The U.S. government – under a new law incorporated in the Hiring Incentives to Restore Employment Act signed by President Barack Obama on 18 March 2010 – is demanding that international financial institutions reveal which of their clients are U.S. citizens with accounts of more than $50,000. Foreign banks are, in effect, being asked to act as the international enforcement arms of the Internal Revenue Service. Those banks that don’t comply will be subject to a 30% withholding tax on all payments made to them in the U.S. Many banks and wealth managers have decided it is far easier to politely show their U.S. clients the door.

Earlier this month, the law firm Withers conducted a survey of bankers, accountants, independent financial advisers, trust companies and other private client advisors to analyze the impact of the HIRE Act. Over half said they have seen instances where Americans were denied investment and banking services in the last two years. And 95% expect this to increase as a result of the HIRE Act.

David Treitel, a tax director, at U.S. Tax & Financial Services, said that at least 20% of the American customers serviced by his company’s London and Swiss offices have had their bank accounts closed over the past year.

The Hire Act is only the latest in a raft of different laws aimed at American expats, American residents with off-shore accounts and the institutions that service both groups. Jay Krause, a partner at the law firm Withers, says: “The difficulties that American expats face predates the HIRE Act. But the new law will take it to a whole new level. I think that it is the most remarkable piece of tax legislation ever enacted.”

The U.S. government already taxes expatriate citizens on their worldwide income regardless of where it is earned or where they live, making them the only people in the developed world who are taxed in both their country of citizenship and country of residence. Many expats complain that these rules are getting tougher and the penalties more draconian by the year.

continue reading at the WSJ

Here in Guatemala there are more cell phones than there are people.  That’s because many people carry more than one phone, to use networks for different carriers.  I haven’t figured out whether this is so they can take advantage of different plan promotions, or whether there are different benefits to calling certain users on the same network, or what.

Additionally, there are about 5 times more cell phones than land lines. This is because the cell phone network began to expand in the country before the copper wire network was fully matured, and naturally it’s easier to put up towers than it is to lay cable, so the then-monopoly stopping investing in wire copper.  Finally, it’s really easy to get a cell phone whereas a land line requires deposits, contracts, and the available wire in the ground.

Anyway, most cell calls here are expensive, relative to the states, anywhere from 1-2Q per call, depending on the carrier, your plan and other factors.  That translates from 12 to 24 cents US per call.  When I recharge my phone by buying prepaid minutes, I usually buy 100Q worth of time, enough for about two weeks in my case.  However, I’m told by reliable sources that the major carriers sell far more of the 5Q cards than they do any other denomination.  That means most people here are buying enough credit to make at most 5 short phone calls.  Based on my own usage I would say it is more likely you’ll get only 2 phone calls out of 5Q.

The result of all this is that most people have phones but have no ’saldo’.  I can’t tell you how many times I’ve asked someone why they didn’t call to say they would be late, or why they didn’t tell me they couldn’t make an appointment, or why they didn’t just call instead of getting on a bus and riding across town and the answer is always, “But I don’t have any saldo”.

This lack of saldo is common, and for a long time I thought there was something seriously wrong with my phone because I would get a call but it would only ring once.  I wouldn’t even look to see who called, and then a few minutes later it would ring again, just once.  It got to the point that I finally asked someone and he explained that the caller isn’t charged for the call until you answer, or when voicemail picks up, and so even someone with no saldo can place a call and then hang up, which gets the attention of the recipient without incurring a cost.

I know some gringos who refuse GuateCalls, on the grounds that a person basically wants you to pay for the opportunity to talk to them.  They argue that anyone worth talking to should invest the 1Q in the phone call.  Perhaps my situation is different since I’m so much more reliant on others for helping me in all the ways that I still require, what with business ventures, needy children and dysfunctional Spanish, so I usually respond to GuateCalls.

The other day I learned that one or more of the carriers now allow you to send saldo to another user, so perhaps this will cut down on GuateCalling.  I suspect the carriers will charge for this service, which is amusing to me since they’ve found a way to make money off of the fact that nobody in this country has any money to make the call in the first place.

But a couple of days ago I went to buy a medium-sized cup of iced coffee in the shop within this nicely rennovated bandstand in Tapachula, and was asked to pay 27 pesos for it ($2). It would have cost roughly the same in London, capital of soi disant ‘Rip-off Britain’. But this was Chiapas, which in many other respects still seems to offer the most sensible prices in Central America.

Still, I’ve kind of grown used to rip-off prices in Guatemala, even if I don’t quite understand them. A cup of capuccino or a pizza from Domino’s costs approximately 20% less than it would in London, but I can’t think of any overheads affecting the restauranteur which could mount up to anything like 80% of their UK equivalents.

The killer in London is the cost of renting a retail unit suitable for a coffee shop. Any building in the centre which doesn’t cut it as a locus for shopping can relatively easily be switched to alternative, more rentable uses such as office space or car parking. The owner of the building will generally go for the most profitable usage. Wages are also considerably higher in the UK, with the national minimum set at roughly $9 an hour.

So why is a lot of restaurant food (especially the faster sort) so expensive in Antigua? Can’t be the ingredients (mostly local), the property rent or the labour costs. Maybe red tape is a major overhead here, but then Guatemalan businesses aren’t paying anything like the same sort of corporation tax.

And bear in mind that the average middle class consumer is also earning a lot less (though arguably also paying less to the banks and the government), and so if the pizza seems pricey to me…

Maybe it’s because there’s scarcity, but on the demand side: the number of people able to pay X for a Domino’s pizza in Antigua is as small as the number of affluent tourists in Tapachula and so the price of X has to go up to cover reduced volume. Hmmm, maybe I am economically naive after all.

El Blogador is in Chiapas and is wondering why his iced coffee costs so much when other goods are relatively inexpensive.  Note that he is buying an iced coffee (and we can assume it’s good coffee), not tortillas and beans, and that he’s buying it from a nicely renovated shop.  This hints give us a preliminary understanding of why the coffee is relatively expensive, at least to other goods in Tapachula.

The drink he ordered is not a common one in Tapachula.  Locals don’t drink a lot of iced coffee.  They do eat a lot of tortillas and beans and don’t care how well renovated the eatery is.  They certainly wouldn’t willingly pay more just to eat at a nice eastablishment.  So in the cost ingredient of the coffee we have built in both an exotic product (if not because the coffee itself is exotic because of the relative scarcity of the availability in the aforementioned form), and also a nicer establishment from which to buy the product.  Both of these issues contribute to higher overhead, driving the price higher.  The exotic product requires a greater investment in bringing it to the market and there is a greater risk that it will go unsold.  When you are a bean merchant in Mexico or Guatemala, there’s not much risk of demand evaporating; in Tapachula they have many reasons to worry that foreigners might stop showing up, or at least in as great numbers (Swine Flu, regional violence, economic crisis, etc).

Next El Blogador considers Antigua prices and the overhead, surmising that although prices in Antigua are generally lower than London, the latter’s prices can be somewhat justified when considering overhead.  As we discussed before, overhead is a factor, and although Antigua commercial rents are quite high (you can rent a place in Phoenix at a lower price per square foot), this alone doesn’t justify the price.  (You’ll have to wait for my dissertation on Antigua real estate prices).

Just as in Tapachula the product offering was an exotic one, this also is the case in Antigua.  Whether it is Dominos or a cappuccino, the product is essentially an import.  Yes, I know they make coffee here but the coffee the locals drink and the coffee I get in my cappuccino is not the same, and I’ve seen coffee bags around town that have been imported from the US.  It wouldn’t surprise me to discover the coffee was grown here, shipped to the US, packaged and shipped back.  Even if it remains here and is manufactured and marketed for local consumption, the buyer of that coffee is not the common man, but a wealthy local, extranjero or tourist.  More goes into the packaging, marketing and sales of the product than the actual ingredients.  Don’t fall into the temptation of thinking this isn’t ‘fair’; most products are this way (and life isn’t fair, just ask my teenager).

This means that the market for the product is greatly reduced.  Normally a smaller market means lower prices, because small markets often have corresponding small demands (in the aggregate), but occasionally this is not true.  There is a small market for a Ferrari, but the price remains high because it is an exotic product and the small market has the ability to pay for it.  Ferrari wouldn’t make money selling at half the price, and probably wouldn’t want to sell a product half as valuable, and so at a greatly reduced price the Ferrari would not be available.  It is the same with pizza and lattes in Antigua.  The demand, in the aggregate, is small, but within the market it is quite high.  I suspect prices for coffee and Dominos pizza could go up by 30% and there would be very little change in volume, because the demand-though limited-is intense, and further, the demand is for good coffee.

This deserves an additional consideration.  How are prices determined?  El Blogador considers overhead, and market forces, but neglects to mention the primary motive for setting prices:  profit.  The merchant must cover all of his costs, he must cover the cost of his own time, he must put a value on the risk his capital is taking, and finally he must set prices to provide a profit.

If the price of the product does not cover all these things, then the business will fail.  You see this daily around town as businesses are closing up because at a given volume they could not adequately meet all those objectives.  Where there is not profit, there will not be a lasting, profitable business.  (In this country many will survive but will not be profitable).  In Venezuela we have recently seen why socialism always fails, why it must fail, because prices are subsidized to promote a political ideology instead of allowing to work, which brought about scarcity and eventually a currency devaluation.  That too will have to wait for another time.

Another factor is the government.  El Blogador and other promoters of substantial government involvement in society (also known as Marxists), point to the benefits of governmental involvement and would cite regulations that benefit the consumer, strong infrastructure, etc.  Naturally there are costs that come along with that, first and foremost a high tax rate, secondly the drain on economic growth that comes with government taxation and regulation, and finally the infringement of personal and economic freedoms.  Most importantly when the government consumes money it returns to the economy less than it takes in, whereas private businesses return more through the creation of value, through innovation, etc.

In Guatemala the government is so dysfunctional you have both the presence of taxes and regulation, though they are widely subverted, and you have the lack of the societal benefits or infrastructure that is normally the product of government’s involvement.  For all my complaints about governements in general, the streets in the US are generally well constructed, well maintained, and traffic lights work, etc.  But here in Guate the streets are a mess, there is inadequate parking, buildings are crumbling, and genrally infrastructure is insufficient.  In addition you have the violence, a poorly trained work force, and high rates of crime.

The whole point of this is that there are substantially greater risks to the entrepreneur and his capital here than elsewhere.  If you invest in London or NYC, you do so without a great deal of fear about certain risks to your capital, whereas here you must protect your capital like a pioneer might who was headed west in 19th century America. Those risks keep a lot of businesses out of the market, which reduces the supply of products and services.  This forces prices higher.  (It also means the opportunity for those of us who are here is greater).

As with all prices, the market determines them.  In this case El Blogador’s willingness to ‘overpay’ for that iced coffee is itself a testament to why the price is so high, just as I am willing to pay 16Q for a cappucino at the park or 100Q for a Cohiba or 150Q for a good pizza (not Dominos).  There is a concentration of people like El Blogador and Don Marco in this town, which is why the prices are so high (for everything from real estate to cheese).

So in conclusion, prices in Antigua tend to be high, relative to the economy and the region.  They are high because the goods in question are unique/exclusive, because there are relatively few of them and because the risks to the merchant and his capital are great, and because the demand, while small, is intense.  The next time you find yourself wondering at prices in Antigua (or Atitlan), apply this approach and you’ll find the answer.

We drank coffee and sipped Zacapa for about two hours, and then split up before it became an all-day affair that would prove costly at home.  When the bill arrived, we were surprised to see that we had been billed full price for everything.  The total was over 200Q, instead of approximately half that.  We asked the waitress about it who took the receipt and disappeared without explanation.

A few minutes later the owner/manager arrived and asked us to go to the cash register, which we did, and he rang up the bill…precisely the same as originally.  We explained to this guy that we came for the happy hour and expected happy hour prices.  He acted pissed off, slammed the receipt down on the counter and pulled out a calculator to figure out the new total.  Without itemizing the bill he presented us with a new total, which was clearly not accurate but close enough not to warrant further argument.

There was no apology for the inconvenience, no attempt to present a new receipt, no ‘thank you for your business’, nothing.  I would like to present this as an exception to the way business is done here, but in fact it is more the norm.  It is not uncommon that I will be given incorrect change, or that people will act as though I have no change coming, forcing me to confront them.  The bar in question has a sign out front advertising the specific special we were there for but clearly didn’t want to give that deal to us.

I suspect that much of this is the result of tourists who are unfamiliar with the currency, don’t count their change, or just don’t care.  People who are passing through for a few days or weeks are often loose with their money.  In fact, I was pretty loose with my money for the first six months until I realized just how much I was spending, and how much my cost of living was impacted by these little ‘adjustments’.  It’s easy to spend like you’re in Phoenix when you’re living in Antigua.

Generally speaking, I’m a good tipper.  In the US my standard was 20%, unless service was bad.  Here many places build in 10%, but expect you to tip on top of that (many businesses charge the 10% but don’t really give it to employees).  Often times the tip is built into the bill but if you ask whether the tip was included they will say no.  You’re standing there with the receipt in your hand, which may actually show the 10%, and they’ll just lie to your face.  I’ve tried this many times, just to see what they say.  Maybe so many people have such bad Spanish that it works.

The service here is generally bad enough that I no longer tip over 10%.  If I do get good service I’ll tip 20% or more, especially if the bill is small.  I wish I could say that where I’m a regular this practice of good tipping is rewarded with good service but that’s not been my experience.   Instead, the waiters want to grab my hand and shake it in every ghetto-style imaginable (do I look like Eminem?), when all I want is decent service and basic courtesy.

Unfortunately, in most places around town you have to expect them to shortchange you, lie to you about the bill or otherwise try to screw you.  This is not limited just to locals, I’ve discovered that foreign owner/operator/managers have adapted to the custom.  It’s kind of an ‘every man for himself’ approach with no regard to ethics.  Perhaps in a tourist town nobody thinks twice about screwing the customer because of the belief that he’ll never be back, and perhaps in the days before the internet this might have worked.

But now that I can logon to a number of travel sites (always with a pseudonym of course, like “Nancy Bailey of Semillas de Amor” or “JP of RumBar” or “Darryl of Casa Rustica”), and report on the bad service I get at some places and the strategy of cheating, word gets out.  No people, I don’t really use other peoples’ names as pseudonyms…at least most of the time.

So, be forewarned…even if you’re not accustomed to checking your bill (I wasn’t), you should, and challenge anything suspicious.   If you want to tip them, then tip them, but don’t condone the traditional scheme by overpaying; get the right amount and then leave your extra tip.  It demonstrates that foreigners are not stupid, but neither are they stingy.  Reinforce with your wallet the ethics you’d like these people to learn.  You’re helping the rest of us-and them.

What new security features do you see?

I’ve long suspected the Quetzal is easily counterfeited.  I noticed four new security features on this new money which will give printers counterfeiters a few design challenges. Of course, if you think like I do, and you wanted to go into the printing business, you could just design a slight modification to the currency, such as the one above, make sure you had the necessary tactile feature on the good Bishop’s left shoulder, and print a few million Q worth.  With nothing else to compare it with and a few press releases announcing a new design, you’d be in business.  By the time you were done circulating your inventory, you could be off to El Salvador and begin again.

If you want to look at a scan of some old money, go here.  List what you see and if you find something I don’t, I’ll buy you a drink at RumBar or pay for an online Spanish class at Academia Colonial.

I have been living in Guatemala now for about 3 months. Since 99% of my work is from home, I don’t venture out too much and have a limited circle of friends. I’d say about 10 in total! Give or take a few.

So the fact that 30% of my friends and acquaintances have been affected by the crazy bank system here simply freaks me out.

Genesis, also known as Expat Mom, had a horrible experience happen to her just a short while back when someone copied their ATM debit card and PIN out of a doctored machine and stole ALL of their money. They are battling it with the banks, which offer no protection whatsoever, yet are giving them teeny tiny glimmers of hope saying they will take care of it.

Next, my husband’s good climbing buddy had the exact same thing happen to him, and the money never returned. His bank didn’t even bother pretending. They just told him flat out, ‘Sorry bud, it’s your loss.’

My husband’s colleague had a flat tire and two very kind gentleman pulled over to help out. Who the hell knows how or when it happened, but they ripped out 5 of his checks out of his check book and wrote checks for $5,000 (40,000Q)! The investigation, I am told, is still going on.

With the last case, I mean how hard is it to prove that he wasn’t the one writing the checks. Just get the check, that was obviously cleared illegally and compare the signatures! This should take a minute and a half instead it’s been going on for 3 months now and still no movement.

The banks don’t want to part with any of their money! I am scared to use an ATM and my husband now only goes directly to the bank to get money out. However, then he moans and groans that the tellers all have buddies waiting on the street for anyone who takes out a significant amount of money making it totally dangerous to take out large sums of cash.

No matter how you look at it, you’re screwed.

So my advice was, Credit Cards. In the States they are practically giving these things out in vending machines. Here it’s a totally different story.  I don’t know how true this is, or maybe I’m simply in complete disgust and awe, but my father-in-law, Guatemalteco through and through, and also one of the only people I know here who has a CC rather than a debit card, says he pays $50 a month for this ‘privilege’! This is on top of the ludicrous percentages you pay if you’re late on payments!

In country where so few actually have money, wouldn’t you think the bank systems would want to work with them rather than do all they can to rob them for every single action!

Bio

Marina has been living in Central America for over 7 years and her site Travel Experta is all about traveling in Central America. Marina loves to help people plan the perfect vacation to this amazing part of the world! You can sign up for her RSS feed and join the fun on her facebook fan page and follow her on Twitter at @MarinaVillatoro.

It’s not a class thing or an education thing, because it happens at all levels.  I recently drove to the capital to meet someone, a Guatemalan of education and high social rank, and the guy wasn’t even at his office.  There was no email, no phone call letting me know not to come to the capital, and there was no apology afterwards.

A few days ago the Wife and I invited some friends of ours from the capital, he’s a retired Doctor, she dabbles in real estate, they are wonderful people but when they called 30 minutes after the agreed upon lunch time, they were merely letting me know they had not left the capital yet.  They had invited someone else to join us-with our permission-and apparently he was late.  They arrived 90 minutes after we had agreed on, late enough that I had a conflict with another appointment.

Further aggravating this dilemma is the fact that some expats are unpredictable.  Recently I have had both Nancy and her daughters over for dinner, Art & Rosie for an afternoon of steaks and hot dogs, as well as Jim and Emily, the lefty PCVs.  Each arrived on time or early.  It’s a pleasant surprise.  On the other hand, I know gringos that could be 15 minutes, 30 minutes or an hour late to an appointment.  At least they feign an apology.

I think everyone can relate.  What no one has been capable of doing thus far-to my knowledge-is offer a good explanation for this phenomenon.  However, fear not dear readers, for as you are so accustomed to controversial and intellectual delights on this blog, I am prepared to offer my explanation for this local oddity.

I believe there are two primary factors which have led to the circumstances I refer to as GuateTime.  First, most people here are poor, and have little hope of ever not being poor.  When you are poor you value what you do not have, e.g., sufficient food, warm clothes, or luxuries.  However, because you have lots of time-seemingly more than you know what to do with-you do not value time.  Everyone has it, they have lots of it, and therefore it is not a scarcity.

Things which are not scarce have a low value.  In Guatemala there is lots of water, which is why it is free.  Air is free, which is why they don’t care about polluting it (if it cost something they would care).  Similarly, time has no value.  Even if people wanted to exchange their time for consideration (for you Obama disciples that means something else of value), they do not get very much for it.  There is a point of diminishing returns where the value they receive for their time is so little that it is hardly worth the effort necessary to achieve that.

This phenomenon, repeated through many generations, has created a cultural phenomenon where the concept of time being ‘wasted’, as it would be a waste to leave your cash on the sidewalk, is beyond their comprehension.

What about the rich, whose time is valuable?

Well, here we enter the second part of my thesis.  First, many of the wealthy are wealthy because they made their money the old fashioned way, i.e., they inherited it.  It was not the efficient and productive use of their time that created their wealth, it was the fortunate joining of their father’s sperm with their mother’s egg that brought about their lifestyle.  Therefore they don’t have any reason to value their time either because it is not necessary for them to exchange their time for consideration, and even thinking about it is like contemplating how many angels can dance on the head of a pin (I know, do you?).

However, what the rich and poor alike in Guatemala share is a cultural aversion to the idea that something so precious as time can be valued in economic terms.  Remember the tienda woman with the Milky Way?  Ah, yes, at the time the most popular post in the history of this blog.  That post received visits equivalent to 10 times my daily average.  By today’s standards it was nothing, my being the most notorious expat blogger in Guatemala Central America, but it was one of those pivotal points in my expat adaption to Guatemala (not to mention the first real hatemail I got from Guatemalans).

That eighth Milky Way had a value that far exceeded the 8Q that the others had, not merely because it was the last one (scarcity) or it was the freshest (they were all ancient), but because it represented to the tienda owner her ability to provide a Milky Way to the next gringo who might want one, you know, when I came back in a week or two.

To Guatemalans (yes, I know this is a gross over-generalization), time is something you enjoy.  You spend the time with friends and family.  You share life experiences, emotions, fears, hardships, whatever.  You exchange that time with loved ones because it may be the only thing you can give, and because it is so precious that it cannot be valued.  In a contrarian sense, it has infinite value because it has no value; it is not desired-at least not sufficiently so-by evil, for-profit NorteAmericanos, but it is universally enjoyed by friends, family and loved ones.  While the Quetzals may be scarce daily, you can always share time with your friend.  By contrast, a gringo who looks to be efficient with his time so he can enjoy his true love is considered, as one reader recently commented, “sad, pathetic and unhealthy”.

I have to stop on this line of thinking before I get all misty, but the Guate approach to life is the antithesis of the WASP notion that we should leverage and capitalize on this scarce resource, one which we have a finite quantity of and which we can never regain.  Sure, you might be able to extend your life by depriving yourself of certain pleasures, but you cannot recapture what has been lost.  Of course, being a Papist and from Italian-German-Mohican ancestors, I’m hardly a WASP but the concept of efficiency has value.

You may create and lose several fortunes-I have-but the time is gone forever.  Placing a value on it is therefore offensive, is it not?  You can rightly argue that it is an insult to say that it can actually be valued.  Of course, we have been doing just that if we have ever worked for a wage, for we are simply leasing our time to another for a set rate.  I told the Wife that I am essentially a prostitute in this way, to which she responded, “You can think of yourself in those terms if you wish, but you better not ever refer to me that way.”  Apparently the analogy has its limits.

In conclusion, the typical Guatemalan does not value your time because they do not value their own time.  They do not value it because their economic opportunities to exchange that time for something of value are limited (especially relative to their wealth if they are of that class), and secondly, because they would not deign to reduce the value of time to something which has a strict monetary value.  It is insulting.  Therefore, to be an hour late, or to show up two days later for an appointment as though you were on time, is normal.  In fact, it is good.  Adhering to a capitalistic, imperialistic understanding of the value of scarce resources would be like…prostituting your soul.

In a bizarre way, if you’re retired and you’ve moved to Guatemalan in part because of a slower life, you’ve adopted these values.  Perhaps you spent an entire lifetime worrying about the clock, and now you don’t want to.  You love that the culture is the antithesis of that which you gave your best years to.  Neither does it really matter if something happens, or anything happens at a certain time, because you have nothing to do, nowhere to go, and time is just another way of estimating your ‘expire by’ date.

The US has always been a young country with lots of dreams and visions for the future, necessitating sacrifices to get there (apparently that age is now in our past, for Americans no longer ask what they can do for their country, but what their country should do for them).  If you’re an Indian or Chinese, you’re on the edge of a socio-economic revolution with tremendous opportunities.  A Guatemalan may look at the pre-conquest glory of his country, of a time when the nation wasn’t known for being the armpit of the world, and think that the glory is all in the past.  In my opinion this is both erroneous and imprudent, but it’s my characterization of the ‘chip on the shoulder’ posture.

Of course, if you’re like me and you still have more dreams than memories, it’s a difficult concept to embrace.  What do you think?

Rarely a day goes by now that I’m not hit up for money.  Everyone needs it, and I’m not talking about that circle of expats who support each other whenever the inevitable banking snafus impact cash-flow.  I’m talking about the near-constant stream of people on the phone and at the door asking for money.

In the states, I had different comfort levels with loaning money, close friends or family always qualified for an instant, no questions-asked $100 or $200.  More than that, and we have to have a sit-down.  Rarely is the money paid back, but if you loan what you can afford to give, then you’re okay.

Well, I’m starting to feel overwhelmed here.  The most recent example came when Maid #4 approached me at the beginning of her shift and began a long story about her roof.  I didn’t understand everything, but she obviously needed money to repair it.  I was on the way out the door and told her I’d talk to her later.  As it turns out, my appointment was with a friend of mine who is a local and bilingual, so I asked him to call and chat with her.  I hate doing that, but when precision is important, I’ve found it’s best to get a local who is bilingual over an expat who is ‘fluent’. I know my Spanish comprehension on the phone is only a fraction of what it is in person, so no offense intended to my local expat readers.

This friend, I’ll call him Mateo, he picks up the phone and starts chatting away.  15 minutes later, he hangs up the phone and says, “She wants to borrow money; something about her roof”.  Great.  “Yeah, but what else did she say”, I ask.  He goes on to explain that she needs to replace her roof, her other employer (el Patron), hasn’t paid her in a long time, and if I’ll loan her the money, she’ll take a reduced paycheck for a few pay periods.

You know what comes next…”Quanto Quetzales?”.  Mateo responds, “She wants to borrow 300Q, and she’ll pay you back over the next three pay periods”, (six weeks).  It seems reasonable, so the next day at dinner I provide her normal paycheck (400Q), and give her an additional 300Q.  She seems confused, and over the course of a mind-numbing  10 minute conversation, (my experience is GuateWomen like to talk, and she’s going slow for me), I realize she is asking for 3000Q, not 300Q.  The Wife, overhearing all of this, is staring at me with wide-open eyes, while I’m remembering that scene from National Lampoon’s Vacation (7:50 into the clip), where Clark Griswald offers the brother in-law (Eddie), a loan and starts pulling $20s out of the wallet while asking, “How much do you need?”.  Eddie replies that he needs $52,000 and Clark starts putting the $20s back into his wallet.

Reflect for a moment how in my prudence I asked a Guatemalteco friend of mine to talk with Maid #4, and how he must have heard every detail of her building plans over the course of their extended conversation.  How could 300Q be confused for 3,000Q? To put it in perspective, 300Q represents 10 days’ pay for the maid, where 3,000Q is, well, for you Obama disciples, that’s more than three months’ pay, and of course she’s hoping to pay it back at a rate of 100Q a pay period, so we’re talking 30 pay periods…more than a year.

Keep in mind that to date the longest a Maid has been with me is Maid #3 and that’s 120 days.  And that is the one who after 60 days cut her hours by 40% but wanted the same pay.  (You won’t believe what she asked me recently, but you’ll have to wait for that story.)

I like Maid #4, she’s the one who took the initiative to show up at the house and start working.  We still haven’t figured out how that all came to be, no one has taken responsibility credit for that maneuver.  She works hard, most of the time, and she’s an experienced grandmother who doesn’t shrink from a screaming two year-old who’s ripped off his dirty diaper and is swinging it around the room.  But 3000Q ($375)?!

She explained that she was sorry to ask, but that her bank (BanRural), charges her 20% per month on loans.  For the amount in question, the interest alone would eat up 80% of her monthly compensation from me.  A little rich for a new roof, eh?  If she took just six months to pay it back, the roof would cost her 6,600Q.

Of course, my first thought was that I need to go into the banking business in Guatemala.  My second thought was that I am, in effect, already in the banking business, just not-for-profit.  I’m already lending/giving money to virtually everyone who asks.  Unlike the Guatemalteco bankers, I’m paying Gringo prices as well, so I’m contributing more than my fair share to the local economy.

In the end, I left the extra 300Q on the table, which disappeared along with her Gringo-sized dinner.  If nothing else, it cuts down on the total she has to come up with. Am I good for more in two weeks?  I’m undecided.

What would you have done?

When I left the US, I contacted my bank and let them know I would be traveling in Central America indefinitely.  (Don’t screw up and tell them you’re moving permanently, then they’ll flag your account and make life VERY difficult down the road-more on that in a future installment).

The bank noted my call and said no problem.  Hehe.  Little did I know.

I spent months in Mexico and had no problems.  It only took a few weeks for me to have problems in Guatemala.  The Wife had gone to la bodegona and filled up nearly two grocery carts with food.  The bill came to over 2000Q, the check-out process was extraordinary (requiring the help of 3 little boys who hang around at the cash registers, offering assistance), only to find that my credit card didn’t work.

I had managed to avoid this trip, hating shopping more than a visit to the dentist, and so I got her call, tired, frustrated and undoubtedly irritated (with me).  After all, she’s standing there with two full carts, one of our kids, and several local boys, all observing the unfolding drama and her attempts to communicate in two decade-old high school Spanglish.

While on the phone, I logged on to my account and verified there was plenty of money in the account.  What could be the problem?

She had the guy in charge of credit cards (you don’t pay right at the register, you have to go to a special counter to pay by credit card), and asked him to run it again.  He did, and shook his head at her.  Fortunately, she had another card issued by a different bank, and handed it to him.

Incredibly, he looked at the card and asked her for ID.  I hadn’t considered that they would check ID-they never had mine-but I guess because she had a huge bill and had been declined twice, he was worried.  Well, since her name wasn’t on this card (it was a corporate card of mine), he wouldn’t run it.

Doing my best to avoid leaving $250 worth of groceries at the checkout lane, I told the Wife to walk all the way to the other end of the store to the ATM, and see if she could withdraw cash using the 2nd card.  The guy agreed-reluctantly-and she was able to withdraw 2000Q.  (Would you want to put back two grocery carts worth of gringo food?).  This, plus the cash she had on her, paid the bill.

The poor Wife arrived home 30 minutes later, embarrassed, tired, and without enough cash to pay the kind taxi driver who had waited for her throughout the experience.  He didn’t have change for 100Q (!), so I raided the kids’ piggy banks and put together the 50Q he wanted for helping to load groceries and drive her home.  Shortly thereafter (about 30 minutes, to be precise), I had navigated all the menus on my bank’s phone support system and reached a live person.

The very sweet Indian lady on the phone confirmed that my card had been blocked due to suspicious usage.  The suspicion, in fact, was that it was being used in Guatemala.  Yes, it had been used with regularity in Guatemala AND Mexico for months before that, without problem, and YES, I had called to warn them, but for some reason it was blocked.  After verifying who I was by giving every private and personal fact of my life, she released the hold and apologized, in that unique English that only Indians, educated by the British, can speak.

Less than a week later the card was declined again.  I won’t trudge through the embarrassing details of the circumstances this time, let me just say I didn’t have the cash on hand to pay.  A phone call to the bank later in the day revealed that they had blocked my card again, this time for pulling out too much cash in too short a period of time.  Apparently if you use a card as a credit card, it’s one thing, but hitting the ATM daily and pulling out the max can trigger a red flag of sorts. (No doubt somebody in a government agency got a piece of paper with my name on it as well, and with raised eyebrows said, “Oh yeah, that guy…”).

Why bother contacting your client and inquiring about the usage, when you can just shut off the card?  Well, the kind Pakistani man couldn’t answer that, but he did release the block and suggested I “limit” my use of the ATM, but should feel free to use it as a credit card without further problems.  He didn’t say it, but of course the reason is the US government believes anyone who deposits money in one country and withdraws it in another is engaged in money laundering.

Remember how I mentioned that few places accept credit cards, and those who do, don’t always, and consider what I had just been told.  Now I couldn’t use the ATM freely, but have few places where plastic is accepted.  It was becoming clear I needed another solution.  You’ll have to wait for installment 4 to hear about that.