How to Make Money From Obama (Obamanomics)

Introduction – Obama is in office. What we are going to do is simply point out a few things about where his regime is headed economically and then discuss how to profit from Obamanomics. We mean not making money with him instead from his policies.

USD Money Supply – The thing to watch is Obama and the printing presses. The US is economically dying slowly, maybe not slowly. There are precious little exports in spite of the cheap dollar. Manufacturing has been shifted out of the USA for many years. Many of the products that they manufacture in the USA are not affordable in many parts of the world after this latest financial nightmare, which spread worldwide.

For instance lets say they bailout some car manufacturers. So what, people have no money to buy cars with around much of the world. The car companies have far greater capacity than there is worldwide demand for. Drugs and medical products are dropping in demand as people around the world are in the financial crisis. The demand is for cheap generics from other countries although Americans are stuck having to buy USA pharmaceuticals at extremely inflated prices. Agriculture production is down. USA tourism is down since the dollar gained strength the USA is not such a bargain anymore and people in other countries are scared and cutting back their spending on travel for recreation.

What is Obama’s Plan – He seems dead bent on printing money. In the short run this is to prevent civil unrest in the form of riots etc. What is missing is a long-term plan of any sort. What needs to happen is manufacturing needs to be built up again. This is not happening. There needs to be a cry to the people to stop buying imported goods. This is not happening they do not want to bankrupt Wal-Mart. There needs to be protectionist tariffs imposed on foreign goods to make them more expensive so people buy the domestic goods, again they do not want to bankrupt Wal-Mart. This is not being done.

Obama is cranking up government spending. They will make jobs, give grants, loans, bailouts, tax breaks, etc. None of this will build up the heart of the country economically. Government agencies are not productive businesses. The government agencies are tax consumers, not taxpayers. Governments produce nothing, they are a service industry. Bailing out dead businesses that should have rigor mortis is like playing Dr. Frankenstein who created a monster from the dead and that is what they are doing by saving these businesses – making economic monsters that will eventually have to go back to being dead again. He is sticking his fingers in the leaking dam, which is only going to work in the very near term.

A few months or a year or two later they will have another financial crisis or several of them. The next occurrences will be worse than the previous ones. No sound correctional measures are even being talked about. Obama is not at all talking about cutting Government spending which would be a step in the right direction. Government spending caused the problem to start with and you cannot fix it by increasing government spending.

What Obama is probably going to do is continue World Policeman Gunboat Diplomacy to keep people in other counties accepting the dollar. The most extreme example of this is the oil industry. It appears that the world is sick of this World Policeman Gunboat Diplomacy and will not stand for it any longer. This means they are not going to keep relying on the dollar, especially since Obama is going to be printing so many more dollars wildly. Of course Obama is not talking about cutting foreign aid either. There are people that are homeless in the USA and walking the streets sleeping in parked cars. In the face of this Obama is still going to give out foreign aid ignoring his own people. Why? I have no good answers.

Run the Presses – By running the presses Obama pumps up the money supply. The private Federal Reserve Bank benefits from increased interest and they pay no taxes. Did you notice several of Obama cabinet members are ex Federal Reserve Bankers? So with all the extra money flying around backed by nothing, what is going to happen? Well the world will value the USD much less. If Obama also keeps running the presses to keep the USA wars going and continue their expensive world policeman games it will make it worse. If the world stops believing in this currency, it’s value will drop. This is the direction it is headed. So how can you make money off this is the question?

How to Preserve Wealth Is the First Step – The answer is to diversify into a basket of currencies. We mean hold some money is USD, some money is Euros, Yen, Swiss Franc, UK pound, Hong Kong dollar etc. The idea is to spread your money into about five currencies. There is always going to be some demand for dollars but the demand is going to drop sharply. A lot of countries got burned in the last go around and are not going to take any chances with large USD reserves again. Some countries are going to be printing their own currency that is going to be pegged to a basket of several countries. One of these is Ecuador who is in the process of going off the USD to a new currency ties to a basket of six or eight currencies.

Eight Central American nations are in a similar process. One of these countries is Panama who has so stated that it intends to go off of the USD but we have no date for this. If you are holding cash in a basket of currencies you should be relatively immune from wild fluctuations in currencies. All the currencies would be unlikely to go down together at the same time. Some go down and other go up so your purchasing power should stay the same or may even improve if you hit it right. I would say keep a minimal amount in USD. This should preserve your wealth. Call us for help setting up such bank accounts. We have a bank in a tax haven (no taxes) and has strong bank secrecy where you can do this using a Panama Corporation or Foundation. The bank is not in Panama. They have online banking, credit and ATM cards and very reasonable fees. Inquire.

How to profit Under Obama - Forget the concept that it is all going to come back in the USA. Their unemployment is through the roof and climbing. You have seen many retail stores close their doors. Let us briefly remind you of some of the retailers that have shut all or most of their locations very recently. Circuit city (all locations, 567 stores), Goody’s (all 300 stores), Disney (closing 98 stores), Talbots (78 stores), Ann Taylor 117 sores), Lane Bryant (40 stores closing), KB Toys (150 stores closing), CompUSA (all stores closing), Dillards (all stores closing), Foot Locker (140 stores closing), Linens N Things (372 stores closing), Zales (closed 100 stores). This is just a small amount of the retail closings. Industry experts are expecting 14,000 retail store closings during 2009. Job losses in 2009 should be at least as high as they were in 2008, 3,000,000. Imagine 6 million jobs lost in two years. And some are expecting it to bounce back! Based on what?

One also has to take into account the fact that the retailers are reducing or eliminating the amount of new stores they are opening. Large retailers have experts or think tanks that they go to for advice. If you had a chain of stores doing a few billion dollars a year in sales or more, so would you. These are experts with ties in government and industry. The think tank guys can be wrong but they are often right. They are telling these large retailers to jump ship and shut down. One should learn from this. The other important fact is that no one is coming to buy these chains of retail stores in distress at bargain basement prices. The experts are telling potential buyers to stay away.

There are also no new competitors opening up to fill the void. It is not going to come back magically because some new President turns on the printing presses and does handouts, public service job creation and bailouts. All he is going to do is delay the inevitable for a few months. Then the dollar will sink. When the dollar sinks hyperinflation enters in and then the standard of living drops a lot. Imported goods are extremely expensive because the buying power of the dollar is so low. People will be leaving the USA in droves, well those that can leave and of course this is assuming the government lets them leave. So the idea is to protect and preserve what you have now by diversifying into other currencies and then look for investment opportunities.

Real Estate – We don’t see the USA as an investment market even though prices will be low. There are too many unsold and foreclosed homes on the market. This is likely to be the case for several years as a minimum, maybe decades. Civil unrest is bound to set in sooner or later. Jobs will be scarce. More and more business will be closing not just retail. More and more people will be out of work and homeless. More and more people will not have healthcare coverage. More and more hospitals will be closing. More and more companies will be going bankrupt. Cities and counties will go bankrupt. Pensions will be lost even government pensions, in whole or in part.

The point is people will be wanting to leave the USA. People who never thought they would ever leave will be wanting to move. When the light at the end of the tunnel goes out (Obama) the exodus will start. The idea is to pick the markets where those expatriating from the USA would want to live and can afford to live. The way this works is if you get in early enough to buy on the ground floor you will be able to make a profit as the popularity grows. There will also be opportunities to supply goods and services to these expatriates. As always those who get out first get out with the most.

Real Estate Investment Criteria Appealing to Those Expatriating

Weather – The country should have warm weather. This means it is easier and cheaper to live there. No home heating. If the country is very hot then many will need expensive air conditioning unless the humidity is low and then they can use a swamp cooler, which is cheap to operate. Good weather means reduced living expenses.

Government – The country should not be a police state and should not be cooperating with police states in banking, immigration etc. The government should have reasonable gun laws allowing the people to be able to protect themselves. The country should not tax offshore income. There should be a clear and certain path to obtain not only a residency but also a citizenship. Many residencies have no rights associated with them and are just extended visas in practical application. If you as an expat do not have a clear, fast and easy path to citizenship you have no rights and will be ignored by the government.

Food Supply - The country should be able to raise its own food – fishing, cattle, poultry, pork, lamb, grains, vegetables and fruits. Countries with a long growing season are desirable.

Healthcare - Pharmaceuticals should be readily available without prescription. The healthcare should be adequate and affordable. Expect house calls by an MD in the $25 to $35 price range. Hospitals should be cheap, clean and adequate. Many countries have far better and more affordable routine healthcare and hospitals than the USA.

Housing – Houses should be readily available in the under $100,000 range. We mean nice three bedroom single family home on a mountain, by a beach or somewhere nice to live. This is generally going to mean living in other than the major urban centers. Utilities should be affordable. Water should be cheap. Roads should be decent. Internet should be available. Cell phones should be affordable and reliable.

Services Offered to Expats – You can offer them real estate broker services to find them a suitable house. You could be a real estate developer. Many countries have no real estate licenses. You could set up schools to teach them the local language. Have an employment agency to help them find a maid, driver etc. Open a restaurant or Internet café that caters to them. Sell insurance to them for their car, home and medical. Sell phone, cable, satellite and Internet services to them in their mother tongue. Publish a newspaper or weekly in the expat language.

Other Business Opportunities From Obama Policies

Pharmaceuticals – Bush would not let USA people import medicines reliably into the USA. He had rooms of trained special agents going through incoming packages turning away medicines. This was a broken campaign promise of his. Obama is going to be pushed hard for cheap pharmaceuticals. Foreign drugs, the same exact drugs, often sell for ¼ or 1/3 of the USA price. People will need this help and Obama will probably give it to them. Of course the pharmaceutical companies will threaten to destroy Obama politically for this but he will probably do it anyway probably giving them a warning so they can set up overseas and be the manufacturers. This will help take some of the strain off of the many people that use expensive medications with regularity. We are not talking about Viagra and steroids here. We mean medications for chronic illnesses. Keep your ears and eyes open and when this opens up the market for a legitimate online pharmacy supplying these drugs to the USA will be massive.

Offshore Medical – Millions of people have no insurance. They will still get ill and need major procedures, which they will not be able to afford. Go to a good country and set up a service finding surgeons and hospitals that can perform these surgeries and other expensive treatments for ¼ of the USA prices. Get paid by the doctors and hospitals. Forget plastic surgery and electives. Focus on serious illnesses. Electives will just be put off in a bad economy.

Retirement Homes – People will not be able to afford to go to nursing homes, retirement homes, semi-skilled care centers and skilled care facilities. In the USA these can run on average about $7,000 per month. Look for a lot of these facilities in the USA to be going bankrupt because the amount of people without insurance is rising. This year three million people lost their jobs and this means probably 7 or 8 million people will no longer have medical insurance. The government insurance payments are slow. Doctors are now needing to factor their receivables due to public and private insurance payments to providers taking 90 days and longer. Look for insurance companies to go bankrupt which will cripple some of these providers.

A person can live in many countries in Central America cheap. They can hire a maid for $250 month as a live in. A driver runs about $350 a month. With the help of these two people a person can stay out of a facility. They have no need to clean the house, do laundry or cook. If they need physical assistance like lifting the driver can help. They can get around since the driver can drive them. The driver and maid can do the shopping. Pharmacies deliver. Doctors make house calls cheaply.

There you have it. For probably less than half of the cost of one person in a facility in the USA, 2 people (a couple) can stay in their own house with servants and avoid living in a facility. The average life expectancy in a USA facility is three years in the USA. Here they have their own home with freedoms, mobility, privacy, dignity and control over their own life. So now you can set up such scenarios for the people turn key. Get the condo or home set up with furniture and staff for them for a fee. Do the work and rent it to them staff and all. Well you can twist and turn in any way you like but the business model is basically still sound in a variety of applications.

Cheap Vacations – People will want vacations but will not want to spend USA prices for hotels, restaurants and admission into beaches, attractions, ski resorts, amusement parks, etc. If gas prices stay down go after a resort in Central America. Build your own bed and breakfast. Do eco tours. Things are cheap. Forget trying to gouge USA prices, those places will change or be gone. Think budget vacations with quality. Be creative not a copycat. You should do well.

Summary – These are some ideas to hopefully get you started in your planning. There is always a way to make money out of a changing circumstances, one just needs to be creative enough to find it. We are a law firm and feel free to call on us.

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