One of our familiar themes here at Q Wealth is the decline and devaluation of the dollar – and how you can not just protect yourself against it, but actually turn it to your profit!

Devaluation was brought one step further last week by the latest round of currency controls on the US dollar introduced in the new HIRE Act.

Some people have written that these restrictions do not in fact amount to back door currency controls. We agree to an extent – they are not traditional exchange controls like we still see in some countries like South Africa or Brazil. But they are very much currency controls nonetheless. They amount to just one part of the stealth devaluation we have frequently talked about (see related links below).

Recently, legendary guru Marc Faber wrote that printing money represents a silent way for governments to default on their debt. When a government openly defaults on its debt, says Farber, the workout process is reasonably equitable.  But if a government devalues silently by printing, the burden of the default isn’t shared equally. Those who hold more of the currency being devalued, in this case US dollars, are disproportionately hit. Inevitably those hit hardest are not big sophisticated international investors, who have hedged their risk, but small investors who have simply never thought of hedging against currency risk.  That means, for example, average Americans who have savings in their retirement accounts.

Very few Americans have had the foresight to move their IRA assets out of dollars. Yet it’s something perfectly legal and quite easy to do… at the moment! The restrictions in the HIRE Act will make this much more difficult because they simply make it very difficult to transfer money abroad.

Yes, there are exemptions. The HIRE Act does not in theory impose any tax on an American who transfers his or her own money, to a foreign account in his or her name.

But, there is a big but, banks around the world will be running scared of the regulations. First of all, foreign banks won’t want the US account holders in the first place. Secondly, US banks will be desperately trying to cover their liability by checking the exact purpose of the payment, to make sure it doesn’t come within the scope of the legislation. The burden of proof will naturally pass to the account holder who is trying to transfer money, to demonstrate that the transaction is not subject to the new withholding tax. If the sending bank in the USA has any doubt at all about the purpose of the transaction, they will be forced to deduct 30% tax.

Net result? It is going to be darned difficult for anyone to transfer money out of the USA. If that isn’t a form of currency control, then I don’t know what is!

Faber is predicting that US Treasuries will collapse, sending yields up to a range of 10 percent  to 20 percent during the next five to 10 years, as inflation and supply explode.

Here at Q Wealth our intention is to keep you informed and provide actionable things you can do to protect your savings and your future. Right now, you can still transfer assets legally and openly out of the USA into offshore structures, offshore investments, and offshore banks where your assets are better protected – but for how much longer? I would give it until the end of this year, if that.

Right now, US citizens can legally acquire a second citizenship and passport, and legally avoid taxation on their worldwide income. But it is getting harder.

Where the US leads, the UK, the euro zone and Australia will follow. Subtle, hidden currency controls like this will become the norm in the developed world, particularly the OECD countries. We will continue to expose them while we can. And we will continue to provide real solutions, especially to our paying members. If you are not on our mailing list for the free weekly Q Bytes newsletter, and this matter concerns you, then sign up today for Q Bytes! And if you would like to know what you are missing if you are not a paid-up member of Q Wealth, please see Why Join Q Wealth?

Peter Macfarlane reports on Offshore Banking, Offshore Investing and Asset Protection for Q Wealth Report.

The FDIC yesterday shut down seven more banks in five US states, bringing to 37 the number of bank failures in the U.S. so far this year, on top of the 140 that collapsed in 2009. The news was particularly bad for depositors of Advanta Bank in Utah, as regulators were unable to find another bank to take it over. Therefore anyone with deposits exceeding the FDIC insurance level of $250,000 loses the excess.

These Friday afternoon bank raids have become commonplace by now. What’s interesting, however, is that regulators, quoted by AP, are now saying that “The pace of bank seizures this year is likely to accelerate in coming months, as losses mount on loans made for commercial property and development.”

It was not many months ago here in Q Bytes that we warned you about the coming US commercial property bust, which will make the residential/sub-prime crisis look tiny in comparison.

The FDIC is planning to spend about $100 billion bailing out banks over the next four years. But  get this: they will only deal in future with smaller bank failures. Legislation now in the senate proposes to set up a completely different system to cover failures of big, complex financial institutions. Besides, for reasons we’ve written about frequently including in the latest Q Wealth Report, we believe $100 billion will be nowhere near enough. The government printing presses will soon be rolling again, leading to further devaluations.

Our intention here at Q Wealth is not to scare you. In fact, we have always said that with careful planning and a little thought, there are numerous ways you can profit from the crisis… turn the crisis to your advantage.

First of all, our advice is to reduce dollar exposure. If you have savings, the first thing you need is a simple multi-currency bank account that allows you to switch currencies online. That way you maintain flexibility and privacy. Very few if any US banks offer multi currency accounts, so you’ll probably need to go to an offshore bank. While we do believe FDIC insurance will protect the dollar amounts in US bank accounts, what is the value of having the same amount of dollars in five years, if you can only buy half as much with those dollars?

Fortunately, the best offshore banks are a much safer place to stash your money. If your know how to choose an offshore bank carefully, you can avoid exposure to risky business practices which are bringing down so many US banks. And whilst a million will get you better service in a different class of bank, offshore banking is not just for millionaires. There are good offshore banks out there where you can test the waters by opening foreign currency accounts with $500 or less. Another myth, also untrue, is that US citizens cannot open offshore accounts. Full details of some of these recommended banks, including  our list of offshore banks and contact information, can be found in our free Practical Offshore Banking Guide 2010 available to members.

The last laugh, however, is with the real estate speculators – whom many blame for causing the crisis. No matter what happens to financial markets, people will always need a place to live. When there is ‘blood in the streets’ there are bargains around. Our Q Wealth Expert and Real Estate Guru Thomas Bolther has recently said he believes it’s time to BUY US real estate. Real estate investors who have followed Thomas’s advice from past Q Wealth events and stayed liquid are now set to make a killing. Thomas will be writing more about this on his own blog over coming weeks, at bolther.com He’s also confirmed as a scheduled speaker at our event in Ireland in September (see below)

Following is an edited version of our Press Release announcing the new 2010 edition of our ever popular Practical Offshore Banking Guide which is now available….

While the days of James Bond-style numbered Swiss bank accounts may be over, the world of discreet private banking and offshore wealth management is growing apace as financial uncertainty continues to make people seek safe havens.

Despite highly-publicized government crackdowns on tax evasion around the world during the past year, spearheaded by the G20-OECD “anti tax haven” blacklisting and the US attack on UPS after defection of Bradley Birkenfeld,  more billions are headed for offshore banks and tax havens than ever before – with good reason, and it’s all completely legal. That is the conclusion of the new Practical Offshore Banking Guide 2010, advising high net worth individuals and entrepreneurs on offshore banking and asset protection, that is released today. In it you will find information on nine of the best offshore banks.

In the 2010 update of his annual Q Wealth Practical Offshore Banking Guide, offshore banking expert Peter Macfarlane points out that tax evasion is far from the only factor encouraging smart individuals to go offshore. “There are more good reasons than ever to go offshore. Taxes are certainly a factor, but many people these days are motivated by deeper feelings – they just don’t trust the system any more,” said Macfarlane today. “Basically, they are demanding full control of their own money. The human right to privacy is definitely part of the equation. Why should an individual´s finances be an open book?”

“Bank failures and bailouts are on everybody’s minds, and rational individuals are looking to open accounts at conservative and respectable banks, in countries that respect the rule of law and private property, that do not have this toxic exposure. Clients seek to protect their assets not just against the perceived injustice of many lawsuits, but more fundamentally against a decline in the value of the dollar and other major currencies like the euro and pound. Expecting the imminent devaluation or collapse of the dollar, they are diversifying into better-backed currencies, and of course into precious metals like gold and silver – something made easy by offshore multi-currency bank accounts,” comments Macfarlane, adding: “We’ve all heard about the risks of keeping eggs in the same basket.”

The Practical Offshore Guide 2010 includes special sections for US and European Union citizens, explains information exchange in detail, and proffers practical advice on choosing, opening and operating an offshore bank account.

The Practical Offshore Banking Guide 2010 is published FREE for readers of The Q Wealth Report, a privately-published newsletter covering to offshore banking, asset protection and wealth management. The Q Wealth Report was established in England in 1996 and has a global readership. Englishman Peter Macfarlane, 38, is joint editor, besides running his own professional practice in Panama City, Panama and being a regular speaker at offshore events.  Further bio on Peter Macfarlane is here. The free Secrets of the Super Rich course edited by Peter Macfarlane and others is available here.

The important message below was sent to Q Bytes readers a week ago, but due to its extreme relevance and timing we are reposting it here on the blog. If you are not yet a Q Bytes subscriber, remember it is absolutely free, and you can be the first to get info like this in the future. What are you waiting for? Sign up here today for your free Q Bytes subscription.

Q BYTES – 21 November 2009 – WHY THE GOLD MARKET COULD BE A BIG SCAM!

In this newsletter:

… WHY THE GOLD MARKET COULD BE A BIG SCAM!

… EVIDENCE THAT THE GOLD MARKET OPERATES ON A FRACTIONAL RESERVE BASIS

… CUSTOMERS HOLDING UNALLOCATED GOLD ARE NOTHING MORE THAN UNSECURED CREDITORS

… AN EASY WAY TO BUY AND STORE REAL GOLD BULLION

WHY THE GOLD MARKET COULD BE A BIG SCAM!

Fascinating stuff this week, with another bull market in gold. As I write, gold is hovering around $1,150. (update – a week later – about $1,180) People are certainly freaked out by the declining dollar, as the US government try harder and harder to support the bankrupt greenback.

But further evidence has recently emerged of how the whole gold market is operating on a fractional reserve basis. We’ve long said (and advised in our Gold Report) that if you want gold as a safe haven hedge, you must buy real physical gold and not ETFs, certificates or anything else that is not literally solid gold.

Our “Swiss Mountain Guide” friend Frank Suess recently brought a new report to our attention, and now seems like an excellent time for me to bring this to YOUR attention…

EVIDENCE THAT THE GOLD MARKET OPERATES ON A FRACTIONAL RESERVE BASIS

“Alternative I: on average there is more than one ownership claim on each gold bar conforming to London Good Delivery. Essentially, the (gold) market operates on a fractional reserve basis. If it is true, the next phase in the gold bull market will be a religious experience for anyone unfortunate enough to be short of gold.”

Paul Mylchreest, ‘Thunder Road Report´, October 15th 2009

by Frank Suess, BFI Group, Switzerland

Gold has recently started behaving bullish beyond our short-term expectations. At BFI, we have been watching this phenomenon with interest. Obviously, there are the fundamental reasons that we and others have discussed at length: The medium- to long-term trend of gold certainly has much to do with ‘Easy Money´ liquidity and the related fears of future inflation.

However, inflation is currently on few peoples´ minds and, in my opinion, it is the lesser of two imminent evils. My primary concern is for deflation, or a Deflationary Phase II, if you will. But the reasons for gold´s current strength are possibly a result of more technical reasons. In his Thunder Road Report of October 15th, analyst Paul Mylchreest asks a simple but very important question: how many ‘London Good Delivery´ gold bars are there?

Just like us, Mr. Mylchreest believes that there are fundamental reasons for the surge in gold, amongst them growing fears by individual, institutional and sovereign investors about the real value of fiat currencies, most notably the US dollar. The supply of gold is finite; the supply of dollars is infinite. Certainly, US authorities are printing dollars as if they were going out of style. But Mr. Mylchreest has also researched two more technical scenarios worth consideration:

Alternative 1:

“On average there is more than one ownership claim on each gold bar conforming to London Good Delivery (LGD) standard on the ´pool´ of gold which acts as liquidity for the massive OTC gold trade based in London. Essentially, the market operates on a fractional reserve basis, but if a sufficient number of market participants become concerned about this and there is a stampede to take delivery of physical bullion, there is a risk of market failure. Such a process could be delayed by central banks lending gold to the market, although this would likely be obvious by a spike in gold lease rates, or by a much higher gold price in order to encourage holders to sell bullion. In this scenario, the gold price could soar at any time and the gold market, which is subject to little regulation, is basically an accident waiting to happen;

Or:

Alternative 2:

“There is far more gold bullion held in private hands than is acknowledged by current industry estimates. It is the large amount of additional gold on top of known gold stocks which provides sufficient liquidity to support the high volumes traded through London. The most likely source for this gold dates back to the Japanese conquest of Asia from 1894-1945 when Japan is alleged to have looted the gold and valuables of 12 nations – it is best known as the story of Yamashita´s Gold. If true, my analysis shows that particularly heavy volumes of this gold may have been laundered into the London market during 1986-90 and the mid/late 1990s. In this scenario, the continued evolution of the gold bull market could be more protracted, if supplies of this gold continue to enter the market periodically.”

At the following link, we have uploaded the full Thunder Road Report of October 15th, 2009, titled “Gold market – accident waiting to happen or crime scene? Don´t shoot the messenger”. I recommend you take the time to study this excellent report.

I recently had a group of clients ask me why I was putting so much emphasis on holding precious metals, and why I was so adamant about holding at least a substantial part of it in physically allocated format and in a safe jurisdiction outside of your country. Well, I hope that Paul Mylchreest´s report will give those of you who have the same question a solid answer.

CUSTOMERS HOLDING UNALLOCATED GOLD ARE NOTHING MORE THAN UNSECURED CREDITORS

Here is how he puts it:

• “Customers holding unallocated gold are nothing more than unsecured creditors from the bank´s perspective – they have even less protection than a holder of a typical current bank account. If the bank became insolvent, the holder of unallocated gold could lose some or all of their money – this is perverse when one reason for holding gold is protection from financial crises;

• “The unallocated gold is nothing more than a financial liability for the bank (not a liability to be paid in bullion unless demanded by the customer). The gold, if it´s there, is the property of the bank (part of its working capital) which can do what it wishes with it, e.g. keep it in the vault, lend/swap it, or even sell it – while retaining a financial liability to the holder of the unallocated account; and

• “From the bank´s perspective, the gold can be used as an interest free loan, since the banks can sell, lend or structure derivative trades with the gold. One could argue that there is an incentive, therefore, for banks to operate unallocated gold accounts on a FRACTIONAL RESERVE basis in the belief that it is highly unlikely that most holders of unallocated gold will suddenly demand either physical delivery or conversion to allocated gold accounts.”

AN EASY WAY TO BUY AND HOLD PHYSICAL GOLD IN SWITZERLAND OR AUSTRIA

For more guidance on WHY and HOW you can privately and safely keep your PHYSICAL precious metals, you need to talk to Frank Suess. Frank’s firm BFI Wealth Management has a solution. Under strict Swiss privacy laws, his firm can sell you actual physical bullion that can either be stored for you in secure, insured Swiss vaults, or you can have it physically shipped to you almost anywhere in the world.

For more details of the program, check this link…

Kind regards, until next week,

Peter Macfarlane

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 Peter Macfarlane for The Q Wealth Report

I’m pretty attuned to financial and economic news, being a writer on offshore banking and asset protection matters. I’m well aware of the declining dollar. So I’m probably not as easy as most people to shock. But something showed up in my inbox today that really made my jaw drop. Today I received a guest article from Olivier Garret of The Casey Report, that he sent over to be posted on my offshore banking blog. It showed some startling statistics, based on a new report out from the National Bureau of Economic Research.

The 2008 Bailout has cost the US government so far $8.5 trillion. At the rate we are going, says Olivier, this will be in double digits – double digits in trillions that is – before the end of this year.

Of course, figures like this are way beyond most people’s comprehension… which is no doubt the reason the US government got away with this in the first place. So, it might be interesting to put this in context. That is where my jaw really dropped, when I read the said article.

If we add up in today’s inflation adjusted dollars, the total cumulative cost of all of the major wars and government initiatives since the American Revolution, they come to $8.1 billion. That’s right, less than the total cost of this year’s bailout.

We are talking here about (in descending order of cost):

• The Second World War
• The all-time budget of NASA
• The Vietnam War
• The Iraq War
• The New Deal
• The Korean War
• The Korean War
• The First World War
• The Savings and Loan Crisis
• Afghanistan/GWT
• The Marshall Plan
• The Gulf War
• The US Civil War
• The American Revolution
• The War of 1812
• The Louisiana Purchase

Yes that’s right folks, you add together the cost of everything on the above list and the total is still less than the money the US government has spent on this year’s bailout.

Wow, is all I can say. I knew things were pretty bad, but doesn’t that just put it in context? (As an aside, it’s interesting too to see how much the Iraq war is costing in comparison to other wars) If you want to read this all in more depth, take a look at the original article at the link above.

If this doesn’t make you feel any too comfortable about your investments in US dollars, I’m not surprised. If this doesn’t demonstrate we are in for very hard times ahead, then what does? The time for preparation is now. It’s time to build security and wealth offshore for your family, and for many the time has come to ditch the US, the UK and other economies that are so dependent on the current financial system… instead, it’s time to do something new, something that really creates value, something that will not just protect you but will make you prosper in the coming years, living the international lifestyle of your dreams.

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