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David C. Murray

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Everything posted by David C. Murray

  1. Well, what I can tell you is that in the eight years that we've been here, during which time we've bought one new car and one used one and built two houses, we have never encountered customer service any more insensitive or indifferent than what you'd expect in your local U.S. Walmart, Sears, Best Buy or Home Depot. I've not patronized Clinic Biblica, but the care and the treatment I've received at CIMA have been on a par with what I experienced in Michigan and North Carolina. I'm a firm believer in the notion that the response you receive is largely dependent upon the attitude you project. If you behave like a gentleman or lady, you'll be treated like one; behave like an ass and you know what to expect. Things will be different (ideal, that is) in American Samoa, of course.
  2. Having spent part of my work life in the private sector, I can assure you that there is always business you don't want. And then there's business you wish you hadn't accepted.
  3. Jim, if you click on the "Monthly Average" button on the exchange rate chart on your first link, you'll see that it's dead-flat at c500:$1.00US back to October of 2012. If the chart went back to October of 2010, I think you'd see virtually the same line. As for the inflation rate, I'm not going to dispute efinance's number. Working from 5% annual inflation doesn't make a compelling argument for the Costa Rican CDs whether you buy 'em from BNCR, BCR, or another source at 5%. I think you're right, though, that plus 5% in interest counterbalanced by minus 5% for inflation equals zero growth. On the other hand, 12.75% - 5% inflation still nets you 7% actual growth in purchasing power, no?
  4. Hmmm . . . Well, where I grew up, 12.75% minus 5.75% left 7.0%, not 6.0%. That aside, I think you may be overstating the Costa Rican rate of inflation (although I'm in no position to argue the point). Assuming that you have it right, the computed rate of inflation may or may not impact upon everyone the same. While it's entirely possible, for example, that real estate and vehicle prices are rising, we're not buying either (which would be our largest purchases, if we were making them), so to some extent we are insulated from whatever inflation is occurring as are many who exist in this economy. Nonetheless, the U.S. rate of inflation (I thought it was much lower than 3%) offsetting the virtually nonexistent interest rates on U.S. CDs does, indeed, make even Banco Nacional's crappy 5% on colones look very good. And it makes Coopenae's 12.75% for five years look impossible to pass up. Using your computed real rate of return on U.S. CDs, the net difference at BNCR would be 7% per annum and 14.75% at Coopenae. Yowser! As for the exchange rate, all I can say is that it's been very stable for about three years just a few colones one side or the other of c500:$1.00US. What the future holds is anybody's guess.
  5. . . . as well as . . . 1284 – The Republic of Pisa is defeated in the Battle of Meloria by the Republic of Genoa, thus losing its naval dominance in the Mediterranean. 1506 – The Grand Duchy of Lithuania defeated the Crimean Khanate in the Battle of Kletsk 1538 – Bogotá, Colombia, is founded by Gonzalo Jiménez de Quesada. 1661 – The Treaty of The Hague is signed by Portugal and the Dutch Republic. 1777 – American Revolutionary War: The bloody Battle of Oriskany prevents American relief of the Siege of Fort Stanwix. 1787 – Sixty proof sheets of the Constitution of the United States are delivered to the Constitutional Convention in Philadelphia, Pennsylvania. 1806 – Francis II, the last Holy Roman Emperor, abdicates ending the Holy Roman Empire. 1819 – Norwich University is founded in Vermont as the first private military school in the United States. 1825 – Bolivia gains independence from Spain. 1845 – The Russian Geographical Society is founded in Saint Petersburg, Russia. 1861 – The United Kingdom annexes Lagos, Nigeria. 1862 – American Civil War: the Confederate ironclad CSS Arkansas is scuttled on the Mississippi River after suffering damage in a battle with USS Essex near Baton Rouge, Louisiana. 1870 – Franco-Prussian War: the Battle of Spicheren is fought, resulting in a Prussian victory. 1870 – Franco-Prussian War: the Battle of Wörth results in a decisive Prussian victory. 1890 – At Auburn Prison in New York, murderer William Kemmler becomes the first person to be executed by electric chair. 1901 – Kiowa land in Oklahoma is opened for white settlement, effectively dissolving the contiguous reservation. 1912 – The Bull Moose Party meets at the Chicago Coliseum. 1914 – World War I: First Battle of the Atlantic – two days after the United Kingdom had declared war on Germany over the German invasion of Belgium, ten German U-boats leave their base in Heligoland to attack Royal Navy warships in the North Sea. 1914 – World War I: Serbia declares war on Germany; Austria declares war on Russia. 1915 – World War I: Battle of Sari Bair – the Allies mount a diversionary attack timed to coincide with a major Allied landing of reinforcements at Suvla Bay. 1917 – World War I: Battle of Mărăşeşti between the Romanian and German armies begins. 1926 – Gertrude Ederle becomes the first woman to swim across the English Channel. 1926 – In New York, New York, the Warner Bros.' Vitaphone system premieres with the movie Don Juan starring John Barrymore. 1930 – Judge Joseph Force Crater steps into a taxi in New York and disappears never to be seen again. 1940 – Estonia was illegally annexed by the Soviet Union. 1942 – Queen Wilhelmina of the Netherlands becomes the first reigning queen to address a joint session of the United States Congress. 1945 – World War II: Hiroshima, Japan is devastated when the atomic bomb "Little Boy" is dropped by the United States B-29 Enola Gay. Around 70,000 people are killed instantly, and some tens of thousands die in subsequent years from burns and radiation poisoning. 1956 – After going bankrupt in 1955, the American broadcaster DuMont Television Network makes its final broadcast, a boxing match from St. Nicholas Arena in New York in the Boxing from St. Nicholas Arena series. 1960 – Cuban Revolution: Cuba nationalizes American and foreign-owned property in the nation. 1962 – Jamaica becomes independent from the United Kingdom. 1964 – Prometheus, a bristlecone pine and the world's oldest tree, is cut down. 1965 – US President Lyndon B. Johnson signs the Voting Rights Act of 1965 into law. 1976 – Zulfikar Ali Bhutto lays the foundation stone of Port Qasim, Karachi. 1986 – A low-pressure system that redeveloped off the New South Wales coast dumps a record 328 millimeters (13 inches) of rain in a day on Sydney, New South Wales, Australia. 1988 – The Tompkins Square Park Riot in New York City spurs a reform of the NYPD, held responsible for the event. 1990 – Gulf War: the United Nations Security Council orders a global trade embargo against Iraq in response to Iraq's invasion of Kuwait. 1991 – Tim Berners-Lee releases files describing his idea for the World Wide Web. WWW debuts as a publicly available service on the Internet. 1991 – Takako Doi, chair of the Social Democratic Party, becomes Japan's first female speaker of the House of Representatives. 1996 – NASA announces that the ALH 84001 meteorite, thought to originate from Mars, contains evidence of primitive life-forms. 2001 – Erwadi fire incident, 28 mentally ill persons tied to chain were burnt to death at a faith based institution at Erwadi, Tamil Nadu. 2008 – A military junta led by Mohamed Ould Abdel Aziz stages a coup d'état in Mauritania, overthrowing president Sidi Ould Cheikh Abdallahi. 2010 – Flash floods across a large part of Jammu and Kashmir, India, damages 71 towns and kills at least 255 people. 2011 – A peaceful march in protest of the death of Mark Duggan in Tottenham, London ends in a riot, sparking off a wave of rioting throughout the country over the following four nights. 2012 – NASA's Curiosity rover lands on the surface of Mars. . . . and your point is?
  6. Fred S and demgems, something I overlooked was to mention that here, in Costa Rica, you will have essentially no "social safety net". That is, there is no program like Food Stamps, no rent subsidy for low-income folks, no subsidy for health care, etc. For one in seven Americans, the Food Stamp program is (literally) a life-saver. None of that here. _________ On a separate note . . . I had the "privilege" of spending an hour in Banco Nacional's lobby this morning trying to get my online password sorted out. Between hands of Solitaire, I noticed that they're paying about 5% on two-year colon-denominated CDs. That's making Coopenae's 12.75% for five years look better and better.
  7. Well, when we see the mushroom cloud(s), we'll know you've been right all along, although it'll hardly matter.
  8. Yeah, yeah . . . Easy for you to say, but what were the names of the niece and nephew? "Penny" and ______ .
  9. fpapia, any exchange rate change wouldn't matter to us once we've made that exchange since we'll be invested in and spending colones exclusively. Inflation in Costa Rica, of course, would matter to us, but it would matter to everyone. Coopenae will sell you a CD denominated in either currency for the duration of your choice. So while Banco Popular will give you 10% guaranteed for a year, Coopenae will give you 12.75% guaranteed for five years. Locking in 12.75% for five years looks pretty good right now. Of course rates could go up which would make that five-year commitment look bad, but they've been going down lately and, I should add, they've been going down faster at the banks than at Coopenae. And, with an interest penalty, Coopenae will give you an "out". If rates go that far above 12.75%, we could take the interest hit and re-invest at the then-higher rates. I'm not sure that comparing either Banco Popular's or Coopenae's circumstances in Costa Rica in the 20-teens to a private, commercial insurance company's circumstances in the U.S. in the 19-nineties is meaningful. CONSEVCO was not run as a non-profit financial institution subject to Costa Rican law. Seems like some other comparison (other than Enron) would be in order. As to whether converting dollars to colones in order to get either 10% or 12.75% would be financially wise, that may be tougher to answer. Your dollars held in the U.S. in any financial product are essentially stagnant due to the low interest rates. Next year you'll have virtually the same number of dollars. While inflation is as low as it has been for the past several years, that's a "no harm-no benefit" situation. Stocks, of course, are another matter but then there's the matter of choosing (correctly). An alternative would be to move your dollars to Costa Rica, invest in government-backed bank CDs denominated in dollars at around 4%, and make four or eight times as much as you would have in the States. There's that matter of risk again, of course, and if you're prepared to stand the risk of failure (however minimal it may be), why not just go for the high rate return on colon-denominated CDs?
  10. FredS, if you're anxious about being able to live on your Social Security here in Costa Rica, you should be downright hysterical about the prospect of doing so anywhere in the States. There are a couple of other points to ponder, however. In Costa Rica, you could have much more flexibility in your lifestyle. You could, for example, live comfortably on an almost meatless diet of locally produced foods. Those would be much cheaper than the same foods purchased anywhere in the States. You could also opt to use only public transportation which is hardly universally available in the U.S. And if you chose wisely, you could live at an altitude here where neither heat nor A/C nor even ceiling fans are necessary. That would be virtually impossible in the States. You could also confine your health care to what the CAJA has to offer which, aside from the monthly enrollment cost, is free. On the other hand, in the U.S. you could collect Social Security and continue to work at some job or another. Here, until you're a permanent resident, that would be illegal. And Costa Rican wages, should you land a job, are insultingly low. Too, in the U.S. you'd have access to Medicare which would afford you more choices of health care but at much higher rates. And you'd be in a familiar environment where your native language is spoken. Decisions . . . decisions . . .
  11. Fpapia, Banco Popular isn't offering 10% on dollar CDs, are they? Their high-rate CDs are all denominated in colones, right? You're right that the exchange rate could change but, for whatever reason, it's been stable at around c500:$1 for more like three years than just one. What will happen in the future with either the dollar:colon rate or the purchasing power of either really is anybody's guess. As for stability, you're absolutely correct that Coopenae does not enjoy Banco Popular's governmental backing. What you must determine, however, are two things. First, what's the real likelihood that either of them will fail? And second, while Banco Popular has the government's backing, does the government have the capacity to stand behind that guarantee?
  12. I don't know about maui-mahi, but swordfish are heavily overfished generally and thus threatened. These are long-lived fish which don't reproduced early in life. In years past, swordfish weighed over 100 pounds when caught. Now, fish that large are a rarity. We've long since ceased to eat swordfish.
  13. fpapia, I think the key to success would be to convert dollars to colones, invest those colones in Costa Rican CDs (one or more, maybe staged) which pay higher rates than CDs denominated in dollars, and plan to spend the colones upon maturation. There is, of course, the threat of inflation, but that's more or less true everywhere. To do so, however, would almost certainly require that you be a legal resident of Costa Rica. It's becoming more and more difficult for non-residents to open accounts here. As an aside, the last CD we purchased at Coopenae, a Costa Rican non-profit financial cooperative, will pay us 12.75% locked-in for five years.
  14. Curtis "Boom-Boom" Lemay who wanted to nuke North Viet Nam? This is your hero?
  15. Does this mean that the opportunity to go to American Samoa with you has passed? Is this thread closed?
  16. Before you sign up for this venture, be sure to Google "slave labor in American Samoa" for insights into " . . . the place in the South Pacific where no effort is expended for the sustenance of life . . .". Apparently there are many folks there who are expending quite a lot of effort trying to sustain their lives.
  17. Direct current electricity distribution won out over alternating current a century ago due to the high rate of loss of voltage in direct current transmission. In order to provide direct current service in an urban environment, for example, a substation would have been needed every few blocks and it would not have been cheap. Alternating current can be transmitted over much greater distances without an equivalent loss of voltage. Transmitting electricity by direct current over long distances would require a very large infrastructure investment. What's more, underground electricity lines, while desirable for many reasons, are very, very expensive to both install and maintain. The right-of-way requirements would be essentially the same as for overhead lines but the excavation and encapsulation costs would be staggeringly higher than the relatively inexpensive overhead structures in common use.
  18. Jim, you asked, "David, aren't the rates you publish after taxes which are taken our before they give you the money in CR? I mention that because some folks might be comparing your numbers to the before tax rate they see in the US." Costa Rica imposes an 8% tax on the interest earned on CDs purchased at both national and private banks. The rates that banks quote are net rates after that tax has been withheld. If (say) BNCR quotes (say) 7.5% on a one-year CD denominated in colones, that's what you'll be paid -- 7.5%. In order to give you that 7.5% net return, they actually have to pay around 8.1% before the tax is withheld. Costa Rica does not tax the interest earned on CDs purchased at non-profit cooperatives. The rates they quote are net rates, as well. If (say) Coopenae quotes (say) 10.5% on one-year CDs denominated in colones, that's what you'll get -- 10.5%. And that's what they pay -- 10.5%. Interest paid to U.S. citizens on CDs (or from other sources) by banks in the U.S., by banks in Costa Rica, and by non-profit cooperatives in Costa Rica is all taxable under the U.S. I.R.S. Code. The "foreign earned income tax exemption" in the I.R.S. Code is just that, an exemption from tax on income you earn from actual, active work, but not from passive endeavors like investments, rent, profits from sales, etc.
  19. Eleanor, you wrote, "Why do you think that buying a CD at Coopenae has "virtually no additional risk?" What is it about Coopenae that assures you that your money will be as safe as with a national bank?" First, note that I wrote ". . . virtually no additional risk." I didn't say that there is literally no risk involved in investing in CDs at Coopenae versus in a national bank. Indeed, there may be some additional risk. The questions are, how much? and whether it's worth the exposure. What's the real likelihood of a failure? That said, Coopenae's quarterly audit reports, performed by a rotating cadre of international auditing firms, reflect rock solid risk management. If you want to compare Coopenae's risk to that of a national bank, backed by the government, then you need to apply the same yardstick to them both. What is Banco Nacional's risk exposure? BCR's? And what about the government's real ability to stand behind them or any of the other national banks should one of them fail? What audit reports have you seen for the national banks and the government? Coopenae has been around since the mid-1990s. It's the largest financial cooperative in Costa Rica with some 85,000 members and the fourth largest in Central America. Its size and track record say something, no? And it has yet to fail to perform as promised. And whereas Banco Davivienda is paying around 7.5% (if I recall correctly) for a one-year CD denominated in colones, Coopenae is paying around 11% for one year and 12.75% for five years, also denominated in colones. The interest rates paid by all the financial institutions in Costa Rica, national banks and cooperatives, are falling. That's important to bear in mind. If I can lock in a 5.75% additional return for five years from an institution whose likelihood of failure is virtually (there's that word again) zero, I'm gonna go for it. As always, your mileage may vary.
  20. Eleanor, you asked, "My question to you, David, is this: If you are getting a $5 return on your coffee plantings and that is half of the profit, then why does your neighbor continue to work the coffee farm for $5 a year? That doesn't make sense to me. I understand your part of it - you don't really need the income -- but what about Juan Carlos?" First, the second and third pickings are always more abundant. The $5.25 (don't forget the quarter!) was merely the very first, and very worst, "take" we've ever experienced. I cite it for its amusement value. Second, the labor to restore the productivity of our coffee has provided Juan Carlos and the neighbors he recruited to help immediate cash income. I pay my half as they accomplish one task or another. Several times each year, the men come to cut weeds, apply fertilizer, etc. There's a cash flow to them then apart from harvest times. Third, that restoration also holds the promise of future, and much more rewarding, harvests for years to come. In fact, in recent years our share of the profit from the harvest, while still not supporting us, has been substantially more than that first time in 2005. We and Juan Carlos are in agreement that it makes sense to continue to invest in the coffee to the extent that we (well, he) not only maintain it, but we also plant as many as 1,000 or so new plants every year. As the plants age, it makes sense to replace them. And remember, the plants are beautiful, and with roots that can extend as far as eight feet underground, they help hold the soil.
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