Category: Investor News/Analysis

The Dollar Crash, Effects on Ecuador

I’m ticked, like most Americans as I continue to watch the dollar drop in value. With the dollar at or near all-time lows against many foreign currencies, like the Euro, I thought I’d mention the effects I’ve seen in Ecuador.

Ecuador is one of the few countries in the world that actually uses the dollar as it’s official currency. In Latin America, only El Salvador and Panama also use the dollar.

This means that as the dollar drops, and the rest of the world gets more expensive for Americans on a fixed, dollar pension…their only options will be to stay at home (what I think the American government wants) or choose to live in one of the few other countries with the dollar, like Ecuador.

This is a BIG deal and makes Ecuador a very attractive both short and long term investment, as well as an interesting, warm, relatively-nearby place to retire for many Americans.

For example, in 2006 I lived in Colombia, then the dollar traded at around 1-2500 Colombian Pesos, now a dollar is worth 1811 pesos, a 28% drop in value. When I visited Brazil in 2006 the Real was trading around 2.15 to the dollar, now it’s at 1.57 to the greenback, a 27% drop.

And if the world’s rich realize the dollar is a losing investment, and dump it, the dollar will be worth even less, as I saw on a recent trip to Hong Kong where many of the rich I met who before held dollars now hold their savings in Chinese Yuan. It’s well-documented the Yuan is undervalued yet continues to gain in value against the dollar at a steady, government-regulated pace (it’s gained 4.5% over the last year against the dollar according to xe.com).

Buy Yuan. Invest in Ecuador. Interesting.

This coming week I’ll reveal how to buy Yuan on my Insider’s Ecuador Newsletter, sign up below (you can unsubscribe at any time):

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Inflation Trends in Ecuador

Since the dollarization, Inflation has been reduced to normal levels.

According to the Ecuador Central Bank, in 2000, the inflation rate of the country was 90%, in 2003 6.1%, in 2006 2.87%, and in 2009 4.31%. The Ecuador population loves the dollar and does not plan to switch back any time soon.

If you liked this you’d love my my weekly Ecuador Insider’s newsletter where I reveal everything a savvy investor must know before they invest in Ecuador, sign up below (you can unsubscribe at any time):

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Ecuador Economy Update

This week on the Ecuador Insider’s Newsletter I’ll uncover some interesting facts about the current state of the Ecuadorian economy…sign up below to be sure you get it (you can unsubscribe at any time):

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The Trend-Setters of Ecuador to Watch

This week on the Ecuador Insider’s Newsletter I’m going to uncover how to discover trends in Ecuador before anyone else can, be sure to sign up within the next day if you want to see this report, it will go out at 5am on Sunday morning!

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Land Invasions and Squatters in Ecuador

“What the hell am I doing here?” I thought as I sat in a cramped living room of a tiny shack-like-house on the coast in Ecuador.

I was there to talk about a small beachfront lot I found in another part of town. When, all of a sudden, the owner came into the room… an elderly, overweight man who seriously needed a shower.

He said, “That property you’re interested in has been in my family for decades.” It was beautiful too, a small vacant lot right on the beach, in a zone exploding with growth all around. And boy, was it cheap, but for reasons, one was the lot was “occupied by an invader (“invasor” as the Ecuadorians call it)”. Some elderly guy who was deeply settled in one end of the lot, living in a stick shack.

He had no legal right to be there, he just was… he was a land “invader”. The owner said, “Oh, don’t worry about him, I know ‘em, I’m sure he’ll leave once the lot sells.” “Yea right,” I thought.

Ecuador, like most Latin American countries, has a problem with land invasions or poor people with nowhere else to go who “occupy” vacant lands and call them home.

Contrary to popular belief, as I confirmed with a local lawyer before writing this piece, there are no laws in Ecuador that protect land invaders, or “squatters”, and the process to get them off your land is pretty straight forward. Go to the police in your local area with the title of your land and place a “denuncia” (charges) and the local authorities will take it from there evicting the unwanted trespassers.

Now, the reality. The police in Ecuador are not as efficient as what you may be used to, and sometimes you may even have to pay to get them to do their job (although they are getting better). And uprooting someone who has been there for years is certainly not easy.

But yes, you certainly CAN make a lot of money “land-banking” in Ecuador, and it certainly makes more sense than storing all your wealth in the American dollar or Euro these days.

So to prevent problems with invaders, walk the entire land you plan to buy before you buy and be sure it has both proper title and is unoccupied. If it is occupied, be sure to get the current owners to vacate it before handing over any deposit money! Also, if you plan to leave the lot vacant for a while, be sure to visit your lot occasionally and maybe even put a fence to show the land is spoken for.

Recently, this year, it made big news that the government evicted hundreds of “invaders” off lands in the poor areas around Guayaquil city proving property rights of lawful owners are being respected.

And in case you were wondering, I ended up not buying the lot I mentioned earlier because, besides the invader, also had title issues … there’s always next time!

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