Editorial Note: Wow! Here we are, worried about all the rain we have had these last few months, yet now I have heard from friends in North America, and what heatwaves!! Frankly I’d rather get a little wet. So here we are with another issue to keep you out of the rain for a bit. Something I hope for everyone, from owning a car, to making a will in Costa Rica. Definately things you need to look into when living here. Also we have a few items on Charity works, wildlife, and this month even something about Beer! One of my favorite subjects for certain. So we hope you enjoy, and please remember that submissions are welcome. - Ryan Piercy
Next Month- how to pre-order your Hoja de Delinquencia online!
This magazine has been published every two months for 14 years as the official communications media of the ARCR. Our organization provides service to thousands of foreigners who have chosen Costa Rica to reside for short periods or for permanent residence. Since 1984 the ARCR has been offering reliable SERVICES, INFORMATION and ADVOCACY to Costa Rica’s foreign residents. We have the experience and ability to help you with your residency application, immigration, business and financial management, real estate purchases and rentals, property management, insurance, pet importation and much more. If you wish to place an ad in El Residente, please contact the ARCR main office. Goods & services offered are paid advertisments. Neither ARCR Administracion nor El Residente research the companies and take no responsibility for the quality of such goods or services.
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Presidents Re epor t by The Board Hola ARCR Members,
more for unlocked). Slipped in the ICE sim card and, voila, I’m in business here in Costa Rica. Went up to the States, bought a cheap U.S. sim card, placed it in the phone, voila, calls in the States. Next, try it in Europe and South America - one phone, different sim cards. Works for me. Any questions, give me a call or email.
Not even going to spend much time on Hola ARCR members. Probably my last (or next to last) the subject but the colone is again strong Presidents Report as new Officers and Board members vs. the U.S. dollar, obviously hurting will be elected at the October General meeting. The date, time, and place will be announced soon, so make plans those of us with dollar incomes. I feel many dollars are coming to Costa Rica (legally or not) as they are attracted to attend. All members are welcome. by the relatively high returns/interest rates available here vs. Our August seminar, held at Fogo Brazil restaurant, was the U.S. and Europe. Even short term. well attended even though a few of our normal speakers had conflicts and couldn’t be there. Ryan Piercy, as always, did a great job filling in and was probably the most prolific, if not the most popular, speaker in the Seminar. As new laws, regulations, etc. come into being, it seems we update and add new material to the Seminar constantly, especially in the areas most interesting to foreigners living here. Come join the Happy Hour after the Thursday Seminar. New attendees really appreciate hearing the first-hand experiences of we expats, “good, bad, or ugly.”
Rain, rain, and more rain and it’s not even Sept/Oct? Many people suffering right here in Costa Rica as well as other countries due to storms. Folks here need a helping hand. On the other side, my backyard is growing like wild, grass, flowers, fruit trees, and an overabundance of birds all colors of the rainbow. What a treat just to watch. And with a good friend, driving around the west side of San Jose admiring the beautiful red flowering trees. Soon to be orange and purple flowering trees. Can’t think of a thing to make me move from Costa Rica. What a place! Terry Renfer A couple items of interest. Immigration is toughening their ---------------------------------------stance on the “perpetual tourist” i.e. the person living in Association of Residents of Costa Rica Costa Rica but leaving every 90 days to renew the visa. If you are in this category and especially if you have assets FIRST FRIDAY LUNCH here, be warned that you might not receive a 90 day renewal but something less with a warning to become legal. Also, The first Friday of each month finds a group of ARCR members for those of us who are legal, i.e., have residency/cedula, and staff sharing lunch and good conversation at Hotel Parque del when renewing same we are now required to show Embassy Lago. Beginning around 1:00 PM members gather in the restauregistration and a Costa Rican police report. Although, my rant. You will find it about 1 block North of the ARCR office. All recent renewal experience in BCR did not seem to require are welcome! those doc’s. Go figure??? MONTHLY NEWCOMERS SEMINAR
In the last couple of weeks, I have talked to several folks who were in the residency process and had paperwork from Costa Rica to prove that. But that paperwork was not accepted by the U.S. airline they were using to return to C.R. The airlines (in a couple cases, U.S. Airways) refused to permit purchase of a one-way ticket and only allowed them to board after buying a round-trip ticket. In fact, in one case, the persons were told they had to be Costa Rican citizens in order to purchase a one-way ticket? Guess the “right hand not knowing what the left hand is doing” isn’t true just in Costa Rica.
Join us on the LAST THURSDAY and FRIDAY of ANY MONTH (except December) to find out more about what it is like to live in Costa Rica, and how to go about getting things done here. We invite professionals from each field to share their knowledge and expertise with you. Hear what they have to say and ask them the questions you have not found the answer to. Email seminar@casacanada.org for more details. HAPPY HOUR
The Happy Hour will now be held each month following the Seminar, set to be at Fogo Brasil located in Sabana Este. This is Something I just “discovered.” Possibly “old hat” to some of specifically 4 blocks North of the ARCR offices. All are welcome! you. As I travel a bit, I have explored a number of different Bocas provided for by the ARCR will be available for everyone... ways to make phone calls in different countries. Generally (cash bar).
all were very costly or very inconveniente Just purchased a GSM, unlocked, 4 band cell phone in the States (pay a bit
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Cover Shot Cricket (polo) has been played in Costa Rica since the turn of the 20th century. At one point there were 46 teams registered in the province of Limon, during its heydey between 1910 and 1939... (photo by M. E. Walker)
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and farcical plays. The group’s monthly social meetings are held in the theatre on the first Monday of the month from 7p.m. to 9 p.m. and everyone is welcome. Membership: Student C2,500, Adult: C5000, Family: C8000. Also, earn your Wings, become an LTG Angel. For more information Call the LTG Box Office 8858-1446 or www.littletheatregroup.org
Alcoholics Anonymous Groups meet daily throughout the country; times and places change frequently. Call for up-to-date information. San José 2222-1880 (Anchor club, also serves Narcotics Anonymous) Av 6 Calle 1, 2nd floor Maryland Building. Heredia (Laura) 2267-7466, Puerto Viejo Limon 2750-0080, Zancudo 2776-0012, Tamarindo 2653-0897, Flamingo (Don) 26544902, Manuel Antonio (Jennifer) 2777-1548, Jacó (Nancy) 2637-8824, Zoo Group Escazu 2293-4322. Al-Anon Meetings Al-Anon Family Group is for all family and friends of Alcoholics. For information in English, please call Martha 2483-1275 or Sandy 2266-1061; For Spanish please call Christine 8840-4658 American Legion Post 10- Escazu Post 10, The oldest and largest American Legion Post in Costa Rica, meets at 12 noon on the first Wednesday of each month at the Bello Horizonte Country Club. For information and map, please call Mel Goldberg at 2288-0454 or 8870-6756, or John Moran at 2232-1680. American Legion Post 12- Golfito Meetings are held 4 pm 1st Tuesday every month at Banana Bay Marina. The Golfito GOVETS have been helping Southern Costa Rica for over 20 years. Contact Pat at walkergold@yahoo.com or 2775-2809. American Legion Post 16- Heredia All veterans are welcome. Meetings are the second Tuesday of the month at Hotel America in Heredia at 12 noon. Contact Post Commander Jim Young or Post Adjutant Ken Johnson at 2591-1695. Bird Watching Club The Birding Club of Costa Rica sponsors monthly trips to observe local and migrant birds in various areas of the country. For more information contact us at 2282-5365 or at costaricabirding@hotmail.com Canadian Club (ACCR) The Canadian Club of Costa Rica welcomes all to join us for our monthly luncheons, and at our annual Canadian themed events. For information visit our website: www.canadianclubcr.com Democrats Abroad Democrats Abroad meets on the last Saturday of every month at the Aurola Holiday Inn, San Jose. Contact Nelleke Bruyn, 2279-3553, e-mail cr.democratsabroad@yahoo.com. Join Democrats Abroad at www.democratsabroad.org. Register to vote absentee at VoteFromAbroad.org! Little Theatre Group LTG is the oldest continuously running English-language theatre in Central or South America. The group currently puts on a minimum of four productions a year offering a choice of modern, classic, serious,
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Newcomer’s Club Newcomers Club of Costa Rica (for women) meets the first Tuesday of every month, September through May. September meeting will be an interest fair. Contact: 2416-1111 costaricaporo @yahoo.com or http://www.newcomersclubofcostarica.com PC Club of Costa Rica This computer Club meets on the third Saturday of each month at Pan American school, in Belen, 830 to 11:30 am 2 months Free Trial for newcomers. For information call Chuck Jennings. Phone 2266-0123 www.pcclub.net Republican’s Abroad The Republicans Abroad of Costa Rica meets the second Tuesday of each month. Contact Francis 2203-6131, or or fax 2282-2150. Radio control Sailing Club Meets at Sabana Park Lake. For information contact Walter Bibb. Wwbbsurf40@yahoo.com Wine Club of Costa Rica Please mark your calendars The wine club usually meets at 1 P.M. on the last Sunday of each month. Join us to tantalize your taste buds and expand your education. For more information on upcoming events please contact us Phone 2279-8927, 2257-2223 Women’s Club of Costa Rica In 2010 The Women’s Club celebrates 70 years of philanthropy in Costa Rica. Current programs focus on education, primarily through scholarships and development of school libraries for children. It is one of the oldest, continuously operating service organizations in Costa Rica. WCCR membership numbers 250 English-speaking women, representing 25 countries of the world, drawn together by the motto: Friendship through Service. Monthly meetings with guest speakers are held the second Wednesday of each month, as well as regular luncheons, teas, and many interest groups. Guests are welcome and further information can be found at www.wccr.org Women’s International League for Peace and Freedom (open to men too) Bilingual group meets in Heredia on the first Wednesday of the month at 10 a.m. in the clinic of Mireya Gonzalez. We work on peace and human rights issues. Call Mitzi 2433-7078 or write peacewomen@gmail.com Young Expats of Costa Rica Some Expatriates under the age of 40, and currently living in Costa Rica, have formed a new social club to be coordinated through their website This club will help younger expatriates living in, or moving to, Costa Rica meet other expats in their age group for; friendship, romance, travel and activity partners, and professional networking. www.YoungExpatsOfCostaRica.org Veterans of Foreign Wars: Post 11207 Meetings are held at 12 noon, the first Tuesday of every month, at Club Colonial Casino on the second floor. All members are welcome and veterans who served overseas may join. For info please email the post at vfw112072003@yahoo.com.
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Wild Side
LV VII
by Ryan Piercy
New World Birds... As we all know, Costa Rica boasts a large variety of birds, and this is again reflected in the family of Emberizidae, the New World Sparrows and species. Costa Rica lists near 50 species of this group, which, similar to the Tanagers, display the variety of colours seen in the avian world. larger species, and the sparrows, finches, seedeaters and The specific species which belong, or not, within this family, others are smaller in size. is still in dispute. In fact some references state that many of the species may be more related to Tanagers, but tat we can Though many of the species are colourful, one we must make leave up to the experts. special note of is plain black, but carries a special position, as it is endemic to Costa Rica. The aptly named Cocos Finch In any event, these are basically a large group of seedeaters, can be found throughout the island, but only there. Known and many of the species here tend to forage low on the locally as the Pinson de la Isla del Coco, its scientific name ground and in underbrush, thus we can see them frequently. is Pinaroloxias inornata. Unadorned I guess as the male is Colours range from black to white, and greens, reds, blues, completely black. Females are a blackish brown streaked yellows, and so forth. A full spectrum of duller hues to with olive brown. rainbow bright. In some cases the sexes are like-coloured, while others are very different. They mostly tend to have While the specimens here forage on the ground for their thick conical bills, which can help novices distinguish them a seeds, insects and fruits, some of them do fly up to lower little from the narrower billed tanagers. branches, and often the more melodious ones fly a little higher to sing from exposed locations. It is normal for the females to make the nests, again close to or on the ground. The females here lay and incubate normally 2, occasionally 3 eggs, which both sexes undertake to feed once hatched. Most young remain in the nest for 10-15 days, and as they are born naked, often leave with plumage quite different than that of the adults. Due to the number of varieties here, different specimens can be seen throughout the whole country at different elevations. The best recommendation here is to keep your eyes open for various small species, and keep a good reference book handy to look them up as you spot them. One hint, the Painted Bunting is best searched for on the Pacific slope, during the winter from October-March each year. While species are too many to list in this article, there are a few of particular note we should mention. In terms of colours it is the Painted Bunting that takes the prize, in bright red green and blue, Passerina ciris resembles a small parrot. The Indigo Bunting is also pretty with its vibrant blue, as well as its cousin the Blue Grosbeak. In terms of size, it appears the Black-headed Saltator is the largest in this group. While most of the species are between 4-5 inches, Saltator atriceps is double that at 9.5 inches on average. This is also about 1.5 inches bigger than the next largest species. In general, Saltators and Grosbeaks are
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Costa Rica Liv vin g by Ana Hernandez
The Imperial Eagle on a Can of Beer Sometimes ideas for articles come from the least expected source. The idea for this article came from the July-August issue of El Residente Magazine. The front cover shows a very festive oxcart parade with a man in campesino attire, presumably, a boyero — the oxcart guide — sitting atop his colorful transport with a very happy disposition: one hand closing around the upright supports of the oxcart, and on his raised left hand, a can of Imperial beer, that has, just as much as the oxcart and boyero, claimed, over the years, a very important traditional status in this country. I have been thinking about how much Costa Ricans like to consume beer, perhaps just as much as Germans and North Americans do. As I began investigating a bit more about this fascination beer intake, I realized that the consumption of beer around the world might even surpass the intake of pure drinking water. I did some investigating too on the names of our local beers, and I found out to my surprise, that there are other well-known “Imperial” related brand names in several other countries. There is a popular beer from Barranquilla, Columbia, called “Aguila” or Eagle, which is the common nickname for our local Imperial beer, and there is a traditional Imperial Stout from Russia, and many other beers that share similar names as ours. Moreover, the symbol of an Imperial Eagle has been used very often on many things and has always been associated with power, royalty, strength, and haughtiness; but in Costa Rica, it is immediately associated with the most famous Tico beer of all: la Cerveza Imperial, with its very recognizable logo of a black imperial eagle on a yellow and red background painted over an aluminum can.
continue expanding their vast beverage market with plain and flavored bottled waters, “Tropical” fruit juices (locally owned trademark name) and non-alcoholic beer. They are importers of many recognized foreign beers, such as the popular “Corona Beer” of Mexico, and of Toña, a light colored lager type beer, immensely famous in Nicaragua, and quickly making inroads in Costa Rica. Before all of this hoopla with industrially produced beer, our Tico ancestors used to produce their own version of a fermented drink from a variety of grains or sugar cane, called “chicha”, a beverage very much like beer in taste, although sweeter and higher in its alcoholic content. Traditionally, the “chicha” was used in indigenous celebrations where the delicious beverage was served in huge containers to all present. Many partook of the drink for several days until the contents were exhausted or the community members were all drunk; whichever came first. Modern beer is also a fermented liquid, with more than a 90% water content made with the malt extracted from barley, maize, cassava, wheat, rye, sorghum, millet, or from sugar cane and even sweet potatoes. The liquid is turned into beer by a fermenting process that usually contains water, malt, hops, and yeasts, in different amounts and grown in many different regions of the planet. The malting process is achieved when the seed of the grain is harvested during its highest starch germination. Through a process called the lag phase, an enzyme turns the starch into sugars that will eventually metabolize into carbon dioxide and ethyl alcohol. The hops are flowering vines whose flowers and essential oils are used to add a unique flavor and aroma to each different beer and also balances the sweetness of the malt. The yeast is a type of fungi essential in the fermentation process and adds to the beer its peculiar flavor. Lager is a word that in German means “to store” and describes the process of storing the wort, the name for the sweetened liquid prior to it becoming beer, in temperatures around 34º F, in a cold, dark place, for about 30 days. This respiration and maturation process allows the taste or beer to ripen to its crisp, distinctive flavor we like and enjoy so much, but that manages in each swallow to maintain a touch of mystery and is an ancestral calling to gather, party and socialize.
Historically, the beer tradition in Costa Rica started in the Limón Province in 1908 in La Florida de Siquirres, when the Lindo Morales brothers, of Jamaican origin, went from owing a small ice factory that provided ice for the ships in the Port of Limon, to expanding their business with the acquisition in 1912 of the Traube Brewery, originally founded in Cartago. Costa Ricans have seen the tiny Traube Brewery grow to the size of a mega industry: the Florida Ice and Farm, or Here is looking at you! Don’t forget to drink responsibly and better known as La Cervecería Costa Rica, is located in Rio to recycle your beer cans and glass bottles. Segundo in Alajuela, not too far from the airport. Ana Hernandez has worked with multi-cultural and Florida Ice and Farm produces many locally known beers, in intercultural communication issues in Costa Rica and the strong or light versions, such as Bavaria Gold and Bavaria United States for over twenty years. She and her sister Maria Dark, Pilsen, Rock Ice. They are also licensed to locally run a study abroad organization and are directors of the produce or distribute a long list of internationally well-known Center for Cultural Interaction in Costa Rica, an educational brand names such as Heineken, Smirnoff Ice, Bamboo and agency dedicated to furthering cultural understanding among Cuba Libre, Pepsi, 7 Up, Orange Crush, Evervess, etc., and people from different countries.
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Children Are e Our Future
driver got out and spoke with spirited animation to a man who appeared from a building nearby. “Sorry,” the driver reported to us, “the bridge is closed.” This was less than two weeks after the collapse of the bridge over the River Tarcoles which had killed five people, and it seems Costa Rican officials were being careful.
by Martha Rollins
Yorleni quickly informed us, “No problem, we will walk another way. It doesn’t matter when we reach the school since you are spending the night, aren’t you?” We all looked Reaching for the Stars at each other in dismay! Knowing that we were not prepared Far from the lights of the Central Valley, in the Simiriñak to spend the night in the mountains, we quickly arranged for Territorio Indegina Chirripó on Rio Pacuare, a remote area in our taxi driver to wait for us until dark before we began our the Talmanca Mountains, reside the Cabécar, the largest and hike up to the school. most isolated of Costa Rica’s indigenous groups. A school, Escuela Paso Marcos, built by the Japanese government, Our trek took us through beautiful, pristine terrain along was established there in 2007 to serve the Cabécar children the Rio Pacuare. We forded two or three small rivers then crossed the Pacuare on a narrow hanging pedestrian along the Rio Pacuare. bridge with loose boards under our feet. Yorleni pointed out landmarks as we made our winding way following a sometimes non-existent pathway. An hour and a half later we came upon the school and met with the present director of the school, Adolfo Fallas Acuña. The Cabécar adults love story telling and the culture holds a rich heritage of stories and legends about the sun, the moon and the stars. He told us that the Cabécar children are interested in subjects that reflect their folklore, as well as animals, specifically vultures, serpents and horses. We observed a child’s drawing of the sun embraced by the The Cabécar live in primitive conditions. Their individual moon pasted to a nearby wall. The storytelling tradition has, dwellings, once round huts with reed walls and thatched however, been dying out and the younger members have roofs often perched precariously on mountain peaks, developed a love for listening to the radio. now have more durable corrugated tin roofs and a more conventional shape. They have problems with poor nutrition We spent the rest of the day in the village and, as the and obtain their food by gathering fruits and vegetables that shadows lengthened and our anxieties rose, the director grow wild in the area and by hunting, using primitive tubes found a young man who volunteered to guide us back the from which to blow stones to stun small game, along with long and winding way to our (hopefully) still waiting taxi. handmade bows and arrows. An example of these objects can be seen at Galeria Namu on avenue 7, between streets After we crossed the hanging bridge we began to encounter 5 and 7, in San Jose. Continued on page 9...
The owners of Galeria Namu had suggested that we visit the school because the approximately 50 children there were in need of library materials. So, in late 2009. Suzy Nagel from the Women’s Club of Costa Rica, Silvia Coto, a friend fluent in Spanish, and I began our trek to visit Escuela Paso Marcos. We were accompanied by a teacher at the school and its first director, Yorleni Leiva Morales, herself a member of another indigenous group, the Buruka, as our guide. Our adventure began in at the Transtusa Bus Terminal in San Jose early in the morning where we took the bus to the closest well known town, Turialba. From there we hired a taxi for the rest of the journey. After driving one and a half hours into the mountains on increasingly precarious roads, we pulled up to a small bridge blocked off with a sign. Our taxi
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to an hour each way to attend classes and take their studies very seriously. Perhaps we can plan a field trip for him to an observatory. With encouragement and assistance he might become an astronomer or teacher or work in an observatory one day. As the children were reading, Isabel disappeared into the cocina, returning with a small dish of hot arroz con pollo for each child. I do not know how what we had brought had became enough for everyone, but it had; I thought immediately of the Biblical story of the “loaves and fishes”! I am hoping for another miracle that depends upon the children themselves and the elders in the community. Their rich cultural heritage of stories and myths might develop into ways to prepare themselves for adulthood inside or outside their community. With natural curiosity they already are reaching for the stars!
Cabécar villagers returning home with huge bundles on their heads. They were smiling broadly and some were staggering, I thought, under the weight of their loads. When we described this to our taxi driver he burst out laughing. It seems that these Cabécar villagers had spent most of the afternoon on the grass where the taxi was parked, listening If you are interested in helping the children at Paso Marcos to the radio and drinking their home made liquor; the radio or are interested in other Woman’s Club of Costa Rica reception is best there. The possibility that our taxi driver Community Services projects, please contact: may have had a few drinks too, crossed my mind! On July 29, 2010, I returned to Escuela Paso Marcos with my very knowledgeable friend Isabel Arias, Directora of Liceo de Orosi, Manuel Haug Umaña, who works for the Costa Rican Counternarcotics Institute and who has a long time interest in helping the Cabécar, and Adolfo Acuña, Director of Paso Marcos and his two children. We carried with us, in addition to a hot lunch of arroz con pollo prepared by Isabel’s mother, a special cargo of 52 children’s books, a telescope, and laminas depicting the solar system and the animals of the forest. The books were donated by the Women’s Club of Costa Rica. The telescope, laminas, and some selected books were donations by private individuals. There are plans to provide materials for making bookshelves for a library.
Martha Rollins 2268-6802 martha_rollins@yahoo.com Or Pat MacKinnon macandpat@gmail.com Chairman Community Services Committee
For this trip we were certain our plans would not go astray. We had not one, but two 4 wheel drive vehicles with competent drivers, and since the bridge was open, we took a different route up the mountains. This time, however, both vehicles became stuck in the mud, so we still had to walk an hour and a half to the school. This time, to our surprise, some older Cabécar students, and one mother with her children by her side, appeared on the road to help carry our boxes. At the school the children were delighted with the books, especially the pop up book on the heavens. Some children chattered in the Cabécar language until they were reminded to speak Spanish only at school, and most were unusually serious and hungrily read the books without putting them down. One young man of high school age helped to put together the telescope and did not leave it and the pictures of the solar system, even to eat. High school students walk for up
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Connection n by the Women’s Club of CR
A TV Appeal Was Made Integral to fund-raising were a letter-writing campaign to major businesses and a 15-minute appearance on Channel 7 television by Laura Montes de Oca and Cristina Maria Cabezas, appealing for pledges.
Response was incredible throughout the whole country. Individual donations flowed from the general public. Corporate and employee donations came from Banco Nacional, CAJA, Back in 1980, the people of Costa Rica responded from IBM, Bayer, Union Carbide and more. their hearts to rally around the Women’s Club’s initiative to raise $50,000 to bring the first mammogram machine to the The ladies of WCCR even donned their hats to hit Paseo country. Native and ex-pat communities all dug into their Colón rattling tin collection cans. pockets to make the dream a reality.
It Was a First for Costa Rica
Grand finale and major contributor to the project was the $50,000 is equivalent to $130,000 in today’s US economy successful raffle of a Datsun 120Y. Thanks to the government, and a lot of money to raise in six short months! special consideration was made for the charitable cause, requiring no taxes to be paid by WCCR on purchase of the Mortality rates for breast cancer in Latin in America were car. Tickets were 50 Colones each (approx $9). We wish we increasing in the late 70’s. WCCR had just lost member knew the winner’s name that was drawn on December 4th, Helen Ford to the disease. 1979. WCCR president Olive Caffrey thought what better way to commemorate the club’s 40th anniversary than to bring the newest mammogram scan technology to the country in Helen’s memory. The Cancer Relief Fund project was undertaken on behalf of Hospital San Juan de Dios in San José.
The goal had been reached and a $50,000 check was sent in February 1980 for a Sistema de Mamografia “Mammorex II” para Radiografia del Seno to Picker International in Cleveland, Ohio, a leader in radiotechnology machines, for delivery to Hospital San Juan de Dios. The Machine Arrived But, the story doesn’t end there.
Fund-raising began in earnest For almost a year, the machine sat in Customs while Doctors July 31st 1979 with a Tea Party Amaña and Moreno were sent from Hospital San Juan de - teas were the mainstay of social Dios to the US for training in the technology. Dr. Moreno later life in those days. became head of radiology at the hospital. Held in the Colegio de Médicos Fast forward to 1997. This year WCCR funded 80 ballroom, the tea featured mammograms for women as yet another of their many an extravagant Display of charitable projects. International Costumes, including WCCR president Olive (a Scot) in her kilt, dancing a rousing Highland Fling. The mammogram machine was well used for decades at Hospital San Juan de Dios, detecting early cancer and Even the Fling had special meaning in the battle against saving countless lives. breast cancer as it is said that the dance originated in the 1700’s to celebrate a Scottish war victory. Our machine is obsolete now and has been replaced, but a plaque still hangs in the hospital thanking the Women’s’ Club But, that was only the beginning and by November an of Costa Rica and the people of the nation for joining together incredible $30,000 had been raised! Everyone participated in a successful campaign to bring the first mammogram and projects appealed to the whole population. machine to Costa Rica. There was a bake sale, a sale of artworks, a cooking demonstration at the home of the Chinese ambassador, a Youth Symphony concert, a wine and cheese party, sponsorship of a Little Theatre Group performance, and even something called selling of gasoline shares. If you know what that was, we’d love to hear from you.
El Residente
Joan Ritchie Dewar has been a member of WCCR since 2009. For more information about the Women’s Club of Costa Rica, please contact us at www.wccr.org or secretary@wccr.org
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A Day In Th he Life by Allen Dickinson
Cars: Watching, Buying, Owning. I’m a car guy, an ex-hot-rodder, and interested in all things automotive. To me, there’s no melody sweeter than the sound of a strong V-8 engine under acceleration. My enthusiasms aren’t just limited to souped-up cars, however, but include all cars from the latest million-dollar exotics to the (When I spy one of those more exotic cars, it always strikes me as a little incongruous. I ask myself, where can the owners most mundane people movers. I just love cars. drive these beautiful, super-fast cars? Many Costa Rican I have always loved cars. As a kid I hung out at the new car roads, paved and unpaved, are very narrow and navigating dealers in September / October to get a glimpse of the new around parked cars and trucks while avoiding kamikaze models from Detroit before they hit the showroom floor. So it motorcycles, oblivious pedestrians, and the occasional might seem like I’m slightly out of place living in Costa Rica, wandering horse or cow, can be a thrill. If I owned one of a country where one of the most common cars seen on the those $250,000 cars, I’d have to carry a cardiac defibrillator roads is the early- to mid-nineties Hyundai’s and where the in the trunk!) late 1970s Toyota Starlet is considered a collectible. So, just to satisfy my need for a regular ‘fix’ of current car info, I More practical high-end SUVs are frequent sights too. I’ll subscribe to a leading US car magazine and parse out the bet a significant percentage of Land Rover’s new car sales articles so the publication lasts most of the month between occur in this Central American country. There’s also a big contingent of Porsche Cayennes, and more than a few Gissues. Wagen Mercedes-Benzs. Of course, all the latest, large, But, even if my current magazine issue has run out, there Japanese brand SUVs, Toyota, Nissan, Mitsubishi, Honda, are plenty of automotive sights on local roads that keep my Mazda, etc. are amply represented. interest satisfied. In fact, sometimes driving around is better than my magazine because nearly every automotive brand, There are quite a few classic cars here too – I’ve seen many not seen in North America – brands like Alfa Romeo, everything from an original Mini to Citroen 2CV to a Ford Barbus, Citroen, Fiat, Opel, Peugeot, Ssang Yong, and Model A to a Triumph TR-3. I’ve even spotted one Triumph Stag, a semi-rare vehicle anywhere in the world. In the small Smart – are presented in real life here. town where I live there’s a candy-apple red 1965 Chevrolet And, it’s not unusual to see exotic and very expensive cars Impala, a late ‘70s Lincoln Continental Town Car, and an of all types on a nearly daily basis. In one day I saw four exquisite 1954 Chevrolet pickup which has been given full different late-model Ferraris, and spying a Porsche Carrera street rod treatment. In nearby San Jose a friend owns is not an uncommon occurrence. Even when one of the more a Buick Reatta, and I know where there’s a 1970 Pontiac exotic cars isn’t around, there are other interesting sights to Firebird that looks better today than it did when it came observe - usually it’s something like a Mercedes-Benz high- off the showroom floor forty years ago. Some of you may performance AMG model. Or maybe it’s one of the powerful know that Ryan Piercy owns a 1972 AMC Cardin Javelin in M version BMWs or a Maserati Quattroporte. I’ve even seen excellent condition. For those with the passion, there are at one Porsche Panamera, a four-door model new in the market least two car clubs in the central valley, comprised of owners of these older, uncommon cars. in 2010. Although American cars aren’t really big sellers,. There are Chevrolet, Chrysler, and Ford new car dealerships here, but most models of the cars aren’t very common on the roads (the pickup trucks are popular though.) Which is not to say there aren’t any here, there are still some around, but most are older models that have crept in. There are probably more dirt roads than paved ones in Costa Rica and driving those roads, particularly in the rainy season, explains why fifteen-year old four-wheel drive Geo Trackers and Isuzu Troopers are in abundance. It’s also easy to understand the popularity of two other highly utilitarian Continued on page 15...
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vehicles; the original Land Rover and its near twin, the Toyota Land Cruiser. Both are highly revered by Ticos and there are a surprising number of them around. On one occasion I was caught behind a club of over seventy-five Land Cruisers touring the countryside up near Volcan Poas. Every one was fully restored and looking so new and polished they could have come off the assembly line yesterday.
On the ‘con’ side of importing a car, the first thing to consider is the cost of the shipping expenses to get it here. Figure $500 or more depending on the departure location. Then, once the car is here, keep in mind that the import duties can cost you, out of pocket, 25% to 40% (in some cases more) of the North American or European value of the car, new or used. Those duties apply to all cars imported, new or used, The vast majority of cars here, however, are not new or and therefore increase the market price for every car in expensive exotic or classics – most of the traffic that clog Costa Rica. the streets are bland people movers, like older Hyundais, Toyotas, Datsuns, or the occasional Volkswagen Beetle. To get an idea what that means in dollars, a quick price Even the gawd-awful ‘80s three-cylinder Geo Metro is a comparison via a Costa Rican newspaper and on-line common sight. listings in North America got me the information that a 2000 Honda Civic that goes for about $9,000 in the USA runs Among the later models, it appears that the general about $13,000 here; a mid-nineties Geo Tracker in good population is purchasing predominately cars that are one of shape and with 100,000 miles on the odometer sells for the Asian brands, with the Korean Kia and Hyundai making about five-thousand dollars in Costa Rica while the stateside the biggest inroads. Japanese brands are popular too, and price for the same car is roughly half that. A newer, 2008 Chinese made cars are starting to become more common Chevrolet Tahoe LT lists for $55,000 in Costa Rica whereas too: Chery, Gheely, and Great Wall are three examples. the same car in the United States demands about $28,000. The difference in price simply reflects the import duties and Besides watching traffic, I read license plates as they give costs of getting the car here. (There are those who will tell an insight into the car market here. It is easy to tell which you they imported a car more cheaply than what they could cars have been here a while because the blue-on-white buy the same car for here, and those cases do exist. But in license plates for private owned vehicles are sequential and my experience they aren’t the norm.) consecutively numbered, and the plate remains with the car forever. The lower the number, the longer the car has been You must be careful in what you bring here, however, licensed in Costa Rica. (Pickups, commercial vehicles, because a car originally sold outside Costa Rica, which busses, and motorcycles, etc. all have their own separate looks outwardly exactly like one sold here, may not be licensing schemes.) The oldest license numbers I’ve seen identical. Cars, SUVs, and vans, especially ones sold in the is #100 on a 1967 Ford Galaxy and #165 on a Toyota a North American market, sometimes differ drastically in both neighbor drives every day. electronic and mechanical ways from those sold by the same manufacturer in other parts of the world. If you unknowingly The license plate numbers are informative in that they bring one of those unique North American cars with you, reflect the growth of the Costa Rican car population, which you might find later that the parts and technology for making is phenomenal. In late April 2007 I was issued a new repairs are not be readily available. license plate, 669XXX. In June 2010, barely more than three years later, the numbers on the license plates being The Pro side is that you will have YOUR car here, a known issued have exceeded 830,000. That’s over 161,000 newly quantity. registered cars, or a nearly 25% increase in the total number Unless you are absolutely positive you can’t do without the of registered vehicles in slightly more that three years. particular vehicle you had at home, and cost is no object, I Astounding! believe that buying something already here is the smarter option. So, what does all this mean to the average non-car-crazy Continued on page 16... Gringo living here? Well, if you are trying to decide if having a car here in Costa Rica is important to your situation or lifestyle, you now know a little about what the car population is like, and that information might be helpful in making that decision. And you now know the market offers a wide choice of brands and styles from which to choose. If you decide owning a car in Costa Rica is something you need to do, you first need to decide how to accomplish getting one. There are two choices: 1) import the car you have in your home country or, 2) buy one already here. Either way, it will be expensive. New cars sold in Costa Rica are just that – new and designed for this market. Therefore, I won’t spend any time on that subject. So, lets look at the pros and cons of importing, and then consider used cars.
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So, what about buying a local used car? As I mentioned, vehicle and the more coverage that is needed, the higher the there is a tremendously diverse car market in Costa Rica and cost. In one case I’m familiar with, full coverage on a midfinding a good quality used car is easy. (I know where there’s nineties Hyundai runs about $360.00 a year. a pristine Ferrari for sale, if you are interested.) Another consideration is the mandatory, annual safety A word of caution here: If you decide on buying a used car inspection, commonly called ‘Riteve’. The inspection cycle locally, particularly a cheaper one, it’s probably a good idea is based on the last digit of the car’s license plate -- if the to buy from a reputable dealer. That’s because Ticos are plate number ends in a four, the inspection is due in April, notoriously remiss on performing routine maintenance -- etc. If you are looking at buying an already licensed car, not things like regular oil and filter changes often get ignored or only should the plate number and inspection sticker in the pushed back, probably due to the expense involved. Also, windshield match, but there should be a document available when looking to buy from a small dealer, it’s sometimes showing that the car passed the last inspection. These are advisable to be skeptical of the mileage showing on the very thorough and exacting, so if the sticker on the car you odometer -- it’s been known for a disreputable dealer to set are interested in expires in a short time, it’s acceptable to dicker over the fact and / or try to negotiate a discount or the mileage back. written guarantee. Better yet, it might be a good idea to just If it is important to you that it’s a North American brand, it’s pass on the purchase of that particular vehicle. not difficult to find one that has been recently imported from the USA; trade-ins that are not hot sellers in their home Of course, gas prices can’t be ignored. At the time of this countries are sometimes shipped to foreign markets. (You writing, and using the current exchange rate, Regular gasoline is around $4.25 / gallon. There are no gas wars can tell a USA car if the speedometer is in MPH vs. KPH.) here, nor is there any difference in prices between “brands” A caveat here: If you are looking at a USA origin car, it’s a -- the price is set by the government, revised weekly, and good idea to copy the cars VIN number down and check it all stations sell at the same set price. (An interesting note: on Carfax (www.carfaxonline.com). It costs a couple bucks, The “brands” displayed by the gas stations refer to the brand but insurance companies have been known to dump cars motor oil they sell, not the gasoline – all gas comes from the “totaled” in the United States in foreign markets. It might be same Costa Rican refinery.) So, for some, choosing car with nice to know if the car you anticipate buying was a victim of good gas mileage might be an important factor. Hurricane Katrina, or some other natural disaster, BEFORE you buy it, and Carfax can tell you about the car’s history. There is one other expense to owning a car here that Also, remember to find out if it’s a model with parts and sometimes gets overlooked: the Marchamo. That’s the technical service available here. Most are, but there are the annual road tax that comes due every December. It’s like the sticker you put on the license plate back in North America, occasional exceptions. except here it goes on the windshield. The amount to be If you’ve determined that owning a car, imported or bought off paid is based of the value of the car as determined by the the local market, is the right option for you, there are some government. It can be quite expensive, if you have a high other factors that also need to be taken into consideration. value car. One is the cost of replacement parts -- they are not cheap here. For example, an automatic transmission for a large, So, having a car here is a decision that needs to be made late model Toyota SUV can run as much as twelve thousand carefully. It’s certainly possible to do without one, as the bus dollars. (Yes, that’s with three zeros.) A friend sadly learned and taxi services are ubiquitous and inexpensive. But, if you that the price for a new computer for an older Renault Megane need to make regular runs to the store to pick up large items was nearly half the value of the car. So, if you decide to own of food supplies for a month at a time, or plan to travel the a car here, it might be wise to consider looking for something country a lot, then owning a car may not be a bad idea. that won’t cost you an arm and a leg if repairs are needed. If all this sounds complicated, it isn’t. Getting right down to it, In any case, it’s inevitable that sooner or later you will need buying and owning a car here in Costa Rica is little different some service. The good news is that Costa Rican mechanics than buying and owning one in any other country; you don’t and body shops labor rates are relatively inexpensive and the have to be a ‘car guy’ to do due diligence, and ‘buyer beware’ quality of work is generally high. The bad news is that if the is always good axiom to follow when acquiring a car wherever car is electronically complicated, finding someone who has you are. It’s no different here. In the meantime, while you the knowledge and equipment, and who can work on one like are making your decision, you can join me in observing the that, can cause the repair prices go up commensurately. Not multiplicity of expensive and exotic cars on the roads every to mention that parts availability needs some consideration. day. A friend waited over three months for a minor part for his (German made) Opel, not a real popular brand here, from Allen Dickinson is a member of ARCR. After serving 23 years in the US Navy he settled in Pensacola, Florida, where he the dealer. resided for 24 years. In 2006 he retired from operating his No matter how you decide to acquire and own a car here, like own licensed mortgage brokerage business and relocated anywhere else, there are other expenses to be considered to Costa Rica. He holds a Bachelors Degree from the University of New York and a Masters Degree from the besides routine upkeep. University of West Florida. He can be reached via email at: First, and essential, is car insurance. Rates in Costa Rica humphree@bellsouth.net are cheap, but like all places, the greater the value of the
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September- October, 2010
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Legal Updatte by Allan Garro N.
Don’t Forget To Plan Your Will in Costa Rica All those Expats living in Costa Rica part or full time and/or having important investments in the country should take in consideration what will happen in case they die suddenly. Making plans about this issue could avoid leaving legal swamps and headaches to loved ones. People always expect to live as much as possible, but certainly an accident or unexpected disease could change everything in seconds or days only. The legal document that usually comes to mind is to prepare a Last Will and Testament document in Costa Rica in order to set the “rules of the game” while one is still alive and mentally healthy. The two types of Wills that can be made are described as follows: a.
Open. The entire document is prepared by a Notary according to Testator’s desires then introduced on the Protocol Book of the notary. Testator needs to sign in front of three witnesses as a requirement of the document to be valid, then notary will provide a certified document of the document for Testator’s records. This type of Will is considered a Public Record and actually gets recorded on an office at the National Records building located in Zapote. It can be voided or modified anytime Testator desires to do so. In case of small modifications it’s only necessary to sign a Codicil to Will. There is no problem in case Testator losses the provided copy as a public record it can always be replaced.
b.
who legal heirs are, placing on the first line with equal rights the wife, children and parents of the Decedent person. In case Decedent had no wife or children and parents are dead already, a second line includes grandparents, a third line brothers and the list continues. It is necessary to take in consideration that whether there is Will or not, a Probate Process always needs to be started in Court and it takes time –years we mean- as well as an important amount of money to cover different costs such as Advertisements, Appraisals made by Court Experts, and Lawyer’s fees. In some specific cases Notaries are authorized to replace Court and perform some kind of “Notary Probate Process” but still has important expenses to be afforded. However, some other actions can be taken in order to try avoiding Probate because of said complications. To name an example, in some documents such as certificates of deposits, insurance policies or complementary retirement plans issued by financial institutions beneficiaries can be set anytime upon request, in which case upon death appointed beneficiaries automatically acquire the benefits without further requirements. Other way to avoid Probate is to set a Trust in Costa Rica that will take effect in case of death, usually called Patrimonial Planning Trust Contract. In this case Grantor will need to designate a Trustee –can be a bank or individual- that will execute Grantor’s desires upon death as well as to designate the Beneficiaries of the Trust. Advantages to this are that assets can actually be transferred into the Trust tax free. Some foreigners that already have a Trust on their country of origin as well as have everything here registered under the name of a company, usually grant a contingent full power of attorney over the company to their appointed Trustee on their country of origin. Some other people who have assets under a company being stock holders as well as representatives sometimes grant a contingent power of attorney to their heirs so in case something happened to them the beneficiaries have control over the company.
Closed. Testator writes down the Last Will and Testament document by itself then places it into a sealed envelope. Next step is to take it in front of a Notary who will place a document over the envelope acknowledging such document was declared by Testator as his/her Last Will and Testament document, all of this happening in front of 2 witnesses. There are several risks involved For those owning Real Estate Property on personal name on this kind of will since in case the envelope gets lost should consider the possibility to transfer said properties into their heir’s names then keep the usufruct right as a lien for there is no way to replace or know its content. life time. Usufruct right is actually a lien over the property that There is freedom in Costa Rica to set the rules of the Will grants the right to use and enjoy it for life. Upon death, such document. However, some exceptions will occur when lien gets automatically cancelled then heirs acquire full control Testator has minor or handicapped children and/or wife. over the property without incur in any further expenses. As In case of minors, a judge will always grant their support shown, there are many ways to deal in the event of death until they are of legal age or get a career if studying; same avoiding loved ones to suffer the consequences of the lack of for handicapped but in such situation their support needs planning while still alive. to be secured for life and in case of a wife Court needs to Allan Garro N., Attorney at Law grant her right to 50% of all assets acquired during marriage law@licgarro.com time. In case a person dies without a Will then the law sets
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Learning The Languag ge by Christopher Howard
Legal Terms, Part 2 Here is some more legal lingo to help you learn the lawyers’ limericks. Guilt – Culpa Guilty – Culpable Hearing – Audiencia Higher court – Corte superior I.D. Card – Cédula Illegal – Ilegal/prohibido Innocent – Inocente Jail – Cárcel Judge – Juez (masc.)/Jueza (fem.) Justice – Justicia Key witness – Testigo clave Star witness – Testigo estrella Law suit – Demanda Lawyer – Abogado Lawyer’s bar – Colegio de Abogados Legal – Legal Legal form – Papel sellado Life sentance – Cadena perpetua Litigate – Litigar Litigation – Litigio or plrito Lose a case – Perder un caso Lower court – Corte inferior Life in prison – cadena perpetua Probate – Sucesorio Property – Propiedad Prosecutor – Fiscal/procurador Residency – Residencia Restraining order – Orden de alejamiento Retainer – Pago anticipado de honorarios Ruling – Fallo
Sentence – Condena, pena or sentencia Stockholder/shareholder – Accionista Signature – Firma Squatter – precarist Suit – Demanda/ Querella Summons – Citación Suspect – imputado, sospechoso Take the case (lawyer) – Llevar el caso Take to trial – Llevar a juicio Tax evasion – evasión fiscal Testify – Declarar or testificar Testify against – Testificar/declarar contra Testify for – Tesitificar/declarar a favor de… To appear in court – Comparecer To dismiss a case – Desestimar To record (national registry) – Protocolizar To rule against – Fallar en contra de To rule in a case – Fallar To rule in favor of – Fallar a favor de To rule against – Fallar en contra de Trial – Juicio Tribunal – made up of three judges Trust – Fidecomiso Trustee – Fidecomisario Try – Juzgar/enjuiciar Verdict – Fallo Will – Testamento Win a case – Ganar un caso Witness – Testigo
House arrest – Arresto domiciliario or casa por cárcel Illegal enrichment – Enriquecimiento ilícito Impediment to leave country – Impedimento de salida The right to enjoy a thing owned by another person – Usofructo (Like living in their home)
Here is your Costa Rican expression (tiquismo) for this week: “El que con tigre se acuesta, desplumado amanece”: if you court trouble, you´ll find trouble, or literally “He who lays with a tiger, awakes plucked.”
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Dollars & $en nse by Alan Weeks
Looking Ahead in this New Era As Yogi Berra once said, it is hard to make predictions, particularly about the future. However, we can make use of long-term historical data as well as significant recent trends to try to be better prepared. Based on a review of factual data, it is believed that we have now entered and are likely continue to be living in a new economic & financial era for a prolonged period. And, this new era is expected to be fraught with uncertainty and pose many unique challenges. Many lives and lifestyles have already been adversely affected. However, we are counting on the majority of Americans to rise to the new challenges and find the ways and means to achieve a more promising future. As the saying goes, “necessity is the Mother of Invention.” CAUGHT IN ECONOMIC STORMS It has always been an American dream to own a home, and successive governments have provided various ways to make this goal more achievable. Moreover, Bill Clinton and George W. Bush both talked as if owning a home was the only way to join the middle class. And, they believed that not only did this promote social stability, it would build well-maintained neighborhoods; recall Mr. Bush’s “ownership society”. Also, based on the fallacy that home values would keep increasing, home ownership was supposed to be a hedge against inflation and a way to save for retirement. We know how that ‘story’ ended. One does not need to be blessed with extraordinary insight to realize that American leaders should always have been focused foremost on maintaining a sustainable economy and jobs. Instead, a succession of leaders have been distracted by other priorities, sometimes self-serving ones. These leaders also seemed to be ‘blinded’ by hubris and basic financial ignorance to see there would be serious unintended consequences to their actions.
Since then, the U.S. economy has been dependent on consumer spending for about 70% of total activity. The problem with this was that, by 1998, the majority of the huge ‘Baby Boomer’ population was already past the normal age of acquiring things and should have been starting to save up for retirement. But, in order to “keep the good times rolling” U.S. politicians and a compliant Federal Reserve Chairman (the FED) had to come up with creative new ways to achieve this goal. The end result was that the American people were enticed by all manner of schemes enacted by U.S leaders to keep the people spending. Some of the key items were as follows: The government mandated that home ownership should be made available to all Americans. The government eliminated the Glass Steagall Act, and deregulated the banking industries. This ‘opened the door’ to the creation and sale of complex financial instruments, such CDOs, and credit default swaps. The FED “juiced up” the ability to spend by making credit ultra-easy and huge leverage available. The end result was, as the saying goes, “give people enough rope and they will hang themselves” Federal oversight of banking and mortgage lending was negligent throughout the period. This opened the way to widespread fraud. Mortgage qualification guidelines were increasingly relaxed. Ultimately, even NINJAs (people with No Income, No Jobs or Assets) could get mortgages. This proved to be disastrous and has destroyed millions of families. Furthermore, with strong encouragement from Washington, Wall Street ‘Banksters’, a majority of academic economists, and the Mainstream media, the ‘Boomers’ were led to believe they could borrow, spend, and speculate their way to prosperity. These enticements proved to be very successful for quite a few years as many Americans got caught up in the mania and continued “to buy things they didn’t need with money they didn’t have”. However, after the Credit/Debt Crisis of 2007, too many Americans found themselves deeply indebted and most have since been unwilling or, with tight credit, unable to spend on other than the basics. While the current Administration inherited this economic and employment malaise, U.S. voters were led to believe that the new President & his team would be able to get things “cracking again”. It has not turned out well for this Administration largely because the leading economic advisors are academic elites who have been “out-of-touch” with the realities of this ‘Great Recession’. They are said to believe that after massive bailouts, huge ‘stimulus’ spending, along with enticement programs, such as ‘Cash-for Clunkers’ and home-buyer credit, “the U.S. economy would rocket out of the deep recession” because there had been an extended period of built-up demand.
Now, let’s go back to the early 1990s for another review. At that time, Ross Perot was forecasting that “the major sucking sounds heard out of the U.S. over the next period would be manufacturing jobs”. This proved to be right, as the greatest loss of manufacturing jobs in U.S history did occur during that period. The key problem with this assumption is that this is not a Continued on page 23...
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typical business cycle recession. This recession was caused Because of globalization, both the good and bad aspects by excessive Debt and cannot be solved by incurring even of the U.S. ‘Boom Era’ were spread more widely than ever more Debt. before. That is why this ‘bust’ called the “Great Recession”, is expected to be felt around the globe for a very long time. In addition, had these economic leaders simply ‘taken walks down Main Street America’, they would have seen the THE HUGE DIFFERENCE THIS TIME IS HOUSING (2) “forest of foreclosure signs”; a huge glut of unsold homes; massive job losses; and a swelling number of Americans, Through every other U.S. economic cycle since World War now over 41 Million, needing help to live with Food Stamps. II, a housing boom “sparked” each recovery. This time, it is “acting as a wet blanket” that is dampening any possibility In fact, it is becoming obvious to many that key economic of rebounding. The fact is that there is a glut of new and trends either remain weak or are now in decline again. These used homes and far too many sales have been distressed include: a long-term unemployment dilemma; declining ones. Now, with new home sales plunging again and with home sales and prices; weak home construction activity; so many distressed re-sales, home prices will continue to weak vehicle & retail sales; a U.S. & global manufacturing decline. slowdown; and a steep plunge in the Dry Baltic shipping Without a growing real-estate sector, employment across a Index. huge swath of industries and service sectors have already Moreover, the austerity measures being implemented across been negatively affected. And, one needs to stop and Europe to counter the EU Debt Crisis are bound to have a realize what a huge employer the sectors related directly significant and prolonged impact on future exports from both and indirectly to real-estate was of the total U.S. economy in order to appreciate just what a great toll this has taken on the China & the U.S. U.S. economy and jobs. It is also most unfortunate that, even with State & Federal Debts soaring, the priority of this Federal Government The reasons for having such a grim outlook for the economy has remained on enacting massive new Health Care and include: high and persistent unemployment and underFinancial regulations that will likely “leave the U.S. with a employment; excessive household debt; and many more millions of ARM Mortgage rate re-sets this year and next. couple of trillion more unintended consequences”. Furthermore, the looming prospect of higher municipal, Is it any wonder that many Americans are starting to think State, and Federal taxes will put an added damper on the future of the housing sector. their country is nearing an economic abyss! THIS TIME IS DIFFERENT The authors (1) of the book with this title used centuries of historical data to illustrate that financial meltdowns typically followed real-estate bubbles; rising indebtedness; and gaping deficits. In addition, they found that economists in each successive new era had more often played the role as ‘shills’ to the regimes, instead of providing salutary warnings
As Dee Kessler (3) was quoted as saying: “we are now sailing in choppy waters without a life preserver”. “Without a growing real-estate sector, employment across a huge swath of related industries has already been negatively affected as fiscal and monetary levers have already been pulled”. He also noted there were “structural headwinds, such as public and private deleveraging, higher taxes, greater regulatory costs, and increasing trade tensions”. With the developed world weighed down by debt, low economic growth, and with deflationary pressures mounting, Dee admits he is hardpressed to find areas of the world that will not be dragged down. Given this dismal outlook, investors may wish to heed some sound advice.
A recent example of this has been with the latest FED Chairmen and many academic economists. Remember only a few years ago they were hailing the era as one of “Great Moderation”, arguing that rising debt levels were tolerable. And, based on fancy new theoretical economic modeling, Mr. Bernanke even pronounced that rising housing prices were a sign of improved economic fundamentals rather than (a) The Stock Markets speculative excess. According to Dave Rosenberg (4), a couple of accepted equity valuation methods indicate that the U.S. Market It turned out that the “Great Moderation” era was in fact, a is still overvalued by 46 to 50%. And, recognizing how great snare – a time of irrational borrowing, spending, and closely the major markets around the world track each risk-taking that eventually destroyed wealth rather than other, there should be no safe place to invest. Moreover, create it. because deleveraging is expected to continue through this secular ‘Bear Market’, one has to expect that margin calls This book also provides a roadmap of how things are likely to will keep causing good company stocks to be sold off along pan out in the years to come. Real-estate bubbles invariably with the bad ones. It is, therefore, recommended that the cause banking crises. Huge losses in the financial sector following blunt advice be heeded. Dee Kessler is one of are followed by sharp deterioration of government finances many respected professionals recommending being out of amid bailouts and decreased tax revenues. The decline the stock market now and, either be in cash or, if one has in economic output that follows the ‘bust’ is sharp but the the expertise to do so, ‘short’ the markets. Robert Prechter Continued on page 24... recovery is invariably slow and prolonged.
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(5)
warned in a blunt analogy: “Winter is coming. Buy a coat”. “Others are advising investors to stay naked”. “If I am wrong, you’re not hurt. But, if they are wrong, you’re dead”. (b) The Bond Market Dave Rosenberg and others recognize that deflation pressures are lurking in the U.S & Europe. Thus, it is only a matter of time before we see most prices in the aggregate, start to deflate. In fact, Dave and several respected professionals have likened current circumstances in the U.S. to that experienced by Japan for over two decades since their real-estate ‘bubble burst’. He also noted there has been a decline in Japan’s JGB yields over the last 20 years even with its massive deficit spending. And, the 10 year JGB yield is still at 1.2%. This scenario reinforces Dave’s secular bond theme. He believes there is plenty of room for U.S. Treasury yields to keep declining, and states the: “situation now is one of debt destruction, not debt expansion.” In addition, Dave points out that U.S. long bonds and corporate credit have been outperforming equities so far this year. And finally, we both believe this outperformance will continue because the 78 million ‘Boomers’ are now turning to income generating securities, particularly after experiencing two stock market ‘bubbles bursting’ less than a decade apart. THE NEXT DECADE IN AMERICA It has been reported that almost 75% of Americans are now uncomfortable and don’t like the way things are going in the country. As Dean Baker (6) put it: “If history is any guide, Americans have often thought the U.S was finished”. However, through the next 10 years he believes, “our fright may be our salvation. When Americans have faced the worst of times, they tried harder to make the best of them.” An apt saying for this is: “When the going gets tough, the tough get going.” Or, to repeat another saying, “necessity is the Mother of Invention.” Historians chalk it up to “creative destruction” that accompanies major technological innovation. “New boom industries reshape not just our economy, but our society”, said Michael Stoff. Some significant trends have been identified that could provide a basis for the evolution of a more promising future. As one example, there is now increasing pressure to achieve U.S. “energy independence”. However, Americans have allowed themselves to become ‘addicted’ to Oil and will remain very tied to it, mostly for transportation fuels. The fact is that the U.S. still consumes 20% of the world’s Oil, but has less than 2% of the world’s reserves. We expect the majority of Americans will come to realize that, instead of ‘shipping money & jobs offshore’ to places like Saudi Arabia or Venezuela and risk the transport of Oil to the U.S. in huge tankers; it would be far less risky to get more Oil by pipeline from the Alberta Oilsands.
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In addition to security of supply, a key benefit of Oilsands development is that it creates a significant number of jobs throughout the U.S. For example, the giant Caterpillar trucks used in Oilsands production come from Peoria, Illinois, with components largely from other U.S. sources including the huge 13 foot high tires made in South Carolina. Moreover, Oilsands development poses no exploration risk as there is with deep water exploration. Nor does Oilsands production pose the risk of massive contamination of water fowl & wildlife, seafood, fragile marshes, or 100s of miles of beaches. And, despite all the billions spent on offshore development, Oil production in the Gulf of Mexico has not increased since pre-Katrina days some 5 years ago. FUTURE TRENDS & OPPORTUNITIES IN A SMALLER WORLD Demand for Oil needed primarily for gasoline & diesel fuels, will increase as growth from China & India will more than offset any decline in the U.S. & Europe. However, the supply of “cheap” Oil is declining and is being replaced by Oil from more expensive sources, such as the Oilsands and deep water wells. This will cause future Oil prices to continue increasing. As Jeff Rubin (7) points out, the ultimate consequences of these trends should be very far reaching 1. The cost of long distance transport will keep increasing. This will reduce the financial viability of shipping many products over long distances. Here are some examples of the changes this could make: (a) Shipping fresh fruits & vegetables from Mexico or even California to cities in the Northeast should become increasingly more expensive, as will refrigeration. People should eventually learn, as in the distant past, to expect access to fresh, low cost, products on a seasonal basis. However, demand for fresh vegetables year-round might also create opportunities for huge greenhouses (with solar heating as needed), to be developed around large North-eastern cities to supply more locally grown products economically. (b) Shipping heavy and bulky products over long distances will also become more & more costly. This will make the transport of steel pipe and the like, from India and China to the U.S. increasingly more expensive, and likely spur more local production. (c) It should also become increasingly more economical to make bulky products, such as refrigerators, in the U.S. once again. In this regard, a major producer of fridges, the Chinese company Haier Industries, has already set up to produce them in South Carolina. Therefore, as shipping costs keep escalating, it should start a reverse trend to bring production back ‘onshore’. And coupled with another major new trend, a growing demand by hundreds of millions of young Chinese and Indians for much higher wages, these should start to ‘level the playing field’ for U.S. workers. 2. (a) As we have already seen in the U.S, when the cost of
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gasoline increased and started to squeeze peoples’ budgets, their initial reaction was to conserve through reduced driving. Then, as fuel costs escalated further, people started to look at lower cost alternatives, a concept known as substitution. Some Americans who already owned Hybrid vehicles modified their system in order to re-charge at home during the night. Another future option, where feasible, would be to convert to natural gas. (b) The cost of commuting from ‘McMansions’ in distant suburbs to jobs in the cities will keep escalating over the years, as will the cost of heating and/or cooling them. These factors will make those ‘McMansions’ increasingly less attractive while the demand for apartment/condos close to major clusters of employment should grow. (c) A steady rise in the cost of commuting should also keep increasing the demand for better public transport. This in turn should spur the development of modern, high-speed, transit systems into the cities. And, because the switch to lower cost public transit would also substantially reduce pollution, both public health and environmental issues, this concept will become increasingly more attractive. It is Jeff Rubin’s prophecy that “ultimately, ever increasing energy costs will fundamentally change the way each of us lives our daily lives from: where we choose to live & work; what we eat; to what car we will drive next. In addition, this will be a growing factor in which industries will likely provide the best future job opportunities as
September- October, 2010
well as those you’re likely to lose jobs from. Thus, Rubin’s positive belief is that: “Ironically, there’s going to be a return to the past, in terms of a re-emergence of local economies”. As he expresses this belief, “the world will get a whole lot smaller over time.” It will also be a very positive trend for the world economy that 100s of millions of younger Chinese & Indian people should continue striving to increase their own standard of living. Thus, they will become the huge new generation of acquirers. This trend will provide a much needed boost to the Asian domestic economies and in time, reduce substantially their dependence on exports. And the combination of trends in the Eastern nations and in the West should go a very long way to re-balancing Global Trade and decrease the potential for Trade wars. The best prospect of all is that these various trends should start to re-create many new job opportunities for U.S. workers. Please note that the opinions expressed in this article are solely those of the writer. For more information and reference details please contact Alan Weeks At (507) 290-3136 or by E-mail: imccr2002@yahoo.com
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Exchange rate of the Costa Rican ¢ to the US Dollar February 558.45 March
528.78
April
516.04
May
545.72
June
540.24
July
522.71
Basic Interest Rate February 8.00 % March
8.00 %
April
7.75 %
May
8.50 %
June
8.25 %
July
8.00 %
Exchange rate of other currencies to the US Dollar Japanese Yen 86.260 Swiss Franc
1.0410
Canadian $
1.0367
Giro (DEG)
1.5185
ÂŁ Sterling
1.5599
Euro
1.3009
Mexican Peso
12.731
Korean Won
1,182.8
Danish Krone Norwegian Krone Argentine Peso
5.7276 6.1159 3.9383
Colombian Peso 1,845.6 Brasilian Real
1.7628
Libor Rate 1 month 0.3050 % 3 month
0.4538 %
6 month
0.6678 %
12 month
1.0367 %
Prime Rate
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3.25 %
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Holidays of Costa Rica September15th- ARCR closed ‘Independence Day’ October 12th- ARCR closed ‘Dia de las Culturas’ November 2nd‘All Soul’s Day’ ******************** A Touch of Wisdom “Genius is only a great aptitude for patience.” Georges-Louis Leclerc de Buffon (1707-1788) “Just because something is common sense doesn’t mean it’s common practice.” unknown “Mediocrity knows nothing higher than itself but talent instantly recognizes genius.” Sir Arthur Conan Doyle (1859-1930) ******************** A quick smile... Two factory workers are talking. The woman says, “I can make the boss give me the day off.” The man replies, “And how would you do that?” The woman says, “Just wait and see.” She then hangs upside-down from the ceiling. The boss comes in and says, “What are you doing?” The woman replies, “I’m a light bulb.” The boss then says, “You’ve been working so much that you’ve gone crazy. I think you need to take the day off.” The man starts to follow her and the boss says, “Where are you going?” The man says, “I’m going home, too. I can’t work in the dark.”
September- October, 2010
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