Escape to Costa Rica for Retirement and Investment

We have been hesitant to write an article urging Americans to jump from a sinking ship for fear that we will inevitably be called biased, or America haters, or a snake oil salesman.

Do we believe America’s best days are behind her? Yes. Are we biased? Yes. Do we stand to gain if people move to Costa Rica? Yes. However, the following is not a political statement or an ideological one, nor is it an advertisement; it is simply a fact-based assessment of the times in which we live.

Every American that I speak with is feeling the pain of the collapsing U.S. economy. I feel that it is finally time to say what we all feel: America’s growth and prosperity is over, and maybe it is time to look abroad for retirement and investment.

As the U.S. economy continues its free fall, the quality of life for millions of Americans is being threatened. The U.S. economy declined 3.8% in the final quarter of 2008 and the future appears to be one of further decline. The U.S. economic fundamentals are simply woeful. Unfortunately, it is widely believed that this is just the beginning of the suffering.

• The stock market has lost 50% of value
• Jobs are disappearing at a record pace
• House values continue to plummet – down over 20% on average
• Foreclosure numbers have risen 225% since 2006 to 3.2 million filings.
• Health insurance is impossibly expensive
• Social Security and Medicare funds are rapidly facing solvency deficiencies
• The government is waging two expensive wars – $594B and counting
• The Fed is printing money around the clock – they added 98% to the money base in the last year alone!
• America’s service-based economy produces little of value

The US government recently announced that the unemployment rate rose to 7.2% in December from 6.8% the month before. The US economy lost 2.6 million jobs in 2008, of which 1.9 million were lost in the past four months. Of these, 524,000 were lost in December alone. Furthermore, these are the “sugar-coated” government numbers.

The Wall Street Journal stated that “While the official unemployment rate is 7.2%, a different figure that includes discouraged workers who have dropped out of the labor force and those working part time because they can’t find full-time work hit 13.5% in December. That was nearly a full percentage point higher than in the previous month and up from 8.7% at the end of 2007.”

James Turk, economist and founder of Goldmoney, sees another Great Depression: “Unemployment is the key measure that signals whether or not a depression has begun, and by the SGS measures we are rapidly approaching the 25% unemployment rate usually mentioned as the most important signpost marking the depths of the Great Depression. That high rate of unemployment cut a wide-swath of misery through the American population.”

A recent Op-Ed piece that was published in The New York Times by Nobel Laureate Paul Krugman on January 5th stated: “The fact is that recent economic numbers have been terrifying, not just in the United States but around the world. Manufacturing, in particular, is plunging everywhere. Banks aren’t lending; businesses and consumers aren’t spending. Let’s not mince words: This looks an awful lot like the beginning of a second Great Depression.”

Sure, the election of Obama brought a certain amount of hope, but the fundamentals are too powerful and too far-gone for a speedy recovery no matter how much money the Fed prints. In fact, the emergency stimulus packages may only exacerbate the problem. The “Deflationists” on one side point to shrinking credit, less consumer spending, falling home sales and lower commodity prices; and on the other side, the “Inflationists” point to the unprecedented amount of money supply as all but guaranteeing runaway inflation leading to a dramatically weaker dollar and steep price increases for consumer goods and services.

Either way, no one seems to be pointing to a rosy outcome for the foreseeable future.

The unfolding crisis has indisputably been created by institutional monetary policy; whether the blame goes to Wall Street, The Congress, George Bush, Banks or The Fed, it is inherently something that happens when a tipping point has been reached — growth slows, then stops, then retreats, and someone is left holding their devalued assets and a debt which exceeds the ability to pay back the money borrowed to “own” them in the first place.

We feel that developing countries, such as Costa Rica, are more protected than their North American and European counterparts – particularly Costa Rica, because of its unique unyielding political stability, strong social structures, and a strict lending environment. Further, the broad appeal of Costa Rica and the close proximity to the U.S. serves to drive demand for retirement homes, investment, and business.

Most importantly, the fundamentals of Costa Rica point to a continuing relative prosperity. After a year of high inflation at 22.5% in 1995, Costa Rica experienced a recession through 1997. Since then, inflation dropped as low as 9% and GDP has grown solidly in the 5% range year after year.

Costa Rica now boasts an unemployment rate less than that of the United States. Furthermore, with the arrival of CAFTA, privatization and competition will be introduced, which will update or replace some inefficient national systems, thus creating more jobs across the board and strengthening overall growth opportunities.

Costa Rica still derives most of its income from tourism. It stands as the most visited nation in the Central American region, with 1.9 million foreign visitors in 2007, a higher per capita rate than other popular destinations such as Mexico, Dominican Republic, and Brazil. Moreover, Costa Rica continues to gain popularity for its strong stance on the environment, which as led Costa Rica to be ranked 5th in the world on the 2008 Environmental Performance Index rating – up from 15th place in 2006. This trend will continue as more channels are opening for those interested in sustainable living.

The world economy is gloomy, and we do not take the position that Costa Rica will be completely immune from the fallout, but the fact remains that Costa Rica is a developing country changing in fundamentally beneficial ways for the tourist, retiree and investor. Costa Rica presents a positive, exciting and fresh alternative in an economic climate that is desperate need of some good news.

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Considering The Atenas Area For Your Home In Costa Rica?

The AARP (American Association of Retired Persons) ranks Atenas as one of “The Best Places to Retire Abroad.” For more information about homes and land for sale in the area please contact our Recommended Realtors in Atenas by using the simple form below:

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.