There were 29 people in attendance and there was plenty of room for 29 more.

It is a beautifully finished condo with a 180 degree view of Lake Chapala from the master bedroom, den/guest room, open concept living/dining room and kitchen. Our friends amazing artwork adorns the condo and complements the formal style.

There are three bathrooms in the unit and the terrace goes right around the condo offering a spectacular view of Lake Chapala. Last night the view was beautiful in shades of grey which looked like a painting.

There is rigid security in this building and many common areas offering outdoor living. Tennis, swimming, barbequing, party rooms along with hairdressing and spa facilities are offered to name a few.

My tablemate was noting that one could not distinguish this condo from a fabulous one in New York
City but, of course, for considerably less money.

The kitchen had three cooks preparing our delicious supper. To start there were beautiful fat shrimp and almond stuffed Greek olives. Then we had Chiles en Nogadas which is the traditional chile served on Mexican Independence Day as is sports the three colors of the Mexican flag. Also a cheese filled chile relleno was on the plate and chicken fajitas with spicy beans, guacamole and flour tortillas.

For dessert we had individual mincemeat in artful pastry packages with whipped cream and a chocolate truffle.

Naturally, there was white and red wines and champagne.
It was a terrific mix of people both expats and Mexican and I am sure everyone had a lovely time in lovely surroundings. Also the visiting friend regaled us with stories and songs after dinner.

The point of this story is to illustrate that there is something for everyone here in Ajijic, Lake Chapala in terms of property to suit every taste and pocketbook. Quaint village homes are available right up to high end carefully guarded condos overlooking our beautiful Lake Chapala and many other opportunites in between. Select a broker who knows the area and ask them to show you the many faces of Ajijic.

The post said that although things are not so good here in Ajijic, Lake Chapala it is the same worldwide and this too shall pass.

The financial crisis in the US is not a solitary situation and most other countries in the world are suffering too. Greece, Italy, England are also not doing so well financially at the moment but the good news is that the best minds in the world are working on a solution to the problem and, if the politicians can agree, some steps will be taken to resolve the financial downturn worldwide.

Surprisingly enough, Canada and Mexico are doing a lot better than most countries. Real Estate is booming in many markets in Canada and houses are still selling right here in Ajijic, Lake Chapala.

The economic climate is not great in the US which does affect us here but we would be smart to consider the growth we are experiencing in Mexico and that we are now indeed a development nation and no longer a third world country.

Yes, things are a little slow in some sectors, but by turning our minds to our own markets things can and are improving.

The US and the world will solve this financial crisis in due course and our job is to carry on until that happens, hopefully, sooner rather than later. The first step would be to realize the lost jobs in the US are not coming back and the so called “job creators” are well aware of this fact.

Globalization and technology have changed things forever and the thing now is to look forward to the areas of the future where new jobs will be created. I saw an excellent piece recently suggested that tourism is down 1/3 in the US because of visa restrictions so tourists are going elsewhere. If some of these restrictions were lifted the tourists would return and so would jobs in the tourism business.

That is one example but there are many more. A very respected man of impeccable credentials, Fareed Zakaria did a piece on jobs which was called “Restoring the American Dream: Getting Back to Work.” You can find this piece on the CNN website. It is very enlightening.

It is always easier to play the blame game but it seems to me it would be more productive to look forward rather than looking back. Better times are around the corner and we still are lucky enough to live and buy and sell real estate in paradise

You can go online and search all the real estate brokers in the area and find the one that best suits your needs. Remember how it is to find someone that you trust and that will answer all of your questions about a new country with knowledge and patience.

You can see all the different areas of Ajijic from properties right in the town to the assorted gated communities and subdivisions. All of this information is very useful but it still will not give you the flavor and feeling that one has when they are actually here in Ajijic, Lake Chapala.

I remember when we first started to come to Ajijic, I would get the most wonderful feeling of belonging. I loved the warmth of the people, the wonderful smells and the amazing climate. I could not wait to explore the town and all of the properties that were available for sale or rent. The shops were quaint and charming and the colors all around us were beautiful. The flowers and flowering trees were lush and profuse and my favorite is the Jacaranda trees which usually bloom in February carpeting the entire village in fragrant lilac colored blooms.

I loved this beautiful village in the sun nestled between the Sierra Madre Mountains and Lake Chapala. I loved the cobblestone streets and the bougainvillea’s cascading over the high stone walls.

The Nueva Posada was a wonderful place and the centerpiece of Ajijic if you will. The Eager family who is now in the third generation of the family owned business was happy to answer all of our questions.

The restaurants were small and interesting and the food delicious and very moderately priced.

Whenever we have bought a home before I always had a feeling about it when I first saw it. I knew this was the house for me. I still trust my instincts and I know Ajijic, Lake Chapala is not for everyone.

That is why one certainly can do a great deal ahead of time online in finding a house and/or a real estate broker to look after you but you will not really know whether or not Ajijic is for you until you are here and feel Ajijic for yourself. If you do like this area and you do get this feeling that I did I am sure you will be as happy as we have been for over 17 years.

Do your due diligence and then make the trip to see, feel and smell the beauty of Ajijic first hand. I am sure you will not regret your reconnaissance.

Benvenidos

First: A reality check on Mexico

Mexico is in a unique position to reap many of the benefits of the decline of the US economy. In order to not violate NAFTA and other agreements the U.S.A. cannot use direct protectionism, so it is content to allow the media to play this protectionist role. The U.S. media – over the last year – has portrayed Mexico as being on the brink of economic collapse and civil war. The Mexican people are either beheaded, kidnapped, poor, corrupt, or narco-traffickers. The American news media was particularly aggressive in the weeks leading up to spring break. The main reason for this is money. During that two-week period, over 120,000 young American citizens poured into Mexico and left behind hundreds of millions of dollars.

Let’s look at the reality of the massive drug and corruption problem, kidnappings, murders and money. The U.S. Secretary of State Clinton was clear in her honest assessment of the problem. “Our insatiable demand for illegal drugs fuels the drug trade. Our inability to prevent the weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers and civilians,” Clinton said. The other large illegal business that is smuggled into the U.S.A. that no one likes to talk about is Human Traffic for prostitution. This “business” is globally now competing with drugs in terms of profits.

It is critical to understand, however that the horrific violence in Mexico is over 95% confined to the three transshipping cities for these two businesses, Juarez, Tijuana and Nogales. The Mexican government is so serious about fighting this, that they have committed over 30,000 soldiers to these borders towns. There was a thoughtful article written by a professor at the University of Juarez. He was reminded of the Prohibition years in the U.S.A. and compared Juarez to Chicago when Al Capone was conducting his reign of terror capped off with The Saint Valentine’s Day Massacre. During these years, just like Juarez today, 99% of the citizens went about their daily lives and attended classes, went to the movies, restaurants, and parks.

Is there corruption in Mexico? YES !!! Is there an equal amount of corruption related to this business in the U.S.A.? YES !!!. When you have a pair of illegal businesses that generate over $300,000,000,000 in sales you will find massive corruption. Make no mistake about the Mexican Drug Cartel; these “businessmen” are 100 times more sophisticated than the bumbling bootleggers during Prohibition. They form profitable alliances all over the U.S.A. They do cost benefit analysis of their business much better than the US automobile industry. They have found over the years that the cost of bribing U.S. and Mexican Border Guards and the transportation costs of moving marijuana from Sinaloa to California have cut significantly into profits. That is why over the past 5-7 years they have been growing marijuana in State and Federal Parks and BLM land all across America. From a business standpoint, this is a tremendous cost savings on several levels. Let’s look at California as an example as one of the largest consumers. When you have $14.2 billion of Marijuana grown and consumed in one state, there is savings on transportation, less loss of product due to confiscation and an overall reduction cost of bribery with law enforcement and parks service people. Another great savings is the benefit to their employees. The penalties in Mexico for growing range from 5-15 years. The penalties in California, on average are 18 months, and out in 8 months. The same economic principles are now being applied to the methamphetamine factories.

FOX News continues to scare people with its focus on kidnapping. There are kidnappings in Mexico. The concentration of kidnappings has been in Mexico City, among the very rich and the three aforementioned border Cities. With the exception of Mexico City, the number one city for kidnappings among NAFTA countries is Phoenix, Arizona with over 359 in 2008. The Phoenix Police estimate that twice that number of kidnappings goes unreported, because like Mexico 99% of these crimes were directly related to drug and human traffic. Phoenix, unfortunately, is geographically profitable transshipping location. Mexicans, just like 99% of U.S. Citizens during prohibition, go about their daily lives all over the country. They get up, go to school or work and live their lives untouched by the border town violence.

These same protectionist news sources have misled the public as to the real danger from the swine flu in Mexico and temporary devastated the tourism business. As of May 27 2009 there have been 87 deaths in Mexico from the swine flu. During those same five months there have been 36 murdered school children in Chicago. By their logic, if 87 deaths from the swine flu in Mexico warrants canceling flights and cruise ships to Mexico, then close all roads and highways in the USA because of record 43,359 automobile related deaths in the USA in 2008.

What is just getting underway is what many are calling the “Largest southern migration to Mexico of people and real estate assets since the Civil War” A significant percentage of the Baby Boomers have been doing the research and are making the life changing decision to move out of the U.S.A. The number one retirement destination in the world is Mexico. There are already over 2,000,000 US and Canadian property owners in Mexico. The most conservative number of American and Canadian Baby Boomers who are on their way to owning property in Mexico for full or part time living in the next 15 years is over 6,000,000. Do the math on 6,000,000 people buying a $300,000 house or condo and you will understand why the U.S. Government is trying to tax this massive shift of money to Mexico through H.R. 3056. The U.S. government calls this “The Tax Collection Responsibility Act of 2007″. Those who will have to pay it are calling this the EXIT TAX.

Mexico: A better economic choice than China

Another large exodus from the U.S.A is high paying skilled jobs. The job shift in automobile sector, both car and parts manufacturing, is already known by most investors. In the last few months as John Deere and Caterpillar have been laying off thousands of workers in the U.S.A., and hiring equal numbers in Mexico. The most recent industry that is making the shift is the aerospace manufacturers. In the city of Zacatecas there is currently a $210 million aerospace facility being built. With the 11 U.S. companies moving there, it is estimated to provide over 200,000 new high paying jobs in the coming years. One of the main factors for the shift in job south to Mexico instead of China is realistic analysis of total production, labor and delivery costs. While the labor costs in China are 40% less on average, the overall transportation costs and inherent risks of a long distance supply chain, and quality control issues, gives Mexico a distinct financial advantage.

Mexico’s real economic future

Mexico has avoided completely the subprime problem that has devastated the U.S. banking industry. The Mexican banks are healthy and profitable. Mexico has a growing and very healthy middle and upper middle class. The very recent introduction of residential financing has Mexico in a unique position of having over 90% of current homeowners owning their house outright. U.S. banks are competing for the Mexican, Canadian and American cross border loan business. It is and will continue to be a very safe and very profitable business. These same banks that were loaning in a reckless manner have learned their lesson and are loaning here the old fashioned way. They require a minimum of a 680 credit score, 30% down payment, and verifiable income that can support the loan. In most areas of Mexico where Baby Boomers are moving to, with the exception of Puerto Penasco (which did not have a national and international base of buyers), there is no real estate bubble.. The higher end markets ($2-20 million) in many of these destinations are going through a modest correction. The Baby Boomers market here is between $200,000 and $600,000. With the continuing demand inside the Bay of Banderas, that price point, in the coming years, will disappear. This is the reason the Mexican government is spending billions of dollars on more infrastructure north along the coast all the way up to Mazatlan.

The other major area where America has become overpriced is in the field of health care. This massive shift of revenues is estimated to add 5-7% to Mexico’s GDP. The name for this “business” is Medical Tourism. The two biggest competitors for Mexico were Thailand and India. Thailand and India’s biggest drawback is geography. Also recent events, Thailand’s inability to keep a government in place and the recent terrorist attack in Mumbai, have helped Mexico capture close to half of this growth industry. In Mexico today there are over 56 world class hospitals being built to keep up with this business.

Mexico is currently sitting on a cash surplus and an almost balanced budget. Most Americans have never heard of Carlos Slim until he loaned the New York Times $250 million. After that it became clear to many investors around the world what Mexicans already knew: that Mexico had been able to avoid the worst of the U.S. economic devastation. Mexico’s resilience is to be admired. When the U.S. Federal Reserve granted a $30 billion loan to each of Mexico, Singapore, South Korea, and Brazil, Mexico reinvested the money in Treasury bonds in an account in New York City.

According to oil traders, Mexico’s Pemex wisely as the price of oil shot to $147 a barrel put in place an investment strategy that hinged on oil trading in the range of $38-$60 a barrel. Since the beginning of 2009 Mexico has been collecting revenues on hedged positions that give them $90-$110 per barrel today. Mexico’s recent and under reported oil discovery in the Palaeo Channels of Chicontepec has placed it third in the world for oil reserves, right behind Canada and Saudi Arabia.

The following is a quote from Rosalind Wilson, President of the Canadian Chamber of Commerce on March 19, 2009. “The strength of the Mexican economic system makes the country a favorite destination for Canadian investment”.

OPPORTUNITIES: WHY PUERTO VALLARTA & THE RIVIERA NAYARIT

The answer is simple and old fashioned: SUPPLY AND DEMAND.

The area of Puerto Vallarta/Riviera Nayarit inside the Bay of Banderas is an investor’s dream. This area has the comprehensive infrastructure in place, world class hospitals and dental care, natural investment protection from the Sierra Madre Mountains, endless future water supply, low to nonexistent crime, international airport, and limited supply inside the Bay, first class private bilingual schools and higher than average appreciation potential. Like many areas in Mexico there is large demand for full and part time retirement living and a lot of construction underway to meet this demand. Pre construction of course is where the best bargains are available.

I would offer a word of caution for investors in Mexico. Do not be seduced by the endless natural beauty that is everywhere, both inland in colonial towns and along thousands of miles of beach. Apply conservative medium and long term investment strategies without emotion. The demand for full and part time living by American and Canadian Baby Boomers is evident throughout the country. The top two choice locations are ocean front, and ocean view. The third overall choice, which is less expensive, is inland in one of the many beautiful colonial towns or small cities.

Mexico, with the world’s 13th largest GDP, is no longer a “Third World Country”, but rather a fast growing, economically secure state, as the most recent five-year history of its financial markets when compared to the U.S.A.’s financial markets suggests.

DOW JONES AVERAGES MAY 2004 10,200 – MAY 2009 8,200 20% LOSS IN 5 YEARS

MEXICAN BOLSA MAY 2004 10,000 – MAY 2009 23,000 130% GAIN IN 5 YEARS

The complex will be named Lake Chapala Hotel and Casino Resort and is located on eight hectares of land just to the east and slightly above Chula Vista Norte. It will be set in the heart of a fifty hectare spread called Tierra Salada, also now undergoing development as a residential subdivision.

It will be the first of its kind in Mexico and is costing approximately $40,000.00 dollars is designed to appeal to the high-en clientele from Guadalajara.

The blueprints show a casino with 50,000 square feet of floor space to be outfitted with 3,000 slot machines and 24 gambling tables for blackjack, poker, roulette, craps and bingo (bingo?) plus three five-story towers to accommodate 300 hotel rooms and 30 suites.

The facility is also being designed to house an entertainment show room with theater seating for 3,000 spectators, spa and swimming pools, a sky bar nightclub disco built on top of the hotel, three gourmet restaurants and a food court adjacent to the casino.

This project will generate 1,000 temporary jobs during conception and 500 full-time employees once it goes into full operation. The new “full blown Las Vegas-style” hotel and casino complex is touted to be eco-friendly and is being built in close harmony with the natural setting, with an internal system for sewage treatment, and grey water recycling as well as application of solar energy.

It is interesting that in this economic climate in the US the Palacio Development Group from Arizona has chosen lakeside to build this huge project. Obviously, these business people believe that Mexico’s economy is, indeed, on the rise.

This, of course, is going to affect our lifestyle here in Ajijica, Lake Chapala but not necessarily in a bad way. More people with money coming to lakeside means more income for the small business owners, more interest in local real estate and more awareness in general of our village in the sun.

No paradise stays hidden forever (just ask Puerto Vallarta) and this project certainly appears to be going forward so we all might be better served by adopting a “glass half full” attitude.

I, for one, am adopting the attitude that progress is good for everyone. However, there will be more traffic and if you have a gambler at home you might want to hide your credit cards. After all it will be much easier to take a ride up the Libramiento Bypass than to get on a plane to Vegas.

Surprisingly enough as we watched the Dow Jones Index plummet 512 points yesterday we still find the economies in both Canada and Mexico are growing and even flourishing in many parts.

Real Estate is booming in Toronto and Vancouver, Canada and we are lucky enough to be busy here in Ajijic, Lake Chapala even though it not the “busy season”.

They say the definition of insanity is doing the same thing over and over again expecting a different result. It would seem then that perhaps looking south of the border during these times of financial unrest could make a lot of sense for a better life and easier retirement.

I would suggest going north of the border but I am partial to our almost perfect weather in Ajijic, Lake Chalapa which is 75 degrees and sunny 99 percent of the year. Having lived in Toronto, Canada for many years I cannot say the same thing about the Canadian weather.

For those on fixed incomes it would make sense to have your limited income go as far as possible and the cost of living here is much less than it is in the US or Canada.

One of the many reasons Mexico’s economy is thriving is because many now skilled workers are returning home from the US as the jobs are scarcer or non- existent. This influx is stimulating the economy as the infrastructure continues to improve.

We see it ourselves. Things are very different here than when we moved to Ajijic, Lake Chapala over 17 years ago. We now have world class technology available at competitive prices which makes doing business anywhere in the world possible.

Products and services are now available to us that in the past were unheard of and things continue to get better every year.

Some people like to view Mexico as a third world country but we have always seen it as a developing nation and I think if you do your due diligence online you will find out that Mexico could be the place of the future for growth and stability.

Retirement can be stepping into the great unknown but now with everything Mexico has to offer in terms of economic growth, excellent affordable healthcare and realistic real estate opportunities this might be the place for you. It is certainly has been for us and for that we are very grateful for every wonderful day we spend in our paradise in the sun.

Ask questions and find it if Mexico has everything you need and want in a retirement opportunity.

Our favorite expression is “Most people come for the weather but stay for the people”.

Evidently, there is a hurricane off the coast of Mexico, Beatriz, which is causing the rain we are having during the day. As I have written the “rainy season” brings us rain usually early evening and in the night and the days are bright and sunny como siempre. (As usual.)

There is a silver lining, however, brought by all this rain that is twofold. One, it is very good for the level of our beautiful Lake Chapala and, two, the warmish temperatures have dropped to a very comfortable degree. Wet but comfortable.

The level of the lake is very important to our community. When the lake is down it affects real estate and when it is up, as it is now, real estate booms or at least moves.

Also another bonus is that if you look up at the Sierra Madre Mountains you will see that they have turned into the green velvet I foretold.

This is, to us, still the most beautiful season of the year here in Ajijic, Lake Chapala. We were lucky enough to get our roof seen to before the rains came and have an aluminum piece plastered across our front doorway to prevent water coming into the house.

None of these small things affects our love of the “rainy season”. The flowers are blooming in gay profusion the flowering trees are wonderful and the smells are so fragrant after the rains. The storms are exciting and dramatic and the gardens love all the attention.

The hot dry month of May is over and the rains even came a week or so early so we have that much more time to enjoy this most wonderful time of year. The temperatures are perfect this time of year and all outdoor activities are greatly enjoyed or will be when the hurricane system off the coast moves on.

The beauty, of course, is even with all the rain when the sun does come out everything dries up very quickly and our lovely outdoor living continues.

So make sure your windshield washers are in good working order and buy your “rainy season” umbrella which we seldom use but buy anyway.

If you watch any of the weather reports from up north you will see that over 11 states are experiencing dangerously high temperatures and even in Toronto this week it has been over 90 degrees F.

So if we have to put up with a little more rain during the day that we are used to remember it is only temporary and we still have the best climate in the world in our beautiful village in the sun.

Of course we have the best climate in the world. Our cost of living is substantially better than up north. We enjoy kinder gentler times, a full infrastructure and a schedule as jam packed with an extensive choice of activities or as free as one might like.

Properties are as varied as one could possibly imagine with something for everyone at very affordable prices and if you do ever want to sell your house this is much easier than up north too.

We also enjoy visits from family and friends especially when it is cold up north.

At the moment we are lucky enough to have our first grandson, Ethan Alexander, visiting with us for what we hope is at least a few months.

Our daughter gave birth in the US so he would have dual citizenship which used to be automatic for an American giving birth here but that has now changed.

She and Ethan returned to us June 19th and are now living with us with her husband and we are delighted to have them.

Now I know I sound like a first time grandmother but he truly is a wonderful boy. Ethan has the calm temperament of his mother (and her incredible deep blue eyes) and seldom cries. He is very alert and advanced for a two month old as he is holding his head up and loves to keep moving. This will be fun when he starts crawling.

Our two dogs, a golden lab and a bichon frise/poodle mix, are both very gentle with the baby for which we are very thankful.

Ethan is indeed a very lucky boy to have his mother and father now reunited and having a wonderful time as a young family. Ethan’s father is very gentle with him and Ethan looks forward to his coming through the door every evening.

Today they were going off to visit family in Chapala and I had to laugh at the preparations just to get Ethan out the door. As our daughter said “it is a process”.

We will enjoy every minute we are lucky enough to have this new family with us which is another wonderful thing about retirement in Ajijic, Lake Chapala.

Everyone always comes home to our beautiful village in the sun.

Go to www.newamericamedia.org and enter the above title in search. Very interesting and positive information about our country.

Mexico is in a unique position to reap many of the benefits of the decline of the US economy. In order to not violate NAFTA and other agreements the U.S.A. cannot use direct protectionism, so it is content to allow the media to play this protectionist role. The U.S. media – over the last year – has portrayed Mexico as being on the brink of economic collapse and civil war. The Mexican people are either beheaded, kidnapped, poor, corrupt, or narco-traffickers. The American news media was particularly aggressive in the weeks leading up to spring break. The main reason for this is money. During that two-week period, over 120,000 young American citizens poured into Mexico and left behind hundreds of millions of dollars.

Let’s look at the reality of the massive drug and corruption problem, kidnappings, murders and money. The U.S. Secretary of State Clinton was clear in her honest assessment of the problem. “Our insatiable demand for illegal drugs fuels the drug trade. Our inability to prevent the weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers and civilians,” Clinton said. The other large illegal business that is smuggled into the U.S.A. that no one likes to talk about is Human Traffic for prostitution. This “business” is globally now competing with drugs in terms of profits.

It is critical to understand, however that the horrific violence in Mexico is over 95% confined to the three transshipping cities for these two businesses, Juarez, Tijuana and Nogales. The Mexican government is so serious about fighting this, that they have committed over 30,000 soldiers to these borders towns. There was a thoughtful article written by a professor at the University of Juarez. He was reminded of the Prohibition years in the U.S.A. and compared Juarez to Chicago when Al Capone was conducting his reign of terror capped off with The Saint Valentine’s Day Massacre. During these years, just like Juarez today, 99% of the citizens went about their daily lives and attended classes, went to the movies, restaurants, and parks.

Is there corruption in Mexico? YES !!! Is there an equal amount of corruption related to this business in the U.S.A.? YES !!!. When you have a pair of illegal businesses that generate over $300,000,000,000 in sales you will find massive corruption. Make no mistake about the Mexican Drug Cartel; these “businessmen” are 100 times more sophisticated than the bumbling bootleggers during Prohibition. They form profitable alliances all over the U.S.A. They do cost benefit analysis of their business much better than the US automobile industry. They have found over the years that the cost of bribing U.S. and Mexican Border Guards and the transportation costs of moving marijuana from Sinaloa to California have cut significantly into profits. That is why over the past 5-7 years they have been growing marijuana in State and Federal Parks and BLM land all across America. From a business standpoint, this is a tremendous cost savings on several levels. Let’s look at California as an example as one of the largest consumers. When you have $14.2 billion of Marijuana grown and consumed in one state, there is savings on transportation, less loss of product due to confiscation and an overall reduction cost of bribery with law enforcement and parks service people. Another great savings is the benefit to their employees. The penalties in Mexico for growing range from 5-15 years. The penalties in California, on average are 18 months, and out in 8 months. The same economic principles are now being applied to the methamphetamine factories.

FOX News continues to scare people with its focus on kidnapping. There are kidnappings in Mexico. The concentration of kidnappings has been in Mexico City, among the very rich and the three aforementioned border Cities. With the exception of Mexico City, the number one city for kidnappings among NAFTA countries is Phoenix, Arizona with over 359 in 2008. The Phoenix Police estimate that twice that number of kidnappings goes unreported, because like Mexico 99% of these crimes were directly related to drug and human traffic. Phoenix, unfortunately, is geographically profitable transshipping location. Mexicans, just like 99% of U.S. Citizens during prohibition, go about their daily lives all over the country. They get up, go to school or work and live their lives untouched by the border town violence.

These same protectionist news sources have misled the public as to the real danger from the swine flu in Mexico and temporary devastated the tourism business. As of May 27 2009 there have been 87 deaths in Mexico from the swine flu. During those same five months there have been 36 murdered school children in Chicago. By their logic, if 87 deaths from the swine flu in Mexico warrants canceling flights and cruise ships to Mexico, then close all roads and highways in the USA because of record 43,359 automobile related deaths in the USA in 2008.

What is just getting underway is what many are calling the “Largest southern migration to Mexico of people and real estate assets since the Civil War” A significant percentage of the Baby Boomers have been doing the research and are making the life changing decision to move out of the U.S.A. The number one retirement destination in the world is Mexico. There are already over 2,000,000 US and Canadian property owners in Mexico. The most conservative number of American and Canadian Baby Boomers who are on their way to owning property in Mexico for full or part time living in the next 15 years is over 6,000,000. Do the math on 6,000,000 people buying a $300,000 house or condo and you will understand why the U.S. Government is trying to tax this massive shift of money to Mexico through H.R. 3056. The U.S. government calls this “The Tax Collection Responsibility Act of 2007″. Those who will have to pay it are calling this the EXIT TAX.

Mexico: A better economic choice than China

Another large exodus from the U.S.A is high paying skilled jobs. The job shift in automobile sector, both car and parts manufacturing, is already known by most investors. In the last few months as John Deere and Caterpillar have been laying off thousands of workers in the U.S.A., and hiring equal numbers in Mexico. The most recent industry that is making the shift is the aerospace manufacturers. In the city of Zacatecas there is currently a $210 million aerospace facility being built. With the 11 U.S. companies moving there, it is estimated to provide over 200,000 new high paying jobs in the coming years. One of the main factors for the shift in job south to Mexico instead of China is realistic analysis of total production, labor and delivery costs. While the labor costs in China are 40% less on average, the overall transportation costs and inherent risks of a long distance supply chain, and quality control issues, gives Mexico a distinct financial advantage.

Mexico’s real economic future

Mexico has avoided completely the subprime problem that has devastated the U.S. banking industry. The Mexican banks are healthy and profitable. Mexico has a growing and very healthy middle and upper middle class. The very recent introduction of residential financing has Mexico in a unique position of having over 90% of current homeowners owning their house outright. U.S. banks are competing for the Mexican, Canadian and American cross border loan business. It is and will continue to be a very safe and very profitable business. These same banks that were loaning in a reckless manner have learned their lesson and are loaning here the old fashioned way. They require a minimum of a 680 credit score, 30% down payment, and verifiable income that can support the loan. In most areas of Mexico where Baby Boomers are moving to, with the exception of Puerto Penasco (which did not have a national and international base of buyers), there is no real estate bubble.. The higher end markets ($2-20 million) in many of these destinations are going through a modest correction. The Baby Boomers market here is between $200,000 and $600,000. With the continuing demand inside the Bay of Banderas, that price point, in the coming years, will disappear. This is the reason the Mexican government is spending billions of dollars on more infrastructure north along the coast all the way up to Mazatlan.

The other major area where America has become overpriced is in the field of health care. This massive shift of revenues is estimated to add 5-7% to Mexico’s GDP. The name for this “business” is Medical Tourism. The two biggest competitors for Mexico were Thailand and India. Thailand and India’s biggest drawback is geography. Also recent events, Thailand’s inability to keep a government in place and the recent terrorist attack in Mumbai, have helped Mexico capture close to half of this growth industry. In Mexico today there are over 56 world class hospitals being built to keep up with this business.

Mexico is currently sitting on a cash surplus and an almost balanced budget. Most Americans have never heard of Carlos Slim until he loaned the New York Times $250 million. After that it became clear to many investors around the world what Mexicans already knew: that Mexico had been able to avoid the worst of the U.S. economic devastation. Mexico’s resilience is to be admired. When the U.S. Federal Reserve granted a $30 billion loan to each of Mexico, Singapore, South Korea, and Brazil, Mexico reinvested the money in Treasury bonds in an account in New York City.

According to oil traders, Mexico’s Pemex wisely as the price of oil shot to $147 a barrel put in place an investment strategy that hinged on oil trading in the range of $38-$60 a barrel. Since the beginning of 2009 Mexico has been collecting revenues on hedged positions that give them $90-$110 per barrel today. Mexico’s recent and under reported oil discovery in the Palaeo Channels of Chicontepec has placed it third in the world for oil reserves, right behind Canada and Saudi Arabia.

The following is a quote from Rosalind Wilson, President of the Canadian Chamber of Commerce on March 19, 2009. “The strength of the Mexican economic system makes the country a favorite destination for Canadian investment”.

OPPORTUNITIES: WHY PUERTO VALLARTA & THE RIVIERA NAYARIT

The answer is simple and old fashioned: SUPPLY AND DEMAND.

The area of Puerto Vallarta/Riviera Nayarit inside the Bay of Banderas is an investor’s dream. This area has the comprehensive infrastructure in place, world class hospitals and dental care, natural investment protection from the Sierra Madre Mountains, endless future water supply, low to nonexistent crime, international airport, and limited supply inside the Bay, first class private bilingual schools and higher than average appreciation potential. Like many areas in Mexico there is large demand for full and part time retirement living and a lot of construction underway to meet this demand. Pre construction of course is where the best bargains are available.

I would offer a word of caution for investors in Mexico. Do not be seduced by the endless natural beauty that is everywhere, both inland in colonial towns and along thousands of miles of beach. Apply conservative medium and long term investment strategies without emotion. The demand for full and part time living by American and Canadian Baby Boomers is evident throughout the country. The top two choice locations are ocean front, and ocean view. The third overall choice, which is less expensive, is inland in one of the many beautiful colonial towns or small cities.

Mexico, with the world’s 13th largest GDP, is no longer a “Third World Country”, but rather a fast growing, economically secure state, as the most recent five-year history of its financial markets when compared to the U.S.A.’s financial markets suggests.

DOW JONES AVERAGES MAY 2004 10,200 – MAY 2009 8,200 20% LOSS IN 5 YEARS

MEXICAN BOLSA MAY 2004 10,000 – MAY 2009 23,000 130% GAIN IN 5 YEARS

–I myself am made entirely of flaws, stitched together with good intentions and a few wires and pins.

–Yo mismo estoy hecho completamente de defectos, cosidos entre sí con buenas intenciones y unos alambres y clavijas.

–
Bob Miller

Robert P. Miller, PhD
535 Westfield Rd, Suite 100
Charlottesville, VA 22901