Sovereign Investor

Why Keeping Your Money Tied to the Dollar is Too Risky

Jeff Opdyke — Wed, 22 Feb 2012 21:52:56 +0000

How To Escape From America, and Where to Go

I want you to spend some time today or this week tracking down a number – the percentage of your wealth invested in the U.S. That means not just stocks and bonds, but savings and CDs, home equity, the cash value of insurance policies … basically, everything of wealth that you own.

If it exceeds 29%, you’re overly concentrated in America.

Though most people assume America’s stock market is a juggernaut, the reality is that U.S. stocks represent just 29% of the value of all the stock markets in the world. Yet, my bet is that if you’re like most American investors, you have more than 90% of wealth in the U.S. Maybe even 100%.

I could make a very strong argument that the best way to invest is to spread your money across every stock market in the world based on each market’s contribution to the overall value of global stocks.

You would, in effect, create a perfect global index fund, in which your wealth rises alongside world GDP. You’d have zero worries about whether economies and stock markets in America or China or Germany – or anywhere – were up, down or sideways.

But the approach the vast majority of investors take – keeping all your money invested in one economy – is the epitome of risky, even if that economy is America.

Black swan events you can’t imagine and routine events that you can, pose significant hazards to your finances. What if the black swan event you can’t foresee is the breakup of the U.S. amid social or political turmoil? What if the routine event you can see is the continued decline of the U.S. dollar because of poor fiscal management in Washington?

In either case, your wealth would come under attack.

It’s impossible to gauge what a black-swan event might mean. But it’s easy to see how an event as commonplace as the ever-declining value of the U.S. dollar flows through your finances.

The line plots the dollar’s path against a basket of major world currencies, as tracked by the U.S. Federal Reserve. Yes, there have been some up moves. But it’s clear to see that since the eary-1980s, the dollar has largely been heading down.

And with each downward blip, your purchasing power shrinks. That’s a direct impact on your wealth.

Putting money to work outside of America helps you maintain your purchasing power as the dollar continues to decline.

This next chart shows that. It’s the inverse of the chart above, and it’s telling you that had you been invested in that basket of foreign currencies in the 1980s, you would be repatriating more dollars today than you started with. It shows graphically why no one should ever have all of their wealth tied to a single economy or currency.

The Easy Way to Get Outside the Dollar

Logistically, I know that spreading money across every economy in the world is a practical impossibility – though, personally, I am trying my best.

But you can begin to reduce your dollar exposure through one simple step that you can easily pursue here at home – own foreign currencies.

Everbank offers numerous CDs built around baskets of currencies. My preferrence is Everbank’s All Weather CD, comprised of the Norwegian krone, Swiss franc, Canadian dollar, Singapore dollar, Chinese yuan and gold. (The Sovereign Society has a marketing partnership with Everbank, and we may benefit if you choose to invest through the bank. That said, I would never recommend an investment if I didn’t believe in the product or the firm – and I have some of my family’s wealth invested through Everbank.)

This CD spreads your money across multiple continents and multiple economies – and tosses in a bit of gold – to counterbalance your reliance on dollars. You buy it, you hold it and let it roll over from one quarter to the next. It’s not a trade you make for the next three months.

Consider it a currency insurance policy – one that protects you against the undeniable, long-term decline in the U.S. dollar

You can open an Evertrade account from the comfort of your Barcalounger, making it exceedingly easy to put some of your wealth outside the greenback.

After all, you would never own just one stock in a portfolio. So why would you own exposure to just one economy?

Until next time, keep a global view…

Jeff D. Opdyke

P.S. Investing overseas is one way to protect your assets, but to truly shield yourself from a crumbling US economy and the greed of the US government, a second passport is a must. In The Passport Book, former US congressman Bob Bauman will show you how to safely, and legally, escape rising US taxes and establish a second citizenship overseas. To find out how you can get a copy of this ultimate guide to international living and travel, simply click here.

Leftist Lies Attacks Your Right to Privacy

Bob Bauman — Wed, 22 Feb 2012 16:57:27 +0000

Setting the Record Straight on the Iraqi Dinar

The constant lies of Left-wing radicals, both American and foreign, continue without cease.

An example of this radical campaign of falsehoods appeared today under the byline of one Scott Cohn, identified as “Senior Correspondent, CNBC.” The arresting title of his article: “Ranch House Near Reno is a Thriving Tax Haven, and It’s Not Alone.” You can read it for the full details of Cohn’s distortions and slanted reporting, but one would suspect a “senior” reporter would have some integrity and concern for the truth. Not this guy.

Given that CNBC has become the broadcast mouthpiece of American leftists and the chief cheerleader for Barack Obama, Cohn’s article is still an unbalanced smear of the State of Nevada and its laws that permit incorporation of businesses without having a public record of the true “beneficial owners.”

Cohn wrongfully equates business ownership privacy with money laundering, tax evasion and criminal conduct – for none of which he offers any proof.

Anti-Privacy Conspiracy

For the last decade the U.S. and international radicals have fought to abolish financial and personal privacy with the specious argument that government has the right to know everything about your finances. This position is endorsed by President Obama and radical Democrats in the U.S. Congress who adopted the horrendous Foreign Account Tax Compliance Act (FATCA).

As part of their anti-freedom campaign these Leftists demand public and government access to all financial accounts of U.S. and others citizens, wherever located in the world – including the States of Nevada and Delaware.

The anti-privacy campaign began in 1990 with the Financial Action Task Force (FATF), a 33-nation offshoot of the Organization for Economic Cooperation and Development (OECD) in Paris. Both are public relations operations on behalf of the major welfare, high tax governments known as the “G-7.”

Using their alleged war on dirty cash as cover, the FATF proclaimed what it calls “recommendations” it insists countries must convert into national laws. It began issuing these “rules” in 1990, revised them in 1996 and is still at in 2012.

Behind FATF’s smoke screen about fighting money laundering and terrorism lies complete and utter destruction of financial and personal privacy for everyone. The true FATF objective is handing welfare state tax collectors complete access to every citizen’s financial lives.

War on Drugs Excuse

The original justification for FATF’s anti-privacy assaults was claimed to be waging the “war on drugs.” We were all supposed to surrender our financial privacy as governments pawed through millions of our accounts in hopes of finding one drug lord. Since the terror attacks of 9-11, 2001 the FATF cry justifying its latest demands has been “anti-terrorism.”

What FATF wants is an end to private beneficial ownership of corporations, trusts, foundations and partnerships. FATF claims legal entities including corporations, trusts, foundations and partnerships, and limited liability companies “can be exploited for money laundering or terrorist financing purposes.”

FATF’s solution to this non-problem — allow government and tax collectors carte blanch access to all records of all legal entities. The FATF assumption seems to be that privacy per se is bad and Big Brother government has an unlimited right to know all.

This decade old FATF lie was what CNBC’s Cohn repeated today in his slanted article about Nevada’s

laudable privacy laws.

Left’s Intent: Destroy Financial Privacy

This OECD, leftist, Big Brother anti-tax haven pressure is a smoke screen for welfare state tax collectors aiming for complete destruction of financial and personal privacy for everyone, (just as the so-called PATRIOT Act already has done in the U.S.)

For these anti-freedom dictators abolishing bank secrecy is not enough. They also want to end lawyer-client privilege, plus the imposition of a global system of total tax information exchange among all nations.

For citizens of the United States all this is an academic discussion — under the Draconian terms of the 2001 PATRIOT Act, financial privacy is already dead. The government has the power to obtain financial information in secret about anyone — and to confiscate your wealth.

Small wonder that many millions of Americans do business offshore to take advantage of the strong privacy laws in places such as Switzerland, Panama, Singapore, Austria and Luxembourg.

The Real Issue: Liberty

Of course the spurious cry by those who advocate ever increased government surveillance of not just our finances, but every aspect of our lives, is the old saw: “If you aren’t doing anything wrong, what do you have to hide?”

It is absolutely wrong to characterize this debate as “clean money versus dirty cash” or “security versus privacy.”

The true issue is the fundamental right to privacy.

Privacy is an inherent human right. True privacy is a basic requirement for maintaining the human condition with dignity and respect. The real choices in this debate are personal freedom and liberty versus government control of our lives and our fortunes.

Tyranny, whether it arises under threat of terrorist attack, alleged solutions to money laundering problems or under any form of unrelenting domestic authoritative scrutiny, is still tyranny.

Liberty requires security without intrusion — security plus privacy. Widespread surveillance, whether by police or nosey bureaucrats, in whatever form it takes, is the very definition of a police state.

And that’s why we should champion privacy, both personal and financial, even when we have nothing to hide.

P.S. As President Obama and the money-hungry government continue to think up new ways of taking as big a chunk of your wealth as they can, finding these offshore havens is more important than ever. With our Sovereign Society Freedom Alliance, I’ve assembled a team of the world’s top asset protection attorneys, tax specialists, and bankers to bring you the information you need to make informed decisions about how to protect your wealth. You can learn more about my research, and what steps you can take starting today, by clicking here.

Don’t Leave Your Estate Planning Until It’s Too Late

Bob Bauman — Wed, 22 Feb 2012 16:49:47 +0000

How You Could Make 150% Gains as Silver Soars to $75

John Goodman, founder and president of the posh Palm Beach International Polo Club, qualifies as a member of the “one percent” of the population who are “super-rich.” He has an airplane, yacht, polo ponies, and an unspecified amount of his late father’s $1.4 billion fortune from Goodman Manufacturing, a heating and air conditioning company.

But it is a recent and most tragic event for which Goodman is now making news.

Multimillionaire Goodman stands accused in a drunk-driving incident that killed 23-year-old University of Central Florida student Scott Wilson.

The tycoon, whose club is located in Wellington, Florida and was driving his Bentley at the time of the incident, stands accused of DUI manslaughter, vehicular homicide, and leaving the scene of an accident with a blood-alcohol level allegedly twice the legal limit.

His criminal trial begins on March 6. He could spend up to 30 years in prison if found guilty.

While this incident is terrible on many levels, it is also bizarre.

On the advice of his counsel, Goodman has adopted his 42- year-old girlfriend Heather Hutchins as his third “child”, as part of an asset-protection defense strategy. The goal is to protect some of his assets against a civil suit, in which millions of dollars in damages are likely to be sought.

However, as twisted as this case is, it highlights one primary point: Good estate planning should always be done early, with the best of legal intentions.

It should never be used as a last-minute attempt to avoid the consequences of a crime, alleged or otherwise

An Unusual Solution

Goodman’s lawyers argue that under the terms of a reportedly $200 million pre-existing trust fund created for any of the mogul’s “children,” his new daughter, Ms. Hutchins, eventually could get at least one third of the fund’s value, along with Goodman’s two biological children, Harriet and John Jr.

Counsel for the Wilson family claim Goodman’s legal maneuver is a way for the tycoon to maintain control over one third of the trust’s assets, a situation that will become all the more important if he has to pay out millions of dollars in the civil suit. Goodman’s counsel has denied this claim.

As an attorney, I know I can’t make that judgment without knowing the terms of the trust involved and other facts about Goodman’s estate plan.

But it underscores what I have long preached about the importance of early estate planning, with the added protection of an offshore components.

A senior U.S. Federal Reserve economist estimates that by 2050, the U.S. “baby boom” generation will pass on to their heirs some $41 trillion in assets, the largest potential inter-generational wealth transfer in world history.

Forbes magazine estimates that there now are 1,140 billionaires in America. A record 10.5 million U.S. households have a net worth of $1 million or more in 2012.

Despite the Great Recession that wiped out $15.5 trillion in household wealth in the U.S. alone, the total number of U.S. families with a net worth of more than $1 million, including real estate, will double by 2020 to 20.6 million.

But, in spite of these statistics, many wealthy people I meet remain completely unprepared for the unforeseen. Many don’t even have a will. Perhaps the prospect of acknowledging mortality blocks the need for action.

Noah Didn’t Build the Ark When It was Raining

An estate plan is essential to the long-term well-being of your family and heirs. Good estate planning will help avoid problems of control and sharing wealth with children. Many experts advise that good estate planning should include:

Making sure a basic plan is in place before diving into the more complex, and often irrevocable, estate planning.

Avoiding, when possible, giving one child control over another

Dividing up assets into dollar amounts, rather than percentages, to avoid disputes among beneficiaries over valuations and cost issues.

On the other hand, most advice on estate planning understandably does not deal with middle-aged girlfriend adoption.

And, if you have a sizeable estate – one that is worth more than $1 million – I believe you should consider an offshore component.

When you move some of your estate offshore – be it an offshore bank for great currency and investment diversification or a foreign trust for more robust legal protection – your heirs enjoy far greater protection from domestic U.S. creditors and lawsuits.

Importantly, those assets can remain much more confidential, avoiding the publicity and hassle of the U.S. probate process.

But, perhaps more importantly, proper estate planning with the prudent use of an offshore component means that in the event of a crisis you probably won’t have to adopt your girlfriend.

Faithfully yours,

Bob Bauman

P.S. There are a world of ways to help protect your family’s financial future, and trying to tackle them on your own can be overwhelming. That’s why I created The Freedom Alliance; to make sure my readers have the best, most up-to-date information possible to make informed decisions on how to secure their wealth. Click here to read my latest report, and find out how you can get “Off the Grid” and make sure your money stays in your hands.

NYC Trader’s Expo 2012: Day 2

Andy Hecht — Wed, 22 Feb 2012 15:42:04 +0000

http://www.youtube.com/watch?v=wblAsN2HDTw

No Matter What’s in Store for America, Gold Will Always Be There

Jeff Opdyke — Tue, 21 Feb 2012 19:46:35 +0000

Setting the Record Straight on the Iraqi Dinar

In elementary school, as part of the eighth-grade play, one of the nuns who had come to know me through the years as a hard-headed prankster, pulled me from the lineup of wannabe actors and said, “You, Mr. Opdyke, are definitely one of the Lost Boys.”

We were doing Peter Pan.

Three decades on, I still feel like a forgotten person in a land where, increasingly, you have to unlock your imagination to believe all that’s going on around you.

Nowhere in America do I feel like my voice means a damn thing anymore. Special-interest groups and the dueling political parties have so divided our government that no one represents me.

And by “me” I mean the Great Middle – the vast bulk of us, who disavow the tiny lot of conservative zealots controlling the right, and the small faction of militant social engineers screwing the country from the left.

Where oh where are the true centrists who fight against the unstoppable expansion of federal spending, federal agencies and federal powers? Where are the centrists who believe in states’ rights over federal rights, America’s cornerstone?

Where are the leaders who believe that government should be small and fiscally conservative, and that Americans should be left alone to pursue their personal definitions of life, liberty and happiness?

You can’t find enough of those mavericks today these days to field a two-man bobsled team. Without them putting America on a new path, I believe that we, as a country, are heading for an epic clash … one that could very well change the geography of America.

The Only Investment that Will Outlive America

Problem is, I see no change in sight. So, I hold physical gold – in the form of pre-1933 collectible coins and bars. It’s the core of what I call my “family insurance plan.” I have insured my house, my car, my health and my life … and I have insured my wealth and my family’s purchasing power in the event that bad things happen to a good country.

I watch gold prices daily, but honestly I don’t care if gold hits $2,500 an ounce tomorrow … I am not selling. Gold is the only form of real money that has held intrinsic value throughout history. More so than a U.S. dollar, gold has a far better chance of surviving a crisis of confidence in what has become of the American way.

Now, let me be clear: What I’m talking about here – the changing geography of America – is not an issue of the 1% vs. the other 99%. That’s a straw man that the Occupy Wall Street urchins use as a sound-bite. America’s real problem is that our standard-of-living is in decline – and that’s purely a political issue.

The middle class is shrinking, while the welfare class increases. Based on the statistics, you’d think we hired politicians specifically to arrange that.

Though ours is supposedly the land of plenty, nearly 47 million of our countrymen – 15% of the population – lives on food stamps.
One in every five American children lives in poverty, only slightly better than Mexico. Less than half of American families live in a middle-income neighborhood, down from nearly 65% in the 1970s.

A record 35% of the wages earned in America now come from the government. Household income, meanwhile, has been flat to down for much of the past decade, even as the developing world quickly gains on us.

Just look at how bad it’s getting in America in terms of debt, which is a direct reflection on the weakening underpinnings of the country as a whole …

Every level of government has accumulated debt that, combined, now approaches 250% of America’s total GDP … and these numbers don’t reflect the off-balance-sheet debt of Medicare/Medicaid, Social Security and Baby Bush’s ill-advised, vote-buying Prescription Drug Plan. The unfunded liability for those three giveaway programs – some $117.6 trillion – is nearly eight times larger than America’s $15 trillion economy.

Those of us in the middle aren’t getting squeezed by fat-cat bankers and the millionaires and billionaires that The White House routinely scapegoats. We’re getting squeezed by the people we elect to run – and who are, instead, ruining – the country. I am growing weary of paying for a government that, like a compulsive eater, can’t stop itself from gorging – on our income.

America has stagnated. We are a country now approaching terminal decline. The buck has to stop somewhere … and “somewhere” has to be Washington. And if the buck doesn’t stop, the country’s lurch toward building an entitlement state using excessive debt and the toil of taxpayers will be certain to tear America apart.

Could America’s Map Change?

I know it sounds radical but I believe that if the federal government doesn’t change its approach to taxing, spending and entitlements – that if it doesn’t stop gorging on the wealth of its people – then places like Texas, Vermont, California and Arizona rebel and reclaim the powers the federal government has usurped.

There is a growing tide of disgust with the direction America has taken. It’s not hard to see the U.S. become a looser confederation of far-more independent states … or maybe some states will just say screw it and break way to create new countries with smaller governments that are more responsive to the people. You know, like America used to be.

I’m not advocating secession. I know there are all sorts of legal, moral, financial and logistical arguments against it. And, I’m not saying it would be easy. Indeed, it would probably be quite messy, if not bloody in areas.

But secession — or something resembling it– increasingly looks like a viable path that some states could pursue if enough people in the local population get fed up enough at the federal government.

And if you think Americans won’t get that mad, consider the new report from the World Economic Forum. At #50 in the world, public trust of politicians in America ranks below Ethiopia, Iran, Syria and Tunisia … places where politicians are despised, under attack or are brutally removed from power.

For those who argue that secession could never happen in America, remember that America’s very existence is the direct result of one of the most-significant – and bloody – secession moments in history … the American Revolution.

Until next time, keep a global view…

Jeff D. Opdyke

P.S. There’s nothing to be gained from simply sitting back watching as America’s Political Class drags this country further towards the abyss. To do everything you can to secure you and your family’s financial future, you need to start taking steps NOW. At our 11th Annual Total Wealth Symposium, we’ve assembled a group of the world’s best asset protection and investment minds to provide you with a roadmap towards a safe, prosperous financial future. Learn more about how your can register today

NYC Trader’s Expo 2012: Day 1

Andy Hecht — Tue, 21 Feb 2012 18:52:43 +0000

http://www.youtube.com/watch?v=K4P9Hql07nM

The Frontier Market Drug Company with 15% a Year Growth

Jeff Opdyke — Fri, 17 Feb 2012 19:09:38 +0000

You’ve probably heard or read the tired axiom many times that when America sneezes, the rest of the world catches a cold. It’s one in a long list of beliefs that has U.S. investors wedded to the notion that the Western markets are the best place to grow and preserve your wealth – and everywhere else in the world is just a dangerous pit of wealth destruction.

But as with so many other tired beliefs, this one is wrong, too.

And I’ve come armed with a small bit of proof. Take a look at this chart …

Notice the top line, Sub-Saharan Africa. The place that most of America perceives as a tempest of famine, pestilence, corruption and war basically sailed through the global financial crisis that pushed the U.S. and Europe to its knees – a position where both remain today. Though I’m not necessarily pointing you to Africa, that dashed line tells you one unassailable fact: Not every country catches a cold when America sneezes. In fact, some economies don’t even pay attention.

The Best Returns Always Come from Smaller Stock Markets

The markets that care little about the direction of America are known as the “frontier markets,” some of the smallest economies on the planet. But their small size is what makes them so appealing to us as investors.

Small economies grow fast because they’re coming off such a tiny base. And because they tend to be what Westerners still regard as “third-world” countries, there’s not the same abundance of investors. That gives us an advantage we don’t have when we’re trading in the U.S. or most other major stock markets.

When you’re one of the few miners panning for gold in an overlooked creek, you have a much better chance of dredging up the big, valuable nuggets. That’s exactly what the frontier markets are … overlooked creeks where big nuggets hide in plain sight.

There’s a chart I use in many of my presentations that shows the top stock-market returns by country, going back many years. Much of the top 10 reads like a list of countries you expect to find on the nightly news, because some insurrection or coup or social upheaval – places like Zimbabwe, Pakistan, Oman, Ivory Coast and Ukraine. You rarely find a Western nation in the mix … and never – not once – has the U.S. topped the list.

Even in our best years, the mid- to late-90s, when U.S. stocks were soaring, frontier markets from all over the world were generating stock-market returns two-, three- and five-times greater than American gains.

Aside from the obvious reason that small economies grow faster than large ones, unknown companies in overlooked markets generally trade at ridiculously cheap valuations … and no matter where in the world it exists, institutional investors always sniff out cheap values and dive in.

Taking AIM at the Frontier Easily

Personally, I access frontier stock markets by opening local brokerage accounts around the world, in places like Zambia, Egypt or the United Arab Emirates, among others. I do so because it’s the purest way to gain access to the kinds of small- and mid-sized local companies that are the direct beneficiaries of small, local economies. This is how I direct readers of my Emerging Market Strategist investment newsletter to invest in Asia.

But an intrepid constitution is not a mandate for pursuing profits in the frontier.

You can gain access to frontier companies from the Philippines to Algeria through the London Stock Exchange’s junior Alternative Investment Market, or AIM.

Much more so than New York, London is a financial hub for small companies from Africa, the Middle East, India, Southeast Asia and even parts of South America. It’s where much of the world’s frontier investment managers and analysts work.

And because it’s London, that makes it easy to trade from the U.S., given that every major online brokerage firm allows you to buy and sell on the London exchange.

To get accustomed to trading in the frontier through London, I recommend you grab a few shares of a Bangladesh-based drug company that is listed on AIM.

The company is Beximco Pharmaceuticals (AIM: BXP)

Beximco is Bangladesh’s largest exporter of pharmaceuticals, shipping a portfolio of more than 400 generic and branded-generic drugs to more than 45 countries across the developing world, mainly developing markets like Cambodia, Myanmar, Vietnam, Pakistan and others.

Though many of the inhabitants of those countries are impoverished or barely hanging onto the lowest rung of middle-class (i.e., the working poor), spending on medical care is exploding across the developing world. Along with better food and shelter, improved healthcare is one of the first expenses a family makes when it starts earning more … and it’s one of the prime budget items in countries that are using newfound commodity wealth to improve society.

Drugs are a big part of the trend and, as such, Beximco is in a sweet spot.

Fast Growth at Cheap Prices

Beximco’s strengths are in antibiotics and drugs to treat diabetes as well as respiratory, central nervous system and gastrointestinal disorders, among others. Competition in generics is fierce, and even in Bangladesh’s Beximco Pharma is one of several drugmakers. But it’s the largest and it’s stealing market share from rivals.

The company has been around for more than 35 years, and today operates a state-of-the-art manufacturing plant outside of Dhaka, the Bangladeshi capital. That might sound sketchy, but Beximco’s facilities have received the equivalent of the Good Housekeeping seal of approval from food and drug regulators in major markets like Australia and Austria (and Austria’s approval is recognized through the entire European Union).

Sales last year approached US$90 million, up a healthy 17% – and they should grow another 15% or so for the next several years.

Indeed, Beximco has a big catalyst in the offing. Branded drugs worth $150 billion in global annual sales are coming off patent in the next few years. Beximco will play a role in cranking out knocks offs of those blockbuster drugs, and will make them available at prices consumers in developing markets can afford. That will drive earnings.

Perhaps best of all, Beximco is ridiculously cheap. The shares trade at just six times 2012 earnings and just two times cash flow.

That’s cheap.

It might take some time for investors to catch on to the good story that is Beximco. But they will catch on, and Beximco will soar.

Until next time, keep a global view…

Jeff D. Opdyke

P.S. New frontiers of investment aren’t always just geographic; new technologies on the horizon are set to open up entire new worlds of investment. The growth of digital currency is one of those opportunities, and in my latest special report, I’ll show you how you can profit from the coming Death of Cash.

Panama: An Offshore Banking Playground Just a Short Flight Away

Bob Bauman — Thu, 16 Feb 2012 22:40:40 +0000

How To Escape From America, and Where to Go

One of President Ronald Reagan’s favorite anecdotes concerned an always-optimistic six-year-old boy who, when taken to a stable piled high with horse manure, emitted a yelp of delight.

This little boy clambered to the top of the pile, dropped to his knees, and gleefully began digging out scoop after scoop with his bare hands.

“What do you think you’re doing?” his father asked, baffled.

“With all this manure,” the little boy replied, beaming, “there must be a pony in here somewhere!”

Living with the grim reality of oppressive government, snooping tax collectors and a media barrage of untruths about investing and doing business “offshore,” I know it is difficult to be positive. A siege mentality may seem more appropriate.

But I am here to suggest that in exercising your fully legal right to bank, invest, travel, live and seek profits offshore, you should never ignore the “playground” aspect of what you are doing.

Some years ago, a British-based company, Scope Books, published a series about a mysterious person identified as “Bill Hill,” who told tales of “P.T. Freeman.” The “P.T.” stood for perpetual traveler, among other things, and his shtick was touring the world as a “tax exile,” enjoying life and avoiding staying anywhere long enough to establish a taxable domicile.

Come Visit Your Money

Bill Hill was also the originator of the “Five Flags” theory of good living and asset protection, (about which I have written), each flag representing a different offshore venue for recommended action.

Now I am uncertain as to where I first heard the enticing phrase, “Come visit your money,” but I think it may have been from the Sovereign Society’s, long-time Swiss investment expert, Ron Vrijhof, a gentleman noted for his hospitality to clients visiting Zurich.

In those long ago pre-“Know Your Customer” days, when a foreigner could open a Swiss bank account simply by wiring funds, our man in Zurich cheerfully advised his clients to “visit their money in person” and take time to enjoy the beautiful country, advice he still recommends.

Indeed, on my own first visit to Zurich, Rob revved up his SL class Mercedes Benz convertible and drove south into the mountains, where he said he knew just the country inn for a delicious dinner of Swiss huhn rösti.

In beautiful summer sunshine, convertible top down, we ascended an impressive Alpine peak, the Andermatt, nearly 9,000 feet high at the peak. Slowly it got colder by degrees until I was shivering. That was when I first experienced, to my posterior’s surprise, heated auto seats.

My point is that life is too short not to take advantage of the many enjoyable places where you can:

1) bank and invest your capital;

2) enjoy the available pleasures, comfortable accommodations, good food, and pleasant company while indulging your interests, art, history, music, go fishing or just lay on a white sand beach in the sun.

Take, for example, the Republic of Panama.

As long ago as the 1920s, Panama adopted investor and asset protection-friendly laws governing banking, corporations and trusts, and later, private interest foundations. Unlike the U.S., Panama has a sensible territorial tax system that exempts all income earned outside the country.

At a time when the PATRIOT Act in the U.S. has abolished financial privacy, Panama maintains its commitment to maximum privacy without allowing foreign tax evasion or money laundering. It has more than 80 banks, including some 50 multinational banks, which collectively hold an estimated $100 billion in assets, with liquidity impressively high at an average 30%.

From 2005 to 2012, Panama’s economy grew by more than 8% a year, the fastest rate in the Americas. It also boasts a host of qualified offshore professionals and bankers.

Panama City offers thousands of modern condominiums and more than 100 skyscrapers (including a Trump Tower, of course), first-class hotels and restaurants, plus excellent high-speed Internet and other global communications.

Downtown Panama City, the balmy, tropical capital on the southern, Pacific end of the Panama Canal, suggests Miami, except arguably more locals speak English here than in some parts of South Florida.

No Taxes and Immediate Residence

Night clubbing and fine dining can be local delights. And the Panama Canal, now under a $6 billion expansion, is a must see.

For those who want to combine play with business, there are multiple retirement and vacation retreats on the Pacific side, Bocas del Toro on the Atlantic side, and Boquete in the northern mountains.

Panama also offers its famous pensinado program, which welcomes qualifying foreign retirees with immediate residence, no taxes and discounts on goods and services.

Citizenship is available after five years, under one of several programs that grant immediate residence.

You can easily find the equal of Ronald Reagan’s metaphorical “pony” in Panama without having to dig.

Panama is just one offshore playground. I’ll be back to tell you about other enticing locations in the future. Stay tuned and stay positive!

Faithfully yours,

Bob Bauman

P.S. Panama is just one of many offshore playground. As President Obama and the money-hungry government continue to think up new ways of taking as big a chunk of your wealth as they can, finding these offshore havens is more important than ever. With our Sovereign Society Freedom Alliance, I’ve assembled a team of the world’s top asset protection attorneys, tax specialists, and bankers to bring you the information you need to make informed decisions about how to protect your wealth. You can learn more about my research, and what steps you can take starting today, by clicking here.

America’s Slide into Greece

Bob Bauman — Thu, 16 Feb 2012 21:41:58 +0000

How You Could Make 150% Gains as Silver Soars to $75

President Obama, in a scandalous show of bad faith and dereliction of his sworn duty, proposed a phony FY 2013 budget plan this week that increases spending from $3.8 trillion in 2013 to $5.8 trillion in 2022.

True to his New Deal socialist antecedents, the Obama budget will add to the bloated size and scope of the federal government and the national debt. Each American’s share of this debt is now $49, 211.27.

Here is a right-on comment about the Obama budget by Washington Post columnist Charles Krauthammer: “The president knows that we are headed over a cliff. He just wants to get past Election Day as he does on everything. But this is a budget worthy of Greece and for the president of the United States to offer it knowing how dire our situation is, is truly scandalous.”

If You Spent Like Obama…

For a stunning revelation of what the $3.8 trillion Obama budget would mean in the understandable numbers of an average family who followed his example, see the ABC News analysis by Jake Tapper.

If your budget followed Obama’s example it would mean a family budget as follows (with comparable Obama budget numbers at right):

Total family spending: $38,000 $3.8 trillion Obama spending

Total family income: $29,000 $2.9 trillion Obama deficit for 2013

Total new debt: $9,000 $9 trillion new Obama debt added

Existing credit card debt: $153,000 $15.3 U.S. national debt

Quite obviously, no family could live like this — and neither can the United States for very much longer. Yet the president, who apparently thinks Americans are all ignorant dolts, told us he was “cutting” spending in his phone budget!

Fat Phony Budget, Non-Existent Cuts

Cato Institute economist Dan Mitchell (below) cut through the fog to get at the truth of what Obama claimed was a $2 trillion budget “cut” in spending over ten years.

“We have a budget of almost $4 trillion? So if we’re doing $2 trillion of cuts,” Mitchell said, “we’re cutting government in half. That sounds wonderful.”

But what the president was talking about is not even a cut. Obama just proposed that over the next 10 years, instead of increasing spending by $9.48 trillion, they’d increase it by “just” $7.3 trillion; calling that a “cut” is nonsense.

Mitchell gave an analogy: “What if I came to you and said, ‘I’ve been on a diet for the last month, and I’ve gained 10 pounds. Isn’t that great?’ You would say: ‘Wait, what are you talking about? That’s insane.’ And I said: ‘I was going to gain 15 pounds. I’ve only gained 10 pounds, therefore my diet is successful.’”

Snouts in the Feeding Trough

A central problem is that Americans in every demographic group are increasingly getting government handouts. That makes it that much tougher for weak kneed politicians to cut spending. Add to that the fact that half of all American pay no income taxes, so what do they care?

According to the Census Bureau’s data from the 3^rd quarter 2010, 49% of Americans live in a household receiving benefits from one or more federal and state programs. That’s 148 million people out of a total population of 304 million. More than one in three Americans lived in households that received Medicaid, food stamps, or other means-based government assistance.

The Greeced Slide

Of course Obama and the Left want to go right on spending without making any real cuts or reforms. What they want is more taxes with the goal of redistributing income from those who pay taxes to those who don’t. This is another cheap repeat of the old Roosevelt New Deal political plan of “Tax, Spend, Elect.”

Just take a look at the stark, revealing numbers about U.S. government spending:

Now compare U.S. and Greek deficits prompted by big spending politicians and selfish political demands:

The End Is Near

The plain truth is that the United States government is very close to bankruptcy – and the politicians of both parties who refuse to act to solve this national crisis are morally bankrupt.

The final reckoning day is soon at hand, the day when China, Singapore and all the other investors stop propping up the U.S. Then the game will end — with a resounding crash. You think those riots in the streets of Athens can’t happen here? Folks, you ain’t seen nuthin’ yet!

When that happens, (and at this rate in wont take a decade), U.S. Treasury bonds and Washington’s credit rating will be worth little more than those faked document piles of subprime mortgages issued by greedy bankers at UBS, Merrill Lynch, Credit Suisse, Citibank and the Bank of America.

When that day comes who will bail out profligate America? And most importantly, where will you be then?

Isn’t it about time you moved some of your cash and asset offshore to a country where it (and you) will be safe — rather than sorry?

The Sovereign Society can tell you how and can help you do it. Don’t wait until Obama and his gang jam the exits to freedom.

Switzerland Victim of IRS “Culture of Abuse and Intimidation”

Bob Bauman — Thu, 16 Feb 2012 14:14:54 +0000

Setting the Record Straight on the Iraqi Dinar

The U.S. Internal Revenue Service (IRS) is “out of control” and the U.S. Congress should passed legislation that will “end the culture of abuse and intimidation within the IRS.”

Way back in 1997-1998 those were the fighting words of U.S. Sen. Charles Grassley, (R-Iowa). As a Senate Finance Committee member, (he is now the ranking Republican), Grassley promoted an eight-month investigation of IRS taxpayer abuses, followed by a well-publicized round of Capitol Hill hearings that exposed brutality of the IRS in numerous taxpayer cases.

That long ago show of temporary concern produced a “Taxpayers Bill of Rights” and promises of IRS reform that were soon forgotten.

Now 14 years later, Grassley, his polling apparently showing a majority of Iowa voters suspicious of offshore tax havens, has taken to intermittent bashing of the IRS again. This time his complaint that the IRS should be even harder on alleged tax evasion offshore by U.S. persons.

Tax Evasion is a Crime

I certainly do not condone tax evasion, a punishable offense as it should be. But the IRS has long since tacitly adopted the view that legal tax avoidance is the same as illegal tax evasion. And with the morass that the Internal Revenue Code has now become, who can tell the difference.

I doubt the distinguished senator from Iowa, (with whom I had the honor of serving with in the U.S. House of Representatives), would admit the IRS is still engaging in “abuse and intimidation” (and even blackmail) — because this time the IRS tax brutality is aimed not Grassley’s Iowa farmers, but at the sovereign nation of Switzerland, long an ally of the United States. (See Dan Mitchell’s column yesterday, A Swiss Response to American Fiscal Imperialism).

IRS Destroys Oldest Swiss Bank

On January 27th Wegelin & Co., Switzerland’s oldest private bank, founded in 1741 in Saint Gallen, sold its business to the Raiffeisen Group under threats from the IRS. Three of the bank’s client advisers were indicted earlier in January on U.S. Justice Department (DoJ) charges of tax fraud and evasion.

A week later the DoJ had the bank itself indicted by a U.S. grand jury in New York, charging the bank had conspired with over 100 Americans to hide more than $1.2 billion in unreported client assets from the IRS. The bank is now a “fugitive from justice” because it failed to appear at a New York hearing last week.

The DoJ action made international history.

It was the first time an offshore bank had been indicted by the U.S. for enabling tax fraud by U.S. taxpayers. The DoJ also seized more than $16 million from Wegelin’s correspondent U.S. bank. Because Wegelin, (with a reported US$22.7 billion in assets) has no branches outside Switzerland, it used correspondent banking services, a standard industry practice, to handle money for U.S.-based clients.

Good Enough for Napoleon and Eugénie

Wegelin was one of the last “pure private banks” in Switzerland. It had eight managing directors, each of whom has accepted “unlimited liability” for the bank, meaning they are personally liable for the bank’s commitments.

That may have been a decisive factor in selling the bank to the Raiffeisen Group. In past centuries wealthy European families trusted the bank to manage their fortunes. In the French tradition of keeping cash in another country, clients included Napoléon III and his wife Empress Eugénie.

A Nuclear Threat

A knowledgeable source in Zurich told me that unless Wegelin turned over all the information the IRS demanded, it had threatened to cut off Wegelin from access to the U.S. banking system. This would be done by expelling the bank from the Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT).

I have written about SWIFT before; this system handles most of the world’s cross-border electronic payments, exchanging 18 million payment messages daily between banks and financial institutions in 210 countries.

Apparently Obama and his IRS considered U.S. tax evasion at Wegelin a threat as great as the country of Iran and Mahmoud Ahmadinejad, since the U.S. government has proposed the same cut off punishment to deprive Tehran of funds needed to develop nuclear weapons.

My Zurich source said the anti-Wegelin U.S. action was an effort to intimidate ten other offshore banks now under DoJ/IRS investigation including Credit Suisse, Julius Bär and Basler Kantonalbank.

Mu informant said Wegelin’s demise will only increase fears in Switzerland that the U.S. DoJ sees more to gain by picking off individual banks with the threat of criminal prosecutions, rather than agreeing with the Swiss government to a comprehensive civil solution that covers all Swiss banks.

Every Bank for Itself

Several Swiss media reports have accused some of the 10 banks of handing over data to the IRS without the knowledge of the Swiss authorities, or at the least planning to follow this expedient path.

“This could mean that some banks have lost faith in the ability of their government to protect them,” said Hans Geiger, emeritus professor at Zurich university’s Swiss Banking Institute “They appear to believe that they can get better results by going directly to the U.S. administration.” Do you really think so, professor? Duh!

In 2009, the untrustworthy banking giant UBS, about which I have commented many times, was forced to settle with the U.S. government over similar tax charges, paying a fine of $780 million, handing over the names of nearly 4,500 U.S. clients and admitting to wrongdoing.

What Next?

For an interesting summary of where Swiss banking may be headed, see A Hard Transformation For Swiss Banks by Dow Jones reporter, Anita Greil.

She suggests that regardless of how negotiations with the U.S. and other foreign governments turn out, “two things are now clear: Swiss banks will have to make sure that taxes are paid on clients’ assets, and this will require significant investment on the banks’ part in personnel and new information technology.” Ensuring this will cost over a half billion U.S. dollars overall, according to the Swiss Bank Association.

For smaller Swiss private banks, which are the majority, this will be difficult if not impossible to handle. Banking experts expect the big banks, UBS, Credit Suisse and Julius Bär to be the eventual winners.

Swiss Bank Secrecy is History

As for the historic 1934 Swiss Bank Secrecy Law, that has already preceded Wegelin Bank into oblivion. It’s still on the statute books, but the law has been superseded by a host of Swiss signed tax information exchange agreements (TIEAs), Swiss political weakness and by surrender to IRS blackmail.

The 1934 Law was passed to thwart the Nazis from obtaining information about the Swiss accounts of German refugees from Adolf Hitler’s persecution. Who could have predicted the irony of what I have called “the Nazification” of the U.S. Internal Revenue Service finally producing the demise of Swiss banking secrecy.

Last Word

Switzerland is among the world’s oldest surviving republics. In modern form it was born in turmoil created by the expansionist ambitions of Napoleon Bonaparte. It has withstood the depredations of the Carolingian feudal system, the Hapsburgs, the Reformation and two World Wars.

Through it all trust in the Swiss financial system has made the Swiss the managers of an estimated one-third of all worldwide funds held outside their country of origin, over US$8 trillion.

The Swiss will survive the IRS and be the better for the ordeal.

The Sovereign Society respect U.S. tax law and U.S. reporting requirements. We also value financial privacy, a concept that died in America with the PATRIOT Act. Switzerland still does have privacy remaining for law abiding and tax paying persons.

For our American and other national members, the Sovereign Society has long standing existing arrangements with reputable Swiss banks that are not under IRS investigation.

We also can recommend Swiss and other investment professionals that now are registered with the U.S. Securities and Exchange Commission (SEC) and can assist all U.S. client investment reporting.

Join us as a member of the Sovereign Society and we will be pleased to connect you with reliable Swiss banking and investment professionals.

Or would you rather keep trying to get a human voice at the Bank of America on the phone?