Ecuador Real Estate – Politics for Real Estate and Food for Art


Ecuador real estate values are affected by politics and food so before we look at food as art, let’s delve more into the table talk here at El Meson about the art of politics. Many readers are investing in Ecuador real estate so they now have political concerns over the new president and how he can affect Ecuador real estate values.

Ecuador’s new President, Rafael Correra, yesterday reduced his own salary form $8,500 a month to $4,000, a popular move I am sure, but I suspect he’ll have to do more than that. He has called for a quick referendum to abolish Congress. This obviously has not made him popular with Congress. He is saying that congress is corrupt and that the United States has not been fair with Ecuador.

First, let us face the fact that he is correct. Everyone here thinks that the congress is corrupt. Everyone thinks that the US has taken advantage of Ecuador. Take for example a recent case when Ecuador cancelled a contract with Occidental Oil that produced a fifth of Ecuador’s oil.

Ecuador insisted that Occidental violated the terms of its operating contract. A US Trade representative said "We are very disappointed at the decision of Ecuador, which appears to constitute a seizure of assets of a US company."

She said countries must "obey the rule of law with respect to foreign investors" if they hoped to be a free-trade partner of the US, adding she expected Ecuador to pay Occidental compensation.

The reality is that the lease probably was not fair in the first place. Occidental probably did violate its lease.

Another reality is that the Ecuadorian oil company will probably create even less value for the Ecuadorian people!

The reality is that this was probably one corrupt group stealing from another. Sorry to sound so cynical but the poor people usually end up getting screwed! We now have a new guy in the equation. He is young, ambitious and he starts from day one with very strong rhetoric that has immediately placed him in conflict with the old guard.

This is for one of two reasons. He is young, inexperienced and impatient. This is a bad combination. Or he is very wise and saw what happened to his recent predecessors who offered much to the poor but accomplished little. Those predecessors lost their political base quickly and were removed.

If this is the case Correra’s plan might be to strike deeply and swiftly. The question will be can he get away with it.

Only time will tell about Ecuador real estate.

The really important question is what does it mean to us, the small guys who want to have some little business or own our little piece of paradise and Ecuador real estate here in the land of the eternal sun.

First, may I remind you that Ecuador has seen a fruit basket turnover in presidents in the last decade yet the nation has not shed but barely a drop of blood in the process. This has not hurt Ecuador real estate because the people of Ecuador are peaceful, friendly and physical aggression is not in their nature.

Second, Ecuador real estate and land ownership is protected in the constitution and is a part of the fabric of the people.

Correra has stated he will protect Ecuador real estate and land rights. Recently he spoke out at the banking system which has been shifting funds abroad. He has said he will tighten banking regulations to stop capital flight, but that he does not plan to seize private property.

Hours after he was declared winner of the Presidency he said he wanted Ecuadorian banks to retrieve some US$2 billion they have deposited in US banks in Miami, Florida. "I want them to bring that money back and set up a system of credits, like the banking system should do, and start a common fund. They want us to get on our knees begging for foreign investment when our own banks send money to Miami. We're financing foreigners and that's unacceptable," he said. He is right. This is what they should do if he does not try to over regulate the system (as they do in the US).

Though the more he will try to force this issue, the more the banks will fear him and resist.

Correra has said that he’ll put a tax on foreign speculation. He said “Yes, foreign speculation of all shapes and forms must stop … including capital flight,” signaling foreign direct investment is welcome. This could be good for Ecuador real estate values.

Correa went out of his way to quash rumors that as a left-wing politician he plans to seize private property. If this is true Ecuador real estate values will be protected.

This could be good news for those of us who wish to invest in Ecuador real estate. Correra’s rhetoric may scare investors away leaving a buying opportunity for those who remain. However if you are a nervous investor or cannot afford to lose a bit in the unlikely event that there is some form of property seizure…wait a bit. You may lose some opportunity, but perhaps you’ll sleep better at night.

Keep the basics in mind. Left, socialistic, communistic and especially central controlled government regulated economies do not work. Correra talks about lining himself with the likes of Fidel Castro. This is the guy who runs an economic system via terror that is so bad that people risk their lives to swim or boat across The Florida Straits.

The US system has plenty of inequities but it works better than that. In short Correra if he walks his talk is headed down the wrong path. His political power comes for one reason only…..the poor people are fed up with being poor. If his days in office make them poorer then he won’t last.

Chavez in Venezuela can temporarily hang on to a crappy productivity system because the country’s oil revenues allows him to do so. Bolivia’s leftist President has a trick as well. Coca is a big part of Bolivia’s economy. Western efforts to shut this down reduce income to the poor. The new administration there allows more coca to be grown which makes them also temporarily seem better off.

Correra may be planning on financing some economic stupidity as well with Ecuador’s oil revenues. He may want to think again because a big part of his political base comes from the indigenous communities.

In global terms, Ecuador is a small oil player. Revenues from its existing Amazon oil reserves are critical in keeping the country's economy going. There may be huge, untapped reserves in the Amazon rainforest.

For Correra to get at it he has to get past some of the very same indigenous people that are his base. These regions have organized themselves politically in a bid to keep the oilmen out of their ancestral homes. Much of the reserves are beneath pristine virgin rainforests which are legally designated indigenous tribal territories.

Milton Carrera the president of the Achuar community one of the larger Amazon groups said (quite rightly) “We were here thousands of years before Christopher Columbus arrived – the land can't be touched, it's our inalienable right.”

In 1999 the government sold exploration rights in two areas. Six years later the exploration had yet to get under way.

The simple but hard fact is the poor want to be part of the Western industrialized economy. I am not sure this is a good thing. They may even bemoan it if they get it. However I think this is what they want. If so the only way for them to get bit is to become more productive. They need better education, better infrastructure, better industry and freer trade. These things are no easy task so I do not envy Correra.

My take on all this so far first is to wait and see. We have a nation of friendly, easy going and peaceful people who are fed up. For the past ten years they have listened to promises and then kicked the guys out when they were not immediately filled. Nothing seems to have changed.

For those who love the place buy, buy, buy Ecuador real estate now while others are scared. This has to date been a winning formula. But keep in mind that Merri and I are pioneers speaking here.

You can see why I remain excited about Ecuador real estate when you look at what Steve, just wrote to me:

“Gary, While looking for Ecuador real estate for sale I ran across this little chalet style bungalow that is for rent at $200 per month. It overlooks Lake Yaguarcocha that you have written about before. This lake hosts a golf course and a motor racing track. The views from the chalet are absolutely marvelous with the lake sparkling down below surrounded by green hills. There is a cherry tree outside and best of all, in my opinion, a porch facing the lake – perfect for an early morning coffee. There are two bedrooms, a bathroom, and a large living area with an adobe style chimney. It sits on a hacienda and the owner speaks good English and is friendly. He told me he may decide to sell the chalet and as much land as the prospective buyer wants – he has 50 acres. He may even sell the whole caboodle as his wife and children are in the USA and he misses them. The hacienda is 2 miles from Ibarra city and a 45 minute drive from Cotacachi along the Pan American Highway; a pity otherwise I would snap it up for myself. Here is a shot of the house and a picture taken from the front yard. Steve”

Here is a terrific piece of Ecuador real estate

There you have it. We have political concerns here and we have political concerns back home. When you sit in your beautiful house with a lake view back home and contemplate the political concerns it costs you a lot more than $200 bucks a month!

Let’s not forget the important stuff either, Ecuador’s art and food! Or rather art food.

I think that perhaps when we first took over El Meson, the chef and staff had not been encouraged to be creative. We may give them freedoms they have not encountered before and suddenly they have responded in a burst of creativity and beauty.

You saw the wonderful dinner that Santiago the chef created yesterday. Look at his breakfast. Those who stay with us at El Meson get a free, beautifully served breakfast. Diners used to Holiday Inn FREE breakfasts cannot understand what this means, sitting here in the sunny court yard and having not only delicious but beautiful meals served by joyful smiling people who really want to please. This is authentic care, not something we have trained them to do.

You start with fresh squeezed tropical juices, mango, blackberry, papaya, pineapple and many more.

Then comes fresh fruit and look how they have started serving this (we did not ask). Eduardo comes in voluntarily early each day to create these beautiful food impressions.

Then Santiago takes over when, after Consuelo serves the quinoa or hand made granola, he cooks the eggs. Look what he has chosen to do himself.

With wonderful sunny weather and food like this it’s easy to not worry too much about the non important stuff that might (or might not) happen.

We are completing our business plan for this internet service we will provide at a new website we are creating. The annual fee with be somewhere between $99 and $149 a year. Merri and I are sold on Ecuador, have more than a decade's experience here and are now pulling out all stops. To help you get started I am making a really special offer. Order the Ecuador Report now and I'll sign you up for a free year's subscription to our Ecuador Expedition internet service. You'll save somewhere between $49 and $100! You can order the report at http://www.garyascott.com/catalog/ecrep/

Snap Decisions Sometimes Are Best and can be Good for Health

Merri and I find we make a lot of snap investment and business decisions. They always seem to turn out best.

This makes sense because scientific studies are suggesting that in some cases using your instincts is better than thinking too hard.

A BBC article recently said: “Trusting your instincts may help you to make better decisions than thinking hard, a study suggests. University College London found making subconscious snap decisions is more reliable in certain situations than using rational thought processes. Participants in the study were given a computer-based task and performed better when they were given less time to make their decisions.”

We have written about this before when we reviewed the book Blink by Malcolm Gladwell. His books supports the idea that first thoughts are best. We have also written about “Investing Beyond Logic” how we use astrology to help our decision making process. Blaine Watson recently conducted this course here in Ecuador. This course was such a success and Blaine so loved Ecuador that he is returning and will contribute in our upcoming import-export course this February 20 to 25. Details are below.

Until next message, good Ecuador real estate to you!

Gary

P.S. Join us in the Ecuador sun this winter. Here is a schedule of the courses Merri and I will sponsor and or conduct.

Feb. 20 – 25, Tues.-Sun. Import-Export Course.

Mar. 9 – 15, Fri.-Thurs. Expanded Super Thinking + Spanish.

Mar. 16 – 18, Fri.-Sun. International Business and Investing Made EZ.

Mar. 19 – 21, Mon.-Wed. Andes Extension & Real Estate Tour.


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