August 28 Wisdom of the Masses Q&A


To share the inner intelligence we all have we are making  Saturday our Question, Answer and Comment day.

Please send your questions, opinions  or comments.

Fight fire with fire. Use the wisdom of the masses to avoid herd when it stampedes!

Question:

Gary just curious to see if you have ever heard of “Everbank”..it is a currency bank, that is FDIC insured?…if so what do you think about it…?…Thanks

Reply: Sure I have known of Everbank for many years.  They has two aspects… one regular commercial bank. In fact I have an Everbank account myself as Everbank absorbed Bank of Florida a Naples Florida bank I have used for years. Everbank recently took over Bank of Florida.

The other aspect are their multi currency accounts.  This began years ago with Mark Twain Bank in St Louis.   I wrote about that bank many years agao when they became one of the first US banks to offer deposits in a number of currencies and other programs that were FDIC guaranteed.

Mark Twain was also absorbed by Everbank…. so now Everbank offers multi currency accounts.

Everbank has growing importance for Americans because it is becoming so difficult to find bank abroad that will serve US investors.

Everbank fills the role of providing multi currency diversification. However it does not offer the same asset protection as a bank account abroad so US investors need to modify their activity

US investors who simply used an overseas bank account for currency diversification and asset protection need some legal planning to keep the asset protection when they bank within the USA.

If part of your account is for asset protection, be sure to look at how to accomplish this goal with the US account.   This can be accomplished with limited partnerships, trusts or corporate planning.

I have been referring those interested in Everbank and multi currency accounts to my long time friend and attorney, Joe Cox. Joe is one of my most trusted advisers and specializes in asset protection, tax and estate planning .

For more details contact Joe Cox at jcox@coxnici.com

Learn more about Joe Cox here.

Questions on Ecuador Airfares:

Gary, I have traveled Los Angeles/Quito/Manta 4 times using American, United, and Continental. Each trip requires two overnights at the Radisson. Good for the Radisson, pleasant for me, but costs $170 Dollars and makes each way a two day trip. Also, the Icaro interior flight is now priced at $99 round trip. Portal to portal 29 hours.  I have just completed researching flights and have found Taca Airlines LA to Guayaquil the least expensive at $697 round trip. It’s “Red Eye” but arrives in Guayaquil at 3:pm, which I hope means I can get a bus to Manta same day. I would be portal to portal in 19 hours and save over $250.What is your experience with this airline, the bus to manta, the bus schedule, and costs.

Another reader wrote:

Airfares are out of sight again.  Newark to Quito is $599.00 plus taxes.  I am wanting to come to EC middle of October for holiday shopping.  If any of your readers find anything cheaper from this part of the earth, and they tell you, would you please print it, or send me an e mail.  Thanks so much. Hi to Merri for me.

Replies about…

ecuador-buses

Ecuador buses.

A reader shared this valuable information: Maybe you’ve covered it, but just wanted to share a bit about  Ecuador ground transportation.  You don’t have to stick to Airplane  travel to get around comfortably in Ecuador.

Last month I traveled between Guayaquil and Cuenca for $12 on a modern Minivan service provided expressly for that route—I believe 5 to 7 passengers travel  in this ride. The trip was a very comfortable ride, with a very  professional and friendly driver, viewing the most spectacular  mountain views.  We travelled through the gorgeous Cajas National  Park, and got some ideas where to stay for future vacations, as  there are hotels and resorts in beautiful locations on the way.  The  views reminded me of the beautiful Swiss and Italian Alps—breath  taking.  The minivans are not available for all routes in Ecuador,  but there are other cheaper, yet very comfortable options.

The Reina del Camino bus line is available in just about every  terminal terrestre (bus terminal) in Ecuador.  It’s a well  established bus line, being one of the largest and oldest bus  companies in Ecuador.  You have to make sure you ask for the  “Ejecutivo” (Business Class) version of the bus, which is an
upgraded bus and a bit pricier—about $7 from Bahia de Caráquez to  Guayaquil–a 5-hour ride.  The Ejecutivo is available to the most  popular routes in Ecuador; we were surprised that they did not offer  a Cuenca-Guayaquil route, but found the Minivan service to be an  awesome alternative.  The Ejecutivo bus is enclosed with air  conditioning, dark window shades for your sleeping pleasure,  comfortable reclining seats, clean bathroom, and they even play
movies.

Now I’ve travelled with my kids and rather than letting the bus play  some “boring” adult movie (my three small boys’ chief complaint), I
usually come prepared with a movie or two of my own.  The bus  attendants, have never had a problem catering to our needs, and
cheerfully played our movie rather than the one they may have stored  in their cabin.  I have to admit that the bus choice of movies can
vary greatly from great family films, to bang-bang shoot-em-up type  of stuff, so I never take chances when I bring my kids along.   I
absolutely love this bus service, and saves me going through the  hassle of buying plane tickets, or driving my own vehicle for long
distances.  Since the seats are assigned, and I am 6’ 4” tall, I  make sure I ask for the seat near the front where I can really
stretch out; however, seats are comfortable enough, even for a tall  guy like me, that any other seat assignment has worked out fine for
me.

Security concerns are also covered. Buses and bus terminal  entrances are ticket controlled, along with a standard carry-on
baggage inspection.  The buses are absolutely prohibited from  stopping to pick up anybody along the way; you get assigned seats;
and even controlled luggage tickets, so there is no danger of  someone walking off with your bags.  Some longer bus routes do stop,
but only for a gas refill at approved modern gas stations, where you  can stretch your legs, go to the restrooms, and browse through their
snacks.

Bus terminals are very secure, and offer food, restrooms, shops and  other services.
For example, the Guayaquil bus terminal is a huge,
modern three-story mall with a giant modern food court with choices  from McDonalds, KFC, to all types of local delicious meals, and all
in between choices for all tastes.

Taxis are always available at  terminals, and have always averaged me about $2 to $3 for a long ride across the other side of the cities I’ve visited; can’t beat
that.   I pay $3 from the Chone, Manabí terminal to our Ranch and  get charged $3 for the 12Km ride.  I can share about taxi security
some other time.  Hope this helps with your travel needs.  For any questions, let me  know.

ecuador-buses

Question: Hi Gary, you asked for it!  Your thoughts on the merits of collective wisdom were interesting and in my opinion right on the money.

I believe in the democracy as the best form of government. Direct democracy is for the most part not practical therefore I suppose representative democracy is second best.

In the USA there is considerable “interference” with the purity of this process. Your 1906 example of 800 people judging the weight of the oxen worked because each individual viewed the oxen personally. For US citizens to apply worthwhile collective wisdom in the operation of our country we must each receive similar, accurate information about issues on which we are to make decisions.

I have friends who get all their information from Fox News and have a considerably different view of the world than I do. Other friends get their information from MSNBC and have another view point.

It seems that sustaining all of our “freedoms” will depend on the primary freedom that a modern democracy relies on which is “freedom of the press”. This term should today be “freedom of the media”. Democracy requires a media that presents accurate information without the influence of their corporate owners, reporters, or others, and lets us develop our own opinions.

Today after years of unbridled consolidation, 90% of all US media (TV-Radio-Publishing-online-etc.) is owned by 5 giant entities. All of these five are interested in making money much more than presenting unbiased news.

My question to you is; Can our form of government long exist when our collective wisdom is constantly bombarded with information tainted with opinion which supports a prejudiced view point, instead of neutral, impartial reporting by journalists dedicated to the truth as they witness it or discover it through investigation?

Reply:

The only source of real freedom comes from a strong economic base where everyone has a chance to live well and ones efforts are protected and the fruits of their labor protected.

The history has been that industrialized countries provided this economic base of freedom and emerging countries did not.  So great fences have been built to keep to poor from moving to places where most are rich.  However as the tide changes we have to wonder… will the walls build to keep people out start keeping citizens in rather than outsiders out… like a Berlin Wall?

Readers often ask me about Nationalization in South America.

ecuador-politics

Photo from May 6 Economist article on Bolivia nationalization.

I often receive notes from unsettled readers writing with worries about Correa nationalizing all of Ecuador whenever politicians in Venezuela or Bolivia or Peru act up.

These really are different countries… different people…. different political histories and Correa is quite different having risen from poverty via the educational route not military.

world-view

Photo I took of Correa in Cotacachi.

Yet the economic prosperity is growing in Latin America.

We can see the future in the here and now.  Plus our imagination is a value tool if we use it realistically and see ahead with an open mind.  Our forward vision is always blurred by the haze of quantum uncertainty that create this  world.

We should hedge our bets.

One chapter in my first book “Passport to International Profit” published in the 1970s, was about the “Concept Conversion Trick” and says:

“The Concept Conversion Trick begins when people agree on a good concept for working and living together. The people go to work and if the concept is good they will create a paradise. The government gives them a flag and a song. Then the government pulls the trick. The government convinces the people that the flag and song are important. Then while the people are busy watching the flag and singing the song, the government replaces the concept with a set of ever increasing written rules and regulations administered by bureaucrats and backed up by a police force.

“This trick trades people’s individual freedoms for a shiver up the spine when the song is played the piece of cloth is waved. The Concept Conversion Trick turns spirit into matter. Like trading love for a beautiful plastic doll. When the trick has been pulled and the dust settles, the people realize too late what has happened. Anyone who steps out of line is called unpatriotic or even criminal. He is swatted down by the bureaucracy or police force, crushed with overwhelming power or made an example of so others will tow the mark ‘for the good of society’. All this is done in the name of public interest.”

If this writing sounds prophetic having been written 25 + years ago, it was not. Any simple review of any previous great society shows this trick and evolution. Like the Roman Empire , things may get better for a while, then worse and then better again. In the long term, as societies age, they lose their original vibrancy and life.

Should we be surprised? Does not every single thing in this universal existence develop in the same way, vibrant and flexible while young and growing thicker and more brittle with age?

My father loved animals and worked at the Portland City Zoological Gardens. He was a really kind, gentle, fair and scrupulously honest man. Yet one of his jobs was doing the zoo’s annual budget. I recall him spending weeks late at night (on his own time) working over these budgets each year. I also remember his telling me that every year they had to ask for more money because otherwise the city government would give them less. “If we do a good job with their funds, they penalize us,” he told me.

This is how the bureaucracy and society works, millions of small units each trying to grow and spend a little more, until the whole thing swells into an unstoppable mass of self-interest. This is the universal nature to grow until the growth becomes so excessive that balance is lost!

This truth shows us the nature of mankind and every underlying force that goes from birth to continuity and then transformation. This is the way of life and if we are smart investors we recognize this and adapt.”

Read more from this book “Don’t be a sitting duck when the shooting starts“.

This is why I have almost always bet against the US dollar.

This is why my business has been global for more nearly 40 years.

This is why I am so involved in Ecuador Europe and the USA now.

My experience is that Ecuador is very democratic free country filled with sweet friendly people. My bet is that the flag waving focus on drugs and terrorists and anti US sentiment will mislead a lot of potential investors and create bargains here now. That’s why Ecuador is one place where I am putting my money.

Send your opinions and or questions!

Gary

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