Once you’ve secured your assets offshore in a protected structure, what next? How do you put them to work for you? How do you really ‘create wealth offshore’?

Certainly there’s no point in keeping much cash in an offshore bank account. Interest rates are at record lows, and offshore banks typically pay lower interest rates even than what you are used to offshore. Precious metals like gold and silver are an essential part of any portfolio… but you don’t want to keep all your assets in those, either. Stock markets are good for speculation with a small amount of capital, but frankly they are so manipulated that you as a small player will depend more on luck than judgement.

That leaves one asset class that we haven’t covered for a while: alternative offshore investments, like private offshore hedge funds. I’m moved to write about these because in the last week I’ve come across a couple of interesting opportunities from people I trust.

A WARNING AND CAVEAT FIRST
Those last three words are very important: ‘people I trust.’ Offshore investments are generally subject to little or no regulation. They are intended for sophisticated investors. Unfortunately there are some people out there who are just bad investment managers, and worse are outright offshore investment scams, so you need to go with people you trust.

The good thing, however, is that with alternative investments you can have a much greater involvement with management. You can typically get to interact and meet with managers. One of the opportunities I heard about this week even includes the fringe benefit of being able to use properties owned by the fund in South America.

So it’s all about finding people you trust. The very best way to do this is to get on a plane and do your due diligence in person, seeking second and third opinions along the way. Fortunately, there are people who can point you in the right direction by providing you with the benefits of their research as you start off. In this week’s free Q Bytes newsletter that has just gone out to subscribers, I mention three such people. I won’t name them here because I want to respect their privacy, but if you don’t want to miss out in future, be sure to sign up for Q Bytes.
FOR SOPHISTICATED INVESTORS ONLY

When investing in this kind of opportunity, who you know is everything. Funds like this don’t accept investments from the public, and even less from US residents unless they can certify themselves as sophisticated investors. Fortunately, such limitations don’t apply to participations from entities like Panama offshore corporations, Panama Foundations, or offshore LLCs, though entry levels are typically six figures.

I’m keen on Latin America not least because of resource investment opportunities. And earlier this year a number of Q Wealth readers got involved via Linda Dixon, our long-time  friend from Canada who moved into the gold and silver business in Peru and few years ago, with an alternative investment in a silver mine. These investments are coming to fruition now with huge returns. I talked to Linda a couple of weeks ago and she is preparing some interesting articles and videos for us, that will be available shortly in the Members Area.

If you don’t yet have access to our Members Area, you can see a summary of benefits (in essence, a list of all the info and tools you are missing out on) right here
Another trusted friend who has made a detailed study of alternative investments in frontier markets lately founded Alternative Latin Investor. Nate has been based in Buenos Aires for quite some time, and is just back from a four-month stint in Africa seeking to expand coverage of frontier markets over there. I’m trying to persuade him to join us on our residence, citizenship and investment trip to Paraguay this coming January.

Nate is putting on a very interesting webinar with some big-name experts on alternative investments in Latin America. It is scheduled for November 10th and requires advance registration – with an early bird discount before November 2nd.
NEW PETER MACFARLANE INFO SITE
Finally, just a notification that the new Peter Macfarlane & Associates site is finished. It’s nothing flashy or exciting, but explains a little more about why my consulting firm does in terms of corporate structuring, precious metals and second citizenships. Feel free to check it out at http://www.petermacfarlane.info

• The USA closes – only 2/100ths of a point behind Russia.
• Americans have the same online freedom as Putin’s subjects.*

Our friends at Cryptohippie, an online privacy protection service, have just released the 2010 edition of their excellent Electronic Police State Report. Following is their summary of the report, which you can download free along with the data used.

When we produced our first Electronic Police State report, the top ten nations were of two types:

1.      Those that had the will to spy on every citizen, but lacked the ability.

2.      Those who had the ability, but were restrained in will.

This is changing: The able have become willing and their traditional restraints have failed.

The United States, with the UK and France close behind, have now caught up with Russia and are gaining on China, North Korea and Belarus.

The key developments driving this are the following:

• The USA has negated their Constitution’s fourth amendment in the name of protection and in the name of “wars” against terror, drugs and cyber attacks.
• The UK is aggressively building the world of /1984 /in the name of stopping “anti-social” activities. Their populace seems unable or unwilling to restrain the government.
• France and the EU have given themselves over to central bureaucratic control.

METHODOLOGY

We moved to a more elaborate ranking system this year. The categories remained the same, but we have now weighted each one according to its importance. (The weighting factors are shown in parenthesis for each category itemized below.) Within each category we used a comparative method of assigning value.

We have not taken into account how many people, or what percentage of people, are affected by each characteristic. So, even though very few people in North Korea have Internet access, those who do are subjected
to very serious surveillance. The low number of users has no effect on the national ranking.

In addition, it is significant to note that we are /not/ measuring government censorship of Internet traffic or police abuses, as legitimate as these issues may be. Nor are we including government corruption.

Note also that none of our categories apply to evidence-gathering by traditional, honest police work. (Searches only with warrants issued by an independent judge, after sufficient examination of evidence.)

THIS YEAR’S RESULTS

We ranked 51 major states.

Here are the 51 states and their rankings, with last year’s ranking shown in parenthesis.

1. North Korea (2)

2. China (1)

3. Belarus (3)

4. Russia (4)

5. United States of America (6)

6. United Kingdom (5)

7. France (9)

8.  Israel  (8)

9.  Singapore (7)

10.  Germany (10)

11.  Ireland (12)

12.  Malaysia (11)

13.  Netherlands (14)

14.  Italy  (24)

15.  South Korea (15)

16.  Australia (18)

17.  Belgium (17)

18.  Spain (43)

19.  Austria  (21)

20.  Ukraine (16)

21.  Greece (28)

22.  Switzerland (30)

23.  Japan (19)

24.  Norway (22)

25.  Canada (29)

26.  India (23)

27.  New Zealand (20)

28.  Portugal (44)

29.  Denmark (26)

30.  Hungary (27)

31.  Poland (32)

32.  Sweden (34)

33.  Bulgaria (49)

34.  Taiwan  (25)

35.  Czech Republic (40)

36.  Cyprus (37)

37.  Finland (33)

38.  Lithuania (36)

39.  Estonia (39)

40.  Luxembourg (45)

41.  Slovenia (31)

42.  Malta  (38)

43.  Iceland  (41)

44.  Latvia (35)

45.  South Africa (42)

46.  Argentina (46)

47.  Mexico (51)

48.  Thailand  (48)

49.  Romania (47)

50.  Brazil  (50)

51.  Philippines (52)

We will issue our next report toward the end of Q1, 2011. We welcome input and assistance from reliable sources.

We may be reached at: info@cryptohippie.com

Full PDF Version of this report

Report Data

Supplement: The Taking Of The Internet

Related link: Totally Secure Laptops

by Frank Suess, BFI Consulting

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

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

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

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

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

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

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

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

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

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

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

Buying Gold “At Home”

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

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

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

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

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

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

Buying Gold Offshore

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

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

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

Conclusion

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

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

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

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

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

Protect your children! Catch your cheating spouse!

Those are the claims made by a rash of new websites selling cellphone based tracking and spyware software. And the scariest thing is that this dreadful software does exactly what it claims. Global Nomads researched and tested some of these packages and gave us some advance information ahead of a forthcoming update to their excellent mobile phone privacy report.

All you need is physical access to a cellular phone for less than five minutes, and you can install a kind of ‘virus’ that will track locations and make conversations and text messages available to you in real time. You can access the contacts list, see photos exchanged. You can even make outgoing calls from the compromised phone via your computer….

It may well be illegal, but that probably won’t stop jealous spouses. And if you can do this, just what capabilities does the real Big Brother government have?

There are very few technical restrictions on how this works. According to the frequently asked questions at phonestealth.com for example:

Will this work in my country? Yes! This product does not depend upon country or mobile network. It will work anywhere in the world!

Will I have to install any software on the phone(s) I wish to spy on? No. This product only needs to be installed on your phone.

Whereas bigdaddyspy.com at least shows a sense of humor:

It’s time to catch ‘em where they least expect it ON THEIR CELL PHONE! THIS PRODUCT IS BOTH CREATED FOR THE FAITHFUL AND PRESENTED TO THE FALSE-HEARTED TO DISCOURAGE INFIDELITY AND RENEW TEMPERANCE AND VIRTUE.

Flexispy.com goes one step further, actually showing a photo of a couple in flagrante with the testimonial:

Thanks to FlexiSPY I finally figured out my wife was cheating on me with my brother. I had a bad feeling about this for over a year. After the divorce, my life is so much better now. Thanks FlexiSPY, I’m free again – Divorced

Of course we find these sites somewhat distasteful and for that reason we are not creating hyperlinks direct to their sites. But you can search for them on Google and click on their sponsored ads (each click costs them money!)

Some of these sites, it’s worth noting, also sell a few more privacy-friendly products such as a cellphone voice changer.

Our advice for years has simply been to avoid cellphones. It’s better to communicate via e-mail that can be made secure more easily via open source security software. If you must use a mobile, it’s best to buy pre-paid anonymous phones in countries that don’t ask for ID for cellular service (Which countries don’t ask for ID for mobile phone service? Panama is one. We would welcome contributions from readers on others…)

Some of our Q Wealth friends are working right now on a new encrypted VOIP telephone service that should be available in the next month or two. This will pair nicely with secure laptops, privacy technology, and secure e-mail. If you would like to get advance information – especially if you are considering replacing your laptop or internet phone service soon – please talk to Peter Macfarlane or Brian Craig.

As for the consequences of this form of surveillance, even if done for something as seemingly innocuous as protecting your teenage daughter, asset protection expert Mark Nestmann warns “the consequences could obviously be catastrophic if you discuss anything on your cell phone you wouldn’t want published on the front page of The New York Times.” In an article on his blog he lists seven ways you can protect yourself against cellphone spyware.

by Peter Macfarlane, non-resident banking and asset protection expert and joint editor of The Q Wealth Report

“We’re disillusioned.” “Fed up with the way things are.” “Obama stands for oppression.”

Those are just a few of the many comments people send me every single day. People are out there desperately searching for the kind of material we publish about Freedom, Wealth and Privacy. Ever since we started offering our free five part Secrets of the Super Rich course by e-mail, we have also sent out an additional e-mail soliciting feedback from readers. Plus, as most readers of this blog will know, I encourage all paid subscribers to approach our office for free informal advice, consultations and referrals.

Please be assured that, although at times another member of staff will reply, I personally read each and every one of these comments. And any consultations about offshore banking, investing, asset protection and so on are channeled to me (other topics are handled by other members of the Q Wealth Experts panel)

We’ve been getting a lot of new subscribers recently. So you can imagine my workload. I’m sorry if you have contacted me and there has been a delay replying. But I love this work and I think it’s the only way to keep my finger on the pulse. If I were a politician I would call it “listening to the grass roots.”

And what a strong signal is coming from those grass roots these days! People want out. They want out of the USA, the UK, Australia, Canada and many other places. But what they are opting out of is not so much the countries, but the system. And I use the singular intentionally even though I’m referring to many countries. The system has become totally oppressive. Fortunately, Q Wealth is dedicated to empowering individuals to regain control of their lives and escape the ratrace that is the first or developed world today.

‘They’ used 9-11 to take away our civil rights. Now ‘they’ have used the financial crisis to take away a lot of our financial rights and our very own money! Who do you think is paying for the huge bailouts going on now? You, of course, dear reader. You are taking on debt in the name of future generations. Your kids growing up in this system will either be burdened with debt for several generations, or the system will have to go bankrupt. I predict the latter.

Fortunately, the secret is out. You can opt out of the system. More and more people are voting with their feet, taking their pounds and dollars offshore where it can still buy something of value. They are still a tiny minority, but a very fast growing minority.

Some of us are more natural gamblers than others. Some are happy moving offshore on a shoestring budget, confident in their abilities to make money and create long term wealth… from a new offshore, tax-free base somewhere in paradise.

Although we’re originally from the UK, you won’t have missed the fact that we are pretty keen on Latin America these days. Your money goes further and the quality of life is better. Above all, there is less stress… and you can make money on the internet by managing your capital, or through active e-commerce businesses, or even manage onshore real estate portfolios from offshore with a big tax advantage over your competitors.

Others will move offshore for purely ideological reasons. It’s about getting the government out of our hair. Escaping the culture of fear. Even many people who are in the system are disillusioned. I liked the recent comments of Dame Stella Rimmington, former head of the British Secret Service MI5 (the real life version of ‘M’ portrayed by Judi Dench in the Bond movies) who said of the terrorism threat: “It would be better that the government recognised that there are risks, rather than frightening people in order to be able to pass laws which restrict civil liberties, precisely one of the objects of terrorism.”

I couldn’t have said it better myself. I opted out of this rotten system a long time ago and you would never get me back. Offshore is more a state of mind than a place. A physical move, maybe a second passport, brings the most benefits. But you can start moving offshore, start creating that safety net or back-up plan, without leaving home – especially if your profession or business is portable. Now is the time. Don’t delay any longer, otherwise you will lose some of the advantage.  The word is out!

If you are looking for practical advice on Freedom, Wealth and Privacy, you have come to the right place. Here at The Q Wealth Report we don’t believe in scaring people. Like Dame Stella, we believe that we should all be prudent and recognize there are risks – and a lot of those risks have to do with the financial and political system that we cannot control. But rather than sitting crying to ourselves, or trying to swim against the current, let’s do something about it. That’s why you are here. Join us on the journey by subscribing to The Q Wealth Report today!