If the US having entered into a new war this weekend is not enough to push Americans into action to protect their financial future, I don’t know what is.

Are You Prepared?

So much is going on. There was so much to write about in this weekend’s free Q Bytes newsletter that we decided to post some of it on the blog is well. It’s important that this information gets as widely circulated as possible. First we covered some very important new practical guidelines on Foreign Bank Account Reporting requirements (FBAR) for Americans – US reporting requirements just became a bit clearer. The FBAR requirements are also a wake-up call for non-Americans who have been using the USA as a tax haven – urgent action is required there.

Talking of wake-up calls…  following a major and horrific natural disaster, a nuclear disaster closely averted, and a new attack by Allied Forces in Libya, definitely the worst seen since the invasion of Iraq, wake-up calls are very much at the forefront of our minds. According to the New York Times, Qaddafi has pledged a long war, saying: “We will not leave our land and we will liberate it … Those who are on the land will win the battle,” he declared, warning that “oil will not be left to the United States, France and Britain.”

It seems like yesterday that we saw TV footage of Tony Blair in Libya, proudly welcoming Libya back to the international community, as British troops started training their Libyan counterparts.

But if that’s not an indication of how things can change overnight, consider the case of Japan. A highly developed and prosperous nation, issuer of the world’s third reserve currency after the dollar and the euro, brought to its knees, just like that. Our thoughts, of course, go out to the millions of people affected.

Could the same happen in the US? In Europe? I don’t know, but Irwin Redlener, director of the National Center for Disaster Preparedness at Columbia University says that Americans are grossly unprepared for the next disaster. He says horrific events such as 9/11 and Hurricane Katrina have served less as wake-up calls than snooze alarms—before Americans are pulled back into complacency. Meanwhile, renewed attacks in the Arab world raise the ugly prospect of more terrorist attacks in the US, Britain, France and the rest of Europe.

Amazingly, during this time, the Japanese currency has been appreciating on the markets and the G-7 have intervened to keep it lower. Exciting times for short term currency speculators, but yet more intervention in the free market that I think has a much deeper long-term significance. Once things calm down I will try to address this topic in a future article in Q Wealth, and without doubt it will be on the agenda for our Q Wealth Symposium in Hong Kong later this year (please use our contact form if you are not yet on the list to receive advance details of this event but you would like to be.)

My intention with this letter is certainly not to spoil your weekend, however. I don’t know about you, but I sleep sounder being well prepared. As Simon Black says, there are two ways to sleep well at night: be ignorant or be prepared.

I don’t necessarily mean you should run out and buy flashlights and iodine tablets, prepper style. Though it may not be a bad idea. France, where the public are generally very happy with nuclear power, distributes free iodine tablets regularly to those who live near its many nuclear power plants.

Disaster preparedness, in my view, involves being prepared for anything – even the most unpredictable. If and when disaster strikes, it’s not very likely to be in the form of the obvious threat you have already prepared for. What I am thinking more about is just having a general ‘Plan B’ in place – perhaps a second home in a far way country, assets secured offshore, a second life that you and your family could step into… a second passport?

Remember, disasters also don’t have to be of enormous magnitude to have a disastrous effect on you. Just something like being sued or accused wrongly of something could turn into your private disaster.

The catastrophe I would concentrate most on preparing for, though, is a financial crisis… because I’m convinced that this will not only happen, it actually is happening now. If you look beyond the mainstream headlines, you can see it happening all around. So it’s really important to secure your financial future and independence. How? For example by holding physical precious metals, foreign assets, or by internationalizing your retirement account. These are all things that we at Q Wealth Report can help you achieve and you’ll find further information browsing this site. Where, for example are the best offshore banking countries? The best places to obtain a second passport, either through residence or economic citizenship? What should you know about tax havens like Panama? What is the best way to buy physical precious metals offshore? What is the best asset protection jurisdiction?

So, don’t panic, but don’t hit the snooze button on recent wake-up calls either. If the US having entered into a new war this weekend is not enough to push Americans into action to protect their financial future, I don’t know what is. Commit to action. If you are looking for the practical nuts-and-bolts information, you’ll find it in the Q Wealth Report and at our events. But you are the only one who can make the first move. It’s in your hands. Nobody else is going to do it for you.

You can start here, with our free five part course on offshore wealth creation: Secrets of the Super Rich

It’s almost a year since I wrote the original article How to Open an Offshore Bank Account in Singapore, and it has consistently been the most popular article on the blog archives almost since day one. I have been thinking for a while, therefore, that it was time to revisit the subject of Singapore offshore bank accounts. Then finally I was stirred into action by my friend Simon Black, who is in Singapore at the moment. Simon wrote an article this week on Why Singapore is the ‘Easiest Place to be an Entrepreneur.’

Do you want to open a bank account in Singapore? How can you do so as a non-resident? Do you need to go there or can you open your multi-currency account by mail? These are some of the questions I’ll be answering in this article.

The city-state of Singapore has developed in recent years into one of the best private banking jurisdictions. But besides targeting their traditional but fast growing market of wealthy Asian business people, the best offshore banks in Singapore today are also developing products and services tailored specifically for North Americans, Europeans and Aussies. Despite the big time zone differences, Singapore’s business culture and use of the English language makes this easier.

While in most of the world opening a bank account seems to be getting harder and harder, in Singapore it is actually getting easier!

Ask anyone in Singapore what the easiest way is to open a bank account as a non-resident, and they will almost certainly point you in the direction of one of the foreign banks. Citibank, for example, is a major player in Singapore and you can contact them via their site. They will return calls to wherever you are in the world.

I’ve always liked Citibank. Citibank is culturally very different from most American banks, having a much more international outlook. Back in 1897 they were the first US bank to establish international banking operations. Whereas most US banks don’t even allow you to send an international wire transfer online, today nearly half of Citibank’s branches and offices are outside the USA. Wherever they go they settle into local banking culture and generally offer excellent internet banking, credit cards, 24 hour call centers and the like. They are completely comfortable doing business in multiple currencies – something essential in Singapore’s business and banking environment.

Citibank, like other international banks that are big in Singapore – HSBC, ANZ or the British emerging markets bank Standard Chartered for example -  would be ideal for those who cannot travel to open an account. The process would be first to contact the Singapore offices, then ask about procedures for certifying documents in an overseas branch or affiliate that is located near to wherever you are. Big international banks can generally arrange this – even more so if your investment is substantial enough to qualify for a premium service like Citigold ($1 million minimum in Singapore) or HSBC Premier.

However, if you are looking at banking offshore for privacy reasons, you’ll probably want to avoid American banks. Citibank will, for example, require a social security number from US citizens or a National Insurance number from British citizens, and will likely make you sign a waiver of Singapore banking secrecy law, allowing them to make reports to your home country authorities, as a condition of opening the bank account.

Whilst I hope none of you would be unsophisticated enough, given all the how-to info on this site, to rely on banking secrecy to hide or fail to report a personal account… I still think it’s undesirable that you should have to waive legal rights that are there for your protection, if it’s not absolutely necessary.

One international player that might be less subject to pressure from foreign governments in Standard Bank, a South African bank that has established a significant presence in emerging markets from China to South America. Standard Bank should not be confused with Standard Chartered Bank by the way – they are different institutions.

Ultimately, however, the best confidentiality is to be found with local or Asian market banks. OCBC Bank for example (Overseas China Banking Corp) would be a good place to start. They also have an excellent online trading portal, iOCBC. Last time I asked, they did still accept offshore brokerage accounts for US citizens, though given the provisions of the HIRE Act, who knows how long this will last.

During the coming year I’ll be focusing more on Singapore banking. I’m looking forward first to Simon Black’s Sovereign Man workshop in Panama in February, which is a chance for those from the American continent to meet Singapore bankers in person without flying right around the world. Then, I’ll likely be attending the Shorex Singapore event for offshore professionals in April. If you are going to be in the area, let’s meet up.

If you are not yet a subscriber to our free weekly Q Bytes newsletter, be sure to sign up here right now, and I’ll inform you via the newsletter as soon as our updated Singapore report is available. In the meantime, paid up Q Wealth members are welcome to contact our offices for referrals to more discreet private offshore banks that wouldn’t want their names publicized here. We also now have a great provider for opening accounts in Hong Kong and we can make referrals on request.

Peter Macfarlane comments on Gold Bullion Investing, the Dollar-Euro rate, and Crisis Investing Opportunity in Hungary for The Q Wealth Report

I’m trying to get ahead of myself at the moment in order to take a little time off in August. The result of this is that I’ve got behind on some other things, like keeping up with the news. Besides, I’m a traditionalist who still likes reading magazines in print, and they sometimes take a while to catch up with me on my travels.

Hence, I’m only commenting now on an interesting article in The Economist dated July 10th. They got my attention with the cover headline “Why Gold Has Probably Peaked.” Huh? How could the Economist be saying that? Here’s a quote from the article:

At some point either the worst fears of the gold bugs must be realised – in which case, heaven help us – or the world will become a less nervous place.

The hypothesis of the article is that demand in India and China for gold jewellery is shrinking, that gold is not a great investment because it doesn’t pay interest. As the world economy returns to business as usual, says the Economist, “the gold market may also return to some semblance of normality” – in other words downwards.

Well I can’t disagree that if the global economy really does get better, gold quoted in dollars might fall. But the idea that the global economy is getting better, or that the world is suddenly about to become more tranquil and relaxed, really is a stretch…

Sometimes I think Americans have a hard time understanding Europe, as I have written recently in my comments on the Euro. I said the Euro would recover and now it’s back above 1.30 to the greenback. But the Economist is very European in some ways and it seems they have a hard time understanding Americans. I mean, if they think the world economy is returning to business as usual, what planet are they referring to???

Most of my days at the moment are taken up with Americans who want to get out of the USA. They are looking for offshore investments, foreign residencies and economic citizenships. Of course if we get bogged down in our daily routines we might be able to block out of our minds what is going on – and that is what the majority do, because they don’t want to leave their comfort zones.

However, just think back to two years ago, even a year ago, and see how things have changed – for the worse. Anyone who thinks business is getting back to normal is living in cloud cuckoo land.

Here’s something else I like. The article quotes Willem Buiter, and Anglo-Dutch economist who blogs at the FT under the moniker maverecon as saying he would not invest:

into something without intrinsic value, something whose positive value is based on nothing more than a set of self-confirming beliefs.

Apparently, Buiter was talking about gold when he said this! However I would say it about fiat currencies like the dollar, euro or pound sterling. Is he seriously trying to tell us that say the US dollar has intrinsic value based on anything other than self-confirming beliefs? (In that case, the dollar is backed by the full faith and credit of the Obama government…) Give me my gold bullion I can touch and feel over paper and electrons any day!

On a slightly different but related topic, my fellow traveller Simon Black who blogs as Sovereign Man has written a couple of interesting pieces on fiat money recently. In what I think is an excellent analysis, he explains why trillions of dollars of institutional money are constantly looking for the least worst currency to hang out in, leading to frequent switching between the dollar, the euro and the yen in a race to the bottom. This keeps the three currencies almost even in the race to the bottom, so people don’t really notice the devaluations going on… but like any landing in a storm, there’s a lot of turbulence.

Then yesterday Simon wrote about Hungary, a country I used to live and invest in some years ago and still a pretty good place to live I think. I’ll be watching Hungary closely and Simon correctly points out that what is going on there could well turn out to be more devastating than the Greek sovereign debt crisis. This would definitely lead to a flow of money out of the euro again, and the balancing increase in the dollar as that turbulence continues. As a reader pointed out on Sovereign Man, “The result of a Hungarian default would be very similar to Argentina in 2001 with some very interesting investment implications.” I rather hope Hungary does default… then I will be one of the first in there to buy some tangible real estate with a briefcase full of Federal Reserve promises…

However, one thing Americans never quite understand about Europe is that nothing happens there in August. Hungary is unlikely to default in August as that would interfere with the annual month-long party at Lake Balaton, where Budapest moves to in August. (Like Paris moves to the countryside, or Buenos Aires moves to Punta del Este in December)

It’s always safe to take some time off in August. Come September, your writer and the Q Wealth team will be gathering in Cork, Ireland for Q Wealth Masterclass – a unique opportunity to meet and rub shoulders with a dream team of people who think like us. Read about the speakers here and Five Urgent Reasons why you should attend here. This will be your opportunity not just to protect your assets but put them into long term offshore investments with growth potential. Gold and Offshore Real Estate will be right up there at the top of the investing agenda.

It seems that what the Economist sees as the worst fears of the gold bugs is actually just what the gold bugs are hoping for… Heaven help people who are not gold bugs!