Are Any Other US Expats Worried About a Debt Default?

Yeah have 2 years worth of expenses in cash cop in a safe if the situation is not resolved within that time frame, then we are all in trouble.

I am diversified between pesos in Colombia and dollars in the USA. If the dollar plummets, the pesos remain valuable. If the pesos devalue, dollars are valuable. I don't know what else to do... but I am not worried about it. My assets are minimal. You might say I got plenty of nothing, and nothing's plenty for me. I got no car, got no mule, I got no misery because the things that I prize like the stars in the skies all are free.

@karencds Glad you posted. I think it is a valid concern. Without getting political, the Usa is being leveled to fit the new financial system. I have some Colombian peso debt and USD debt in Colombia but i pay all vis USD. Its been dipping and as the US gets destroyed the foreign currency is becoming more attractive to all. I would diversify in assets other than

money and make lots of good friends.

The US has defaulted on it's dept several times....4 times according to some.  But those were 'trivial' compared to what could happen.  If it defaults, the dollar looses it's value, and all currencies against the dollar will gain.

Russia and India just cancelled talks about aligning to a currency that is not the dollar...so who knows.

Petro could just as easily destroy the Peso's gains during these times though.  He already sacked Ocampo, and pushing his reforms will drag the peso down further...if they get passed. 

It will be a balancing act between the two though:  The loss of the dollar as the reserve currency vs Petro being able to pass, or force, his reforms.

Many thanks, everyone. Just as I thought. I should put some money into a Colombian bank account. What’s the best way to do this quickly? Any suggestions for the best bank here to choose for a wire transfer?

When did the U.S. default on the national debt?

"The US has defaulted on its debt several times," stated

poster MTBE on this thread.

That unattributed assertion is at odds with what

NBC News has reported. "The US has never

defaulted on its national debt..." according to

nbcwashington.com

This debt ceiling scare seems to be shaping up as

another fiscal-cliff type story, with one side or the

other giving ground near the last minute to

'save the day'. In a previous era, this was

widely referred to as brinksmanship, a strategy

employed in an attempt to make the other side

back down as a deadline neared (pushing things to

"the brink").

I have seen nothing posted on this thread so far

that would persuade one to move most of his or

her cash into a Colombian bank this month in the

form of pesos.

cccmedia

@cccmedia nice reporting. I agree. I do not believe there are many valid or good ways to protect against the world currency from being totally devalued. It would devastate the USA as well as many other countries. The US would be on a collapse situation that it has never seen in its history. That being said what is the next move? What would the US do? I think the answer has been in play the whole time and is likely forming a new currency that is dictated by a central bank other than one country's Bank. It would likely be a world Bank run by a world organization valued by the same people. Coincidentally when the world's most powerful Nation is that as weakest point in history. Or is it a coincidence. In either case having pesos or dollars probably will have little impact.

Do you think investing in the most deflated currency at the time would be a smart play to realize some improvement if a world power was to start distributing wealth to the Nations? I don't blame you if you don't want to get into this topic, haha.

A "worlld power" to start "distributing wealth

to the Nations"?

That's rich (pun intended)!

cccmedia

As for the world's "most deflated currency,"

that arguably is Argentina's whose inflation

was officially reported a few days ago

as 104.3 percent.

They have a "blue market" down there.

Only currency experts who know what they're

doing should mess around with

Argentina pesos unless they already have them

and would use them to buy property

in Montevideo or Miami.

cccmedia

@cccmedia ... You say: "I have seen nothing posted on this thread so far

that would persuade one to move most of his or

her cash into a Colombian bank this month in the

form of pesos."

I would say there are two good reasons related to risk and return.

RISK: your money is safer in a Colombian bank. Have you heard of any regional banks in Colombia that have failed this year? In the USA there have already been three regional bank failures in 2023.

RETURN: Financiera Dann Regional in Medellín, Colombia offers a CDT with 17% guaranteed return on a completely risk-free savings instrument. In the USA have you heard of anyplace you can get a CDT with a 17% guaranteed risk-free savings?

It is not a bad idea to have money in Colombia earning 17% return, especially as the peso is gaining strength and the dollar is losing value (has not reached 5,000 at any time this year). With a potential credit default on the horizon the USA could be thrown into a recession. Invest in Petro's Colombia; Petro was elected by a majority of the Colombian people.

17 percent! Wow!

Thank you for providing thiis information.

Here in Ecuador, my CD at Banco Guayaquil

is earning in the 8-9 percent APY range ..

and that's about as good as it gets here,

according to my research.

So, Futuro...

Tell us more, please!

I will effort contacting Dann Regional and

ask these questions. Do you have any input?

Can a non-resident with Ecuador cedula (part of

the Mercosur group of nations) participate?

Whom can one contact to make arrangements

at a financial institution such as Dann

for such an investment?

What is the maximum CD(T) investment

one can make that is risk-free and

government or FDIC-style guaranteed

against loss?

Where do la DIAN and its tax collectors

fit in this picture?

What else does a foreign investor need to know

in order to quality for a 17 percent return?

cccmedia in Quito

First Petro didn't win the popular vote in the 1st round

And going to second round he won by 50.47% of the vote so that's like half of the people. So that's not alot. And right now his disapproval is growing by the day.

And he's trying to force his reforms thru all of the great companies in Colombia their stocks are tanking, more unemployment is coming to Colombia because investors are scared this is gonna turn into another dictarorship. I will keep some cash on hand in a safe location but not in any bank.

CDT in 2023 .. Too good to be true?

According to noticiasrcn.com, which tracks such matters,

the highest APY yearly return on CDT investments in

Colombia was about ten percent, based on a 360 day investment.

So how is Dann Regional offering 16 to 17 percent APY now?

What FDIC-type entity insures depositors and investors

against loss in Colombia .. and up to what investment amount?

Curious readers want to know.

cccmedia

CDT stands for certificado de depósito a término.

@cccmedia There's good news, and bad news for loss protection of investments and deposits in Colombia. It's not exactly the FDIC. What it is, is Fogafín - Fondo de Garantías de Instituciones Financieras. The protection is called the Seguro de Depósitos.

The good news: They protect the "little guy" who may have investments and bank and money accounts, and savings and checking, and at no direct cost to him.

The bad news: The accounts are protected only up to 50 million COP - a little over $11,000 USD at today's exchange rate.

Here is an article that explains it:

https://www.semana.com/finanzas/ahorro- … ia/202236/

Here is the government website for Fogafín:

https://www.fogafin.gov.co/que-es-el-se … definicion

In the first article is one sentence that shows how different Colombia is as a third-world country from other more developed first-world countries. The article says that only 1.5 million Colombians - out of a population of some 50 million - have some sort of financial instrument, a "producto financiero". That's only 3% of the total population. In the US, over 68% of adults have a checking account, 55% have a credit card, 50% have a savings account, 22% have a mortgage, 20% have some sort of loan, etc. etc. according to this source:

https://www.statista.com/forecasts/9971 … -in-the-us

This is all theatrical politics, happens every few years and nothing ever happens.

Even if it did, It woud be very temporary, and would result in a recession,  all ships would sink equally as the tide went out.

And we would see the weaker ones, didnt have any clothes, including many developing countries, i.e. Colombia.

This is all theatrical politics, happens every few years and nothing ever happens.
Even if it did, It woud be very temporary, and would result in a recession, all ships would sink equally as the tide went out.

And we would see the weaker ones, didnt have any clothes, including many developing countries, i.e. Colombia.
-@nico peligro

Recession?  Nah...the Admin will just redefine it like last time....

Political theater is the right term.

They'll throw the MAGAts a bone .. and they'll cave.

Their leader can't afford to be blamed for

tanking the country a year before the election

given the clear obligation to pay for debt

already agreed to.

cccmedia

The only way I can see that it would concern me is if they delayed paying out Social Security benefits that I may start collecting in a few months. Although that is an option they have never resorted to that and I doubt that they ever would as it would be certain political suicide. They have delayed paying out mature savings bonds and shut down government programs or furloughed some employees. At the end of the day not muchI can do about in anyway.

lpd

I kinda diagree about saying default will not happen, that it is just political theatre.

One reason I disagree is that the USA already defaulted Jan. 19, 2023 and is now in the “extraordinary measures” stage until June 1, 2023 at which point Biden can ignore the debt limit and continue to pay congressionally mandated spending as is his duty by the 14th amendment of the USA Constitution.

Biden cannot be sued for executing on spending mandated by Congress. Who would have legal standing? Given the clear originalist language in the Constitution what possible legal claim could be made to not pay the debt… ceiling be damned.

-@futuroexpat

----

@futuroexpat

What the heck is this long string of numbers you posted, futuro?

Are you communicating by secret code that most of

our Expat.com members would not understand?

This is not a rhetorical question. Explain what is behind

apparent code.

cccmedia

Expat.com designated expert for this Colombia forum

N.B.  When I pressed Reply to show his first line of numbers,

four lines of apparent gibberish unexpectedly appeared in the

futuro citation above his screen name.

-@futuroexpat


-@cccmedia

Those numbers are something from a missing link or photo that Futuro posted.  The photo was that of an investment firm or bank that was giving 16.9% return on CDTs.

@futuroexpat What debt did the US have on that date and not pay? That is after all the definition of default.

lpd

@Lpdiver ... My mistake. Here is what led up to Jan. 19, 2023:

On December 16, 2021, USA lawmakers raised the debt limit by $2.5 trillion to a total of $31.4 trillion.

On January 19, 2023, that limit was reached, and the USA Treasury announced a “debt issuance suspension period” and began using  “extraordinary measures” to borrow additional funds.

However, we can trust the USA government to resolve this situation any day now. Don't worry, be happy!

@futuroexpat I would hardly even remotely call that a default. It is similar to my MasterCard informing me that I have reached my credit limit and then increasing it and my telling my wife NOT to increase our personal debt. The ceiling is almost always increasing. Nothing to see here in my opinion, other than interesting theatre.

lpd

@Lpdiver says ... "Nothing to see here in my opinion, other than interesting theatre."

So, you don't see the USD being devalued more compared to the Colombian Peso?

Do you trust the government officials to resolve the situation before a recession, massive unemployment, and economic collapse happens?

I am not so sure now that it is theatre. It's looking more like blood sport.

@futuroexpat... I am not your typical Golden Mile, El Poblado, sex tourist expat in Colombia. I am currently residing principally in the US and will probably be a 180 day wonder when I retire very soon. I live very contrasting lives between the U.S. and Colombia. In the U.S. I live in a nice house in a gated community with about 1.500 square feet per person in my home. Each person in my house has their own car and so forth. In Medellin I stay in Doce de Octubre, own no vehicles etc. I dine on a lot of street food and home cooked meals by a Paisa. So my costs are vastly different. I have often stated in the "other" forum that if comparing apples to apples Colombia is not that much if ANY cheaper than living in Texas. So with anticipate SS income of near six grand I can live quite well in Colombia if I can navigate the visa maze and the tax maze.

I have survived multiple recessions, double digit unemployment, double digit interest rates, and I plan on being unemployed within a year anyway. I have worked long hard hours and have over fifty years of income reported to social security. I have been frugal with my money and the only debt I have is a home mortgage at under 3 % interest rate. So no I am not worried...mainly because there is absolutely nothing I can do about it. I do admit that it is possible that our politicians could fork up; but, again nothing I can do about it.

I did have an 18 month CD in the late seventies or early eighties that paid 18 or 19 percent interest and you got an over and under Browning 12 guage if you kept it for the full two years. Gotta love the Cajuns down in Morgan City, LA!

Don't mistake my good outcome as anything more than good fortune and a willing to work at what ever job came my way. It is said that God protects fools, drunks, and children... I suppose I have triple indemnity!

lpd

@Lpdiver ... Thanks for sharing. With your SS retirement income you can live like a king in Colombia. One thing I don't understand is this: "Colombia is not that much if ANY cheaper than living in Texas"

My income is way less than yours. I could not live in El Poblado, Medellín or in The Woodlands, Texas.

According to Rent.com in 2022 an average one-bedroom apartment in Texas is $1,316 per month ... and a two-bedroom averages in at $1,634. In COP that would be between 6.000.000,00 and 7.000.000,00 pesos (COP) per month for a small apartment in Texas. In Colombia nice apartments in nice neighborhoods in smaller towns (not Bogotá or Medellín) go for between 1.000.000,00 and 3.000.000,00, less than half the average cost in Texas.

In Colombia the cost of living is, on average, 66% lower than in United States. Rent in Colombia is, on average, 84% lower than in United States, according to Numbeo. That has been my experience in Colombia also... porque yo soy un gringo de lavar y planchar, yo soy un gringo platanatizado.

LP:  I am thinking you must be well over 75 to have invested during the Carter years of high CD rates and inflation.  My parents got some of those CDs.  You also must have waited until 70 to take SS income.  How will you pay for health care?  Out of pocket?  Have you considered Costa Rica?  The current prez of Columbia is a left wing marxist much like the a$$clown now ruling in Brazil.  That does not bode well for expats. Verdad?

@drpeterjstanton ... The country's name is Colombia, not Columbia.

BOGOTA, May 4 (Reuters) - Colombia's Congress on Thursday approved a $247.4 billion four-year development plan, paving the way for the government of leftist President Gustavo Petro to implement social and economic reforms.

@drpeterjstanton You are close, shave about ten years off of the age and you will be in the ball park. Yes, I delayed taking SS benifits.Yes the expat outlook is on a downward trend currently for Colombia and many other locals. In a lot of ways I don't blame them though. Here in the USA we look down on immigrants getting benefits that they don't really qualify for and I imagine Colombian's often have similar sentiments. Time will tell; but, my desire to live in Colombia remains the same but the economic advantages are dwindling daily. May settle on being a 180 day wonder.

lpd

Settle for being a 180-day wonder, LPD?

That's one way of looking at it, though not mine.

I like avoiding all the Colombian paperwork by

simply accepting a passport stamp for 90 days

at a time when entering Colombia.

I like avoiding worldwide-tax potential obligations

by staying in La República for 180 days or fewer.

I like traveling arouund the Hemisphere and seeing

different surroundings and swimming in hotel pools

part of the year.

Variedad es la especia de la vida.

cccmedia, the 180-day wonder, from Mexico City

@cccmedia C3...I concur with all your assertions. The difference between you and I is that I am married. My first choice would be sailing around the world on a sailboat but mamacita is deathly afraid of the ocean and well she is nice to have around. Plan "B" currently... is a meandering multi year trip down the PanAM HWY. Sooner or later though one need a home base... I hope that it not for years to come.

lpd

Other way is to stay in Colombia legally 180 days a year and the other 180, " live" legally in Ecuador and drive across the border every 90 days without stamping passport and live " physically" but not " legally" during these 180 days as well.

@cccmedia C3...I concur with all your assertions. The difference between you and I is that I am married. My first choice would be sailing around the world on a sailboat but mamacita is deathly afraid of the ocean and well she is nice to have around. Plan "B" currently... is a meandering multi year trip down the PanAM HWY. Sooner or later though one need a home base... I hope that it not for years to come.
lpd
-@Lpdiver

My wife and I did the PanAm Hwy for two years.  Should've taken 6, but Covid put a damper on things...

@mtbe How did you do your travelling? I am currently vacillating between by older F-150 truck and simply working my way down via buses etc.

lp

@mtbe How did you do your travelling? I am currently vacillating between by older F-150 truck and simply working my way down via buses etc.
lp
-@Lpdiver

We bought a Ford Transit van and I converted it into a camper: Bed, kitchen, etc, with solar panel system for power.  In the two years, we only stayed in hotels 4-5 times, all else was wild camping...or small town squares/parks.

I would do it in the F150 with a camper on the back.  If you're not keen on camping, or would stay at hotels along the way, might want to find something more efficient to drive.  But plenty of people do it in trucks with campers.