The following is a special excerpt from the October 1st, 2010 issue of The Dollar Vigilante
Expatriation of Ass & Assets
by Jeff Berwick
"Because you can't fight city hall, but you can leave town!"
The timing is excellent for a feature special report on Mexico. The country just finished it's 200th anniversary of La Revolucion and Mexico has been a regular in the news, mostly for all the wrong reasons - drug trafficking and the swine flu panic of 2009.
I am writing this report from Acapulco in the very southwest of Mexico, a place where I have considered "home" for the last few years and therefore have some good inside insights into this very misunderstood country. Suffice it to say that if your only knowledge of Mexico comes from the western mass media, you don't know Mexico.
I spent all of 2004 traveling Mexico on my sailing catamaran from Ensenada, near San Diego, all the way down the Baja to Cabo San Lucas, then across the Sea of Cortez to Mazatlan, Puerto Vallarta, Barra de Navidad, Ixtapa & Zihuatenejo, Acapulco, Puerto Escondido and Huatulco. Since I've also ventured inland into Mexico City, Monterrey, Guadalajara and across via airplane to Cancun.
In the following report I will outline why I believe Mexico is the safest country in North America and why I think it should be a destination high on the list for many as a place to reside as a tourist or as a resident - becoming a citizen to get a second passport is less of interest to us although it may make sense to some people and we outline the process below.
Lifestyle
I find it to be of the utmost in paradoxes between reality and what most people think is reality here in Mexico. I currently live in a place that I consider to be very close to paradise - Acapulco, Mexico. Yet, upon telling someone I live in Acapulco their first question, almost invariably, is, "is it safe?".
To give you somewhat of a picture of what my lifestyle is like here, I normally awaken in my 29th story apartment (which is so cheap you won't believe it - more on that below) with a full view of Acapulco Bay (one of the most beautiful bays in the world - only beaten by Rio de Janeiro, in my opinion). I pour some black or green tea and check some email and news for the day. I then do some power yoga for 25 minutes on my balcony. I hear nothing but the waves lapping below and the sky is pure blue on 97% of the days in Acapulco.
After yoga I head down to the pool and/or beach which is located directly below and I do some sprint
laps. The sun is almost always beating down and the rush from the exercise and the vitamin D (sunscreens have been shown to cause skin cancer rather than preventing it for many reasons including the fact they block vitamin D production) always makes me feel incredible - the views on the beach also can be very inspiring as per the photo to the right (note: we've had an influx of female subscribers of late and I want to let the female subscribers know I will endeavour to find some good photos of local men in future expatriation editions in the future).;)
Another Tought Day on the Beach in Acapulco (click to enlarge)
I then usually wander over to the man who sells fresh fruits and I get a fresh mango and fresh coco juice (one of the healthiest juices on the planet), for 50 pesos ($3.50 USD) as we chit-chat about the vagaries of the day.
After that I usually head up to my apartment where my maid is finishing cleaning the entire apartment. Maid service is daily and included in my condo fees which are, by American standards, cheap.
Later in the day I usually head to one of numerous high-tech, fully equipped gyms (at less than $1/day) and sometimes venture out in the evening with friends to a restaurant or nightspot. A nice local dinner generally will cost around $10. A glass of house wine or a bottle of beer is usually around $1-$4. You can spend more, of course, at some of the world class luxury restaurants in Acapulco such as Becco al Mare but for those who want nice meals for cheap, there is a neverending supply, from Napoli and Forza Italian, both owned by Italians to numerous sushi, steak and of course, Mexican restaurants.
When I am out in the evening I've never seen so much as a fistfight. Everyone is happy, smiling and very social. The culture, here, is very polite and reserved. Upon meeting a girl who you know or are just meeting it is standard to give them a kiss on the cheek and to say, "Buenas Noches" (good evening).
In nearly 3 years in Acapulco I have never seen any crime, whatsoever. Of course, I live in the tourist area, which is safer than in the outlying areas, but even still, if you look at the crime rates Mexico is much safer than the US (more on that below).
But from a pure cost perspective, while Mexico is not as cheap as places like Thailand or Argentina, you can definitely live a very nice lifestyle for very cheap.
Costs
Some people don't realize it but Mexico is a huge country. It is only because it is situated beside Canada and the US that some may think it is a smaller place, but after years of traveling through Mexico there are still dozens of spots I have yet to see including Taxco, Puebla, Veracruz, Playa del Carmen and much more. Another thing foreigners don't realize is that Mexico is very diverse. Every area has its own unique accents, style and culture. Acapulquenos are very relaxed and friendly. People from Monterrey are usually super trendy, hip, artist types - usually they play in a rock band and have dozens of piercings and tattoos. People in Guadalajara are ultra-refined. They tend to be more involved in high-level business, enjoy opera and other cultural events and can be found most evenings as some of the most chic bars and restaurants in the world.
Foreigners usually gravitate to places where other foreigners are including Puerto Vallarta, Mazatlan, Cabo and Cancun. But these places are much more expensive due to the influx of foreign investment - and have much less of a style/vibe. These place feel more like the USA than Mexico.
Acapulco, on the other hand, is one of the coolest cities in the world with an amazing culture dating back to Spanish galleons conducting trade routes from Acapulco to Manila Philippines 450 years ago which still have many remnants of that culture.
In Acapulco you can find beachfront, centrally located, fully furnished with new modern furnishings fully-titled condos for under $60,000 USD. Property tax is almost non-existent at around $150 USD/year. In fact, being the entrepreneur that I am I saw the potential of this place and began a company renovating and selling condos here under the trade name AcaCondos (http://acacondos.com). I can then rent out those units in my boutique hotel concept (http://LTGPS.com) whenever the owners (many of whom only spend 1-2 months per year here) aren't using them at very good rates of rental income.
I buy most of my groceries for very cheap from the mercados (farmer's markets). All the chicken, beef and eggs are all grown on local farms with very little pesticides and certainly no antibiotics. The vegetables and fruits are ultra fresh and very cheap as well.
In reality, if you wanted to be very frugal, you could easily live here for under $50/day including your condo maintenance fees, property tax, food, internet and Canadian/US Satellite TV which is available this far south from Canada's Shaw Direct in HDTV.
Safety
In my 3 years here I have never witnessed any crime whatsoever. Not to say that there aren't some issues with the failed US led war on drugs which is causing a lot of problems in Mexico. But 99% of all these problems are between the rival drug gangs, of which the police are one of them. They fight amongst themselves for lucrative trade routes. It is very rare when any innocent civilians get caught in the cross fire.
But even with this drug war the amount of homicides in Mexico is way lower than in the US.
AT LEAST 52 SHOT, 7 DEAD OVER WEEKEND
I hear quite often from Americans asking about the safety of Mexico. My reply to them is always the same: I should be asking you about the safety in the US! The headline, above, is from an article in June from Chicago (http://www.huffingtonpost.com/2010/06/21/chicago-violence-at-least_n_619259.html). In fact, nearly every weekend, 40 people are shot in Chicago.
And Chicago is better than many other US cities. Here is a listing in descending order of murder rates (per 100,000 people) for major cities in 2008:
Detroit 37.4
Baltimore 36.9
Washington DC 31.4
Philadelphia 23.0
Chicago 18.0
Mexico City 8.1
I couldn’t find a reputable source for a murder rate for Acapulco but I can confidently state this: Inside of Acapulco (not including surrounding areas where there are some problems from time to time – anything within 200 miles of Acapulco is always reported in foreign news as occurring IN Acapulco) the rate would likely be very low. And inside the tourist areas of Acapulco that rate would be even lower. It is a rarity when even so much as a fight happens in the tourist zone. The people of Acapulco realize the importance of tourism to the economy here and it is just simply not allowed in this area.
Put simply, if safety is a concern, and you live in the US, you should move to Acapulco!
As someone who lived for ten years in Vancouver, Canada and two years in Los Angeles, I can say that I saw exponentially more crime and violent situations in both Vancouver and LA than in the main tourist destinations of Mexico. I can't remember how many times I left a bar in Vancouver with my head down as rival drug gangs shot it out, especially during the 2009 Vancouver gang war. And, suffice it to say, there weren't many neighborhoods in LA I felt very comfortable walking around once the sun went down.
Where in Mexico?
There are plenty of places in Mexico to choose from. From the beautiful and bustling port of Acapulco, to the small, quaint Ajijic on Lake Chapala near Guadalajara to Huatulco, Puerto Vallarta, Mazatlan, Playa del Carmen and numerous others, the options are nearly endless. It is really just a matter of taste. For me, being a bit of a city boy who also enjoys living near the beach, Acapulco was the perfect choice as it is a fairly large city while still having the feel or a tropical resort town.
If you like peace and quiet more than luxurious fine dining and nightlife then the best locations are Huatulco, in Oaxaca, in the very south of Mexico - I call it "the coolest" small town in the world. I liked it so much that I was going to only stay there overnight on my sailing catamaran and I ended up staying 3 months. Another nice, quiet place that has attracted a lot of expats is Ajijic on Lake Chapala. Fellow newsletter writer, American Dudley Baker Pierce, writer of preciousmetalswarrants.com happily lives there.
Puerto Vallarta is another beautiful locale but it is becoming a bit pricey as many expats have discovered it over the last two decades.
In fact, if you believe Mexico may be a place you'd like to put down some roots my recommendation would be to tour through Mexico for a few months and try out many different locales until you find one that suits you. Bus service throughout Mexico is first class, safe, cheap and easy.
The Future
By no means is Mexico perfect. There are many issues here. The government and the police are mostly corrupt - but that is the case in most places, not least of which is the US. However, unlike in the US, the police here are more of a nuisance than a real problem. They really don't take their jobs seriously like they do in the US. They are mostly looking to get 100 or 200 Pesos ($8-16) off you if they find you going through a red light or making a u-turn where you are not supposed to.
The biggest looming problem in Mexico is that due to the Mexican petroleum industry being nationalized 
Mexico Oil Supplyand controlled by a government agency, Pemex, Mexican oil reserves have been trending lower and lower as incompetent bureaucrats cannot compete with the free market in terms of finding and exploiting oil reserves - as well as funneling off any profits from Pemex to all manners of political boondoggles and outright theft.
In 2008, Mexican Energy Secretary Georgina Kessel warned the Mexican Congress that if legislators did not approve reforms within the oil sector, the country would suffer a "severe energy crisis" within a decade. That's probably an understatement.
Mexico's oil production is rapidly declining. The Cantarell oil field, one of the world's largest, is responsible for almost two-thirds of Mexico's production. In 2004, it brought up 2.1 million barrels a day; today it produces only half that. Unless new sources are found, Mexico -- up until recently the second-largest supplier to the United States -- will become a net oil importer by the year 2018. So, as you can see, this has huge implications for both Mexico and the United States who would lose yet another major oil supplier.
It's an even bigger deal for the Mexican government, for whom oil represents the single largest amount of revenue for the federal government -- about 40 percent.
What this could mean is a collapse of the Mexican government or yet another collapse in the Peso. However, that's not necessarily a bad thing. Every country would be much better off if its government collapsed and it's fiat currency were to become worthless. Why? Because then the free market would have an opportunity to take hold and create real wealth and prosperity.
And besides, if the Peso were to collapse it would hardly be chaos in Mexico. In fact, your average Mexican would just shrug his shoulders and say, "Again?"
It is for this reason that we believe Mexico is a safer place to live right now and we also think it is a much better place than the US to sit out the coming US dollar based financial system collapse.
In fact, if the people of Mexico were smart they would legalize all drugs for purchase, consumption and sale (one interesting item that was barely reported in the US media is that all drugs are legal in Mexico for consumption currently - just not for sale and trafficking). This change alone would end all the violence between the drug gangs and tourists would flock in even greater amounts to Mexico. Then if they were to back the Mexican Peso with silver, an obvious choice being as Mexico is the 2nd largest silver producer in the world after Peru, investment capital would flood into the country.
These two small changes alone would result in Mexico being, very quickly, one of the richest and safest places on Earth. Don't think it can happen?
There is already a large movement in progress to legalize drugs for sale as per this article entitled, "Weary of Drug War, Mexico debates Legalization".
And Hugo Price, a very smart Mexican, has been lobbying for the return of the Peso to the silver standard.
If these two movements were undertaken, Mexico would be one of the richest countries in the world within years.
Tourism/Residency/Citizenship
If Mexico were to legalize the sale of all drugs and back the Peso with silver we'd be the first in line to apply for citizenship. However, that currently not being the case we believe the best way to utilize Mexico is to live here as a tourist or as a resident.
TOURISM
Most nationals receive a 6 month "tourist visa" on arrival in Mexico and we find that to be a sufficient amount of time to not even bother applying for residency. We personally always have some reason or another (business, vacation etc) to leave the country every six months, so why "enter the system" and make yourself known to the government as a potential source of taxes. As well, even if you overstay, it usually only results in you having to pay some clerk in some humid, dank backoffice a few hundred Pesos. Or, even better, you could fly into the Tijuana airport and walk across the border into the US on a Friday or Saturday night with the tens of thousands of American kids who had gone to Tijuana for a night of fun. They don't even check passports on exiting the country through that border as there is just too many drunk, young teenagers to bother processing.
RESIDENCY
However, if you wish to live in Mexico and don't want the bother of leaving every six months, applying for what is called an "FM-3" is simple enough. You basically just need to show proof that you have sufficient income (around $1,000/month) and fill out a bunch of forms and you can get your FM-3 residency.
CITIZENSHIP
It isn't very easy at all to get a Mexican passport. You would need to have lived here for many years and usually have to have some relation (marriage) to a national. But a Mexican passport is not a great travel document so we would advise those seeking a 2nd passport to go to much easier locations such as the Dominican Republic.
Conclusion
Other than a few cities, such as the city of Juarez on the American border, the great majority of Mexico is much safer than the USA. As well, Mexico is eminently more free than the US. As example, check out CryptoHippie's annual Police State rankings by country (https://secure.cryptohippie.com/pubs/EPS-2010.pdf). Out of 51 countries, Mexico ranks as #47 in freedom (as one of the freest) from the electronic police state. The USA, by the way, ranks #5 only behind North Korea, China, Belarus and Russia.
In other words, Mexico is, by far, the safest and most free country in North America, despite what Canadian and American news tries to sell you.