It has happened so often and for so many years, that you don’t even think about it. You head to the store for whatever: food, entertainment, hardware, personal items, little luxuries, or bill payment. Out comes the debit card and an exchange, hopefully satisfactory to both sides takes place. You got what you wanted. The store / service company took in cold hard cash right from your account or several days later depending on how long it takes the accounting manager and the financial institution to process the transaction.The outcome is, however in most cases, certain. Bermuda dollars spent for Bermuda goods and services received.Purchasing foreign goods, trips, and services abroad has easily become as automatic for most people. The process behind these transactions is entirely different though, than a dollar for dollar routine Bermuda island exchange. It is, foremost, a globally valueless Bermuda dollar tendered for rather steep incremental costs to purchase hard foreign currency (for instance, US dollars, Canadian dollars, or UK pounds), before the goods and services are provided to you. More on the foreign currency conversion process through vendors and institutions in the next sequence. Additionally, those foreign currency, say US dollars, have to be available as a reserve resource ready for purchase.What would happen if you went to your friendly local banker and there were no US dollars available that day? Or, perhaps you bought some fabulous shoes and electronics online stateside with your foreign credit card?Imagine your reaction if the return message is that your order was delayed for US dollar (or other currency) conversion availability reasons. While it may be unlikely that this event could occur, and while many of us are reluctant to admit it, we are, as an island with an insular economy, completely subject to global currency forces.Nothing, let me repeat that, almost nothing that we purchase in Bermuda can - at point of origin - be paid for in Bermuda dollars. We must have the necessary foreign currency component offset to complete the transaction. There will be those reading this who disagree; I certainly welcome any comments with proof to the contrary. Better yet, let us consider generating a list of services or products that can be purchased solely with Bermuda dollars, that never - in any part of the process from source onward - need foreign currency.Here are two examples to ignite your imagination.Fishing is Bermuda dollar only based. Is it really? First premise, well, yes, maybe, if you sit on a dock with some line and bait, but can you catch enough to make a living? Gone are the days many of us remember (and participated in) of millions of winter mackerel runs right through Hamilton Harbour to Crow Lane.There appears, by virtue of total absence of discussion, no movement on local fish farming initiative. No, it is not possible. Today, you need a boat, gas, fishing gear, radar, electronics, survival equipment, marketing sources and insurance. How many of these items demand foreign currency to build the business?No native cedar left for boat building. No fishing gear, and other equipment produced in Bermuda. Marketing locally is possible, but not the elaborate links to other branding sources. Local insurance, probable, if it is even available. Bet dollars to donuts the reinsurers’ headquarters are based elsewhere.What about local food: carrots, potatoes, salad greens, broccoli, onions, pumpkin, strawberries, milk. Lovely, but hardly a balanced diet with missing ingredients such as fruit, wheat, rice, and adequate protein.We can purchase Bermuda grown food with Bermuda dollars. Yes, but how much is available and to how many people? Those that get in line first? Food produced in Bermuda is the end product. Bermuda has precious little left now of the major ingredients: rich soil and agriculture zoning. Everything else for production has to be purchased abroad.No farmers, no food. We have a few incredibly hard-working families still willing to farm the land. Farming, the most important of all natural industries, is more than 10,000 years old. Regrettably, farmers and farming does not demand the respect it deserves as a life saving factor in civilization. There are millions of adults and children who have never been exposed to primal basic of life; growing food.Bermuda is incapable of food self-sufficiency, unless you think that cell phones are not only for ordering taking out, but are edible as well.Only foreign dollars can pay foreign debt principal and interest due. Bermuda needs foreign currency for more than maintaining our lifestyles. According to a recent article by Larry Burchall, our Bermuda foreign currency debt interest payments alone stand at an estimated US$86 million per year.The Bermuda Monetary Authority’s Regulatory report of December 12, 2010 shows a negative balance for the Net Foreign Currency Position, indicating that the amount of foreign currency liabilities outweigh the amount of foreign currency assets. Foreign currency inflows are very much needed for our debt repayment schedules.Ultimately, what do those foreign dollars mean to us everything!So where does that leave us. For some, there may be a slowly dawning recognition that international business is the lifeblood of our economy. Every single dollar / pound of foreign currency flowing into the island from their endeavours is vital to the Bermuda economy.Change in attitude. If the foreigners don’t come, neither does the real cash deal. Every man, woman, and child old enough to understand what our guest workers and their companies mean to our satisfactory lifestyles should undertake a crash course in gratitude etiquette and insurance knowledge-based seminars.The end result; we will know every exempt company’s business model well enough to explain it to the world. By learning about their stock prices, their specialty insurance areas, their profit and loss issues, their global structures, their charitable contributions to Bermuda and their initiatives in hiring and training young Bermudians, Bermuda residents will implicitly and explicitly respect international business, because we value their business.The $64,000 question. Will this attitude change happen?Stay tuned for articles on investments, retirement, real estate, immigration / residency and domicile, crossing borders, taxation, estate planning, foreign currency, insurance, reader stories, and relationship in recession part 2.Martha Myron, JP CPA CFP(US) TEP, is an international Certified Financial Planner practitioner in private wealth management. She specialises in independent fee-only cross border investment, tax, estate, and strategic retirement planning services for Bermuda residents with United States and multi-national connections, and US citizens living and working abroad. She is a Masters in Law candidate in International Tax and Financial Planning and the American Citizens Abroad Country Contact for Bermuda. www.americansabroad.org. For more information, contact martha.myron[AT]gmail.com or 296-3528 at Patterson Partners Ltd.