All- there were a lot of great comments and questions this week, I will review several here:
Excellent insights on Latvia and the way to trade the devaluation. Johan from Sweden asks if we are too late shorting Sweden’s banks. I think not, and here’s why:
Swedbank, one of the largest Swedish banks in Latvia, posted a 2 billion kronor ($250 million) second quarter loss just hours ago, compared to the average estimate of 1.27 billion kronor. Loan losses soared to 6.67 billion kronor ($850 million), a 1500% increase over last year’s loan losses.
This tells the story of what has happened to the bank’s loan portfolio *before* Latvia devalues. The post-devaluation carnage will be even worse.
Given the bad news, what happened to Swedbanks’s stock today? It rose 11.6%… simply because management expressed ‘confidence.’ I think this is absolutely insane.
Sweden’s banks have certainly taken a hit in the last 12 months, but the good-news story that management is spreading is just a charade to mask weak fundamentals. They will falter, they will fail.
Another important follow-up item about Latvia: Some of you asked me if Latvia has an ancestry citizenship program like Lithuania.
According to my sources, Latvia does NOT have anything similar to Lithuania. Sorry. But never fear, there are plenty of cost effective (and even free) passport programs out there.
One of the many things I’m working on is what will probably the most comprehensive second-passport guide out there; I’m partnering with a few other citizenship experts and plan on marketing this in the coming weeks.
I want to thank everyone who contributed some very personal insights… so let me level with you about a few things.
Giving up US citizenship does not mean being barred from the country forever. I know several people who have done it, and they come and go regularly… while entry to the United States for a former citizen is not guaranteed, it is not guaranteed for current citizens either. Renouncing citizenship is more of a psychological exercise than anything else, especially for an expat.
That being said, I am still a US citizen, and I don’t plan on giving it up anytime soon. I think the US still has a future, but it will go through some serious pain first… so I’m willing to hold on to the passport for now until my assessment changes.
Sure, I have to pay stiff taxes in the meantime, but my expat lifestyle means I pay less. More importantly, my assets are safeguarded overseas, my businesses (except for one) are offshore, and I am enjoying bountiful opportunities around the world, both personal and financial.
As I hope you will find out soon when you hit your own breaking point, the expat leap is not all that scary… as ‘Tropical Freedom’ commented, jump in– the water’s just fine.
Taking baby steps is important for beginners… get a passport. Travel. Find places you love that meet your needs. Buy and store gold. Move cash. Buy property. Seek income and investment opportunities. Obtain a second passport.
It doesn’t have to happen at once, and it needn’t cost an arm and a leg. Many expats live an amazing lifestyle at a fraction of the price in their home country… they have children. medical needs. elderly parents. financial constraints. Every excuse for not trying has already been overcome…
Except for the will to act.
If I do end up coming to August 6th Atlanta entrepreneur event I mentioned on Wednesday, I will definitely make an announcement ahead of time to have a get together for anyone in the area.
I also received several questions about business opportunities and how to get started… as an investor and entrepreneur, I can say that this covers a lot of ground– so stay tuned and I will dedicate part of this missive to specific overseas opportunities that I see.
Also, for our readers who are already out there living an independent, expat life, please drop me a line… I would like to interview several of you for a regular series as I think it would be beneficial to the phyle at large.
If you’re interested, please contact us from the ‘Contact‘ link on our website.