TheWalk.com

By Mike Muehleck

One and a half million U.S. households are preparing to move out of the U.S.
The vast majority of émigrés are in their 20s, 30s, and 40s. And some may not
ever return.

No, we are not talking about the next major deployment of National Guard
units to the Middle East. In fact, none of the emigrants are government
workers or corporate employees leaving for temporary overseas assignments.
These folks are malcontents or adventurers. They consist entirely of private
citizens and their families packing up and leaving the good ol’ USA solely at
their own initiative.

This news comes from a Zogby International poll of 115,000 Americans
conducted over the past two years. Bob Adams, CEO of New Global Initiatives,
commissioned the poll when he realized that no reliable database tracks the
movement of Americans out of the country. A recent Barron’s article, written
by Bob Adams, breaks down the Zogby/New Global Initiatives data as follows:

· 1.6 million (U.S. households) have already made the decision to leave
· 1.8 million are seriously considering and likely to leave
· 7.7 million are somewhat serious about leaving and may do so
· 3.0 million are seriously considering purchase of non-U.S. property
· 10.0 million are somewhat serious about purchase of non-U.S. property

Adding it all up, some 10% of all U.S. households are looking to leave the
country, while another 11% are considering living outside the U.S. at least
part time.

“That Can’t Be Right”

“Incredulous” is the word that best describes the reaction of people when
they hear Adams’ conclusions. I brought the subject up the other night while
barbequing and drinking beer with some American business people I know here
in Bangkok. Even this well-traveled group greeted the poll results with
skepticism. They asked, “How did he get thes data? Who did they interview?”

Maybe I was missing something, I thought to myself. So I decided to give Bob
Adams a call. I reached him one evening at his home in Panama. “It’s
happening,” Adams insisted, when asked about this new wave of emigration.

“And we really can’t say exactly why.”

While Adams’ survey includes destinations all over the world, the survey’s
findings corroborate Adams’ first-hand observations in Panama. Adams says the
recent American immigrants to Panama are different from previous ones. Ten
years ago, the typical American ex-pat in Panama was likely to be a retiree
who had previously been in Panama. Perhaps they had been on a military
assignment or with the Canal Zone administration. These folks tended to live
in “American only” enclaves for social and security reasons and had fairly
little interaction with the local population. These older ex-pats frequently
used the words “tropical paradise” to describe why they moved to Panama.

But today’s immigrants tend to be a lot younger, professionally employed, and
more likely to meld into the international community than earlier
transplants. These folks generally say they moved to Panama for adventure, a
lower cost of living, or to escape the growing intrusiveness of the American
political and legal systems.

Adams’ interest in the topic of American emigration is the result of
serendipity. Having lived and worked overseas for four decades, Adams decided
it was time to settle down. He identified Panama as the best candidate. As he
was preparing to move, he noticed the poor quality of Web sites catering to
potential immigrants to Panama. So he set up his own site,
RetirementWave.com. He intended to create an impromptu guide to assist like-
minded people in the decision to move to Panama. But it quickly turned into
an unpaid job responding to inquiries from interested parties worldwide.
Adams realized he could reach an audience that extends beyond Central
American real estate investors.

Why Do People Emigrate?

Why do people leave home for strange foreign lands? While a handful might
claim to leave for political or religious reasons, most seek greater economic
opportunity. All of my grandparents emigrated from Germany or Lithuania in
the early 1900s. My wife’s Chinese grandparents, for example, emigrated from
China to Siam in the same generation. None moved to new lands because of a
burning desire to be “free.” They all moved because they wanted to make more
money and thus enjoy a better life.

If you Google the word “emigration,” and you’ll mostly get sites that detail
the emigration from Europe to the U.S. in the 19th and early 20th century.
Google “American emigration” and you get a link to Adams’ New Global
Initiatives Web site and not much else. Most economic oriented sites only
discuss the effects of legal and illegal immigration into the U.S. It’s hard
to find any thoughts about the economic, political, and demographic effects
of younger Americans leaving for greener pastures overseas.

If people emigrate to find economic opportunity, might Adams’ survey portend
bad news for the U.S.? Current U.S. GDP is $44,000 per person versus Panama’s
$8,000. It seems unlikely that people are leaving for immediate financial
gains. Still, Panama is a young country demographically, with a median age of
26. Panama’s GDP grew at an 8% clip last year. It doesn’t have the U.S. baby
boomers’ $55 trillion unfunded pension liability. Neither is it involved in
difficult, expensive Middle East nation-building. So we should not be
surprised if a growing number of 20-to -40-year-old Americans are willing and
eager to abandon the wealth that “has been” to pursue the wealth that “might
be.”

Investors might want to consider a similar tactic.

[Joel’s Note: Mike is a regular contributor to one of Agora Financial’s
flagship publications, Strategic Investment. If you are at all interested in
expatriating some of your investments or find yourself questioning the short-
term performance of the American economy, you will certainly be interested in
Strategic Investment’s report…it’s not for the faint of heart. Read On
Here.

I broke this article into two parts, because of its length and the obvious break in content. Part 1 can be seen here.
- Ed

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