Legendary Swiss market pundit Marc Faber recently advised a group of high flying investment managers to ‘buy farmland and gold,’ reports the Times of London.

Dr Marc Faber is an interesting and often controversial commentator. His greatest claim to fame is having advised investors to pull out of the stock market a week before the 1987 crash. Now his belief, he reportedly told an assembled group of pension and sovereign wealth fund members in Tokyo the US is going to go bankrupt. The best way to achieve international asset protection and diversification is to buy physical gold and farmland, he believes.

So who is Dr Marc Faber? Dr Faber moved to Hong Kong in 1973 and – although he still keeps an office there – he resides in Chiang Mai, Thailand, along with a number of our subscribers and friends. As well as having penned several books, Faber has his own monthly investment newsletter The Gloom Boom & Doom Report.  Faber has been long term bearish about the American economy for a number of years and continues to be so.

According to Wikipedia, he concluded his June 2008 newsletter with the following:

The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy. The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I’ve been doing my part.

The reporting in the Times also offers insight into Faber’s way of thinking:

His investment advice, which was the first keynote speech of CLSA’s annual investment forum in Tokyo, included a suggestion that fund managers buy houses in the countryside because it was more likely that violence, biological attack and other acts of a “dirty war” would happen in cities.

He also said that they should consider holding part of their wealth in the form of precious metals “because they can be carried”.

One London-based hedge fund manager described Mr Faber’s address as “excellent, chilling stuff: good at putting you off lunch, but not something I can tell clients asking me about quarterly returns at the end of March”.

Needless to say, we agree with Dr Faber’s predictions. We have been telling people for several years to get out of the financial system by buying physical gold, as well as diversifying with multi-currency offshore bank accounts.

We also recommend purchase of productive and useful real estate, as opposed to real estate held for speculation. Farmland in countries like Paraguay, Uruguay and Brazil, for example, has proven to be an excellent investment over the past few years, but will only show its true value in the future. Our planned Paraguay Citizenship and Real Estate Investment Tour has been delayed somewhat due to pressure of work, but we are still planning to go ahead with it, now probably in early May. Anyone interested in coming along is more than welcome to contact us.

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.

Here at Q Wealth we strive to bring you the best offshore banking and asset protection options – and tell you important facts about them that you may not read elsewhere. Our advice is impartial as our business is selling subscriptions, not asset protection or offshore banking setups.

We have a small but highly select and dedicated team of experts beavering away behind the scenes seeking out important informatiomn on behalf of our freedom-loving members. And one of the benefits of being a full member is getting access to this exclusive material at no extra charge.

Today we would like to introduce you to a new Q Wealth expert, New Zealand trust consultant John Allcard. He has just finished, co-authored with Peter Macfarlane, a brand new report on another recommended offshore asset protection strategy: “Trusting in Trusts.”

Some offshore asset protection options stand head and shoulders above others. Peter Macfarlane’s exclusive report demystifying Panama Private Interest Foundations (sometimes incorrectly known as Panama Asset Protection trusts) was appreciated by many readers, and is available free to members for immediate download.

But many people have asked us about trusts – specifically things like asset protection trusts, living trusts, medicaid asset protection structures, investment protection trusts, etc.

Why would you want to use such a trust?

Below is a checklist John and Peter developed regarding what you can do with offshore wealth and asset preservation trusts. See if any of the following requirements apply to you…

• You want to protect your assets offshore, keeping them private and confidential
• You want to invest offshore for growth and wealth accumulation
• You want to achieve financial freedom and not be bound to the economic woes of any one government, country or currency
• You want to safeguard your business, assets and family against malicious or unwarranted lawsuits, seizures or criminal charges
• You want to legally pay as little tax as possible
• You want to place a legal defense barrier between you and the government – in other words, to gain the offshore advantage
• You want to protect your assets against the risk of divorce
• You want to leave a tax-free inheritance to your children’s children and beyond
• You want to support good causes – to choose where your money is put to good use, rather than letting the government make that choice for you.

Trusts are one of the most important asset protection tools used by elite or Super Rich families all over the world. Trillions of dollars’ worth of assets are likely held via trusts – but there are no statistics on them. Can you guess why?

Anyhow, if you are serious about protecting your hard earned wealth, you should read this exclusive free report on how to use offshore trusts, “Trusting Trusts” is our first new research report for 2010. But as a Q Wealth member, you can get an advance copy right now, within the next few minutes. You can download it in our Members’ Area.

The first part of this report explains in general terms what is an offshore trust, and most importantly how you can use a Trust to achieve the offshore asset protection and wealth protection benefits listed above, besides many others.

The second part of this report focuses specifically on New Zealand as a jurisdiction for offshore asset protection trusts. As you will discover, New Zealand is one of the premier jurisdictions today for setting up wealth preservation structures.

If you are thinking of setting up an offshore asset protection trust or any similar offshore asset preservation structure, whether in New Zealand, the Cook Islands or elsewhere… but are not yet sure if it’s right for you… then this report is essential reading. Your investment in time will be well worthwhile.

You will learn to get the most out of your trust, and at the same time it could save you from making potentially disastrous and costly mistakes.

For further information, simply sign up now or visit our new Offshore Asset Protection Trusts information page.

by Peter Macfarlane

In my Gold Report ( a.k.a. “How to Purchase and Hide Gold Bullion Offshore”) earlier this year, I wrote that the USA, UK and other major countries are bankrupt. This may not be news to some readers, but the vast majority of the population carry on believing the mainstream media, in spite of all that has happened.

Recently, I received a call from a personal consulting client asking why I said the USA was bankrupt. I guess he had seen in the last few days gold surging ahead, breaking new records in terms of US dollar pricing, while the dollar was falling. Now of course that doesn’t necessarily mean gold is really gaining ground… it could just be taken as evidence of the dollar losing ground – since gold is real money. The Fed can’t print gold.

What was the evidence behind my claim of the USA being bankrupt? And how does one define a bankrupt country? And where do other countries, particularly the UK and Switzerland, fit into the equation?

I decided to answer these questions briefly here, for everybody’s benefit.

First of all, defining a bankrupt country is not easy. Iceland clearly went bankrupt in a more traditional sense. But Iceland was a relatively insignificant country of only a few hundred thousand people. My contention is that the USA is also bankrupt, but it is not so obvious because there are many other factors there supporting the currency – the greatest of which is China. While the USA is bankrupt, China is the richest country in the world.

Who says? And where is my evidence for that? No less authority than the Central Intelligence Agency, obviously a US government agency. Now don’t get me wrong, I know the CIA make mistakes, at least one of which led to a major war. But I think in this case the CIA’s figures are quite accurate…  Click here to visit CIA site and see the Current Account Balance ranking

Take a look at that page, which shows the Current Account Balance. In plain language, that just shows what countries have ‘money in the bank’ and which are operating in a permanent overdraft mode!

China is at the top of the list, with a huge positive balance – not far off that of Germany, which occupies the number 2 position.

The United States is at the bottom, with a negative balance more than five times greater than the next largest debtor, Spain.

You’ll also see the UK, France, Spain and Italy down there with the USA.

Here’s another interesting page to look at: Gold and Foreign Currency Reserves

You’ll see China up at the top again, with huge foreign exchange and gold reserves. Most of China’s foreign exchange reserves are held in US dollars.

On this chart, the USA is at number 19, with foreign exchange and gold reserves just above Switzerland’s (but note the USA has smaller reserves than Malaysia, Libya, Mexico and Iran)

So compare the figures – the USA’s negative current account balance with the USA’s reserves – what is actually there backing the dollar – and you’ll see a huge discrepancy. The current account deficit is almost nine times the amount of the reserves.

Here’s how I interpret those figures: The fundamentals of the US dollar are a disaster. It is being supported only because the Chinese and US governments want to keep its value up, and to a lesser extent because other governments see the dollar as a reserve currency. This arrangement has suited many parties for years, but it doesn’t really suit China any more.

Many other governments see the writing on the wall (especially the BRIC countries – Brazil, Russia, India and China) and are diversifying out of dollars for their foreign exchange reserves as well as for other important activities like trading oil. Take a look at where those four countries appear on the list. Very interesting!

So my conclusion is that the dollar is doomed. It has to weaken a lot further. I’ve explained in other articles why I foresee the continuing stealth devaluation of the US dollar rather than an outright dollar collapse. (See related article links below) I just cannot see how anyone, not even the might of the US and Chinese governments working together, can support the US dollar long term. Of course they might succeed in the short and even medium term.

Another interesting factor affecting the US dollar is the commercial real estate timebomb in the USA. We just emailed Q Wealth members with some important information on that this morning. If you are not yet a member, that’s something else you missed out on!

The Euro is a more complicated matter because there are such widely divergent economies in the Euro zone (Germany and Spain for example). Many people believe the Euro will break up. It might, but somehow I think that is unlikely. I think the Euro could benefit, at least in the short term, from the run out of the dollar. If you are going to keep reserves in fiat currency, and you want to avoid the dollar, the Euro is the logical choice. That said, its fundamentals are terrible too.

What about Switzerland? Switzerland is actually looking good. If I wrote that it was in bad shape in the Gold Report, that was because of its huge exposure to Eastern European currencies – another timebomb that I won’t get in to here. The other thing is that Switzerland is inevitably very dependent on whatever happens to the Euro. But I would probably revise my opinion from earlier this year on Switzerland. I keep some of my own assets in Swiss Francs.

And the UK? A lost cause in my view. They are stuck somewhere between the dollar and the euro. Sterling might recover in the short term.

Finally, I should say that I am no currency expert. I hold fairly strong views but don’t seek to impose them on other people. My work is offshore structuring and managing offshore banking relationships. Managing money is a big responsibility that I prefer to leave to others. But my own portfolio is heavily invested in gold, and I believe the next decade will belong to emerging economies. Buying currency is something akin to buying shares in a country. And my currency bets are on emerging markets.

Note: Peter Macfarlane is joint editor of The Q Wealth Report, a unique privately-circulated newsletter dedicated to achieving personal freedom, wealth and privacy – and to securing wealth and nurturing it offshore. If you are new here and would like to see more views like this, be sure to check out our free five part course on the fundamentals of offshore investing and international asset protection. Sign up now without obligation for this free course and our weekly Q Bytes free newsletter.

“The Dethroning of the US Dollar could happen sooner than you think,” says Keith Fitz-Gerald in a recently published article. The implications of this for asset protection purposes are huge – now is the time to diversify out of the collapsing dollar, and protect your wealth and assets through the use of offshore corporate banking structures.

By Keith Fitz-Gerald Investment Director Money Morning/The Money
Map Report

By now virtually every investor has heard the argument that the U.S.
dollar is slated to lose its status as the global reserve currency. And that’s
good – as far as it goes.

What’s bad is that many of these investors have yet to latch onto the fact
that this could happen much sooner than many people realize and in a
manner that will catch most by surprise.

Let’s take a look at the three key reasons that this shift away from the U.S.
dollar happening – and sooner rather than later:

1. The Asian Region Currency Partnership: Japan, once the staunchest of
U.S. allies, is leading the charge to form a regional currency partnership
based on closer ties between itself, China and South Korea. Ostensibly
part of the second trilateral “leader’s meeting,” that happened earlier this
year, financial cooperation was front and center on the agenda (at Japan’s
invitation) as a means of coping with the ongoing global financial crisis
and with the subsequent resumption of worldwide financial growth. It was
also key to the Association of Southeast Asian Nations (ASEAN)
discussions that took place this past weekend – with the waning influence
of the U.S. economy again playing a key role in the discussion amongst
potential ASEAN trading block partners.

At a time when U.S. leaders are fooling only themselves by pretending
this country remains the key player in the health of the worldwide
economy, Japan’s newly elected Prime Minister Yukio Hatoyama didn’t
mince words following the trilateral meeting when making such comments
as “until now we have been too reliant on the United States” and “I would
like to develop policies that focus more on Asia” to press-corps attendees.

Having spent 20 years in the region, I can’t say I’m surprised by this
development. And you shouldn’t be, either. Between China, South Korea
and Japan, we’re talking about 16% of the world’s gross domestic product
(GDP) – a figure that’s growing almost daily, by the way.

There are obviously some significant challenges, given the cultural
sensitivities that remain in the region as a result of World War II. But even
those are being trumped by today’s serious global financial demands. After
the three-nations met, Chinese Prime Minister Wen Jiabao noted that “we
have agreed to seek common ground and shelve our differences.”

In a column written from my family home in Japan earlier this year, I
noted how important it is to “read between the lines” when investors are
attempting to decode English-language statements being made by officials
in Japan or China. It’s not what’s actually being said – at least, not as
Westerners hear it – that’s important. That’s actually been shifted a bit by
the translator. You really have to go back and make an effort to see just
what it was the official actually meant.

Granted, that’s not the easiest of exercises. But it does force you to really
look at what’s taking place – which will usually give you a much-more
accurate picture than if you just trust what’s said by the Western press.

So Wen Jiabao’s statement can be construed as it’s “time to get down to
business.”

2. When “Black Gold” is No Longer Quoted in Greenbacks: Middle
Eastern nations and members of the Organization of the Petroleum
Exporting Countries (OPEC) finally couldn’t contain themselves any
longer and leaked information a few weeks back that they’re pursuing a
non-U.S. dollar trading basket as a replacement for the current U.S. dollar-
traded oil markets.

We’ve been forecasting this for some time. The difference this time around
is that the Middle Eastern nations are now all but openly in cahoots with
China, Russia, Japan and France – all of whom the United States continues
to blithely believe it can outmaneuver.

While the meetings have been held in secret, my sources in Hong Kong
and the Persian Gulf region suggest that the move is imminent and that the
establishment of an independent trading market is all that’s keeping us
from a day in which oil prices are no longer quoted in dollars. Oil will
instead trade in the combined basket using currencies from the nations I
just mentioned. Led by China and potentially – although this is a big leap -
tied in good measure to the yuan.

As a side note, this may at least partially explain the rise in gold prices as
enlightened traders begin to hedge the dollar’s ultimate demise. This
makes sense for two reasons: First, China uses oil in an incrementally
greater proportion than the United States because it remains less energy
efficient. That means that China will take in an increasingly larger
percentage of world supplies.

Second, gold is the only “currency” that is potentially liquid enough to
serve as a transitional store of value until the new currency basket arrives.  Pun absolutely intended.

Incidentally, you can expect Brazil and India to join the party shortly,
leaving the United States even further out in the cold. And while we’re at
it, my guess is that the new oil markets will be based in Shanghai, and not
in New York or Chicago.

Watch, too, as the United Kingdom is dragged – kicking and screaming -
to the euro because it will have no choice but to abandon the U.S. dollar.

3. U.S. Firms Are Already Adopting a China Focus: While ostensibly
supporting the recovery here, major U.S. companies are already looking at
what it will take to list their shares on China’s stock exchanges. Although
I’ve been following this story for at least two years, it’s received almost no
attention in the U.S. news media. When it does happen – and it will – this
will be one of the biggest wakeup calls yet for those Western investors
who refuse to acknowledge Asia’s economic ascendance.

I’m not talking about fringe companies here, either. I’m talking about
stalwarts like Wal-Mart Stores Inc. (NYSE: WMT), The Coca-Cola Co.
(NYSE: KO), and General Electric Co. (NYSE: GE), to name just a few.
In short, companies that U.S. investors view as American as apple pie are
pushing to be viewed as Asian as quickly as possible.

I originally thought this wouldn’t happen for five to seven years (which is
still faster than most investors believed possible). Instead, I give this shift
12 months to 24 months – at most – before we see the first listings.

The fallout from this will be considerable. The historic financial centers of
London and New York will take yet another step to the sideline as new
Asian markets emerge.

To some, this will sound like scary stuff. But uncertainty breeds
opportunity. And savvy investors will welcome the changes because there
will be a fascinating fallout that almost no one is talking about.

The emergence of Asia as a true global financial center will make it so
much easier to raise capital in that part of the world. All this new Asian
capital will likely lead to a new golden age of investing – certainly in Asia,
but also in the United States and Europe to the extent that companies that
pursue these listings will have newfound sources of capital to buttress
their balance sheets.

Not all companies will be regarded equally, however. For investors, the
best choices will be those companies that can immediately use the money
they raise through Chinese offerings to enhance their global operations,
increase worldwide sales, and cement their relationships with sources of
Asian capital.

So if there’s one key take away in all this, it’s this to paraphrase the words
of American writer Ruth E. Renkel: “Don’t fear shadows – they simply
mean there’s a light shining somewhere nearby.”

Note: Keith Fitz-Gerald  is the Chief Investment Strategist for Money Map Press LLC, as well as for Money Morning, a daily global investing news service with more than 500,000 daily readers in 30 countries. He is one of the world’s leading experts on global investing, particularly when it comes to Asia’s emergence as a global powerhouse. He contributed this article to Q Wealth Report.

by Frank Suess, BFI Consulting

For centuries, gold has attracted investors seeking to protect their wealth and provide a ´safe haven´ in troubled or uncertain times. This remains a reality for modern investors too, although there are also a number of other reasons that underpin the widespread renewal of investor interest in gold. Gold can add an element of potentially outstanding capital gains to your safety-oriented portfolio. And, if structured adequately, gold will entail a minimal downside risk.

We consider buying gold “the right way” to be a HOT topic and unique opportunity in achieving the following benefits:

• Diversification out of continuously devaluing paper currencies, thereby protecting one´s assets against a loss of purchasing power AND, at the same time, setting it up for capital gains.

• Retaining liquidity and purchasing power for the next upturn in business cycles (which in our view has NOT arrived yet), thereby securing the opportunity of taking part and benefiting from it. It is important that the gold format one chooses is supported by a liquid market, i.e. you want to be able to buy and sell rapidly if need be.

• Safe haven: In volatile and uncertain times, there is typically a “flight to quality” as investors seek to protect their capital by moving it into assets considered to be safer stores of value. Gold is among a handful of financial assets that do not rely on an issuer´s promise to pay, offering refuge from default risk. It provides insurance against extreme movements that often occur in the value of traditional asset classes in unsettled times.

• Paper Currency Hedge: Gold is often used as an effective hedge against fluctuations in fiat currencies. In particular, a close relationship tends to exist with the U.S. dollar. When it appreciates, the dollar gold price falls, while a fall in the dollar relative to the other main currencies produces a rise in the gold price. While this may also be true of other assets, gold has consistently proved among the most effective in protecting against dollar weakness.

• Added asset protection and privacy: Structuring your strategy appropriately can provide a considerable level of privacy. Depending on the format gold is bought in, there are considerable privacy and safety related differences. More specifically, buying gold “the right way” can mean avoiding reportability and minimizing confiscation risks.

• Portfolio diversification: Most investment portfolios are invested primarily in traditional financial assets such as stocks and bonds. The reason for holding diverse investments is to protect the portfolio against fluctuations in the value of any single asset or group of assets that react in a common fashion. Portfolios containing gold are generally more robust and less volatile than those that do not.

• Physical or virtual ownership: You can buy gold in its physical form and store the coins, gold bars or jewelry that you have acquired. However, storage fees must be considered. And, one must consider a lower level of liquidity compared to a gold certificate or metal account (also referred to as a claim account).

BUYING AND STORING PRECIOUS METALS “AT HOME” OR OVERSEAS?

A key issue that needs to be addressed is whether an investor should buy gold offshore or “at home”. The answer will not be the same for everyone. Depending on your specific objectives and situation, you may be better off keeping your assets in your home country and storing physical gold in your local bank´s deposit box. You might, however, be well advised to buy and store physical gold offshore. Or, maybe, you should consider a mix of both.

Buying Gold “At Home”

Obviously, this is (a bit) more convenient, simply for the fact that you are not dealing with time and language differences. Furthermore, you can have the gold delivered to your home or directly to the local bank or storage facility of your choice with more direct control over your assets. However, a key issue arises — and this applies to U.S. investors in particular – in regards to the risk of government confiscation when buying and storing gold “at home”!!!

How might a gold confiscation be possible nearly 70 years after the last one occurred? This question is best answered with a series of other questions: Firstly, how will the massive U.S. federal debt (nearly $6 trillion and growing) and the outstanding international dollar float (resulting from the U.S. trade and budget deficits) be reconciled?

Currently, the U.S. dollar (still) enjoys a special status around the world as the primary reserve currency. This status encourages central banks and individual investors around the world to hold it. Leaving the various circumstances and potential scenarios aside, what would be the outcome if the stilts that propped it up were kicked out from underneath this built-in dollar market?

How might the U.S.government react to an economic emergency in which individuals, beset by either a devastating domestic inflation or a deflationary nightmare — or both — were fleeing the banks and equity markets for gold as a means of preserving their personal capital?

Historically, confiscation has all too often been the option taken by governments beset by an economic breakdown. Just as gold is the asset of last resort for the individual portfolio doing service in the most financially threatening times, it is often times the asset of last resort for troubled governments as well. As recently as 1998, during the Asian Contagion, both South Korea and Thailand implemented “voluntary” gold call-ins. The temptation presented by its citizens´ gold holdings was simply too facile to resist.

No matter how you look at it, investors must beware of government confiscation risks that rise exponentially in times of a severe economic crisis (as seen under U.S. President Franklin D. Roosevelt in 1933).

Buying Gold Offshore

The advantages of buying and storing gold offshore are primarily related to PRIVACY and ASSET PROTECTION. However, what is required to reap these benefits is a structure that allows you to re-allocate your precious metals rapidly and store them safely. Ideally, this is done in an efficient and low-cost mode despite any geographic distance issues.

Some clients may prefer buying and storing physical gold over a “virtual” gold account or certificate. They perceive a higher degree of safety in this strategy because of the fact that they are allocated a specific and tangible lot of gold. However, storing physical gold is obviously more costly. And, it is generally less liquid than its “virtual sisters”.

Despite higher holding fees, in today´s environment, BFI ultimately recommends holding physically allocated precious metals, preferably in bullion coin or bar format.

Conclusion

Both options, buying gold offshore or “at home” have their advantages over the other. The offshore option is more complex in execution and requires a larger investment. This is not a “do-it-yourself” commodity, unless you have lots of time and like to travel. Therefore, we recommend taking advantage of a full service program as offered by BFI Consulting and some other firms.

When going the offshore route, beware of strategies that sound too simple. Think the process through. And consider the hefty fees and taxes (VAT) you will pay in some European countries.

The “at home” solution is more convenient and efficient. The key risk, in case of a severe crisis, is government confiscation. It appears, however, that if approached cleverly, these risks can be minimized.

Further reading: Frank Suess Jr is CEO of BFI Capital in Switzerland. His firm provides solutions for buying and storing physical gold bullion, as well as offering a range of excellent portfolio management services for high net worth individuals. He can also assist with Swiss Bank account opening.

If you would like to read more about how to buy, hold and store physical gold bullion offshore, visit our Offshore Precious Metals page. You will also find good information for free here on Gold and Silver Investments.

China’s banking system has twenty-five times the reserves of the US Federal Reserve. The USA’s power to dictate international monetary policy is lost as the rest of the world views the US dollar as a liability. People ask me every day about the “dollar collapse” – why do I keep predicting it, and why has it not happened yet? The answer is to be found in China.

For those of you who have already read How to Prosper from the Coming Shift in Power, module 5 in our free five part Secrets of the Super Rich course, I thought the following guest article by Keith Fitz-Gerald of Money Morning would be of interest. Keith is an investment analyst who lives part of the year in Asia. Here’s what he has to say…

Most Americans will view China’s effort to dethrone the U.S. dollar as the world’s main reserve currency as one of the biggest economic threats that this country will have to face.

But the reality is that this tectonic shift in global finance – and the economic shockwaves that will result – could provide investors with some of the greatest profit plays they’ll ever see in their lifetimes.

No matter which camp you’re in, the China-spawned changes are headed our way.

In 1990, the U.S. banking system was 2.3 to 2.7 times the size of its counterpart in China. Today, however, the situation has been reversed, and there is much more of an imbalance. In fact, China’s banking system has 25 times the reserves of the U.S. Federal Reserve.

At some point, the United States will no longer be able to dictate international monetary policy. Unfortunately, as our monetary policy aptly demonstrates, Washington seems to be the only player involved in this game of high-stakes global finance to not understand just how this is destined to play out.

U.S. leaders continue to employ monetary policy as a weapon – despite the fact that most of the rest of the world views the U.S. dollar as a liability.
At the end of World War II, virtually the entire world functioned on dollars. By some accounts, 100% of the world’s money supply was the dollar. Today that figure has dropped all the way down to 19%, says Rochdale Securities LLC analyst Richard Bove, a noted expert on the U.S. banking system and Federal Reserve.

Now that the federal government has deployed a few trillion dollars more as bailout bucks, it’s clear that the greenback has lost its mojo and the U.S. government has lost its international monetary leverage.

Why is this worrisome? History tells us that the countries with the strongest economies tend to also have the strongest currencies. It may take awhile for the latter to catch up with the former, but the relationship is highly correlated relationship – suggesting that China’s on the rise economically, while its currency is advancing with the unstoppability of a diesel locomotive operating at full throttle.

So if the U.S. dollar gets derailed as the world’s chief reserve currency – as we’ve repeatedly predicted is destined to take place – the world’s next reserve currency is likely to be China’s yuan, known officially as the renminbi.

Washington says that won’t happen, since Beijing takes steps to keep the yuan from being fully tradable. That’s true enough. But Beijing also understands that the dollar is a liability – which is why China’s leaders are going to great lengths to establish the yuan as a viable currency all its own, while simultaneously minimizing the Red Dragon’s dollar-based exposure.
In the last six months, for example, China has signed at least $95 billion in swap agreements, under which it can trade directly with countries for payment in yuan. The countries that sign these deals are getting huge discounts from China in exchange for their participation – and for buying goods from China. And the deals enable China to do an end run around the entire dollar-based currency trading system.

When it comes to this long-term plan to boost the yuan’s importance, China is waging a campaign on multiple fronts. This past spring, for instance, China organized a meeting in Moscow – attended by representatives from Brazil, India and Russia – where the main goal was to supplant the U.S. dollar as the world’s main reserve currency, replacing it with a yuan-led market basket of currencies, one that is simply backed by China’s renminbi, or perhaps even one based on the International Monetary Fund’s so-called Special Drawing Right (SDR).

Created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system, the SDR was redefined in 1973 as a basket of currencies. Today, the SDR consists of the euro, Japanese yen, pound sterling, and U.S. dollar.

My guess is that this gathering in Moscow was merely the first of many such meetings that we’ll see take place around the world in the years to come. Expect the list of attendees to grow, as well.

Given all that we now know, the real question becomes: What happens if China succeeds and the yuan displaces the greenback as the world’s top transactional currency?

The list of potential implications is very long, and includes several scenarios that are almost apocalyptic. But most of the outcomes raise as many questions as they answer.

Let’s consider the Top Five:

1. Global Gloom Leads to U.S. Doom: The U.S. dollar goes into freefall for the simple reason that if no country has to hold dollars any longer, they won’t. Instead – thanks to the ragged state of the U.S. government’s finances – many countries will dump greenbacks fast as they can, which will only put additional pressure on an already-strained U.S. financial system, which in turn will further damage our economy.
2. Inflation Inflates: Inflation will strike here with a vengeance, as anything bought, sold or priced in dollars will instantly rise in price to offset this fall.
3. Repatriation Risk: With the dollar serving as the world’s de facto currency, U.S. companies bear very little exchange rate risk when the time comes to repatriate assets or make currency-related adjustments. That would change overnight and prices throughout the value chains would rise sharply to compensate.
4. Money Costs More: The cost of money itself would rise. If the dollar falls, not only will there be massive selling pressure against it, but the cost of borrowing it will rise dramatically as lenders raise rates to cope with the increased risk of dollar-based transactions.
5. Death By Debt: And finally, if there is another reserve currency, other countries will no longer have to buy our debt, and you can guess where that will leave us – especially given the fact that we’ve taken on trillions in new debt to help finance our way out of our current mess.

My best guess is that we won’t see any one of these things in isolation, but will instead experience a blending of several or all of them. To the extent that China continues to absorb our inflationary influences, buy our debt in measured doses and maintain its reserves, we’ll probably have a measured decline in the value of the dollar – but not the catastrophic fall many in the doom, gloom and boom crowd are predicting. At the same time, I also see the IMF change course in the next few years to reflect China’s increasingly substantial influence and monetary power.

On the individual investor level, this clearly provides a new set of influences that most investors have yet to grasp. Most will perceive what I have said as a threat, but I believe the correct way to view this is that there will be a whole new set of opportunities coming our way.

Some of those opportunities will be obvious – like the need to invest in currencies and commodities that are of interest to China. Others, like direct investments in China’s yuan, will require special insight, a good investment guide, or a leap of faith.

Further reading: If you’ve not yet read Q Wealth’s five part course on offshore banking, asset protection and international wealth creation, check it out now. It’s free. If you are already a member of Q Wealth then you will have access to a wealth of material and information on how you can take full advantage of opportunities presented by the global crisis.

The bottom line – and the most important thing to remember – is this: No matter how this plays out, there will always be an upside for investors who are willing to seek it out.

“It is very important to gain and have a basic understanding of the true nature of money. One cannot protect what they do not understand…”

An Apology is due to you, our valued readers. We’ve been very quiet here on the offshore banking and asset protection blog lately, and we even sent out our free offshore email newsletter Q Bytes a day late last week! We normally try to send out Q Bytes over the weekend so people have time to read it at leisure. Frankly, we are getting more work than we can cope with at the moment. We are a small company and we give our clients individual attention, referring our clients to the best offshore banks and asset protection specialists – but this is a very time-consuming task.

Governments are sending more and more business our way, as more people like you are beginning to understand how they have been scammed in a big way for years. Things are pretty bad now, but they could get much worse. There’s a lot of crazy stuff going on behind the scenes right now, for sure. We want to educate people not just to increase our own business, but because we like helping. Our service is for free + thinking + individuals. If we can help people protect their assets, use the offshore banking system to their advantage, and build and create real wealth offshore, then we are doing something very valuable. Whether you come on board with us, or just follow the mainstream media hype, is very much your decision.

Our contacts are the most valuable part of our business. In the last couple of weeks I’ve been in five different countries, building up, reinforcing and doing ongoing due diligence on those contacts. We search out the best alternative investment, wealth creation and offshore wealth building opportunities for our readers. It is a time-consuming and expensive task… that you can get the full benefit of with our membership costing just $87 per year. So if you are not yet a member, please do sign up now. We will have to increase our prices soon, but you can lock in a lifetime of savings – because we guarantee that if you join now, the rate will stay the same in future years.

One of these contacts is Linda Dixon, the Canadian accountant and entrepreneur who has been writing for Q Wealth for more than ten years. Linda decided a few years ago that the time was right to get into the gold mining business in Peru. Linda’s slogan is “mining wealth responsibly” – her business plan being very different to the big miners. Linda takes care that her mining operations are both ecologically and socially sustainable, by giving back to the communities in Peru. Perhaps most importantly, she doesn’t sell any gold to the cartel, preferring instead to sell direct to investors like me and you.

“Why did has gold retained and increased in value during such a turbulent time?” writes Linda in an article on her gold mining business for the next issue of Q Wealth Report. “Because people know gold is a safe haven, a protector of wealth. Always the horizon sets on the fiat currency and gold returns. The true measure of wealth. The long standing protection of wealth.”

Gold is the money of Monarchs…
Silver is the money of gentlemen…
Barter is the money of peasants…
Debt is the money of slaves…

See for yourself. There are many documentaries now addressing this fact. Best place to have a look is on www.youtube.com Go and have a search for “fiat money”

One “mainstream” clip on YouTube is “The US Dollar, Fiat Currency or Fake Money?” Look at this one and look at others that pop up as related. It is very important to gain and have a basic understanding of the true nature money. One cannot protect what they do not understand….

You see, the currency that is known as the US Dollar is actually not owned by the US government. It is owned by the Federal Reserve Bank, which is neither federal nor a reserve. It is privately owned company that is legally able to print money out of thin air, literally. Hence “fiat” – a Latin word literally meaning “by order.”

The great wealth in America was built with private money being channeled into private ventures. Then the banks came along and began to put in place the system we now call the Federal Reserve and the fiat money system.

At first the people knew not to trust the banks and the first few attempts at fiat currency failed. People saw it for what it was… not real. People said no to fiat and yes to their gold and silver. However, bit by bit it changed. Then the powers that be removed the gold standard support from the USD. Since then, our so-called money has lost value, has devalued year after year after year.

How is buying gold part of the solution to protecting your assets and your purchasing power from the gradual collapse of fiat money?

Rather than supporting another multinational cartel, which in many ways contributed to the financial meltdown, Linda recommends you buy gold direct from the private producer. This may sound complicated, but it isn’t. How would you like it if the gold you were buying was processed in an environmentally positive and conscious manner? And, how would you like it if the gold you buy helps local communities?

The above is a brief taste of what you will find in an article by Linda Dixon in an upcoming edition of The Q Wealth Report, our flagship quarterly newsletter reserved for paid-up members only. In the meantime you’ll find more information on Linda’s company (along with several other, completely different, gold options) in The Gold Report – How to Buy and Hide Gold Bullion Offshore. It’s available free for instant download in our Members’ Area. If you’re a member, have you read The Gold Report yet? If you’re not a member, what are you waiting for? Sign up right now.

More coming soon!

Regards from your friends offshore.

“We are moving rapidly to a corporatist/fascist model” says Vera Verba for The Q Wealth Report

Things have begun declining rapidly in the US!

Obama’s health care takeover has a lot of normal Americans very angry. I now see and hear angry comments about this plan from non-political types at stores, on the street, etc. But, once these people show up at a meeting and complain, the elites slander them as carrying swastikas (Pelosi), being “funded by billionaires,” and having hidden racism and anger because there is now a black President.

These political elites evidently can’t handle dissent, and so, whoever opposes them is not only incorrect, they must be evil. Hence, we see things like this clip from the vile MSNBC:

We are moving rapidly to a corporatist/fascist model. Not only do we hear an abundance of “those who disagree with us are evil” comments, but the large institutions are lining up with Obama – even groups like the pharma lobby and AARP, whom you would expect to oppose such a system; one that controls pharma companies and will withhold treatment from old folks.

You may now expect the elites to get serious about undermining Talk Radio in the US.

The financial situation (currently in a Bailout Bubble) appears ready to fall apart again, and what happens this time is anyone’s guess.

In Production Versus Plunder, I was forced to conclude (against my initial inclinations) that Western Civilization is doomed. I said that there was a chance to avoid mass systemic collapse, but that it would be difficult. The hard thing (which I did not try to do in the book) is to predict when this happens. This week, it has begun to look more like years rather than decades. Was this just one bad week? I dunno.

So, it’s getting scary. (And there is an overflow of bad news from the EU as well.) I don’t have any specific predictions to throw at you, but the past week has not made me more optimistic.

Further reading: The writer is a member of the Q Wealth Panel of Experts as well as being author and publisher of many interesting books. If you are interested in more predictions about the Doom of Western Civilization, along with practical solutions to prosper from it, you might enjoy Dr Richard Cawte’s piece How to Prosper from the Coming Shift in Power that makes up the last part of our free five part course covering Offshore Banking, Asset Protection and Wealth Creation matters. You can obtain the free course by entering your e-mail address in the signup box above, or at this link: The Secrets of the Super Rich

by Peter Macfarlane, Joint Editor

Most continental Europeans like to take an extended vacation in August. But for those of us in the offshore banking and asset protection business, that just hasn’t been possible this year. I’ve also been relatively quiet in terms of my blogs recently, but it’s not because I’ve been on holiday. Quite the opposite. I’ve been beavering a way at full inboxes and stacks of paperwork from clients. In fact, business this August has been busier than most busy months in other years. It seems people are finally getting the message. Your assets are safer offshore! This in spite of a huge publicity campaign suggesting the opposite and backed by all the media resources the government could muster.

One of the main focuses has been the war of words this summer between Switzerland and the United States. But what practicaln implications does this have for those who already have Swiss bank accounts, or for those who are considering opening a Swiss account for the first time? That is what I will examine in this article.

Last week we heard the news from Swiss private banking giant UBS that they had finally reached agreement with the US IRS. Of course, nobody seriously expected a banking, watches and chocolate trade war – an agreement had to be made after appropriate posturing for a while on both sides. The terms of the agreement are still unclear – probably as part of a face-saving exercise for the IRS. My guess is they really didn’t get much actual data on account holders. Maybe a few thousand blatant tax evaders who had been stupid and lazy enough to evade taxes by holding assets in their personal names in undeclared accounts were turned over. If these people had been following our advice from even ten years ago they wouldn’t have had a problem!

However, the IRS got exactly what they set out to get in the first place. This case wasn’t really about information at all. It was about publicity.

Appropriately for those who speak with forked tongues, the IRS sent out a two-pronged warning message: first, to the US public and the world at large, that ‘Big Brother’ doesn’t approve of offshore banking. Thousands of American citizens with accounts at UBS suffered a lot of sleepless nights, and perhaps quite a few have decided to ‘turn themselves’ in anyway via the current tax amnesty arrangements even though their information never had been revealed and never would be. That is why it is so important, if you want to go offshore, to make sure you have access to the right information (shameless plug for our services here!) Those Americans who still believe and trust their own government – a fast shrinking minority – might be dissuaded from opening further offshore accounts.

The other prong of the IRS war of words was a message to Swiss banks, and to a lesser extent offshore banks in general. Banks across Switzerland and elsewhere have been busy closing the accounts of US citizens, based on ‘policy decisions.’ This again, of course, was part of the IRS’ plan all along. Other banks and governments have been taking note too: for example I’ve been hearing reports from Singapore and Hong Kong of banks closing offshore accounts belonging to Australian citizens, as the Australian government is showing of every sign of stepping up the attacks… probably emboldened by the success of the IRS publicity machine.

UBS was taught a lesson. An interesting article in this week’s Economist entitled Offshore Private Banking: Bourne to Survive, “UBS has been haemorrhaging funds, with an outflow of SFr30 billion ($28 billion) so far this year. But the country’s next four biggest listed banks, Credit Suisse among them, have had private-bank inflows of SFr31 billion.” A point of the Economist article is that people have abandoned the bank (UBS) but not the country or the concept.

Another of the Economist’s points is that most people are not actually in Swiss banks for tax reasons. I’ve long written that tax stopped being the major factor in driving people offshore years ago. Sure, people don’t like to hand over half of the fruits of their labour to the state. I can understand that and I’m sure you can too. But in the bigger picture, it is the distrust of big government that is driving people to protect their wealth offshore.

Tax, just like say electricity or salaries, is an expense people will pay if the environment for doing business is right. It would be a stupid person who would lose 100% of something just to save 50% of it. But what governments don’t get is that they have to make the whole business environment attractive. And the way the government should do this? Just keep their noses out of people’s private business and lives!

As more and more business can be done from anywhere on the planet, why would people stay in a hostile business environment? It’s not just money that economies like the USA, UK and Australia are haemorrhaging at the moment. It’s the smart people like you and me who follow the money.

These days as the Economist says, banking clients are  “mainly in Switzerland for its political stability and well-run banks.” (Since early 2007, 135 banks have “imploded” in the USA, but not one in Switzerland) Nothing to do with taxes. They are trying to escape an unhealthy business environment with factors like inflation, devaluation, bank collapses, civil asset forfeitures and the like.

Why oh why then, and this pains me… would people move their assets into the four largest banks? I’m on record as saying Credit Suisse will likely be the next target. It may be this year, or next year, I don’t know. But Credit Suisse already agreed, for example, to some information exchange with the French government. If you are a new reader here, I invite you to explore this blog and the related articles and you’ll find some of my advice on alternatives to UBS for Swiss private banking. For example my articles on the Best and Safest Offshore Banks and Countries and Alternatives to Swiss Banks for Wealth Management.

The bottom line, however, is that there are better alternatives than big Swiss banks like UBS and Credit Suisse for your offshore accounts – whether you are looking for an active business account, an online trading account, or a more hands-off style traditional Swiss wealth management account. If you would like to know more, that is what we are here for. Our membership costs just $87 per year and entitles you to immediate access to a number of informative downloads – for example our recently updated Practical Offshore Banking Guide. If you are not yet a member, go ahead and sign up right now. Or if you are not yet ready to make that commitment,  sign up for our Free Five Part Course on Offshore Banking and Asset Protection first of all to get a feel for our material…

Anyway… I’ve gone on long enough, but for sure we will be hearing more about this topic. A lot more! I’m just on the way over to Panama City, Panama now and will shortly be reporting more from there on some interesting developments in the way the Panamanian government and banking system is handling the heavy-handed OECD and G20 threats. If you would like to receive this update on the offshore scene in Panama, sign up for our special Free Panama Offshore Report and I’ll be sure to get it to you. There’s no charge – all you need to give us is your e-mail address!