More Reasons to Move to Chile

The most popular post of this blog explains why people in the USA and Europe should consider a move to Chile, so this is be a good time to update it with more reasons. The previous post was an upbeat profile of Santiago complete with pretty pictures, while this is a realistic assessment of the deterioration of other countries.

According to Transparency International, people perceive the USA is slightly more corrupt than Chile and slightly less corrupt than Uruguay. Europe, New Zealand, Australia, Canada, and Singapore are perceived as cleaner governments. The USA has deteriorated in 10 years from 16th position to 24th, but remains much cleaner than Cuba, Mexico, Argentina, and Venezuela. How long will that last?

Perhaps not long, as the Supreme Court ruled in favor of Bloomberg in their “freedom of information” lawsuit against the Federal Reserve, resulting in the secretive agency revealing that they printed $7.7 trillion dollars and lent it to banks in 2008 at 0.01% interest. At the time, Congress was debating whether to enact the “TARP” program to dole out $700b to insolvent banks, or less than 10% of what they received in secret. I reckon that move makes the USA as corrupt as Argentina.

The USA bailed out Europe this week by reducing the interest rate on borrowed dollars from 1.08% to 0.58%. This is worse than it seems because Obama and his friends are accruing a trillion dollars of deficit each year and borrowing at 3% to perpetuate the party. The interest rate on new Italian bonds has increased from 3.5% to 7.8% in the last 6 months, and as Italy is the second most indebted country in the world (Japan’s debt is higher), they cannot service the debts and will default soon or cut government spending.

Europe and the USA are like two drunks trying to hold each other up after a long night. They deceptively call it a “liquidity” crisis rather than concede insolvency. Meanwhile, the Chilean government is rapidly increasing government spending to respond to street protests by college students, but it’s prudent compared to other countries.

José Piñera, brother of Chile President Sebastian Piñera, recently tweeted a Financial Times article describing why Europeans should consider emigrating to countries such as Chile:

It has suddenly become respectable to ask the question: what would happen if the euro broke up? Last week’s rise in German bond yields signals that a euro break-up is being taken more seriously by investors. I am told that London law firms are allocating large amounts of time to examining the validity, following a break-up, of cross-border contracts written in euros. And, to judge from my own inbox, asset managers are beginning to ask about the economics of how it could occur.

José Piñera also notes that Spain’s population declined in 2011 because 46% of young people are unemployed, can’t support babies, and that’s due to monopolistic unions and the rigid Spanish labor market.

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