Below is a net floater attributed to American libertarian Harry Browne, author of the classic “How to Find Freedom in an Unfree World”

Free + Thinking + Individuals everywhere, we invite you to pause for thought and take a few minutes out of the New Year festivities to read the following New Year’s resolutions…

With that, our best wishes to all readers. Let’s make 2010 your most prosperous year ever. In the midst of so many problems we see so many opportunities! Q Wealth will teach you how to bank offshore, secure your assets and protect your privacy.

Regards from your editor.

LIBERTARIAN NEW YEAR’S RESOLUTIONS FOR 2010

1. I resolve to sell liberty by appealing to the self-interest of each prospect, rather than preaching to people and expecting them to suddenly adopt my ideas of right and wrong.

2. I resolve to keep from being drawn into arguments or debates. My purpose is to inspire people to want liberty — not to prove that they’re wrong.

3. I resolve to listen when people tell me of their wants and needs, so I can help them see how a free society will satisfy those needs.

4. I resolve to identify myself, when appropriate, with the social goals someone may seek — a cleaner environment, more help for the poor, a less divisive society — and try to show him that those goals can never be achieved by government, but will be well served in a free society.

5. I resolve to be compassionate and respectful of the beliefs and needs that lead people to seek government help. I don’t have to approve of their subsidies or policies — but if I don’t acknowledge their needs, I have no hope of helping them find a better way to solve their problem.

6. No matter what the issue, I resolve to keep returning to the central point: how much better off the individual will be in a free society.

7. I resolve to acknowledge my good fortune in having been born an American. Any plan for improvement must begin with a recognition of the good things we have. To speak only of America’s defects will make me a tiresome crank.

8. I resolve to focus on the ways America could be so much better with a very small government — not to dwell on all the wrongs that exist today.

9. I resolve to cleanse myself of hate, resentment, and bitterness. Such things steal time and attention from the work that must be done.

10. I resolve to speak, dress, and act in a respectable manner. I may be the first libertarian someone has encountered, and it’s important that he get a good first impression. No one will hear the message if the messenger is unattractive.

11. I resolve to remind myself that someone’s “stupid” opinion may be an opinion I once held. If Ican grow, why can’t I help him grow?

12. I resolve not to raise my voice in any discussion. In a shouting match, no one wins, no one changes his mind, and no one will be inspired to join our quest for a free society.

13. I resolve not to adopt the tactics of Republicans and Democrats. They use character assassination, evasions, and intimidation because they have no real benefits to offer Americans. We, on the other hand, are offering to set people free — and so we can win simply by focusing on the better life our proposals will bring.

14. I resolve to be civil to my opponents and treat them with respect. However anyone chooses to treat me, it’s important that I be a better person than my enemies.

The ‘underwear bomber’ incident on Christmas Day on the NWA flight landing in Detroit should serve as a wake-up call for us all.  All the security measures put in place by governments supposedly to protect us against terrorists are not working. The government’s knee-jerk response is to increase security checks. Both these facts are of serious concern to our security, privacy and freedom. Allow us to explain…

Here at Q Wealth our intention is to bring you the common sense analysis behind the headlines. We base this analysis on our extensive experience and our good friends in both the ‘civil liberties’ and ‘intelligence’ communities. Bearing in mind that few facts of the case are known as yet and we are relying on TV reports for our information, here is our initial analysis – first of the actual event, then of the consequences. Warning: It is scary stuff.

First the good news: no-one was badly hurt. The underwear bomber burned his butt. Initial reports suggest he did not have a bomb, but rather some powder sewn into his underwear that he tried to inject with a liquid to cause a fire. Fortunately aircraft interiors are designed to be flame resistant, cabin crew are suitably trained and equipped with fire extinguishers, and one brave passenger physically restrained the terrorist. These three basic, sensible precautions saved the passengers and crew on that flight and the people on the ground below.

Whatever one may think of multi-billion dollar global spying operations and intrusive airport security measures, if they worked it would at least be a strong argument in favor of them. But this incident shows they do not work. The suspect’s father, a prominent banker, had taken the extraordinary step of reporting his suspicions about his son to the US embassy. The UK had refused to renew the suspect’s student visa because of his apparent terrorist connections. Yet here he was in possession of a valid US visa, travelling in his own name, allowed on board a flight to the US.

Airport security in Amsterdam, where the suspect boarded, is as ‘good’ as anywhere else. This writer passed through one of the new full body scanners there nearly a year ago. These are the super-duper new machines that are due to be rolled out over the USA next year. On my particular flight, the business class passengers were being checked by the new machine, while economy class passengers were being checked using the older method.

Nobody informed us what the machine was so I guess the majority of business class passengers had no idea they were having these photos taken. But a properly trained terrorist, especially one with a mechanic engineering degree like this one, who had something sewn into his underwear would surely have recognized the machine and snuck into the other line.

We are civil libertarians but we certainly recognize the need for airport security. The normal airport security that was in place in Europe (but not the US) in 2001 did not particularly bother passengers. It involved a quick scan of the hand-luggage and passing through a metal detector, as well as routine scanning of all checked baggage – measures which would very likely have prevented the 9/11 hijackers. I can also see the logic behind separating laptops at the scanner.

But none of the rules introduced since (restrictions on liquid, taking shoes off etc) make any sense. Does anyone think for a moment that a terrorist is incapable of forging a prescription from a Nigerian doctor that would allow him to take a syringe and more liquid that normal on board a plane? Depriving us of blankets and pillows or restricting hand luggage is just about inconveniencing passengers for absolutely zero security benefit.

Frankly, there is nothing more we can do in terms of physical airport security. It is impossible to introduce a fool-proof system. If a person is smart and determined enough they will be able to carry dangerous items past poorly-paid security guards – people who are taught to function like robots by reacting to whatever the latest threat is and, especially in the USA, to using scare tactics to bully passengers. And while the west wages war in other parts of the world, there will always be those smart and determined people.

Then another personal gripe of mine. More pressure on the use of cash payments for airline tickets. Last night US media were making a big deal of the fact that this guy paid cash for his ticket in Nigeria. All the ‘experts’ claim this is a warning sign of potential terrorist activity. I hope the people who are really in charge, rather than the so-called experts on TV, aren’t so stupid. I took the liberty of checking out the State Department’s website and here is what they say about use of credit cards in Nigeria:

The Nigerian currency, the naira, is non-convertible.  U.S. dollars are widely accepted.  Nigeria is a cash economy, and it is usually necessary to carry sufficient currency to cover the expenses of a planned visit, which makes travelers an attractive target for criminals.  Credit cards are rarely accepted beyond a few upscale hotels.  Due to credit card fraud in Nigeria and by cohorts in the United States, credit card use should be considered carefully.  While Citibank cashes some traveler’s checks, most other banks do not.  American Express does not have offices in Nigeria; however, Thomas Cook does.  Inter-bank transfers are often difficult to accomplish, though money transfer services such as Western Union are available.

So any airline flying from Nigeria had better accept cash payments……

But this is not an article about airport security. Travelling is a hassle these days but lack of pillows is a minor annoyance in the greater scheme of things.

Think for a moment about what would have happened if this attack had succeeded. The indirect consequences could be much worse than the direct ones. Think back to September 11th, 2001. Only this time imagine it worse. A lockdown of the USA. Borders could be sealed. Banks could be closed (Google the ‘bank holiday’ conspiracy theories…) and ATMs switched off. Assets could be appropriated by the government, as is common in times of war. Telecommunications and the internet could stop working. Martial law could be imposed. Events could easily get out of hand – causing blood in the streets, figuratively if not literally.

Similar things could easily happen elsewhere too. In the UK, for example, it is well known that the military have an emergency plan to seal off the whole of Greater London.

As smart individuals we need to make sure we are properly prepared for such catastrophes. Unfortunately, I think the probability of a successful major terrorist attack within the next few years is high, and it is more than likely to target the financial system. This would in many ways be awfully convenient for the powers that be, too – since then they would have somebody else to blame for a total collapse of the financial system that is happening already (see the related post links below to read about the decline in the value of the US dollar or ‘dollar devaluation‘)

I certainly hope I am wrong, and I am by no means saying that all the above things are going to happen. But I consider it would be smart to be prepared. It’s clearly better to have contingency plans in place and never have to use them, than the other way around.

So let’s treat this incident as a wake up call. We all get lazy. We all get stuck in our routines as soon as we feel a little bit comfortable and secure. But it should be a serious New Year’s resolution to put into place strong strategies to protect not just your assets but yourself. Don’t put it off. Do it now before it’s too late!

What do I mean? Different people have different necessities. But here are some of the basics:

• Physical gold and silver: The majority should be stored outside your home country, but you need some at home. Silver coins are better to barter for things like food. Both silver and gold are great investments. But if trading on the markets is suspended then all your ETFs, mining stocks, Perth Mint Certificates and the like will be worthless, at least in the short term. You need a proportion of your portfolio in physical metals. More on Buying Physical Gold Bullion Offshore here.

• Second residencies and passports: Again, it’s all about diversifying risk. Identifying yourself and your family as citizens of a neutral country may just come in very handy one day. Mobility is essential for your security. In the meantime, having legal residence (the papers) and/or a bolt hole (physical property) in a secure jurisdiction like a tax haven, well away from potential problems, is also reassuring. Rather than being forced to flee to an unknown place, you can just step comfortably in to a new life you have waiting for you. And the legal residence can lead to a second passport by naturalization after a few short years. More on Second Passports and Residencies here.

• Offshore Banking: Something as simple as opening a multi currency bank account outside your home jurisdiction can reduce and spread risk. Hold funds in various currencies and financial instruments. Any prudent investor should have international and foreign currency holdings and a multi currency account is a good starting point. For greater security and personal privacy consider the use of a Panama Foundation or Corporation. More on Offshore Banking matters here.

• Alternative Incomes: What would you do if you had to abandon your business tomorrow and leave the country? You should have not just assets in place overseas, but also a secure income stream from some sort of business you can run internationally. More on Offshore Wealth Creation here.

• Understand and Use Privacy Technology: Secure your internet communications. And, though this is certainly more difficult, think about what you would do if you didn’t have access to the internet. I don’t believe the whole internet will collapse, but parts of it certainly could. More on Privacy Technology in our new Secure Computing report, available in the members area.

There are lots more contingency plans you might need to put in place, depending on your family, your business, and your personal situation. For this reason we offer a free e-mail consultation to all paid-up Q Wealth members (obviously in our own time, it can take a few weeks for your reply) and we encourage you to attend our events where such contingency plans are discussed.

The first and most important step, if you like this article and haven’t already done so, is to sign up for our free Q Bytes newsletter to benefit from free weekly tips on major themes like offshore banking, asset protection, personal security, precious metals, and offshore wealth creation.

At this time of year when we have a chance to take a few days off and spend time with family and friends, we would like to wish you and yours a very special and magical Christmas. Whether you are deep in snow or on the beach, may you enjoy the beauty of this time. Thank you for supporting Q Wealth during the past year. And we hope that 2010 will be your most prosperous New Year yet, when all your dreams will come to fruition!

In January we will be launching the updated 2010 edition of the Practical Offshore Banking Guide, our new Computer Security Report, and the next issue of the flagship Q Wealth Report. We have lots of other goodies in store for you too! These will all be available free in the Members’ Section.

If you are not yet a paid-up member but have been thinking about it, now is the time to sign up because we are offering you a special Christmas gift! Sign up before the end of the year (before 31st December) and receive $20 off your first year’s membership… bringing the price down to just $67. I know you have lots of expenses at this time of year, but what price do you put on your freedom, wealth and privacy in 2010? Simply enter the promo code XMAS09 on the signup form, and the discount will be applied automatically. You will be granted instant access to the Members Area. The signup form is here.

If you are already a member, thank you very much for your business and the confidence you have shown in us. If we haven’t already talked whether by e-mail or in person, I do hope we will have the chance to do so soon, possibly at our Cancun ‘Strategies for Success’ event in March that is selling out fast.

Kind regards
Peter Macfarlane
Joint Editor

and all the Q Wealth Team!

Financial frauds and scams may not be a nice topic to close on before Christmas. But it’s an important one. I think even more so than in past years, I’ve talked to many investors this past year who have lost money – sometimes large amounts – in offshore investment scams of one type or another. They and their families won’t be having a great Christmas. So I think it’s an important topic.

It’s certainly not that offshore is full of scammers or even risky. Scammers are everywhere. But offshore investors often make an easy target. Forewarned you can go out and make money offshore without worrying about such things. That is why it’s important you read this article if you want to avoid forex scams, ponzi schemes and the like.

Back in the summer I was invited by a rather mysterious company to a ‘forex luncheon’ in a building in Panama City (Ocean Business Plaza to be precise). I thought it a little odd, since I have nothing to do with forex, but in the spirit of investigative journalism, I went along…

Over ordered-in sushi, which was rather good by the way, the host proceeded to make a presentation about dodgy-sounding hedge funds, roll over programs and a lot of other stuff that had absolutely nothing to do with forex.

I was not the only financial professional there – and whilst everybody was very polite it was clear that nobody in the room was taking the presenter seriously. Some people simply got up and walked out after finishing their sushi. Why they invited me I have no idea, since surely I have a certain reputation as a scam investigator by now and we have an article on our site warning against exactly this kind of scam: Due Diligence for Offshore high Yield Investment Programs. This particular scheme predictably went down a few months later.

During 2009 some of the opaque offshore investment schemes that have collapsed include:

• Hatfield Oak International
• Venture Resource Group (VRG)
• GCI
• Finanzas Forex
• Global Prosperity Plan a.k.a. Global Pension Plan (Belinda Eigenman)
• and several Swedish Credit Unions

Sweden, while a very stable and reputable country, has spurned a minor industry in scams with its credit union legislation. I’ve come across various Swedish Credit Unions over the years and not one has been legitimate.

There are doubtless many others of which I am not even aware. But they all share the same characteristics: above average (unrealistic) rates of return offered, not marketed through conventional channels, based offshore and relying on secrecy to attract clients… and if pushed, they claim that they achieve their returns using forex trading.

Forex trading is extremely high risk. If you have a good, honest broker, you can either make or lose a lot of money. The problem is that few people really understand forex trading so it is an easy play for scammers. There are mysterious entities like CLS Bank and the DTCC that I have written about previously that really do settle multiple trillions of dollars per day in transactions.

Obviously, if you have a dishonest broker, you get the potential downside without the potential upside. Though in reality, the vast majorioty of these scams are classic ponzi schemes that have absolutely nothing to do with forex.

Over the years, clients of Q Wealth have lost millions to scammers of this type. I know, because I’ve seen the proof. Unfortunately these people came to us after they had problems getting their money out.

Others have been smart enough to come to us before putting their money into such schemes, and we can honestly claim to have saved those people millions over the years too. For those who don’t know, one of the benefits of Q Wealth membership is that you can contact us any time for impartial, informal advice on any investment you are thinking of participating in. That alone could be worth thousands of times the cost of membership to you, so I know some members see their $87 annual subscription as a kind of insurance policy.

Doubtless in 2010 we will continue to see lots of similar schemes. Offshore is not full of scammers. If you follow the advice here and in our free weekly e-letter Q Bytes you can easily reach the best reputable offshore banks and offshore brokerage houses. Although we don’t get into investment advice as a business, when we see something good from a reputable source, we do let our members know – recently we’ve been recommending resource and gold mining stocks for example.

What are the trends in scams? What do I expect to see in 2010? The classic ponzi will always be around, because there are always new marks who will fall for it. Probably the forex tag will continue to be applied to these scams.

However, there are some new emerging trends that I have seen in recent months. One is forestry investments – high yields guaranteed from the Brazilian rain forest or from noni or teak plantations in Panama. Following the Copenhagen summit, expect to see more scams revolving around carbon credit trading. And following the surge in gold prices, I am already seeing ads online from penny stock pushers (boiler room penny stock scam operations) who are literally touting the latest ‘undiscovered’ gold mine!

We will also continue to see fraud attempts surrounding documentary credits. Letters of credit and bank guarantees are legitimate instruments used in international trade. But serious international traders have never heard of things like prime bank guarantees, roll-over programs, bank debentures, proof of funds leasing, standby letters, seasoned notes or anything of that nature. Also look out for anything that describes itself as a ‘HYIP.’

So don’t be scammed in 2010. Avoid anything mentioned above like the plague – and if you’re a Q Wealth member who is not sure about something, just write me or Richard and you will get an individual reply in due course. Final piece of advice: if you haven’t yet read our free five part course ‘Secrets of the Super Rich’ you should do so. It is without obligation, and did I mention it’s free? Just enter your e-mail address in the sign-up box above to receive yours.

Just a quick reminder that close of business tomorrow is the deadline to qualify for the Early Bird bonus on entry tickets and personal consultations at our offshore wealth creation event in Cancun, Mexico.

Why would you attend this event?

• To learn more about which offshore corporate structure, foundation or trust is right for you. A Belize IBC, a Panama Foundation, a New Zealand offshore trust or something completely different?
• Learn about the best offshore banking countries and the best offshore banks. Peter will be explaining why countries you’ve possibly never even heard of may be the best offshore banking jurisdictions in 2010.
• Learn how to live offshore and run businesses internationally. If you are into consulting, writing, offshore e-commerce, online video etc you should attend this event. Likewise if you see one of these businesses in your future.
• Learn how to protect your assets. It’s all very well paying an attorney to do it for you, but lawyers are more interested in their fees than your well-being. We teach you how to do it yourself.

Above are just a few of the reasons you might want to attend our Cancun event in March. But there’s another reason too….

For the first time we have decided to offer discounts on offshore corporations, foundations etc ordered from Peter Macfarlane & Associates S.A. at this event. Our reasoning behind this is simple: explaining offshore structures to a group is much more time-efficient than explaining it individually over the e-mail or phone. Savings in time equal savings in money.

With the above discounts, your attendance at the event and your personal one-hour consultation can work out basically free if you decide to go ahead and set up an offshore structure for yourself.

We are also looking for long-term relationship building. You look us in the eye, we look you in the eye. In my view, that is the best form of due diligence.

If you are reading this before December 23rd, it’s not too late to take advantage of our early bird discount. Contact Frederick and he will get back to you with the necessary information: events at qwealthreport.com  (Replace the at with the @ symbol – we do that to deter spammers)

See you there!

Over the last few months and in the wake of the OECD crackdown on tax havens, when talking to my personal consulting clients and handling the free anonymous e-mail consultations we offer to members, I’ve been asked numerous questions about participating in offshore tax amnesty programs like the IRS’s ‘Offshore Voluntary Compliance Program‘ (OVCP), the UK’s ‘New Disclosure Opportunity‘ (NDO) and equivalent programs in many other countries.

Some surprising countries like the Netherlands – including Netherlands Antilles – and Argentina are also getting very agressive with their non-compliant taxpayers and are busy signing Tax Information Exchange Agreements (TIEAs) with offshore havens.

First of all, the usual disclaimers. There is no easy to answer to this question as it depends very much on personal circumstances. International tax lawyers I have talked to are divided in their opinions too. My job here is simply to report what I’m hearing on the offshore grapevine. Nothing here should be construed as tax advice.

The USA  Offshore Voluntary Compliance Program has attracted the severe criticism for being highly ambiguous – even those participating in the amnesty and filing their FBAR forms have received no guarantee that they will not be subject to criminal prosecution later. So, one might ask, what is the benefit of participating in the amnesty? The IRS are effectively saying to taxpayers “you just have to trust us.” Hmm. Any good lawyer will tell you not to trust the opposition. And on that basis many good lawyers have advised clients that it is not in their interests to participate in the amnesty.

Although it has now technically finished, we hear that the IRS may still be offering informal ‘deals’. And the main point of such deals is to collect intelligence on offshore bankers, lawyers, accountants and others who have assisted US taxpayers in tax evasion in the past.

In this regard, I have specifically warned a few clients about undeclared accounts they have in banks that I won’t name in public, but which are likely to be high on the IRS radar. Certain European banks, mainly banks in Switzerland, Austria and Denmark, that I could probably count on the fingers of my two hands, have been very active in the past in terms of marketing their services to Americans. UBS was one of them, but there are others, including some small boutique private banks with mainly American clients.

If the IRS didn’t know about these offshore banks before, they certainly do now. So which banks do you think will be top of the list for auditing with a fine tooth comb once the new QI rules are agreed sometime next year? (More on the new 2010 QI rules coming up shortly in Q Bytes – we are working on that now)

You already know if you are a client of one of these banks or not. In the past, they had representatives travelling worldwide – even to the USA – meeting American clients, often at gatherings frequented by libertarians, banking privacy enthusiasts and the like.

If your hidden account is in a bank with few US clients that has not popped up on the radar, you are undoubtedly in a much more advantageous position. But it’s still not too late to close out your accounts with the affected banks and move assets into a more robust, legally watertight asset protection structure – hopefully including assets that do not trigger reporting requirements (physical gold comes to mind.) By closing such vulnerable accounts as soon as possible, you can minimize (but not eliminate) the risk of detection, since audits should hopefully cover only active accounts.

A second, unstated, purpose of the amnesty programs and the IRS spin machine (press releases etc) is simply to scare people with bluff. A lot of the most productive Americans, who have been the stimulus that brought prosperity, jobs and wealth to their country over past decades, won’t be enjoying a relaxing holiday season this year. We don’t think this is fair, of course.

Although bank secrecy is under attack, it’s certainly not dead yet. On the other hand I’ve been saying for years that it is a BIG MISTAKE to hold unreported bank accounts in your personal name. There are much better ways to legally hide money and protect what is yours. Which are the best offshore banking countries for 2010? We regularly write about such solutions and about the safest and best offshore banks here at Q Wealth Report. We believe in practical, positive advice – not scare tactics.

If you don’t see what you want in our publications, paid-up members are entitled to a free e-mail consultation (subject to the natural limits of my time) and/or to a referral to an expert US tax lawyer we know and recommend based in Panama who can also help with disclosure and amnesty matters.

The IRS have declared the US amnesty a huge success. The UK tax authorities, however, have openly admitted that they are disappointed with the number of people coming through under the NDO. In an effort to attract more, they have extended the deadline through to January 4th.

A separate UK tax amnesty is one negotiated exclusively with Liechtenstein, which it is generally agreed by experts offers very favorable terms to taxpayers. However, only 27 people have come forward so far under this amnesty. From this month, the Liechtenstein disclosure amnesty is being extended to allow UK taxpayers who hold undeclared accounts in other jurisdictions to move those accounts to Liechtenstein and then take advantage of this special amnesty.

Anyway, if you want to be kept informed on this subject it is a regular topic in our weekly Q Bytes newsletter. It is absolutely free, just sign up and confirm your e-mail address. We will not spam you and you can unsubscribe instantly at any time. To sign up to Q Bytes click here.

Getting a second passport can set you free. But if not done right, it can also land you in hot water – as several clients of previous supposedly legitimate economic citizenship programs are finding to their costs. Peter Macfarlane reports.

Second passports are increasingly important as means of achieving freedom and privacy. The paradox of the world becoming at once more globalized and more mobile, yet at the same time more restricted, means that holding just one passport puts you at the mercy of just one government.

Our American cousins have it particularly bad, because US citizens are the only people who are subject to taxation on their worldwide income no matter where they live. While wealthy Russians and Chinese who wanted easier visa-free travel were in the past the main groups seeking second passports, today American tax exiles seeking to renounce American citizenship and escape the tax burden are the main consumers.

If you’ve read anything about second passports, you will have heard of low level scams offering citizenship from countries as diverse as Guyana, Surinam, Mexico, Monaco and Liechtenstein. These countries have no economic citizenship programs, and if you apply for one of these programs the best that can happen is you will lose your upfront deposit. The worst that can happen is that you will receive a doctored pdf file that is supposedly a ‘copy’ of your new second passport, requesting you to pay the outstanding balance – and if you do not pay up you will then be threatend with blackmail.

This article however is a little warning about potential problems at a much higher level – with supposedly legitimate economic citizenship programs.It is about high level corruption and reneging on deals by sovereign governments and well-connected law offices.

As a reminder, right now there are only two legitimate second citizenship programs in the world that allow you to qualify for a second passport by ‘investment’ (in other words, that allow you to buy a second passport.) Both are run by small Caribbean countries. Those are the Economic Citizenship Programs of St Kitts and Nevis and the Commonwealth of Dominica. In the past, however, there have been various other such second passport programs from countries including Seychelles, Belize and Grenada.

Now I’m not going to name names in this article. But the nature of our position here at Q Wealth, talking to numerous clients and contacts, is that certain confidential information tends to come our way. Recently, we have heard of several apparently unrelated incidents that anyone considering one of these paid-for second citizenship programs should unquestionably bear in mind.

• A large sum of money simply disappeared from the escrow account of a law firm on St Kitts. This was money that clients had paid over as part of property purchases intended to qualify them for the economic citizenship program. The clients appear to be out of pocket.
• We have heard from more than one person who was naturalized completely by-the-books in a particular economic citizenship program that was closed down around nine years ago, that they are having problems renewing their passports. One of our sources reports that: The gentleman in XXXXX said that unfortunately there is a “review of the passport process” for the citizens who obtained citizenship through the naturalization process and therefore he is unable to give any deadline. When pressed, he admitted that there are various applications on hold.
• Then there are some serious and seemingly well founded allegations going through the US court system at the moment against another sovereign government of an island nation, that is known to be bankrupt and has been well-known in the past for second passport sales. The allegation is that they used spurious allegations of money laundering against innocent individuals to seize millions of dollars from offshore bank accounts within their jurisdictions, and they are now failing to follow the due process in their local court systems. Of course these allegations are not proven, but it would certainly take brass balls for a money launderer to show up in court in the USA and sue a foreign government, which is exactly what is happening here.

To repeat, the above is more hearsay than anything else and doesn’t necessarily reflect negatively on the governments that are offering second passport programs today. But it certainly doesn’t give us a warm fuzzy feeling about entrusting delicate matters (your passport could literally be a matter of life and death at some point) to small island governments who are desperately in need of money. And lawyers in these places who are entrusted with running passport schemes are, of course, usually golf, church and drinking buddies of the head honchos.

My advice has always been that economic citizenship programs should only be a last resort. They are high profile and most banks and border guards will immediately recognise that you have ‘bought’ your passport. They are expensive. And they are not particularly private.

A much better solution is to go for citizenship through naturalization in a country that does not sell passports. This way your second passport will be much lower profile, and will work out costing you a fraction of what the ecomomic citizenship programs charge. Several countries known to be relatively liberal in this regard are Uruguay, Paraguay and the Dominican Republic. Even Singapore.

The big downside of course is the time-frame. The quickest you can generally qualify through one of these residence programs is 3-5 years. But if you start now, that time will pass quickly. And in the meantime just having the residence can still bring you substantial tax, freedom and asset protection benefits. I won’t go into these here but you can read about in other articles on this site. Start by reading Joe B. Gonzalez’s excellent article on Second Passports by Residence and Naturalization.

As I said a little while ago, while protecting your assets don’t overlook the fact that you need to protect yourself and your family against circumstances like civil unrest or a lockdown of the borders. Why not make it a New Year’s Resoltion to start work on a second passport at the earliest opportunity?

Remember we offer free personal consultations by e-mail to our paid-up members on matters such as this. If you are not yet a member of Q Wealth, you can join now online.

As I’ve frequently stated, the problem with conventional asset protection is that it frequently focuses on preserving the numbers in your offshore bank account. What I mean by this, is that if you have a million dollars, your traditional asset protection lawyer will seek to protect it against unjust lawsuits, greedy ex-spouses, and government seizure – maybe even taxation!

That’s fine as far as it goes… but it completely ignores what is perhaps the most important risk – currency devaluation, specifically devaluation of the dollar. No matter what complicated and convoluted theories economists might come up with, it doesn’t take a genius to figure out that if you print a lot more dollars, each one will be worth less. Every time Bernanke fires up the printing presses, he is devaluing the dollar. If you want to see statistics to back this up, see my earlier post: USA Bankrupt? Here’s the Evidence.

So if you have a million dollars in any of the best offshore banks at the beginning of 2010, and a million dollars plus today’s measly interest in your account at the end of 2010, you will really have made a big loss. So much for asset protection!

The solution, of course, is diversification. You’ve heard the story about the eggs and the basket. Physical gold bullion is one excellent hedge, and has the advantage of being non-reportable on the FBAR form (for US taxpayers) since it’s a physical thing, not a financial account. If you are interested in finding out more about How to Buy and Store Physical Gold Bullion Offshore, click here.

Another good solution is holding a multi-currency bank account. This is a financial service that is simple to use and understand, yet essential for protection against the devaluing dollar. A multi currency account, as its name suggests, is simply one bank account in which you can hold a variety of foreign currencies.

For example, you will log in to your internet banking and see you have X amount of US dollars, Y amount of Swiss Francs, Z amount of Aussie Dollars, etc.If you wire in an amount in a certain currency, the bank will simply hold it in that currency. Of course if you want to switch part or all of your balance to another currency within the account, you can do so with a few clicks of the mouse or a simple phone call.

Multi currency accounts are standard in some of the best offshore banking countries where I typically assist clients in opening their accounts. Despite the government’s propoganda, it is completely legal for most nationalities to hold offshore bank accounts – for the moment!

A question I am often asked is “is it possible to open a multi currency account in the USA?” Unfortunately, the answer is no. There are a few US banks that open foreign currency accounts, the pioneer being EverBank. Even EverBank, however, does not open multi-currency accounts – they simply open separate accounts for each currency you want to hold. This is not bad, but is less convenient.

Another problem with Everbank is this statement on their application form: Please note: Date of Birth, employment information and Social Security Number will be required from all account holders, including trustees and signers on the account. So no accounts for non-US residents, either.

To me, opening a multi-currency bank account in the USA seems like an oxymoron anyway. The whole idea is to diversify out of not just the US dollar, but the US banking system in general. According to bankimplode.com, 208 banks have ‘imploded’ since the beginning of the financial crisis – most of them in the USA.

That is why I have always recommended clients seeking multi-currency accounts to go offshore. For added security and privacy, it’s also wise to use an offshore entity like a Panama Foundation or Corporation to serve as the owner of your bank account. (If you haven’t read our free report yet on the advantages and disadvantages of Panama as an offshore centre, visit our Panama Foundations, Corporations and Offshore Banking page)

So how best do you go about opening a multi currency bank account? Which are the best offshore banks and the best offshore banking countries? Switzerland, Austria, or elsewhere? Where were the best places to open such accounts in 2009, and what will be the best offshore accounts in 2010?

For that information I suggest you download our Practical Offshore Banking Guide which is free for our paid-up members. If you are not a paid-up member yet, you can either subscribe online right now (it only costs $87 and takes a few minutes), or you can test our services with no obligation with our Free Five Part introductory course on Offshore Banking, Asset Protection and Wealth Creation that we would be delighted to send you starting today. Simply enter your e-mail address in the box above to receive yours.

Prefer a personal meeting? Then why not come along and meet me and the team in Cancun, Mexico in March 2010? Details from events@qwealthreport.com

“Many of our clients at BFI are very wealthy,” writes our Swiss Mountain Guide friend and Swiss Gold Storage expert Frank Suess in his latest newsletter. “They spend much time on wealth planning; in other words, on how to protect and grow their wealth. However, they generally do not consider how to protect themselves in the current environment. While protecting your wealth, you should not forget how to protect YOU. Things might not seem so bad in everyday life. Your daily routine is not affected by the bigger changes occurring around you. Therefore, it all does not seem that threatening. They never do.”

Have you defined a contingency plan, an escape route for you and your loved ones, in case leaving your country becomes an unwelcome necessity? If not, we recommend you at least start considering this line of thought. I myself (Peter) was just talking about this very topic yesterday with one of my personal consulting clients. It is obviously a sensitive topic, something not everybody has the guts to face up to. But an important one, nonetheless.

Do you have in place an escape route like a second passport (for example an economic citizenship) or at least a legal residence in a far-off, neutral country where you and your family could ride out the storm?

Certainly having contingency plans in place could make you sleep better at night. The best laid contingency plans are the ones you hope you never have to use!

This is a theme we will be developing more early in 2010 here at the Q Wealth Report, as well as at our forthcoming Q Wealth ‘Strategies for Success’ event in Cancun, Mexico in March. If you are interested in joining us, please contact Frederick in our office for details.

More offshore protection news soon…

I usually refrain from commenting on market conditions. There are two reasons for this.

First, I not really a financial markets guy. I get very bored with all those charts, waves, theories and so on. That’s probably one reason why I stand out from all the self-professed analysts out there on the net. On the rare occasions I do open my mouth about the markets, it’s because I have something serious to say.

My job is nuts and bolts offshore structuring. I’m talking, as regular readers of this blog are well aware, about offshore banking, offshore investing, offshore asset protection and hedging against currency collapses. I like active businesses. I do run a private offshore investment vehicle, but it doesn’t get involved in traditional financial markets – only in what might be termed ‘alternative investments.’

In other words, I prefer to invest my money in sound businesses that I can actually see and exercise some influence over. Businesses where I have the CEO’s personal cellphone number.  Since my modest little fund doesn’t handle multiple billions, I naturally invest in small businesses without stock market listings. I look for small, recession proof businesses in growth areas that will not be affected by short-term financial swings. This is only a hobby at the moment, but over the last few years it has turned into a very profitable one.

Second, I don’t believe the markets are free at all. And again, why complain about something I don’t have any control over? Much better to focus my limited time on something like writing or helping my clients protect their assets.

Sure I keep a little play money in my offshore brokerage account. And I surprise myself sometimes by how successful I am. Markets depend first on psychology, second on manipulations by governments and certain elite forces, and a distant third on actual fundamentals. Then, I remember that I subscribe to a few really good investment research newsletters that certainly make me money. (I’ve listed some of them before, but if anyone is specifically interested, let me know) But really I only put money in my brokerage account that I can afford to play with.

But if clients come to me seeking advice on financial markets, that is not my area. All I can do is refer them to one of my several trusted contacts in this area.

I must say, however, that last week  was abnormally glued to the screen. I always knew gold would go up, and I’m sure it will go a lot higher yet. But it certainly seems like Joe Bloggs on the street has decided gold is a good buy at the moment. The mainstream media hype, which is all that is backing the fiat currencies of the world, must be failing if even average investors are turning to gold. Heck, gold is now even sold in vending machines in Europe!

This week saw the news that French bank Societe Generale had released a report that Ambrose Evans-Pritchard in the British Daily Telegraph dubbed the ‘Bear Case Report.’ This report advises the bank’s clients on how to prepare for the dollar tumbling much further, global equities crashing below March lows, property prices tumbling (remember that email I sent a week ago to QWR  members about the coming commercial real estate crash?) and oil falling below $50 per barrel.

The only solution seems to be for governments to inflate their way out of the problem. But, as was once famously said, inflation is like being pregnant – you can’t opt to be a little bit pregnant!

This was before the news that Dubai World asked for a 6 month break, admitting that they can’t keep up payments any more. Bearing in mind that failure to honour debt obligations is a crime punishable by prison in Dubai, it must have taken some courage, desperation or both for them to own up to that.

Then there was that weird ‘technical difficulty’ on the London Stock Market, which halted trading for a few hours. Now I’m not a conspiracy theorist at all, but that really had me suspecting something.

Oh, and just to take our minds off economic woes, swine flu is conveniently back on the agenda – with a huge jump in deaths in Europe this week. Which of course don’t have anything to do with the wintry weather.

The BBC reported that maybe eating garlic could prevent swine flu. The price of garlic has jumped 300% in China, so expect a global increase to filter through soon. Evil speculators are to blame of course. Maybe those same guys who read the SocGen report, that suggested investing in farm commodities?

Fortunatelyas I write this over the weekend I can see the funny side of things. When faced with apparent disasters, my rule of thumb is “will this matter in five years time?” And although I firmly believe things are going to get a lot worse before they get better, let’s put things in perspective. A private offshore banker from a small Swiss bank (one of the cantonal banks) told me the other day that her grandparents had lived through a real economic crisis – when they didn’t have any food to eat in Europe after the Second World War. For most people hit by the recession, the real net impact is that they will be buying cheaper Christmas presents this year.

Well I’ve rambled on a lot, but what can we learn from last week? I don’t think anything that happened that will be remembered in five weeks, never mind five years. If you want a hedge against inflation, buy gold. Do not buy paper or digital gold as it is most likely a scam. Buy real, physical, solid gold. Want to know how to buy physical gold offshore? Click here.

But if you are willing to be more aggressive, these turbulent times are generating so many new opportunities it’s just incredible. I am truly excited and optimistic about what is going on now making people think about pressing the reset button. If you are not happy with your life as it is, or simply your investment portfolio as it is, the message is loud and clear: you can do something about it! Start with The Q Wealth Report, and join us in Cancun in March for an intensive long weekend course on building offshore wealth!