“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.

We all know that there are investment scams out there, both offshore and onshore. Almost every week we come across a new scam (and that is not counting the electronic e-gold money games and the like that are barely even worth mentioning). That is why we offer our Q Wealth Report paid-up members a free due diligence consultation within our area of expertise which includes international and offshore investing, as well as so-called High Yield Investment Programs (HYIPs). In fact, members also benefit from a free downloadable report called “HYIP-Hype”

In recent months we have been contacted many times by members enquiring about a company known as Hatfield Oak (website: hatfield-oak.com) or Hatfield Oak International. This website belongs to a financial services company based in Panama with the motto “Your Partner for Asset and Tax Planning, Corporate Structures, Payment Solutions and Investments.”

We don’t want to keep answering the same questions over and over again. The large volume of enquiries we have received about them has led us to publish some findings in public for the benefit of our members. The information below is gleaned only from public records in Panama and the company’s own website.

Please be clear that we are NOT accusing this company of any wrongdoing. However, we draw our members’ attention to the following:

• Hatfield Oak are apparently offering services very similar to a bank, though they are at pains to point out that they are a payment processing company. Their website suggests that they are licensed to provide financial services. We consider this to be an attempt to mislead. Yes, they do have a document that appears to be a license for third party payment processing (amongst other things like business consulting and courier services.) However this is NOT a financial type license. In Panama every business must have a commercial license, and this kind of license (that Hatfield Oak has) is the same type of license you need for say a grocery store or a hairdresser. Financial entities are regulated under a completely separate licensing system. You can verify this at the website of the Panama Financial Regulator (in Spanish only).
• Hatfield Oak apparently have a New Zealand financial company as well. It’s worth pointing out that this kind of financial company is not regulated like a bank in New Zealand either. That is why it is not called a bank. Neither is it permitted to carry on banking business in New Zealand.
• The company’s domain name is registered to Domains by Proxy Inc (an associate of Godaddy) This is very unusual procedure for a company offering financial services. More to the point, is that it places the domain and the business firmly within US jurisdiction.
• Their internal law office “Hatfield Corporate Law Firm” appears to be run by nominees.
• The company do not appear to have any valid contact information.

Hatfield Oak appears to be a private company offering certain services that cannot be considered a substitute for a proper offshore structure with a bank account.

Q Wealth Report members requiring further information are welcome to contact us. If you would like to learn more about a few pitfalls of doing business in Panama, please check out our article Panama Offshore Banking and Corporations: Hidden Truths Revealed

What a bizarre world we live in. Here at the Q Wealth Report we work hard to explain the world in a way that our readers can understand. But so many things are full of truth, lies, and irony all mixed up together that they defy logical analysis. Nevertheless we are going to try…

Russia’s Pravda, formerly the official organ of the Soviet Communist party, published a blistering attack on the United States last week. That would not seem so strange, except that the post-Communist periodical accused America of “descending into Marxism.”

One of the comments, for example, was that “the population was dumbed-down through a politicized and substandard education system based on pop culture.”

How very true. It was in the pages of our newsletter last year that Dr Richard Cawte warned against the dangers of television. In the constant race to produce more and more “content” for TV and internet, the quality has gone downhill so much. I even watched the BBC World News Channel the other day and the team was clearly half asleep. Fair enough since it was 4 a.m. in London. The point being do we really need people sitting there at 4am talking when they have nothing useful to talk about?

The writer of the Pravda article, it must be said, appears to be a victim of the propoganda machine himself. As we say in England, “the pot is calling the kettle black.” No doubt the communists who founded Pravda would be shocked at how much it has been dumbed down. I just took a look at their lead headline stories such as “Money Stuffed in Bra Saves Brazilian Woman’s Life” and “Men Become Impotent Because of Women’s Bare Legs.”

Nonetheless, some of his points are interesting and relevant. I particularly liked this one:

These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?

Certainly food for thought I would say.

Our attention was drawn to the said Pravda article by our friends over at MoneyMorning, who have recently been writing a lot of good stuff about the Russian economy. For example, contributing editor Martin Hutchinson sent over the following comments for our readers about why NOT to invest in Russia…

A country that was wealthy when oil was $140 per barrel became deeply impoverished when oil prices dropped all the way down to the $30 range. Those of us who had been alarmed by Russia’s increasing geopolitical and economic assertiveness indulged in a little schadenfreude, feeling that it couldn’t happen to a nicer bunch of guys.

Now, the table has turned again. At $68.87 a barrel, the price of oil is far higher than the price assumptions on which the majority of Russia’s oilfield-investment calculations were based.

Russia has effectively seized the assets of the British oil company BP PLC (NYSE ADR: BP).  Last week BP accepted the very unpleasant Mikhail Fridman as chairman of its joint venture TNK-BP, a sign that its attempt to control the investment into which it had put the majority of the capital was ended. In the long run, the forced expropriation of foreign investors will prevent the Russian oil sector from remaining truly competitive. But in the short run, the expropriated foreigners have found so much oil there that huge revenues are assured for at least a decade, provided the oil price remains reasonably high.

In other sectors, too, the free cash for those with political connections allows deals to be done. Opel, for example, General Motors Corp.’s (OTC: GMGMQ) European subsidiary, was sold not to the Italian company which had a strategic plan for it, nor to the Chinese company that could use it to enter the European market, but to Magma Group, a Canadian parts company controlled by Russian interests, with financing from the Russian state-controlled bank Sberbank Rossii OAO.

The result may not make much sense operationally, but it is another example of Russian interests controlling major strategic assets in Europe. Needless to say, the various gas and oil joint ventures undertaken by Gazprom OAO (OTC ADR: OGZPY) in Eastern Europe, the Mediterranean and North Africa are also extensions of Russian power.

The fact that Russia’s MICEX stock index is up 100% since early January (albeit still 40% below its December 2007 high) is not very relevant to the people who run Russia.

They appear to have two objectives: Using the capitalist system to make themselves and their colleagues very rich and projecting Russia’s power on the world stage – just as the former Soviet Union used to do.

To Prime Minister Putin, capitalism is an attractive discovery, because it works economically much better than Communism did, and thus allows Russia to regain more of its former power than would have been possible under the Soviet system.

In this sense, Putin and current Russian President Dmitri Medvedev have finally achieved the original goals of Mikhail Gorbachev’s reforms in the 1980s; the objective of those was certainly not to bring down the Soviet government or upset the system, but simply to get the economy working more efficiently towards the leadership’s objective of greater Soviet power. Minus the other ex-Soviet Republics, Russia has now achieved this objective – and it may not stay minus the other Republics for very long, if Russia’s rulers have their way.

Given the way the system is rigged against the outsider, Russia is not a particularly attractive place to invest. Clearly, there may from time to time be a good short-term bet that Russia’s rulers will overcome current difficulties. However, the world contains other good managers besides Putin, and some of those others have a genuine interest in shareholder value and determination to create more of it.

By all means, look for Russian companies in consumer sectors that are outside the grip of the oligarchs – but do not expect to do too well, because you may find your company has a new and very expensive sleeping partner. Probably the best vehicle is the Market Vectors Russia ETF (NYSE: RSX), which benefits from Russia’s still-low Price/Earnings Ratio of 7.2.

But remember this: Russia isn’t a great global growth market like China, India or Brazil. And without major changes, it never will be.

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