by Peter Macfarlane for The Q Wealth Report

Singapore is “a convenient destination to protect and add value to your international wealth” according to the website of one of the 205 banks operating in Singapore today. I couldn’t have put it better myself!

Singapore has developed in recent years into a sophisticated private banking and wealth management base for Asia. But besides targeting their traditional but fast growing market of wealthy entrepreneurs in Asia, the best offshore banks in Singapore today are also developing products and services tailored for North Americans, Europeans and Australians, including multi currency accounts.

If this sounds like you, read on to find out about some of the advantages and disadvantages of opening an offshore bank account in Singapore, and learn how to open an offshore bank account as a non-resident. Is Singapore the best offshore banking country for the new decade?

Typical investors from this latter group are looking for first-world banking services, delivered over the internet in English, in a country that is outside the zone of influence of the United States and the European Union.

One of the world’s most prosperous countries, Singapore today boasts a prominent financial centre and highly developed economy. Its flexible regulatory framework, independent judiciary and practical English-inspired legal system have become the foundations of the country’s success.

In common with most offshore financial centres, interest earned by individuals on bank deposits and foreign sourced income – including foreign sourced dividends received on non-Singaporeans securities – is exempt from Singapore taxes. Singapore also has no capital gains tax nor estate duty on bank deposits and investments.

Accounts can freely be maintained in all major currencies. These multi currency accounts provide an excellent hedge for those of us who foresee major devaluations of currencies like the dollar and the euro in the months and years ahead.

Accounts may also be opened in the name of foreign entities like corporations, trusts and LLCs, achieving even greater privacy and asset protection benefits, and sometimes legally sidestepping any requirement to report assets as personal holdings.

All these benefits are delivered in a strong bank secrecy regime, helping account holders to protect their investments from prying eyes inside or outside the country. Banking secrecy in Singapore is not just laid down by law, but is part of the national business culture. Indeed, tax authorities in Singapore are specifically blocked from having any access to individual bank accounts.

As in Asia in general, a lot of business in Singapore has traditionally been carried out in cash. This is epitomised by the $10,000 bill, the largest bank note in the world: at current exchange rates (January 2010) one of these bills is worth more than seven thousand US dollars. These days, however, as restrictions on cash are becoming tighter, sophisticated internet banking is becoming the norm.

So, if you are not resident in Singapore how can you access these banking services? Everything starts with opening a basic current, savings or checking account – the basis of your banking relationship.

One of the disadvantages of banking in Singapore is that you will need to go there to open an account. Banking regulations do not permit the opening of accounts by mail, unless the client is already known to the bank. The only possible exception to this is opening an account at one of the many banks in Singapore that send officers to visit their wealthier clients in their overseas homes, or have associated offices in other countries. HSBC clients, for example, may be able to open accounts at HSBC in Singapore via their local offices. The above process, however, is not advisable if banking secrecy is important to you – since it leaves permanent records of your accounts accessible in other jurisdictions. In any case I always recommend visiting at least once so you can get to know your banker personally.

Apart from that, opening your account should be relatively straightforward. There are few complications. If you choose one of the commercial banks such as DBS Bank or United Overseas Bank, a few hundred dollars will be enough to open an account. If you want a higher level of personal service and are prepared to make a higher deposit, let’s say over a hundred thousand dollars or equivalent (bank policies vary widely), contact one of the more discreet private banking operations. I recommend you go for one of the lower profile ones, since they tend to offer the best privacy protection.

A full list of banks operating in Singapore is available on Wikipedia, and you can contact them directly. It is always easier, however, if you have an introduction from a regulated professional who is known to the bank, such as a lawyer, accountant or company formation agent. My firm can help with that, for example, if you are a Q Wealth member. Membership costs just $87 so won’t break the bank!

In terms of documentation needed to open an offshore account, you will be expected to provide proof of who you are (a copy of your passport), where you live (such as a utility bill) and most importantly of all, proof that the funds come from a legitimate source. For example, if the funds you are depositing were obtained from a real estate sale or from an inheritance, you would show the relevant legal documents to prove this. Finally, it is advisable to take a letter of reference from your bankers at home, introducing you as a responsible account holder. This bank reference may be addressed ‘to whom it may concern.’

Note: Peter Macfarlane is editor of the Practical Offshore Banking Guide, an annually updated guide available free to readers of The Q Wealth Report. If you haven’t got yours yet, sign up today to access this information.

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.

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!

“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…

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.

“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

If you’ve been studying the offshore and asset protection arena for a little while, you might well have heard a lot of good things about the strong privacy benefits of the Panamanian Private Interest Foundation. As an asset protection and estate planning vehicle, it’s second to none.

Most of my consulting clients who choose this vehicle are seeking to create a legal structure that will reduce tax liabilities, protect their hard-earned assets from lawsuits or claims, and make sure that on death, their estates pass to their chosen beneficiaries without unnecessary legal disputes or fees.

The Panama foundation is based on the legendary Liechtenstein Foundation or Anstalt, the preferred wealth management choice of generations of continental Europeans. But it is not so well known or understood in the English speaking world. And these days, Panama offers better offshore secrecy and confidentiality than Liechtenstein.

You might well have Googled a few websites and read articles about Panama Foundations in rather confusing terms. Such articles are often written up either by internet marketers who have little idea about law, or by Panamanian lawyers who have little idea about Anglo-American common law and whose first language is not English.

But few people understand what kind of legal animal a Panama foundation really is. That’s probably a very good thing for those of us using them! The difficulty for many clients is of course deciding upon the best course of action or structure to use. But I am about to let you in on the secret… my new free report sets out to demystify the Panama Foundation, explain the concept in plain English, and explain the differences between a Foundation and a Trust of the Anglo-American variety.

Should you set up a Corporation… or a Foundation? Or both? You will find the answers in my latest report specifically about Foundations. It’s called “Panama Foundations: Use and Benefits Manual” and subtitled ‘Panama Foundations and Trusts Demystified.’

Once again, this report is FREE OF CHARGE. I will explain below how you can obtain your copy.

But what exactly is a Foundation? A Panama Foundation combines some of the best parts of a trust, and the best parts of an IBC or Offshore Company into one legal entity. A Foundation is typically set up to passively hold assets like bank accounts, stocks and shares, and real estate.

The key thing is that, unlike corporations, Foundations do not have owners. They have beneficiaries instead (for example, your heirs). The interesting thing about this is that in most countries it legally sidesteps reporting requirements.

Even in the USA, there are ways you can structure a Panama Foundation to legally avoid IRS reporting requirements. Because US tax law doesn’t specifically recognize Foundations, it is quite flexible on this – you decide how to declare your Foundation. (This only applies to US taxpayers. Other nationalities have it much easier…)

In my report I also explain the ultimate asset protection strategy… by keeping the assets in another country on another continent, you are protected not just by strict Panamanian secrecy and asset protection laws, but by something even stronger… what somebody doesn’t know, they can’t tell. You can make sure that your Foundation are structured so there is absolutely no record held in Panama of what the assets are and where they are located.

This new report, free of charge to registered Q Wealth members covers five topics. You will learn:

• What is a Panama Foundation. What is the difference between a trust and a Foundation, and why is a Foundation often more secure and private than a trust?

• Panama Foundations for Estate and Inheritance Planning

• Panama Foundations as an Asset Protection tool

• Banking for Panama Foundations

• Taxation of Panama Foundations

As always, I’ve kept things simple. This report is written in plain English, designed to explain legal concepts in simple terms. It is not an in-depth legal textbook…. But it has been reviewed by both Panamanian and British lawyers.

This report on Panama Foundations could be yours free in the next five minutes or so. All I ask in return is that, if you’ve not already done so, you sign up as a full member of The Q Wealth Report. You will be granted instant access to the Members’ Only section where you will be able to download this report in pdf format. Of course, if you’re already a QWR member you’re ahead of the game – just log in as usual and you can download it right now.

Of course, this brand new report is only one of the many benefits you will receive as a Q Wealth member. We’re not just about Panama – we’re focused on protecting and creating wealth internationally. We do all the hard work, costly research and due diligence for you – to take you from the overload of the information age directly to where you need to be. As a publishing company, not an offshore services provider, we deliver impartial advice from a global perspective – not biased advice from a Central American perspective, which is what you might well find elsewhere. Need I say more?

As a member you’ll also have access, for example, to the Practical Offshore Banking Guide, the report on buying and holding Precious Metals offshore, a report on Due Diligence on High Yield Investment Programs, and much much more… including the free consultation benefit I mentioned above. You’ll also receive every quarter our flagship publication, The Q Wealth Report.

All this, for less than a good lawyer would probably charge just for talking to you and giving you a fraction of this information. $87 per year to be precise. And if you are not 100% satisfied, you can cancel your subscription at any time and request a full refund. No quibbles, no questions asked.

To sign up right now you just need a Visa, Mastercard, American Express, JCB or Discover card. (If you prefer you can also download a mail-in subscription form to pay by cheque or money order)

Sign up online right now at http://www.qwealthreport.com/signup.php

Kind regards,

Peter Macfarlane

Offshore Banking Consultant and Joint Q Wealth Editor

P.S. Don’t forget we also offer separately an absolutely free report on the Hidden Truths Behind Panama Banking and Corporations. You can obtain the Banking and Corporations report without any need to sign up even. If you haven’t got yours yet, get it at the link above.

When your government acts “above the law”, it is time for serious planning…

The following is reproduced with kind permission from Mountain Vision, the newsletter for clients of BFI Capital in Switzerland. The idea of privacy being a cornerstone of asset protection is very simple when you think about it. Long before banks even existed, people protected their assets by hiding them!

But sometimes we get so bogged down in legal details that we can’t see the wood for the trees. Legal protection is only as good as the legal system (and aren’t you trying to protect yourself against the legal systen?) This article discusses how you can achieve the goal of total privacy and confidentiality for asset protection purposes, while remaining compliant with the law in your country of residence. It discusses the use of physical precious metals such as gold bullion, and international life insurance and annuities of the type offered by BFI.

Anyone who understands anything about asset protection also understands the importance of privacy. It is primarily privacy that protects you from the intrusions of frivoluous lawsuits, greedy attorneys and other predators. Asset protection laws and structures are only the second line of defense. A good asset protection plan should aim at first avoiding exposure and visibility altogether.

What this DOES NOT mean is that you must break any laws. To the contrary, we recommend doing your offshore planning compliantly. However, in reading the newspapers, one could come to the conclusion that privacy is criminal. It is not. Governments around the world are running into fiscal problems, particularly the governments of Germany, the United Kingdom and America. Thus, they are setting off on an aggressive hunt for tax money, increasingly employing methods that are beyond legality.

When your government acts “above the law”, it is time for serious planning. In the absence of rule of law, the most fundamental prerequisite of a functioning free country is undermined. At that stage, protecting your freedom and your property within that country becomes a gamble. Privacy and property are in jeopardy and need to be protected OUTSIDE of your country.

Key principles of offshore privacy

This is the point where you enter the realm of offshore (i.e. international) wealth management and tax planning. A few principles in this context must be understood by all of our Mountaineers, no matter which jurisdiction they come from.

• The purpose of privacy is to protect the well-being and fortune of you and your family. Privacy does not necessarily require a numbered account though. It starts with your going about your affairs “quietly”, particularly in jurisdictions with a high level of litigation. It is important to keep a low profile if interested in avoiding unnecessary risk exposure.

• Privacy amongst tax authorities within a country that is fiscally bankrupt will generally not exist. Countries like those mentioned earlier have given up such privacy protection long ago. Banks, accountants, and other financial professionals have, to a large degree, become tax agents. The transparent citizen has become the norm.

• Safekeeping and investing assets offshore – in other words, outside of the borders of your country – per se is NOT illegal. What may be required though is regular reporting of those assets, depending on where and how your assets are deposited and managed abroad. Not declaring assets held overseas is what can get you into trouble.

• Making “offshore” (i.e. international) arrangements for the deposit and management of your assets does not mean that you can thereby leave the tax rules of your country of residence behind. They will generally apply elsewhere, too. Therefore, one should aim at implementing an offshore plan that achieves asset protection and privacy in compliance with the rules of one´s country of residence.

The ingredients of a solid plan

The ultimate objective of a solid international wealth management strategy should be to incorporate the benefits of overseas privacy while respecting the rules. The key elements of achieving that strategy are to implement a plan that provides for TAX DEFERMENT and NON-REPORTABILITY.

In most jurisdictions, there is no reporting required unless there is a taxable event. Thus, countries with a wealth tax, such as France or Switzerland, will require annual reporting of all assets. Most other countries, for example Germany, the UK, the United States, Spain or South Africa, do not have wealth taxes. Therefore, the employment of investment vehicles and structures that offer tax deferment will generally not be reportable.

The United States presents a bit of an exception here. Treasury Department Form 90-22.1 requires the reporting of all offshore accounts. The form was adjusted recently provoking widespread commentaries. One question that has been raised frequently was whether the new form requires the reportability of international life insurance policies and annuities. The answer, based on a legal opinion we’ve obtained from a top-notch international legal firm, is clearly NO. As long as the policy is tax-compliant, i.e. provides for compliant tax deferability, the state of non-reportability continues as in the past.

While other countries still have a number of strategies, including private placement life insurance and tailored annuities, the US is pretty much left with two strategies that offer compliant privacy and tax deferment:

1. physically stored precious metals without using a bank account
2. compliant life insurance “wrappers” and annuity policies.

Editor’s note: You can obtain a free subscription to Mountain Vision here. Don’t forget if you haven’t already done so to sign up also for our free Q Bytes newsletter from The Q Wealth Report.

After all the hype about tax havens and offshore banking secrecy, the blacklist is no more. A BBC News Report announces that the Organisation for Economic Co-operation and Development (OECD) has removed all four countries (Costa Rica, Malaysia, the Philippines and Uruguay) from its blacklist of tax havens.

“I’m pleased to say that those four jurisdictions have now made a full commitment to exchange information to the OECD standards,” said OECD chief Angel Gurria said speaking in Paris, as reported by the BBC. All four targeted countries have now agreed to adopt OECD standards.

Last week, the G20 leaders agreed in London to take sanctions against tax havens, using the OECD list as its basis. In their communique, they agreed “to take action against non-cooperative jurisdictions, including tax havens“.

It appears that they now have no-one left to take action against, an apparent public relations victory against offshore bank secrecy and the international wealth management advice industry. However, as in most matters of international co-operation and the world of offshore banking and asset protection, there is a little more to this story than meets the eye!

With all the banking secrecy jurisdictions having in theory agreed to change their laws to co-operate on international fiscal matters, why bank offshore? It might appear that there is no future for those of us who believe that we should not be treated as criminals and that wealth we have earned through our own hard work should be allowed to grow unfettered by unnecessary and intrusive government regulations.

Peter Macfarlane’s article about the OECD, G20 and Much Ado About Nothing in the Offshore Banking World explains why this whole show is really nothing more than a publicity stunt by Messrs Brown, Obama and Sarkozy, and why the advice in the Practical Offshore Banking Guide 2009 is still very much valid…

With that, we wish a very happy and peaceful weekend spent relaxing with loved ones to all our Q Wealth readers, wherever in the world they are. We too will be signing off and continuing to do business internationally to help the world’s entrepreneurs generate and create wealth.