Tags

, , , ,

I happened across Expat Forums about a year ago. Not sure how I really got there,  but at the very least, for the sheer entertainment value I started reading around the various forums. It was interesting to take a look at some experiences people were having moving to other countries, and what people’s thoughts were about other places in the world. At the very basic level, I am fascinated by culture the world and people in general, so I was interested in reading some of the stories.

I can say quite frankly that I was amused and enlightened at the same time reading personal experiences from expats all over the world. I closely studied Mexico in particular, because it’s our closest neighbor (other than Canada of course) and the closest to us that is culturally different. Sure our friends to the north are different in many ways, but for comparison sake Canada and the United States are much more closely related culturally than the United States and Mexico.

None the less that’s not the point of this article. If you or your family is seriously considering expatriation, I am sure one of the first things you might do is scour the internet looking for resources to begin your quest to leave the the U.S.A. or Canada, or Western Europe, or any other place on the globe. It’s likely many people have landed on the Expat Forum page. There is a ton on information there.

After months of reading various accounts and exchanged people have had with each other, and their experience in varied degrees of freedom/slavery abroad, I finally realized a few days back that there are articles related to the various country’s. As an example, here is Mexico’s. I was immediately drawn to a pair of articles listed on the site. The first is titled “International People Retire to Mexico” and the second is titled “Hyperinflation in U.S., how will it Affect Mexico?”. Since I consider myself a follower of the Austrian School of Economics, and had an immediate compulsion to read the second article.

The first one is there if you want to read it, but let’s address the second article. Granted it was written a few years ago, although its still on the front page for people looking for information about Mexico. The author begins by linking people to the discussion on the forum concerning the same subject, then proceeds to give his analysis of the events to the readers of the site.

Here is the info linked directly from the article…..

Inflation

These three scenarios are discussed in great detail as are their differing impacts upon the US economy and for example Mexico. Inflation, in moderate terms, is required to keep an economy growing and allows businesses to expand and reinvest for the future. This is pretty much taken for granted and as long as governments are able to keep inflation under control there should be no real problems.

Deflation

Deflation is one of the most hard-hitting and potentially dangerous economic scenarios you could ever imagine. In effect in a deflationary environment the cost of goods and services spirals downwards as consumers hold off on spending, which then leads to significant cost-cutting in the business arena and eventually redundancies. As consumers see their income falling they hold back further on purchases under the impression they will be cheaper “tomorrow” which then forces prices lower, further cost savings in the business arena, more redundancies and less income for consumers and there we have the downward spiral of deflation.

Hyperinflation

While traditionally many people assume that hyperinflation is the figures we have seen in places such as Zimbabwe where the dollar in your pocket will be worth substantially less tomorrow, this is probably an extreme example of hyperinflation. It is widely known that in the current economic environment, where businesses are suffering and prices are falling, the continued rescue packages and fiscal stimulus programs introduced by government around the world have the potential to turn economies around in the short to medium term. As suggested by the Bank of England recently there is a substantial risk of hyperinflation (or possibly just high inflation) as and when an economy turns and consumers suddenly move back into buying mode.

To this end it seems almost inevitable that as and when worldwide economies improve we will see interest rates rocket upwards to try and offset consumer demand (making debt more expensive) and “hyperinflation” although this will be a very difficult and potentially painful situation to control.

If you aren’t utterly baffled by this nonsense, let’s break it down one by one shall we?

Inflation

What? Inflation is required to keep an economy going? So what you are saying is that state sponsored required theft of the populace is required for economic growth? It’s taken for granted? Possibly by the masses, but it certainly isn’t ideal or beneficial for the vast majority of individuals in an economy. Then the author ends with saying, “as long as governments are able to keep inflation under control there should be no real problems.” Again, as long as the theft is minimal and the state schooled population doesn’t notice then it’s ok? As Henry Hazlitt stated in “Economics in One Lesson”, “Inflation itself is a form of taxation. It is perhaps the worst possible form, which usually bears hardest on those least able to pay.” But as long as the state sponsored thugs manages it we are ok right?

Deflation

Where do we even start here? If anyone looks at history like Austrians often do they find the answers. A recent article by Gary North thoroughly debunks the entire argument made by the author. Prices have come down for electronics for years right? It must be tough to be Microsoft or Apple to Samsung these days. With falling prices, people simply wait to buy that new cell phone or laptop, or do they? How prevalent are those devices in modern life right now? I have three cell phones and two laptops in my home. How many would I have if prices never came down?

Hyperinflation

I’m not even sure where he is going here, but it sounds as if he’s saying, “Zimbabwe was an anomaly, have faith in your slave masters, for they will avoid hyperinflation, through as little pain as possible to their constituents. ”

For my sake, I don’t have any faith in anything the government tells me, hence the reason for this site. If you want a more sophisticated answer of what governments may do, revisit Gary North for a possible answer.

If you are looking to expatriate, I would start with The Dollar Vigilante. Among the numerous resources they offer are second passports available at TDV Passports, if you are looking to get your ass out of Dodge, and actually want to deal with professionals who know how to help you.

– Raise the Black Flag –

Advertisements