when civilization functions worst. The more uncivilized a society becomes, the more civilized gold becomes.

So the easiest way to dismiss this statement is to say that maybe it’s 1939 again and maybe this time “we’re all Jewish families in Vienna.” But let’s not let Charlie off the hook so easily. Instead, let’s “unpack it,” in the words of our tutors at St John’s College in Santa Fe, New Mexico. To ‘unpack it’ we need to focus on two key words in Charlie’s statement: “productive” and “civilized.”

Charlie might be right if the world were, indeed, civilized. But maybe the modern world isn’t as civilized as he thinks. Part of what made the world so uncivilized in 1939 was unsound money. The abandonment of the classical gold standard in 1914 made the expansion of the Warfare state possible. The equally unsound system that emerged from World War I — including the Treaty of Versailles — virtually guaranteed that monetary and fiscal instability would lead to political instability. Radical parties like the Nazis flourished.

Gold, on the other hand, is sound money. You are not buying it for a capital gain. You are buying it, by our reckoning, as a way of preserving purchasing power. You extract paper from the fiat money system and turn it into something (bullion) you can later exchange for whatever currency emerges when the financial system becomes more civilized.

Interestingly, for more than a decade Berkshire has underperformed gold — the investment asset Buffett recently called “forever unproductive.”

Since 1997, Berkshire’s shares have declined relative to this forever unproductive asset. The nearby chart depicts the trailing 10-year return of gold since 2007. Thus, the first data point on this chart shows the return an investor would have received from buying gold or Berkshire Hathaway in 1997. Moving across the chart to the right shows subsequent 10-year time frames. Bottom line: Based on a 10-year holding period, there has not been a single moment since late 1997 what an investor would have been better off buying Berkshire Hathaway instead of gold.

No wonder Charlie is so cranky!

This lengthy underperformance by Berkshire may explain Buffett’s and Munger’s very vocal and public hostility toward gold. Or maybe that’s just a function of both men living most of their adult lives in an era where the monetary system was not disintegrating. They are unable to imagine it.

But the chart above isn’t an indictment of the investment acumen of Buffett and Munger. It’s an indictment of the world’s fiat monetary system! A civilized society with civilized people has sound money. An economy with sound money has price stability. This stability allows for long-term planning and investment. This stability rewards investors for identifying which businesses are the most productive and efficient users of shareholder capital.

For these exact reasons, William McKinley campaigned for President in 1896 and again in 1900 as a champion of the gold standard. He won...twice. But just 12 years after his assassination in 1901, the Era of Incivility began: The Federal Reserve came into being. Just 20 years after that, FDR confiscated all privately held gold. And 38 years after that, Nixon cut the dollar’s last remaining ties to gold, thereby establishing today’s very uncivilized “fiat money” system.
In an uncivilized society, where the value of your labor is stolen through inflation (made possible by an unsound money system) long- term planning and investment become much more difficult, if not impossible.

If you accept that we live in civilized monetary times where productive labor is actually rewarded, your brain has been tranquilized by the Big Lie of our times. Munger wants you right where you are. The less you think about how uncivilized the current monetary system is, the less likely you are to question it or disrupt it (which would be inconvenient for Charlie).

But if you live an era that subverts accurate valuation of productive businesses — an era that subverts the productivity of the economy itself by encouraging debt and consumption, owning gold seems prudent, not wacky.

Uncivilized times call for uncivilized investments.


Dan Denning
for The Daily Reckoning

Ok....seriously.....can you guess which country this is?

And the Winner Is...
By Eoin Bassett

Exotic tropical islands, temperate mountain valleys, miles of deserted beaches, First-World cities packed with ultra-modern amenities, and ancient vineyard-shrouded hill towns...
Among the top retirement spots in the world this year, you’ll find great variety in the cultural offerings, climates and lifestyles.
Each destination is desirable in its own way, but they all offer something increasingly hard to come by at home: A good quality of life for a reasonable price. Among these 22 destinations, you’ll discover places where you can save tens of thousands of dollars on world-class health care administered by English-speaking and U.S.-trained doctors...find beachfront condos for less than $90,000...and see that a couple can live well on just $900 a month excluding rent.
Now, no "formula" can spit out the name of the place that’s just right for you. After all, your priorities are uniquely yours. You need to consider what’s most important to you—maybe climate, maybe language, maybe cost, maybe distance from home—and use this index to target accordingly the places you want to explore. The only way you’ll really know if a destination makes sense for you is to go and see it for yourself.
Each year as we compile this Retirement Index, we strive to improve it. We collect more—and more diverse—data. We interview more—and more varied—expats to get the real-world information that keeps our assessments current. This index is, by design, subjective. It wouldn’t be half as helpful if it weren’t. We bring to it more than three decades of expertise and the insights from an international network of correspondents living overseas today and scouting the world on your behalf.
But only one destination could come out on top. And, as expats there tell us, our winner deserves its place.
"Our life here is everything we hoped for," says expat Mike Grimm, who made the move two-and-a-half years ago with his wife Patty. "We’re totally happy and plan to live here the rest of our lives."
There’s so much to choose from, that whatever your taste or budget, you’ll find somewhere to call home here. Whether you’d prefer to live alongside a gently flowing river in a scenic valley, or favor the cosmopolitan lifestyle of big-city living, or want to relax in smaller communities...our winner exceeds even the loftiest expectations. And wherever you go, you’ll meet friendly locals who are happy to welcome you to their beautiful country.
Moving here is easy. For a start, you can import your household goods duty-free. And this country offers some of the best-value real estate in the world. But for many, the true draw is the perfect climate.
The country also boasts top-notch hospitals, clinics and well-trained physicians. All residents are eligible to participate in the country’s Social Security health care system for incredibly low monthly premiums.
Out-of-pocket expenses for doctor visits, procedures, and drugs are a fraction of what you would pay in the U.S. When our insider visited his GP recently, it cost just $25—no waiting—and follow-up visits were free.
And that’s not all that’s cheap here, he says.
"You’ll have dinner out for $2.50, an hour-long massage for $25...a beer costs $0.85 and I know couples living on less than $900 a month excluding rent."
If you want to keep busy with work, it’s one of the best countries for an expat start-up. There are expats here running restaurants, gyms, schools and making money through import-export.
And if all that wasn’t enough, you’re respected in this country as a senior. Seniors who are residents qualify for half-price entertainment and local transport, discounted airfares, and refunds of sales tax. They’ll even let you cut in line at the store!

Ecuador ranked top nation for US, Canadian retirees

NEW YORK - With its low cost of living, balmy climate and cheap property prices, Ecuador has been ranked the top foreign retirement destination for North Americans for the fifth consecutive year.
The South American nation bordered by Colombia and Peru scored the highest marks in InternationalLiving.com's annual ranking of the best places to retire.

With monthly estimated living expenses ranging from $900 to $1,400, Ecuador surpassed Panama, Malaysia, Mexico and Costa Rica, which rounded out the top five countries.

"I think the combination of a welcoming culture, the great weather, the affordability and its proximity to the United States all go together to make it a good package," Dan Prescher, the special projects editor for the website, said on Thursday.

"Panama has a lot of the same things going for it, but it isn't quite as affordable as Ecuador," he added in an interview.

Editors at InternationalLiving.com analyzed data and information from correspondents in the countries most popular with American and Canadian retirees to compile the results, which were based on a host of categories: cost of living, climate, property prices, healthcare, ease of integration, retirement infrastructure, entertainment and amenities and special benefits for retirees.

A large part of Ecuador's appeal is how inexpensive it is for retirees. A beer costs just 85 cents. A doctor's visit is $25, roughly the same price as a one-hour massage.

"Seniors resident in Ecuador qualify for half-price entertainment and local transport, discounted airfares and refunds of sales tax," Prescher added.

Panama, which came in a close second, won praise for its pensioner visa, which speeds up residency, retiree discounts on medicines, entertainment and restaurants, and its friendly people.

Malaysia, the only Asian country to make the top five, drew retirees to its shores with its tropical climate, low cost of living and cheap rents, similar factors that boosted Mexico and Costa Rica's appeal to retirees.
Most of the better countries for retirees were Spanish speaking, including Uruguay, Colombia and Spain.Thailand, which placed ninth, was the only other Asian nation to make the top ten, thanks to its affordability, exotic locales and outdoor lifestyle.

Although the language may differ, Prescher said retirees adapt easily because they usually choose a country with a culture familiar to them.

"Most people know or can learn enough Spanish to get along," he added.

Malta squeezed in at No. 10, winning points for its very low crime rate, Mediterranean climate and abundance of English speakers. English is the second language of Malta, which is a European Union member.
Ireland, France, Portugal and Italy were other EU nations that made the ranking of 22 countries, along with the Philippines and New Zealand, which scored the worst for the cost of living, along with France, but ranked high for integration.

"The places that have been popular with expats for the last five to 10 years tend to stay in the rankings unless something drastic happens, a big political or economic change," Prescher explained.

The 10 Best Countries to Retire to in 2013

Jacquelyn Smith, Forbes Staff

Planning to retire abroad? Ecuador is the top spot for North American retirees, according to InternationalLiving.com’s newly-released Annual Global Retirement Index 2013.
This is Ecuador’s fifth consecutive year at the top of the heap.

This annual Index—now in its 22nd year–ranks the best international retirement destinations. To compile the ranking, InternationalLiving.com editors collated data from its team of experts on the ground in the most popular countries among U.S. and Canadian expat retirees. Editors assessed factors ranging from the price of groceries and average temperature, to utility costs and the friendliness of locals.

The information was then used to score each of the top countries out of 100 in categories such as “Real Estate,” “Climate,” “Special Benefits for Retirees” and “Health Care.

“It’s designed to help readers compare and contrast what we believe are the best options for retirement abroad in 2013,” says Jennifer Stevens, Executive Editor of International Living magazine.

Ecuador's 2012 inflation rate was 4.16 pct

QUITO, Jan 5 (Reuters) - Ecuador's consumer prices rose 4.16
percent last year, the government of the South American OPEC
nation said on Saturday, below its forecast of 5.14 percent.

That was lower than the 5.41 percent recorded in 2011, but
above the 3.33 percent seen in 2010. The success at keeping
price increases in check was a big part of the country's robust
economic performance last year.

Ecuador's economy is likely to have expanded by about 5
percent in 2012, President Rafael Correa said last month. The
growth has been supported by high oil revenues that let him
boost state spending on infrastructure and welfare programs.
The socialist leader has said the inflation rate in 2013
should also be below 5 percent. In December 2012 consumer prices
dipped 0.19 percent, the INEC statistics agency said, compared
with a 0.40 percent rise during December 2011.

Tuesday, January 1, 2013

Chimborazo: A poor-man's Everest

Climbing costs $250, includes guide, dinner, accommodations


he north face of Chimborazo with vicunas running in the foreground. At 6,268 metres, it is the highest mountain in Ecuador and higher than any mountain in North America, Europe or Africa.

Photograph by: Rodrigo Donoso


Mount Everest is the highest mountain on Earth - everyone knows this. But few people realize its geometric supremacy is true only when measured from sea level. If you want to stand atop terra firma's true pinnacle - the place farther than any other from the centre of the Earth - then your destination is a volcano in Ecuador named Chimborazo. This is because the Earth is not a perfect sphere; like me and most of my friends approaching middle age, it has a bulge along its midsection. This deformity is caused by centrifugal forces from the Earth's rotation, which raise sea level by several kilometres near the equator. At 6,268 metres, Chimborazo is well below Everest's 8,840 metres, but measured from an absolute point of reference instead of the malleable oceans, it is more than two kilometres "higher" than Everest.

I first learned of Chimborazo when I passed under its shadow on a cycling trip through Latin America. Its veil of clouds prevented a clear view of its triangular bulk, but a candlelit dining room photograph of its glaciated peak dominating the surrounding landscape haunted me for months afterward. That and the assurance of a local guide it can be climbed easily by a mountaineering wannabe - like me. In the past two decades, guided tours up Everest have made it accessible to non-professionals, however the $65,000 price tag ensures only affluent amateurs get a chance. The cost of climbing Chimborazo is roughly $250 and that includes a guide, dinner and accommodations on the mountain, and a convenient taxi ride three-quarters of the way up.

When I returned to Ecuador to attempt to climb Chimborazo, I was cautiously optimistic about my chances of reaching the summit. Success depends on two things that cannot be predicted: the weather and my ability to acclimatize to high altitudes in a short time. I flew into Quito, which, at 2,800 metres, is second in altitude among the world's capital cities. Only La Paz, in Bolivia, is higher. Quito is a busy city of three million with green mountains looming overhead . And its well-preserved colonial centre provides enough sights and sounds to occupy a wannabe mountain climber for a few days before moving on to higher altitudes.

My next stop was the Urbina train station near the base of the Chimborazo massif. The 100-year-old station house, which hasn't hosted a train in 20 years, has eight guest rooms tucked underneath its pitched ceiling. For four days, I explored the lower slopes of Chimborazo, walking on an ancient stone highway through tiny villages . Gaining altitude, the villages give way to sparse farmsteads where sheep and cattle graze on sloped pastures. The road eventually transitions into a footpath winding up alpine meadows decorated with glacial creeks and flocks of domesticated alpacas and wild vicunas.

When I felt ready to make an attempt on Chimborazo, I recruited one of Ecuador's finest guides, Paco, from the nearby city of Riobamba. Wanting a guide with experience, I was delighted when the 33-year-old Paco told me he had stopped counting his trips up Chimborazo after 200. Neither of us spoke the other's language so our communication relied heavily on gestures and grunts. Nevertheless, I was able to learn that Paco had climbed Chimborazo with a French couple the night before, and that he had not slept before our expedition, which started with a 3 p.m. taxi ride to 4,800 metres and the first of Chimborazo's two high-altitude shelters.
While Paco prepared dinner, I explored the surrounding boulder field that had, over the years, sprouted an expansive collection of tombstones for those who died on the mountain. The several dozen memorials are a sobering reminder to all climbers of the unavoidable risks that exist at high altitudes, and reinforcement that the first priority must not be summiting the mountain, but instead coming back down. I nervously ask Paco about the large number of fatalities, the most recent dating back only a few months.

Between yawns he replied: "avalancha," and resumed cooking.

Because of avalanche danger, the usual strategy for Chimborazo involves climbing through the night so the peak can be reached and the retreat off the glacier completed before the sun has time to warm the ice and reduce its stability.

After a meal of lentil stew, we hiked to a second shelter at 5,000 metres, arriving as daylight faded. I closed my eyes for a few hours of sleep before Paco knocked on my door at 11 p.m. With our headlamps glowing, we stepped out into the frosty darkness.

We clambered up snow-covered rocks for an hour until we reached an icy ridge, where we paused to attach crampons to our boots and a rope to our climbing harnesses. A full moon emerged above the clouds and our headlamps were no longer required. The weather was cold and calm, but to the south dark clouds and flashes of light indicated a storm was nearby. As I watched the clouds stack vertically and the frequency of lightning increase, I meekly voiced my concerns to Paco.

He said a few sentences in Spanish while pointing around, which I interpreted as: "The sky near the summit is calm and we are high above the storm clouds, so the weather is not a concern."

No longer fearing the storm, for the next few hours I affectionately gazed down on billowing clouds and bursts of static electricity; fortunate that from this perspective I was beyond reach of its power and fury, but still privy to its symphonic beauty.

The moon eventually fell below the horizon and our headlamps were pressed back into service. We spent most of the climb trudging up a glacier while skirting steep pitches and crevasses. The only skill required was to follow Paco up the icy slope in a zigzag pattern. My oxygen-deprived brain shut down much of its normal activity and I robotically moved my legs at the same slow pace as Paco.

We climbed higher and as we approached the rim of the summit crater we were blasted by frozen gusts of wind and howling clouds. We were stopping every few minutes but despite ferocious panting, I was never able to fully catch my breath. The fog was too thick to see the topography of the volcano's caldera, but Paco knew the way to the summit. It wasn't until he held out his hand to congratulate me that I realized we had made it. Obviously, he deserved the "fe-licidades" much more than I since it was his second trip to the summit in 24 hours.
It was 5 a.m. and still dark. Originally, I planned to watch the sun rise from the summit, but after only a few minutes of idling, my fingers and toes were frozen numb. Desperate to avoid frostbite on my digits we started the descent. The feeling in my fingers returned within the hour, but it took almost a month for numbness in my toes to disappear.

Our descent was quick and soon we were back where we started. The doubt and anxiety I harboured for weeks about reaching the summit had vanished, replaced by overpowering fatigue. If I wasn't so tired I might have felt proud for having stood closer to outer space than anywhere else on Earth - but, alas, all I could muster was a modicum of relief that I went up a hill and made it back down.

The weather in Ecuador is pleasant year-round and Chimborazo can be climbed in any season. The official currency in Ecuador is the U.S. dollar.

Accommodations in Ecuador are cheap. In Quito, I have paid less than $10 for a private room with a shared bath at the Auberge Inn, www.aubergeinn-hostal.com. There are numerous hotels in and around the centrally located Mariscal district with clean rooms and private baths for less than $25. Rooms at a top-notch hotel like the Royal Quito Radisson cost between $100 and $140 per night. At the Urbina train station, guest rooms start at $14; home-cooked meals are $5 for breakfast and $8 for dinner. If you request the local delicacy, guinea pig, you can hand pick it from the farm across the road. The train station is managed by the tour operator, Alta Montana, www.altamontana.net, and all arrangements for climbing Chimborazo can be made through them.

Air Canada does not fly to Ecuador, but several U.S. carriers do. Delta Air Lines is among the cheapest and a flight from Montreal to Quito connecting through their hub in Atlanta costs between $900 and $1,300. The Urbina train station is a 20-minute taxi ride from Riobamba ($15), which is a four-hour bus ride south from Quito ($8). You can get to Urbina directly on the Quito-Riobamba bus by asking the driver to stop at the Urbina turnoff. The train station is a one-kilometre walk along a dirt road from the highway. Do not attempt this walk if you are wary of dogs because there are always a few patrolling the area.


How One Man Retired in Paradise

A nice story to start the New Year......


 December 31, 2012 RSS Feed Print
Six years ago, Mike Sager was a stockbroker in California with a dream about how retirement could be. He set out to find his own piece of paradise south of the border. “Little did I know at the time that I'd end up this far south,” he says.

Sager’s search led him up and down the Americas, and eventually to Ecuador. “With the economies of the developed world collapsing, an exodus has begun to the undeveloped world. Americans, Canadians, and Brits, especially, but others, too, are looking for options for where to put their money and where to spend their time,” says Sager. “I think of myself as among the front-runners of this emerging migration.

For an American retiree looking for a place to realize the best of his retirement daydreams, Ecuador can make a lot of sense. Geographically, it follows the natural line of migration from the United States, to Mexico, through Central America, and then south. Plus, the weather can be as good as it gets in Central America. When you think of Equator, you probably think of hot and humid weather, but in the highlands of Ecuador the climate is mild and fresh, even cool. Plus, there are no severe weather patterns here, so you generally don’t need to worry about hurricanes.

However, perhaps the biggest appeal of Ecuador for most retirees is the cost of living. It’s very possible for a retired couple to live in this country on a budget of as little as $700 per month.

Sager has chosen to make his home on the coast near the town of Salinas, where he lives on an eight-mile stretch of Pacific coast. "I get up in the morning, make a big mug of coffee, and head out to my deck overlooking the Pacific Ocean. I call it my office,” Sager says. He answers a few e-mails and then plans his day. Frequent activities include boogie boarding, riding his motorcycle, calling a fellow musician to jam, or just sitting there awhile, taking in the view and sound of the waves and breathing in the fresh ocean air.
Soon after he moved here, Sager purchased a hammock and tied it up between two coconut trees on the beach in front of his house. “I sunk into the hammock and sipped the cold brew as I watched the sun disappear into the Pacific,” he says. "We all deserve that kind of experience, those moments that remind you what life is all about.” The important thing to understand is that those moments can be yours easier than you think. All you need is a sense of adventure.

Ecuador is an adventure land, offering a great diversity of landscapes and geography, from the Andes to the lowlands, and a long coast, in a country the size of Nevada. Each region has its appeal, and the best part is they are all very affordable.

“Back in my old life, working in the financial services industry in California, I was constantly stressed about all that had to be done,” says Sager. “Ecuador has taught me to relax and to understand that what needs to get done will get done. My stress is gone. I know it sounds like a fantasy. But I can tell you firsthand that Ecuador can teach you how to let go and enjoy.”

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter. Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Book