Failed States (Sensitive Content)
My wife won’t go to Granada, Nicaragua anymore.
It’s too painful for her.
A couple decades ago, Kathleen and I spent a lot of time in Nicaragua. I even ran a business there for a short while.
We kept going back because it really is a beautiful place, with wonderful people…
But it was on the streets of Granada—Nicaragua’s ninth most-populated city—that Kathleen decided she just couldn’t do it anymore.
We were eating dinner on the outside terrace of a nice restaurant.
Across the street, there were these kids hunkered down on the roadside, making strange objects out of reeds: animal shapes, a cross, a stick man…
They’d probably plucked the reeds down by the lakeshore (the city sits on the shores of Lake Nicaragua, one of the largest lakes in the world).
From time to time, one of the kids would come up to the diners—including us—and try to sell us the reed-decorations…
Kathleen bought one.
And the boy she’d bought it from was so grateful for the money he’d received, he made Kathleen a love-heart out of reeds and presented it to her…
The whole scene was heart-breaking.
These homeless kids—there were no parents in sight—living on the street, starving, doing whatever they could… making things literally out of weeds… to earn a little money so they could eat that day.
The destitution we saw on the streets of Nicaragua just seemed to grow and grow over the years…
Katheen still keeps that heart on our dresser at home: a reminder that the world can be a cruel place, but she does her best every day to improve it.
The boy who gave us the heart ate heartily that day. What happened to him after that…
Humans Suck
OK, that’s my “sensitive content” for today. I’m not usually one for soppy stories.
Still, the suffering on the streets of Granada… a colonial city with a storied past; it claims to be “the first European city in the Americas”… It was a lot to take.
Because, there’s really not a lot you can do to help these kids. Give them a little money and they’ll eat that day. But what happens after you leave…
If you could stay long-term—maybe you could help more.
But we couldn’t stay in Nicaragua—the volatile political situation at the time made it too difficult…
It’s the same political situation that ruined these kids’ future.
Bad economic management… corruption… hoarding of resources by a few folks well-connected to the government… Communism destroyed Nicaragua. It’s still trying to recover.
And that brings me to the point I really wanted to make today…
Humans suck. Governments suck. Politicians suck big-time.
At any one moment around the world, some places are doing better than others—some governments are doing a better job of safeguarding freedoms and providing an environment where business can thrive, and so on… Some politicians are less corrupt than others.
But, over the long-term… as long as humans are humans… you never really know which countries and states might “fail.”
Countless Western investors thought post-Communist Russia was a fantastic place to put their money… that all turned to crap after the invasion of Ukraine.
Literally overnight, Russia was a pariah and you couldn’t do business. Accounts were frozen. Markets closed.
The same might happen to Western businesses in China if it invades Taiwan (which is far from impossible).
For a while during the 1990s, it looked like Nicaragua might have a bright future, after socialist leader Ortega was defeated. The country was opening up, it even became an expat haven…
But then Ortega returned—and in recent years he’s been doing anything, including shooting his own people, to cling to power…
Things could turn around again in a post-Ortega Nicaragua…
So much depends upon the actions of those in power and the good or bad decisions they make. (See: Putin decides to invade Ukraine.)
You want to find a place where you’re not affected too much by the decisions of those in power, one way or the other. But it can be hard.
...We Face The Consequences
Even in the most developed and supposedly “safe” countries in the world, massive human failures happen.
You’ve probably seen the recent news from East Palestine, Ohio.
Here’s how the train derailment was reported by Global News:
“On Feb. 3, a train carrying vinyl chloride and nine other hazardous chemicals flew off the rails and started a massive fire just outside East Palestine, a small town of about 5,000. …
“As the toxic chemicals were drained into a trench, crews ignited a controlled burn to get rid of the substances. A loud boom was heard by reporters that afternoon and the burn sent up a massive plume of phosgene gas and hydrogen chloride in a massive black cloud that was visible from meteorologists’ radars.
“Phosgene gas is a colorless gas with a strong odor that can cause vomiting and breathing troubles. It is highly toxic and was used as a weapon in World War I. …
“Investigators say the train derailed because of a broken axle. Security footage 20 miles back on the rails showed the undercarriage of one of the train’s cars ablaze with sparks flying, raising questions about why the crew wasn’t aware of the malfunction.”
Who’d want to live there right now?
Whether it’s a failure to elect the “right” people… Failure of regulators to regulate what they should… Failure to prevent an accident that could have been prevented… Humans fail. And the rest of us suffer the consequences.
...But It Ain't All Bad
But I do want to end on a positive note.
My letter to you today is a cautionary tale—but it’s not a hopeless one.
Yes, humans fail, states fail, governments fail… History shows, even superpowers fail. Ancient Rome… The Byzantine Empire… The British Empire… They ruled much of the world, but they’ve all disappeared from history.
The United States’ superpower status won’t last forever—nothing does. And sometimes a collapse can happen sooner than you think. (A society that can’t keep its people safe from toxic chemical explosions might be one of the signs… just a thought…)
But we’re not helpless.
We don’t have to sit back and take whatever it is the bureaucrats and politicians want us to take…
When you’re looking everywhere around the globe, like I do—you’ll always find a safe haven for your wealth and your freedom somewhere.
And likely more than one.
These are the places I write about in your Offshore Living Letter and Simon Letter.
But the real trick is: you don’t want to rely on one location… one country… one government to keep you safe.
You hedge your bets by choosing multiple locations around the world (ideally, three or more countries) where you can preserve your way of life. And escape to if things turn bad.
That’s what “diversification” really means. It’s not just about having an option other than the United States—it’s about having more than one option…
After all, true freedom means having choices.
I have plenty more to say on this subject—and how you can get started.
I’ll be writing to you again on Thursday with some lessons I’ve learned about the right and wrong ways to do it…
Sincerely,
Lief Simon
Editor, Offshore Living Letter