* International Investments – Warming Isn’t Cool
* Natural Health Tip – Cool Travel Health Tip
* Ecuador Real Estate – Cool Shifts
Inflation is real and can affect us in many ways. Inflation is often hidden in reality and escapes economic numbers as well.
For example if in the 90s if one looked at inflation figures for Miami housing, the numbers did not look too bad. Then Hurricane Andrew ripped through the city and all the houses built after the 70s (wide spread introduction of shingle staple gun) lost their roofs. Earlier built houses did not. House prices between 1970 and 1990 may not have risen that much. But the later built houses (that did something-cost more) were cheaper.
Recent messages looked at economic problems created by high health costs. Not only are costs rising, services are going down! Here is a note from a long term reader that shows this affect.
“Gary, I am employed in medical research. About 4 weeks ago I was informed that my position was being eliminated because of the loss of funding of the main NIH grant that my position was paid.
‘Frankly, the downturn in this country as a result of the George Bush debacle has gotten us both in the frame of mind of thinking about emigrating and Ecuador sounds like a good place to go. So, can you point me to someone who might know about the possibilities for medical or medical research jobs in Ecuador? Any ideas or referrals you may have would be greatly appreciated.”
Another reader wrote: “Dear Gary, With reference to your message…I have a similar problem with health insurance. Our present plan is to retire in Ecuador. I will be 66 and she will be 60. Do you know of any way to cover my wife against catastrophic med expenses between her ages 60 and 65…without “breaking the bank”? Sincerely”
I regret that I do not have an answer for those living in the USA.
With inflation expect to pay more for health services. Expect to get less. To understand this dilemma even just a bit read the novel Toxin by Robin Cook. Though fiction, Robin presents medical issues that are real!
Expect to pay more for health insurance. Expect to get less!
This applies to all insurance because we have one more insurance problem that goes well beyond inflation.
The first part of this problem is demographic.
One of the largest migrations in mankind’s history has taken place over the past two decades and has transformed the Atlantic and Gulf coast of the USA. Now one in 7 Americans live on the East and Gulf coasts. Beach economies have been growing faster than anywhere else.
This concentration of humanity has flocked to the coastline from rock-strewn coasts in Maine all the way around to sandy barrier islands hugging Texas.
New retirees and baby boomers are settling on the coast full-time or buying vacation homes for later retirement later.
A USA TODAY analysis found that an estimated 41 million people now live in a county that abuts the eastern or southern seaboard. There are also several million inland residents with second homes near the coast. Since 1993, 100 coastal counties have grown nearly 50% faster than the rate for the entire USA. About 1,000 new year- round residents arrive each day.
To a large extent, this migration is being fed by the booming metropolitan centers along the East Coast: Boston, New York, Baltimore-Washington, Charlotte, N.C., and Atlanta. Many urban residents start out buying or renting a weekend home along the coast and eventually move permanently. This is important as you will see in a moment!
This growth should continue with the aging of the USA’s 78 million baby boomers. Millions of boomers should have the financial resources to move to the beach but this creates and coincides with a second problem……global warming.
Our son just sent us a note about a press release by Lloyd’s of London Insurance Syndicate.
The release says that Lloyd’s warns insurers to face the challenges of climate change.
It states that the insurance industry must face up to the growing threat of climate change or risk being swept away.
Lloyd’s has published a report “Climate Change, Adapt or Bust” that warns insurers to act now to understand and actively manage risks from emerging threats such as greenhouse gases and rising sea levels. The report says recent scientific evidence suggests climate changes are taking place faster than imagined and insurance change is long overdue. Here is a quote:
“Recent natural disasters have revealed the inadequacy of capital and pricing models, so catastrophe models must be updated regularly to keep pace with the latest scientific evidence; the industry must take a new approach to underwriting, looking ahead and factoring in climate change scenarios, rather than simply basing decisions on historical records – especially with extreme windstorm seasons set to continue; insurers must prepare for the impact of climate change on asset values.
“Underwriting for profit will be crucial; insurers must regularly review and communicate conditions of coverage in light of the impact of climate change; and effective partnership with business and government will be key to mitigating risk.”
Learn more about this demographic twist at garyascott.com archives
In short this means plan to pay more or rely less on insurance issued from insurance firms in the USA.
Have you had any insurance cancelled or raised a lot recently? If so let me know. I am not selling insurance. I just want to share what is happening with insurance around the world.
The ultimate insurance we can have is strong bodies, good health, clear minds and a diversified global business and portfolio. Plus the willingness to adjust as times and circumstances shift.
Every black has a silver lining. In this instance we want to look for the insurance businesses that will emerge from the change. Calculate where people will shift as they move away from hurricane zones.
This is why Merri’s and my businesses and investments are spread around the world. This is also why we live far from the maddening crowds…and far from the beach. This is in part why Ashe county is booming and Ecuador as well.
We can never know for sure what the future will bring, but what we can know is that if we have a global view, the sun will shine somewhere for us.
Until next message, we hope it shines for you as well.
P.S. Join us in Ashe County. Learn more about investing in overseas markets. Join Merri, Thomas Fischer from Jyske Bank Copenhagen and Steve from Ecuador and me at our next International Business and Investing Made EZ course in North Carolina. Our free accommodations here on the farm are reserved on a first come first served basis so do not delay! Details at garyascott.com
Here’s our horses on the Farm. We love Ashe County…no hurricanes, no earthquakes, no volcanoes. Ashe county is cool but…. in the winter too cool. You can see why we also love sunny Ecuador!