The following article by Peter Macfarlane appeared in this week’s Q Bytes, our free newsletter dedicated to international asset protection, offshore wealth creation, investing and private banking. We are republishing it here on the Q WEalth blog as we feel it is of general interest. If you would like to receive future editions of Q Bytes free of charge, be sure to sign up here.

Hardly a week seems to go by at the moment without Gold being a hot topic here at Q Wealth. But this last week has been an especially rough ride, with gold ‘pulling back’ quite substantially. Is this cause to start crying, or is it an opportunity to stock up on gold?

I thought this week I would briefly discuss some divergent opinions and strategies on gold, and propose a couple of solutions that I believe will put readers into profit.

A reader from California recently wrote me:

“Thank you, Mr. Macfarlane, for accepting my divergent opinion in good spirits….” he begins. Well, everyone is entitled to their opinion and as I always say, I may be wrong! I may be way off track. Maybe Bernanke and Obama will save the world shortly and we’ll all live happily ever after. I doubt it, but anyway I am one of the biggest believers in the world in free speech and liberty of expression.

May I add an additional comment related to gold ownership in ones portfolio?” continues our reader. “When the market price increases from one day to the next, the purveyors of gold advise purchasing the metal for its price is only heading higher. When the price declines from one day to the next, the decline is characterized as a ‘buying opportunity’. One thing is consistent among the purveyors of gold though, they never – repeat, never – issue a “_sell_” recommendation? It’s always buy, buy, buy.

And, least I forget, if one truly believes that the market price of gold is headed higher, why not purchase a gold futures on contract on the Chicago Mercantile Exchange? – which can be rolled over for a distant contract indefinitely. The CME affords the trader enormous leverage on such futures contracts, and there’s no applicable interest charge for the market price that exceed the initial “earnest money” deposit. And the traders’ earnest funds can be in the form of Treasury bills, which are segregated from the funds of the futures merchants account.

Well, I guess we are coming at this equation from polar opposite perspectives. This reader is clearly valuing his gold holdings in US dollars. I do the opposite – my base currency is gold, and dollars are a forex speculation for me, just like euros or yuan or Paraguayan guarani.

My reasoning behind this is that gold is the stronger currency, that has been around infinitely longer than the dollar. The dollar is ‘fiat’ money (see for example these earlier articles) that is created, figuratively speaking, by a printing press currently controlled by Bernanke and partners. The dollar can come and go, but gold won’t. The purchasing power of an ounce of gold has been pretty much constant for generations – whereas the same can certainly not be said for the dollar.

What is the dollar backed by?

One of the better arguments for the backing of the dollar that I’ve heard recently, is that it is backed by the work and entrepreneurialism of the American people. There’s some truth in that. Basically if they keep working hard and handing over the fruits of their labour to the government, there is something of value backing the dollar.

I’m just not sure that those hard-working American people really agreed to have their futures – and that of their sons and daughters and grandchildren – mortgaged in this way by a small subset of politicians and banksters. Maybe it was like the sub-prime mortgage borrowers who didn’t really understand what they were getting into. Cheap and plentiful short term money trumped long term prudence. And we all know how that ended up. Now we are just seeing a much expanded version of it.

I’m far from convinced that investing in the dollar is good business. If it were a case of supporting a stock of a company where the management were borrowing to the hilt for short term fun, while treating stakeholders reprehensibly and not giving a damn about the future, there would also be an ethical argument against getting involved. And I don’t see why governments should be treated any differently than companies. Abuse of the American people is not something I want to get involved in, any more than I would support abuse of cheap labour in Asian shoe factories.

Now I know this may be hard to swallow for people who have valued everything in one reference currency – be it dollars, or pounds or something else – for their entire lives. It is quite a leap of thinking. But it’s totally possible. You need to become a Sovereign Individual, not reliant on any particular country or currency. You need to think in different currencies and look at all currencies, including the one in common circulation in your home country, from the perspective of an outsider. If you were from another country, would you be investing in that currency right now?

Of course, I am not talking about day-to-day expenses. You certainly need some local currency on hand to buy the groceries. Multi-currency credit cards per se don’t exist, but you can easily, for example, obtain a regular credit card billed against a multi-currency bank account. You can sign charges in any currency you like, converting only what you need at that moment. You’ll find information on this, including how to open a foreign multi currency bank account in some of the world’s safest and best offshore banks, in the Practical Offshore Banking Guide 2010

The Dollar Bear Market Continutes

With that in perspective (that I value currencies against gold, not the other way around) let’s get back to the reader’s question. I don’t see so much of a gold bull market right now, as a dollar and euro bear market. My personal view (and there’s no substitute for taking professional advice here) is that this situation will continue as is for the foreseeable future.

Wild swings are caused by day to day speculations, but don’t affect the overall trend. So to turn it around, I believe the price of gold valued in fiat money will continue to rise, and will do so significantly. The more Quantitative Easing that takes place, the less the dollar will be worth. This is what I have written about in the past: stealth devaluation. If there’s more of something, it’s worth less. This logic is hard to argue with.

After all I’ve said above, you can probably figure that US Treasury Bills are the last thing in the world I would want to sink my money into. For me, that would be like buying bonds in a company that I know is about to go bankrupt. Unfortunately, as Ron Holland has explained in the report Are You Ready for the Coming Obama Retiement Trap (available in the Q Wealth Members’ Area) that is exactly what US retirement funds are being encouraged, even forced, to do. This is a seriously scary prospect.

As for buying contracts on the CME, well why not… I’m all in favour of speculation. There are lots of ways you can obtain leverage through brokerage accounts within the system. I keep a large portion of my personal wealth in physical gold, safely outside the financial system. I also keep a ‘play money’ account that I leverage to the hilt and buy financial contracts like this with. It’s doing rather well at the moment. But it’s money I know I might have to lose, for example if a sudden catastrophe hits and the financial markets are closed down. I would put the odds of something like that happening in the foreseeable future at perhaps 15% – 25%. Not a huge risk, but definitely not one I would bet my entire net worth on.

The fact that you can roll over CME contracts indefinitely is part of the problem, of course. It’s extremely likely that the counterparties would be completely unable to fulfill their obligations if everybody wanted to exercise their right to physical gold at once. The whole system relies on punters rolling over.

So, why I don’t like the idea of buying gold futures using T-bonds as earnest money? Because you are using one form of promise to buy another form of promise, when nobody – not even the people involved, I am sure, if you could talk to them and get a straight answer – would really earnestly claim that the promises are backed by anything of value. That is just unsustainable in my view. You might make short term paper profits, yes. Fine… I have nothing against speculation, just as I have nothing against casino gambling – but when I go to casinos I just enjoy the ambience, I don’t gamble.

If you want to use leverage to speculate on the price of gold, here’s what I would do. Get yourself a regular brokerage account that allows you to trade on margin. Get yourself a subscription to Casey’s International Speculator – they even have a 25% discount offer running at the moment. Casey’s International Speculator is one of the longest-running, most respected newsletter services of its kind anywhere, so it’s got a track record. It was founded by Doug Casey, self made international man.I have a subscription and consult it frequently. Then go speculate. That way you’re investing in companies that actually have intrinsic value, rather than pure promises.

At the end of the day, it’s big picture against small picture, short term against long term. We live in interesting times. Enjoy the rest of your weekend!

When it comes to protecting your assets and wealth against devaluation, we’ve been saying for a long time that no major fiat currency is safe. The only long term solution is gold bullion.

Just about ten days ago I wrote in What They Don’t Want You to Know About the Euro Crisis that the real crisis is with the US dollar. Things, I wrote, don’t get hyped this much by accident. The powers that be are keen for the dollar, the euro, and the yen to go down in unison. I suggest you read that article first if you haven’t already.

As I expected, the Euro bounced back slightly once the furor over ‘PIGS’ had passed, rather than collapsing further as some expected. In purchasing power parity the dollar and the euro are about one to one: my general rule is that something that costs a dollar in the Americas costs a Euro in Europe. So there is no doubt the Euro is overvalued in that sense. But the dollar is equally overvalued.

What’s interesting now, is that – exactly on cue – the media are hyping down the Yen. Now, according to the BBC, Japan’s new Prime Minister has announced that the country is at risk of collapse.

What can we learn from all this from an asset protection standpoint?

We’ve never recommended forex speculation. Most people I know who try their hand at forex trading lose money. By forex trading I mean highly geared speculation on ‘pips’ that move by the second.

On the other hand, having easy access to foreign currency exposure is not only less risky, but is completely prudent. A multi-currency bank account allows you to do this.

For those not familiar with multi currency accounts, this is basically one bank account, with one bank account number, in which you can hold many currencies. When you log in via your internet banking to check your balance, you will see not just one balance, but several: you might have for example a US dollar balance, a euro balance, a yen balance and a Singapore dollar balance.

By default, incoming wires or cheques you deposit are retained in their original currency. If you want to change currencies, a few click of the mouse are all that is needed.

Where can you open a multi currency bank account? This is not so easy. In some countries, notably the USA, it’s hard to open a foreign currency account in the first place. They are simply not set up for customers who don’t want to be in dollars.

One notable exception in the US is EverBank. I have previously written a review of EverBank – basically these guys are good at what they do, but our focus here at Q Wealth is specifically offshore investing. As EverBank tend not to accept as account holders international clients who do not have US social security numbers, nor foreign corporations, they are not really on our radar. We also think to achieve international diversification, an account at a foreign bank is better. I just mention them here because some US readers may be interested, especially if the amounts are smaller and they don’t want the hassles involved with Foreign Bank Account Reporting.

In other countries, like UK and Australia, it’s quite easy to open a foreign currency account, but each currency requires a separate account. Sure you can place buy and sell orders but there are fees, minimum balances to consider etc. In other words, you don’t have the simplicity and freedom of one account that can hold numerous currencies.

The same problem exists in offshore and private banking centers like Panama. In Panamanian banks, if you want to switch from say Euros to Yen, you have to give 72 hours notice! And the range of currencies is typically limited to 4 or 5.

That said, we deal with offshore banks in the best offshore banking jurisdictions in Europe, as well as Singapore, that offer much more attractive multi-currency account facilities. Switching currencies is instant, there are no requirements for minimum balance, and best of all you can access a range of more than thirty (30) currencies within one account, from the dollar and euro through to the yuan and the real.

If you are interested in opening such an account, remember that Q Wealth readers are entitled to a free referral to one of our recommended best private banks. Full details, including the application form for this service, are included in our Best Offshore Banking Guide.

The $64,000 question now, is whether the powers that be can continue to play out the hard ball scenario to protect the dollar that we recently wrote about here: What they Don’t Want You to Know about the Euro Crisis. Whilst a reasonable analyst would conclude that they cannot – meaning that the US dollar is doomed long term – it’s looking like they can support it for a while yet. Germany, France, the UK and Switzerland are playing along.

Expect to see attacks on other currencies, particularly the yen. And, for the many readers whom I know like the Aussie dollar (AUD), I am none too confident in its future. I can tell you I wouldn’t put my money on a currency controlled by a government that just decided to kill the goose that lays the golden egg, by proposing a stiff extra tax on its mining industry.

• So you might want to keep short term funds in US dollars, always being aware that there will be ever more restrictions on what you can do with them. (In the wake of the HIRE Act, several countries, most notably Mexico, have introduced further restrictions on the use of US dollars in their banking systems)

• You definitely need a multi currency bank account, in a neutral private bank in a neutral country which is not likely to introduce exchange controls. A multi-currency account gives you flexibility to switch currencies quickly when the need arises, as it definitely will. You’ll find plenty more of information on some of the best offshore private banks within our Members Area. US citizens in particular should be aware that there are numerous signs of further restrictions on export of capital from the USA. So act now rather than later.

• You should keep substantial wealth in gold… physical gold bullion that is. Again, if you need independent advice on how to invest from people who know what they are talking about, Q Wealth is your source of information. Gold bullion is a non-reportable asset.

• And if your right to privacy is a concern to you – as it should be – hold all your assets through corporate entities like LLCs, corporations (IBCs), offshore trusts or foundations. There are good, inexpensive options out there that can keep your assets one step removed from you and anyone who wants to take them away from you, whilst allowing you to retain control, completely legally of course. Reporting requirements depend on your country of residence and citizenship.

• Finally, we live in turbulent times, and if you like what you read in Q Wealth, there is no substitute for coming to one of our live events. This will give you a chance to meet experts like Peter Macfarlane, Frank Suess, Richard Cawte and Thomas Bolther. For further details on upcoming events, visit our Offshore Events page.

Our next event will be in Ireland in late September. There is just time to get in on the early bird bonuses, enabling you to attend for well under $1000. For this event we are offering several different modules, depending on your level of existing knowledge, and the amount of wealth you manage. VIP Mastermind members receive a 50% discount on the event fees, so there’s another thing to consider.

What if you are not yet a member of Q Wealth? At just $87 for a year’s membership that gives you all these benefits, we think it is well worth your while join today. We will help you sort the wheat from the chaff by introducing you to the best offshore banks and international private bankers who can help you achieve your asset protection goals.

However, if you don’t have $87 to invest in a membership, there’s also a free option: try our five part Secrets of the Super Rich course absolutely free and without obligation.

Whatever you do, as the title of this article suggests, RIGHT NOW is the time to start protecting your assets internationally if you haven’t already done so. Don’t put it off!

One of the things that went relatively unnoticed last week was the revaluation of the Singapore dollar. But as a global or offshore investor, you should certainly be concerned about this. It has significant implications for both the US dollar, the euro and the global economy, as well as practical implications for those of you who are interested in offshore banking in Singapore. More on that below.

Note that here we are not talking about devaluation – that’s what’s going on with the dollar, euro and sterling. We are talking about an upward revaluation, because the markets demand it. At the risk of oversimplifying, I’ve often said that a country’s currency is rather like shares in its overall economy. Singapore is going up, while the ‘developed’ world is in a dreadful downward spiral, leading to ever more desperate measures such as currency controls.

By the way, to sidetrack for a moment, a few people have sent me for comment pieces by other writers disagreeing with my recent articles interpreting the HIRE Act’s provisions as capital or currency controls – including some opinions by highly respected analysts. It seems to me these analysts don’t get my point: Yes I know these don’t look like currency controls! They are certainly not typical old-fashioned exchange controls. The Obama administration may be stupid and arrogant enough to believe they can control foreign banks, but they are not so stupid as to try to introduce Venezuelan style currency controls. No my friends…. these are stealth or back door currency controls specifically hidden under other justifications.

A dictionary definition of capital is: wealth in the form of money or property owned by a person or business and human resources of economic value. ‘Control’ I don’t think needs much definition. In my book, anything that seeks to control your free and unrestricted use of your capital, is a capital control. Doesn’t matter an iota if it doubles as a measure to increase tax compliance or catch criminals. To give you another example, AML (anti money laundering) laws are also a form of capital control. The HIRE Act’s provisions in my opinion place major obstacles in the way of free movement of capital. Hence, they are, logically, capital controls. My full analysis is in QWR 54. Ignorance and denial is bliss. ‘Nuff said.

Back to Singapore… Consider the context. There’s been a lot of political haggling about the status of the Chinese Yuan. Singapore is Asia’s major money hub. Serious commentators are suggesting that Singapore allowing its currency to float upwards is a precursor to China doing the same thing. Indeed, Singapore’s Prime Minster Lee Hsien Loong himself has suggested that is what should happen next.

Many commentators have been focused on the Yuan as a purely geopolitical issue, as if the Chinese had full control over the matter… and assuming that it’s in China’s interests to keep the Yuan artificially low in order to export its products cheaply. They forget that China is also a huge importer of resources and raw materials, that are typically paid for in US dollars. After a plunge in the value of commodities, many are racing up again.

The fact is the Chinese no more control the global economy than the Americans do. They can try hard to manipulate currency values in the marketplace, but doing so is a losing battle, besides being very costly.

The upward revaluation of the Singapore dollar, therefore, could well be the beginning of a trend involving other Asian currencies… and another nail in the coffin of the US dollar. Oil and coal producers, for example, will only be too delighted to set their prices based on Asian demand, accumulating those newly strengthened currencies in the process.

This can only serve to strengthen Singapore as a regional international banking centre. We’ve seen a huge upsurge in interest from our readers for offshore bank accounts in Singapore of late. Singapore banks have traditionally targeted the Asian and Australian markets, but increasingly they are looking to attract deposits from Europe and North American clients. The attraction is plain: a stable, English speaking economy with strong banks and an international outlook.

Less obvious, perhaps, but an equally good reason to invest in Singapore is the level of access to Chinese banks. As a foreigner  you cannot open accounts directly in China – and you probably wouldn’t want to. But Singapore offers a lot of the Chinese upside, without the control-freak-government downside.

One of the reasons North American and European clients have not done more banking business in Singapore in the past is simply the distance, and the fact that Singapore banks have traditionally insisted on a face-to-face meeting with clients.

This is changing. As the best offshore banks are taking multi-jurisdictional approaches, it is more likely that your banker can be sitting in an office in your time zone, not too far away for a visit, while managing your account on the other side of the world. We are seeing more and more banks deliberately adopting this diversification strategy. Such banks also have contingency plans in place to shift your account to a different jurisdiction, within the same bank, at very short notice, if a particular jurisdiction should become unfavorable for any reason. This is the ultimate protection for your assets against all forms of currency controls – stealth or otherwise.

I’ll be writing more about this, and Singapore, in an upcoming issue of the Q Wealth Report, as well as summaries in Q Bytes. If you are not yet on the Q Bytes list, be sure to sign up here. It’s free, without obligation, and we respect your privacy.

by Peter Macfarlane

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)

The following item was published in Saturday’s edition of Q Bytes. We consider The Brussels Agreement (also known as the EU SWIFT Agreement) to be an especially important topic so we are reposting to the blog. To ensure you receive useful information like this in future in a timely manner, simply sign up for your free subscription to Q Bytes. We hate spam as much as you do, and will respect your privacy. Of course, you can unsubscribe at any time.

THE BRUSSELS AGREEMENT MAKES ALL EU BANK ACCOUNTS AN OPEN BOOK TO THE US AUTHORITIES
by Peter Macfarlane, Offshore Banking and Asset Protection Consultant

With remarkably little fanfare, the first of this month saw the entry into force of an important agreement between the USA and the European Union known as the ‘Brussels Agreement.’ This I would regard as the final blow for already weak banking secrecy in European Union countries.

Quite a few astute readers have however noticed this press coverage and e-mailed me questions about it. To answer these questions, I will first reveal below more about the agreement, and then look at its impact on banking privacy. On a positive note, banking secrecy remains alive and well outside the European Union.

The ‘Brussels Agreement’ gives the CIA direct, on-demand access to all bank accounts held in the European Union – period. It also goes under the name ‘SWIFT Agreement’ in European Union papers.

This treaty is an extension and formalization of an existing CIA effort set up shortly after the terrorist attacks in New York in 2001. That program granted the CIA access to data held by SWIFT, the Brussels-based co-operative that processes nearly all international bank transfers. The operation was run covertly until the press found out about it in 2006.

The scope of the Brussels Agreement is, quite frankly, utterly amazing to anyone who cares in the slightest about civil liberties or due process. Far more wide reaching than any Tax Information Exchange Agreements (TIEAs) or Mutual Legal Assistance Treaties (MLATs), and of much greater significance than the recent US attacks on Swiss banking secrecy, the Brussels Agreement simply requires that all 27 EU member states grant requests “as a matter of urgency” for banking information made by the United States under its terrorist finance tracking programme. The records will be kept in a database run by the CIA in Langley, Virginia, for five years before being deleted.

Needless to say, the Brussels Agreement grants US authorities much more scope to consult our bank accounts than that granted to domestic law enforcement agencies in Europe. In the UK and most of Europe a judge must authorise a specific search after receiving a sworn statement from a police officer. In the case of requests from the USA, this due process is completely bypassed.

The USA can also, under the agreement, request so-called “general data sets” perhaps better known as fishing trips, based on broad categories such as “relevant message types, geography and perceived terrorism threats”.

One of the reasons for rushing through this new agreement is that SWIFT at the end of 2009 moved part of its systems architecture to Switzerland, away from its existing computing bases in Brussels and the USA. This would have placed a lot of data outside EU and US jurisdiction, a change apparently demanded of SWIFT by Swiss banks and others concerned about the privacy of their clients’ information. A number of banks had threatened to stop using the SWIFT system altogether if additional privacy protections were not put in place.

We can see that this agreement was rushed through in Europe while attempting to avoid both legal and public scrutiny, because negotiation of the agreement on the EU side was mandated back in July 2009, based on legal provisions in the old Maastricht Treaty that expired at the beginning of December 2009. The agreement was reached just before the deadline, at the end of November. It is limited to nine months duration, but EU documents make clear that this is simply a ‘breathing space’ to keep the program alive while a more permanent bank account information sharing agreement is agreed under the legal auspices of the new Lisbon treaty.

Certain elected representatives in Europe are none too happy about the way the agreement was bulldozed through by Brussels bureaucrats, directly attempting to circumvent normal mandates and procedures. A Bloomberg article just published on BusinessWeek entitled U.S., EU Terror-Finance Data Deal Should Be Vetoed, Panel Says has more information.

Of course, certain safeguards are put in place – the most important of which is that the information is for counter-terrorism use only. If the CIA wishes to reveal information to other US agencies such as the Treasury Department, IRS etc, a European judge must rubber stamp this first. Frankly, however, if it were my information being passed around – which it isn’t because I don’t bank in the EU – this safeguard would give me little confidence. Who is realistically going to trust the CIA?

The actual agreement, a classified document obtained from the EU, is here

An ‘Information Note’ on the subject released by the European Union, is here

IMPACT OF THE BRUSSELS AGREEMENT ON OFFSHORE BANKING AND ASSET PROTECTION

From a banking secrecy point of view, perhaps the most concerning thing is that this agreement has a higher legal force even than national constitutions such as Austria, which protect confidentiality. The CIA can look straight into bank accounts in some of the best offshore banking countries like Austria, Luxembourg, Latvia and Estonia, as well as other EU member states where banking confidentiality has traditionally been less of an issue.

The enormous scope of this agreement also makes minor tax information exchange agreements and the like look insignificant. We would not only not trust the CIA to refrain from sharing this information with other US government agencies. They are likely also to share it informally with their colleagues overseas. The precedent for this would be the UKUSA agreement, for example, where the UK routinely spied upon US citizens at the request of the US, because the CIA was technically prohibited from spying on Americans.

However, let’s not panic either. In fact, this process has been in place since 2001, so it’s nothing new. It’s only new that we are learning about it and it’s being subjected to the democratic process.

The other thing to note is that the EU is the only area where the USA has been able to obtain such ridiculously wide-ranging access. Traditional offshore best banking countries like Switzerland, Singapore and Panama are not covered by this agreement, though you should be aware of transactions that might pass through USA or EU correspondent banks. Switzerland in particular has an excellent clearing system of its own which bypasses SWIFT on Swiss Franc transfers.

The usual message, worth repeating in this case, is that by following the offshore banking advice in Q Wealth you can sleep soundly at night. To recap in a nutshell:

• You should make sure all your structures are legally compliant. Just because I say that banking privacy is NOT dead, and I believe privacy in financial affairs is a basic human right, doesn’t mean you should use banking privacy to hide money. You either get this distinction – or you don’t. Secret bank accounts as a tax evasion tool will not work long term. If you conduct your offshore business in a proper manner following guidelines in my articles, your account will not appear on the radar and your assets will be protected.

• Compliance with your home country’s rules is still easy and possible. Plan your second passport (citizenship) and residence with a professional… considering basing yourself, not just your business, offshore. For Americans this is unfortunately more difficult, since the USA is the only country in the world that taxes its citizens on worldwide income. Americans should therefore consider acquiring a second passport and renouncing their first.

It is perfectly possible and legitimate to protect your assets against the inevitable coming devaluation of fiat currencies, by using offshore multi-currency bank accounts. We have talked recently for example about Norwegian Kroner and Swiss Francs being good investment-grade currencies. Both of these currencies are strong, and they clear outside the EU so they are not affected by the Brussels Agreement.

If you would like to learn more about this, and are not yet a member of Q Wealth, subscribe today to gain access to the wealth of resources in our Members Area.

Better still, come to Cancun next month. We still have a few slots available on our ‘Strategies for Success’ event in Cancun and a few spaces available for one-on-one personal consultations. If you have bank accounts in European Union countries like Austria or Luxembourg and would like them to remain private, this should be a wake-up call. If you haven’t yet moved assets offshore but are considering doing so, also contact Frederick in the Q Wealth Office to set up a personal meeting with Peter Macfarlane in Cancun next month.

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.

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.

by Peter Macfarlane for The Q Wealth Report

Anyone looking for currency diversification strategies should consider a multi-currency bank account. Unfortunately this banking product is virtually unknown in North America and the UK, although it is commonplace in some European countries. I say ‘unfortunately’, because this is one of the most simple and convenient tools for anybody looking to diversify out of the dollar. In this article, I’ll explain more about multi-currency accounts and how you can open one.

A multi-currency account is simply a bank account, with a single account number, in which you can hold balances in various different currencies. For example, you log in through internet banking and immediately you see a summary screen showing you have so many US dollars, so many Euros, so many Canadian dollars, so many British pounds etc. Many banks allow you to hold a wide range of currencies, including more exotic currencies. Some European banks now even allow you to hold ounces or grams of gold in your account alongside national currencies.

Advantages to this are numerous:

• For a start, it is clearly a very convenient tool for anyone who is serious about diversifying currency risk. Instead of having lots of different account numbers and logins, you keep everything on one convenient screen. At any time you can easily exchange your balance in one currency (or part of it) for another currency.
• You can wire money in and out in different currencies, to and from anywhere in the world, without the need for currency conversions.  This type of account is therefore ideal if you frequently send and receive money internationally, perhaps dividend payments, or transfers related to an overseas property or family living abroad.
• Banks normally permit you to go overdrawn in one particular currency, provided your overall ‘global’ balance is in the black.
• You can have credit cards and checks linked to your main multi-currency account. Checks can be drawn in any currency. For credit cards, you normally have to choose one particular currency balance that will be debited.

Multi-currency accounts are a good, conservative way to hedge against currency risks or make profits with fluctuations. Unlike ‘forex trading’ your account is not leveraged, so there is not so much potential profit but there is also less potential for loss. This is an easy version of forex trading – for people who don’t want to have their eye on currency rates every minute or even every day.

A multi-currency bank account also beats currency ETFs hands down. With currency ETFs you buy and sell back to your base currency, paying a brokerage fee each time. With multi-currency accounts you hold the actual currency on bank deposit, rather than stock in an ETF.

Anyone who is serious about diversifying outside the dollar needs a foreign bank account –and for many people a multi-currency bank account is the logical choice. But what about the IRS’ Foreign Bank Account Reporting requirements? Simply by opening a personal account like this, you will not affect your tax situation in any way, neither positive nor negative. US persons will be liable to declare foreign bank accounts to the IRS.

However, as outlined above, there are many extra benefits besides tax benefits. One of the greatest advantages, besides the currency diversification out of the dollar, is privacy. Privacy is a basic human right, which is unfortunately disappearing fast when it comes to financial services, where domestic investments are basically an open book these days. Although you might be obliged to report your offshore multi-currency account to the IRS, private parties like credit rating agencies or lawyers who might want to sue you certainly won’t know anything about a private foreign bank account of this nature.

The multi-currency account was not designed as a sophisticated financial instrument. Rather it’s an accident of history, something that developed in smaller European countries like Switzerland, Luxembourg and Andorra where individuals commonly needed bank checking accounts in various currencies. This was especially true in the old days before the euro when Europeans did business in many different national currencies. Not coincidentally, these countries now offer the best international financial services as well as good banking privacy.

However, in modern private banking terms, such an account can provide a basic transactional banking relationship with a foreign bank, onto which you can tag many much more sophisticated wealth management services: for example, foreign currency loans for investing in bond holdings or stock portfolios. Most banks offer such services.

Needless to say, corporations, trusts, foundations and the like can also open multi-currency accounts and in such cases there is an even greater privacy benefit, and in some cases, depending on individual circumstances, tax reporting requirements may also be legally sidestepped.

How, then, can you open a multi-currency account?

Quite a number of banks in some European countries offer multi-currency services by default, as soon as you open account. Unfortunately, especially for US citizens, it has become very difficult to find a foreign bank that will open an account.

It is undoubtedly best if you can travel to meet the bank and open the account. Personal meetings and referrals from known and trusted parties still open a lot of doors that initial research might suggest are closed! It is, however, possible even today to open a multi-currency bank account through the mail.

If you would like further information, including links to specific banks that offer this service, you might like to check out my Practical Offshore Banking Guide, available free to Q Wealth members (just one of many asset protection, offshore banking and wealth creation related benefits). Another major advantage of Q Wealth membership is a free e-mail consultation on your personal situation, in which we can also make referrals to banks where we have working relationships as trusted business introducers.

You can either go sign up now, or if you prefer, sign up first absolutely free and without obligation to receive our five part online course, Secrets of the Super Rich.