Are we on the verge of another global food crisis? asks Peter Macfarlane. And if so, how can we protect ourselves and profit from this crisis? This could have a huge impact on your offshore investments and assets, and – more importantly still – your safety and security. How to protect your assets and yourself? Read on for more…

Editor’s note: If you are not yet a subscriber to our free asst protection and offshore investing newsletter, Q Bytes, we thought you might be interested in the following article by Peter Macfarlane from last weekend’s edition. Sign up now to Q Bytes to receive Peter’s insight in your e-mail each weekend.

Are we on the verge of another global food crisis? Some people think so. This could have a huge impact on your investments, and – more importantly still – your safety and security.  There are even ways to combine secure investments in this area with second passport opportunities. That’s why we’ve decided to focus this weekend’s Q Bytes on this important theme.

Last month was marked by large-scale anti-government protests in Tunisia and Egypt. It’s fair to say that the Tunisian revolt inspired the Egyptian one. The Tunisian riots were sparked by a simple dispute about the right to sell food. Last year we also saw food riots in other African countries, such as Algeria, Mauritania and Mozambique.

Wheat prices have surged 50% since early June, the biggest jump in 30 years, according to HSBC. Droughts in Russia, Ukraine and Kazakhstan, which together account for 26% of world wheat exports, are leading to fears of tight supply and super-charging prices.

Today’s scares are just the latest sign of what could be one of the biggest challenges facing the global economy over the next 20 years – the fight to feed the world. Investors and speculators should definitely be paying close attention.

Food, of course, isn’t like other commodities traded on world markets. No country wants to run out of food or watch sky-high prices dump people into poverty and malnourishment. So both exporting and importing countries often take extreme, knee-jerk populist measures if they think a shortage is coming or prices will keep rising. These measures include things like hoarding and export restrictions. For example, Russia slapped a ban on wheat exports from mid-August last year, while Argentina has severely restricted beef and soybean exports.

Severe structural problems in the world of agriculture have made the balance between supply and demand very precarious. On the production side, there is a severe lack of investment in the rural infrastructure and agricultural research that we need to keep yields increasing. On the consumption side, all those newly wealthy Chinese, Indians and Brazilians are now buying more food than previously… more meat, for example, which means more grain gets turned into livestock feed instead of people-feed. Also don’t forget to add the new diamond for bio-fuels into the equation.

According to the OECD and the UN’s Food and Agricultural Organization (FAO), world population is expected to grow by 2.3 billion people between 2009 and 2050 with nearly all this growth from developing countries. They estimate that feeding a population of 9 billion will require a 70% increase in global food production by 2050.

World Bank Chief Robert Zoellick writing in the Financial Times, in an article that already caused controversy by suggesting that major economies look at a partial return to the gold standard, warned that “with food accounting for a large and volatile share of tight family budgets in the poorest countries, rising prices are re-emerging as a threat to global growth and social stability.”

Another problem many people have not taken into consideration is the falling value of the dollar.  Ben Bernanke’s quantitative easing will continue to cause a greater demand for dollar-denominated commodities, from people like us who are seeking to exchange fiat money for tangible assets.

Where are we going with all this? It’s well known that the Chinese are buying up large swathes of Africa, mainly for natural resources, while Latin America is seen as the new breadbasket – or perhaps the meat producer. Argentina’s government is certified nuts as far as we are concerned, so even wealthy Argentines are investing their capital in production in neighboring countries, particularly Uruguay and Paraguay. Brazil, meanwhile, is speeding ahead in agricultural production.

As some of you may know I recently attended a closed doors briefing in Paraguay with a small group of Q Wealth readers, during which we heard presentations from agricultural and forestry experts (Paraguay’s former consul in Hamburg to be precise, who has now returned to his home country and is heavily involved in forestry.)

I’ve invested quite a substantial part of the assets of my personal investment vehicle in Latin America’s southern cone area recently (including Paraguay and Uruguay) as I believe this area definitely represents future growth opportunities. Another very positive thing about this region is that it’s eminently liveable. That is, you can easily enjoy a safe, clean and reasonably priced first world lifestyle in the area. Africa has lots of potential too for the more adventurous amongst us, but I’m not about to move my family there. However, my family have spent time in Uruguay and got on great.

Last but not least, both Uruguay and Paraguay are quite liberal when it comes to naturalizations – that is, second passports.

At Q Wealth we are not a share-tipping newsletter, but there are certain plays on agriculture in the southern cone region you can buy on international markets. Do your research and due diligence. More generally, you can also expect further significant gains on stock market investments in the ag sector.

Most important, however, is that you understand the big picture, that governments with their short term mentalities are not telling you. This is a region you should watch. With the largest fresh water reserves in the world, plenty of land that is ideal for food production, and relatively hands-off governments, it is probably the world’s best hope to solve the future food problems, and your best hope if you are looking for a safe place to hide out where you’ll never want for food or water.

More to follow in Q Wealth Report.

by Peter Macfarlane for The Q wealth Report

It’s ironic that while residential and commercial real estate investors must take much of the blame for the current crisis, some of the best offshore investment and asset protection opportunities right now involve international real estate.

International or offshore real estate should be part of any savvy investor’s portfolio. Why? Because it’s a great hedge of value, a way to protect the real underlying value of your assets during difficult times.

With Quantitative Easing in the USA and Irish banks the latest in a long line of European bailouts, it doesn’t take a genius to work out that the dollar and the euro are both going to lose value over both short and long term.

With the dollar and euro collapsing, those seeking a safe haven have turned to investing in gold. I believe gold will still go much higher, or the dollar will go lower – whichever way you look at it. But I also believe it would be irresponsible to put your entire net worth into any one thing… gold included.

Real estate, when purchased at its real value as opposed to an inflated, easy-money value, is an excellent hedge. People will always need somewhere to live, and – even more to the point – people will always need food. Food requires agricultural land. As farm subsidies in major economies, like Europe and the USA, are necessarily pruned back, more agricultural production will move to emerging economies. South America, for example, is very well positioned to capitalize on this. Myself and a few clients are putting funds right now into a Hong Kong-based private fund investing in agricultural land in the Southern Cone of South America: Uruguay, Paraguay, Brazil and Argentina in particular.

There are also great bargains to be had investing in international residential real estate at the moment. Some prime properties in Europe, for example, are going at ten percent of their former asking prices. Even assuming they were wildly overvalued before, this now represents a fantastic buying opportunity.  Rather than watching the value of your dollars being eroded daily, you can hold real estate that is virtually guaranteed to increase in value over the long term. Smart real estate investors know they can also flip these properties quickly if they have bought well.

The key to international real estate investing, in my view, is common sense. Buy something that has intrinsic value. Residential property in the downtown areas of most major cities, for example, will always be in demand. Buy in cities where you can see growth.

Farmland also has an intrinsic value. With more and more mouths to feed in the world, I think buying cheap agricultural land is a great investment at the moment. If you are not yet ready to buy a ranch, there are ways you can get in to such opportunities via reputable third party investment managers, private offshore hedge funds and the like.

There is, however, a big mistake that many novice international real estate investors make. I would strongly caution against is buying into new developments in ‘exotic’ countries, especially buying off plan or touristic/retirement style developments. Buying intrinsic value means buying what can you see right now – not what a developer tells you will be there five years from now.

Too many retirees end up paying through the noose for lots that have barely been marked out on the ground and have very little infrastructure. They make the mistake of trusting a developer who speaks their language, or who has been recommended by nominally independent third parties or internet promoters who are in reality getting large kickbacks. They don’t talk to locals and see how much a lot the same size a few hundred meters down the road would cost – if they did, they might be in for a shock!

When buying in a planned retirement or touristic community, you must also consider that you will realistically be unable to resell before the developer has sold off the entire project – something that could take years in the current environment. The safest investment deals in international real estate right now are undoubtedly in existing properties – those that have already been built and are in established, popular locations.

The smartest real estate investors, when going into a market they don’t know, will actually rent a home and spend time there on the ground before they even consider buying. It may takes weeks or months and the patience to listen to all kinds of conflicting opinions, but gradually they will build up an intricate ‘insider’ knowledge of how the chosen market functions. Remember: this ‘on the ground’ form of due diligence is best.

One final word of advice: the best deals are not on the internet. The best international real estate deals always go before they are even advertised. Unlike stock markets, with real estate insider trading is the norm not the exception. The only way to find these best international real estate deals is by getting to know the right people in the right places and asking around.

If you would like to be kept up to date on international real estate investing opportunities, please sign up today for our free weekly newsletter Q Bytes.

Peter Macfarlane reporting from Tocumen Airport in Panama, in transit to the Caribbean…

I don’t write much in Q Bytes about my travels, but most of my clients are aware that I travel almost constantly… meeting clients and suppliers, doing research and due diligence. The last few weeks I have been in South America driving around dirt roads looking at agricultural investment properties, investigating first hand the buregoning gold business in South America, seeking elusive wifi signals in odd corners of hotel rooms (even on the roof of a hotel in one case) and enjoying some great barbeques with foreign investment managers and well-connected locals.

Although the internet is undoubtedly a vast repository of information that has changed the way of doing things beyond recognition in the offshore business, I’m still a firm believer in feet on the ground, and building long-term business through solid relationships. In other words, “you don’t know until you go.”

In fact, I believe this is more important than ever. These days there are unfortunately so many things that could go wrong, that it helps to know who you are dealing with. I only deal with people I have a good feeling about. I don’t look for the cheapest provider. Maybe not even the most successful or the best on paper. My business goes to the person I feel is trustworthy, who will be there for the long term.

I’m happy to have made a few more of those long term contacts on this recent trip – particularly in Uruguay, a very interesting option for tax-free residence and second citizenship, that I’ll be writing more about over the coming weeks. That was one of the main reasons for the trip, in fact: and it was successful. We can now make referrals to recommended experts for residence, citizenship, banking and trust services in Uruguay.

The business climate internationally is getting tougher, and believe me things will get a lot tougher yet. Especially when dealing with matters like offshore banking, asset protection, second citizenships and the like, we also need to deal with like-minded people. People who can see what is going on and who are making adequate preparations. There is no point in entrusting your asset protection planning to somebody who does not see the threats! That’s why it’s a great investment to spend time getting to know your business associates on a personal level, out of the office, to find out what REALLY makes them tick.

Geographic diversification is essential… that means you must be international both in investment terms, and in your outlook. Consider yourself a sovereign individual – because that is what you are. Nobody else is going to look out for you.

A good investment advisor (if you can find one) or perhaps a research subscription might be able to give your portfolio the international diversification you need. But to acquire an international outlook you must travel… to see and understand how things really are in the rest of the world.

Fortunately, more and more people are getting this. Years ago it was quite rare for clients to visit their offshore service providers or bankers. Now we see it all the time. Air travel is easy and cheap. Travel in general has become much ‘easier’ – some would say boring – because on the surface, everything might look so similar. But scratch under the surface by spending time with people in an informal environment, and you will learn so much more.

While I was in Buenos Aires I wrote to Q Bytes readers from an apartment kindly lent to me in Buenos Aires by an North American client who spends about six months of the year here. This place is informally known as ‘PT Southern Command.’ South America abounds with interesting opportunities for attractive returns on your investments, and opportunities for enhancing your freedom. The freedom, of course, is the most important aspect for me.

As a foreigner, nobody bothers you here provided you ‘live and let live.’ You are treated with respect. This particular client and friend, let’s call him Mike, made the leap a couple of years ago and bought his apartment in Buenos Aires. He announced the purchase to everybody at our 2008 ‘Recipes for Success’ event in Cancun and invited all the conference delegates to stay anytime. Mike has never looked back. Sooner rather than later he will qualify for citizenship here and with careful planning he has legally avoided paying a penny in income taxes. Plus, his apartment must have doubled in value judging by the prices I am seeing here now.

I’m not the only one from that 2008 conference who took up Mike on his kind invitation. I’m sure he now has a stream of interesting like-minded individuals visiting PT Southern Command, sealing new friendships, exchanging experiences and information, and providing the mental stimulation that all intelligent people need, but is often to hard to find amongst depressive talk at home fuelled by the mainstream media. I’m proud to think that this came apart from one of our conferenes. (The next one, in September, will be in Ireland – details will be posted shortly on our Events page)

In early July, I will be meeting a number of readers in Santo Domingo, Dominican Republic, who are interested in finding out more about residency and second citizenship opportunities there. I still have a few slots available for in-person consultations, and Santo Domingo is quite easy to reach with many direct flights from both North America and Europe. By meeting a group of clients during the same few days, I am also able to reduce my normal in-person consulting fee by more than half. If you are interested, again please initially contact us to schedule appointment. Due to limited time, please note that only requests from Q Wealth members can be entertained. If you are not a member, please sign up here first.

If you’ve ever considered going offshore, banking, living, investing or doing business internationally in Latin American offshore financial centers like Panama and Uruguay,  or on one of the Caribbean islands (Cayman, Bahamas etc), I’ve got some important news for you below.  As Swiss banks are under pressure as never before to lift the veil of bank secrecy, places like Panama have become to look like more attractive options. But how does this work in practice? What is going on today in the secretive world of offshore banks?

The following missive was sent out in our free Q Bytes newsletter a week ago. Response from readers has been phenomenal so we decided to publish it here on the blog, in order to make it available to a wider audience. (If you would like to receive news like this in advance, directly in your e-mail box, be sure to sign up for Q Bytes – remember it’s free!)

As we noted in our last article on the benefits of Panama Corporations and Bank Accounts, Q Wealth has quite a strong Latin American bias when it comes to investing and carrying out offshore business. Although this may surprise some readers, especially in the face of the world-shaping events and undeniably huge money-making opportunities in the Far East that we’ve also recently covered in Q Bytes, we can assure you that ours is a well thought out and considered policy.

Some places in Latin America are very liveable – Panama, for example, for those who dream of living tax-free near a tropical beach, or Uruguay for traditional European style city living at a fraction of the cost of the original version.

This week we are pleased to announce a brand new report prepared by Alternative Latin Investor magazine in association with Peter Macfarlane and The Q Wealth Report. This brand new report covers in-depth the state of offshore banking and wealth management in Latin America and the Caribbean – from a completely new, independent perspective.

It’s based on exclusive interviews with hands-on people in the know, movers and shakers like top bankers and business leaders. And best of all, this report is available entirely free of charge to Q Wealth members. You can download your copy right now in our Members’ Area.

If you have ever considered setting up a Panama bank account, retiring to a vineyard in Argentina, or opening an offshore internet  bank account (or an e-commerce offshore merchant bank account), then you need to read this report. It will help you understand how offshore banking in Latin America and the Caribbean works today – not so much the nuts and bolts of how to do it that you can already get from our Practical Offshore Banking Guide, but things like why different jurisdictions offer different services, how and what the local people, expat bankers and retirees are thinking right now, how governments in the region are reacting to political pressure from the USA, G20 and OECD, and how to ensure the security of your bank deposits… this report will give you the geopolitical depth behind the headlines, essential information for anyone considering living, investing or doing business in the region. You might also enjoy reading our post on the best offshore banks.

We would especially recommend this report as essential background reading alongside our Practical Offshore Banking Guide 2009.

HERE’S WHAT YOU WILL LEARN IN OFFSHORE BANKING LATIN AMERICA 2009

Will reading this report be a good investment of your valuable time? I’m sure that’s what you want to know. So here are a few of the key points and quotes specifically covered in this report, that I thought you might find particularly interesting. I’ll try to expand on these in future articles, but in the meantime you can read the details in this Offshore Banking Latin America 2009 report…

• Diversifying location for capital is a significant trend in both the Americas and Europe. Those new to offshore banking may be thinking twice about moving in that direction, but those familiar with its mechanisms feel it is a haven in the present climate. You’ll find out why.
• Whereas before most people thought the worst couldn’t happen, now smart people are planning for worst case scenarios. For Americans, that means a total collapse of the dollar. While inexperienced investors may feel that foreign markets are risky during times of crisis, smarter investors are well aware that risk can be substantially reduced by diversifying offshore.
• Instability provoked by the financial crisis could spark the return of economic nationalism like currency controls or even expropriation around the world. This may be carried out via the back door. Learn how investors and banks in the region are protecting themselves and their assets. For example, learn why corporate accounts at Brazilian-owned banks in New York and Nassau have grown ten-fold since the beginning of 2008.
• Find out more about the breakdown between corporate and personal accounts, and how clients typically achieve stronger asset protection through the use of corporate structures
• Read candid interviews with bankers about how European tax directives could affect European banks with branches in Latin America… this is stuff you won’t read on banks’ corporate websites.
• Why Panama is “not so artificial” and has “a solid economy” – compared to certain Caribbean jurisdictions that might look great on paper, but where the rule of law may not be respected. What image do you want to project when people do due diligence on your offshore corporation? One offshore provider gives a few warnings about things that don’t appear in the official brochures, and names a couple of jurisdictions (including one island that is particularly popular with Americans) that have a less than positive reputation.
• Learn more in-depth about the Panama banking system by reading interviews with local bankers and business people. Legally speaking, there are three different types of banks in Panama – what are the differences? Which should you choose, if any? How does Panama provide security for bank deposits?
• Why asset protection is so important: “If you want to sue someone in the States it doesn’t cost you anything but you can go bankrupt defending yourself.” Learn how Caribbean jurisdictions easily prevent this kind of fantasy lawsuit from ever being filed.
• “Before you had to be a multi-millionaire to make it worthwhile. Now there are people with $100,000 looking to diversify into foreign currencies or invest overseas. This has been made possible by offshore internet banking.” Read about the latest internet banking technologies, debit and credit cards, and multi-currency accounts in the region.
• Read an exclusive interview with Gaetan Bucher, Swiss-Dominican banker and the founder of the $850 million ‘International Financial Centre of the Americas’ – the first financial free zone in the world. This is literally a new ‘financial city’ due to start construction by the end of 2009 with completion scheduled for 2012. IFAC will offer real time offshore banking as well as an electronic clearing and settlement house LAIFEX – backed up by sophisticated financial services from big names. The regulations are being drawn up by Washington law firm Patton Boggs and Deloitte Consulting in London. Lloyds of London are also involved in the project.  Crucially, it is completely aligned with ‘best practice’ guidelines from the OECD and G20. This interview in my view represents a fascinating vision of the future of offshore banking and investing, where borders become insignificant. What will the offshore landscape look like when IFAC opens in 2012? Anyone thinking of going offshore now should think very seriously about this last question.
• Discover a new free online networking opportunity aimed at Baby Boomers retiring offshore, where they can search for international real estate, ask questions of experts, and meet people with similar interests. It’s a chance to connect with people who have ‘been there and done that.’
• Nothing beats doing your homework on an offshore jurisdiction before you finally select. One banker comments how smaller banks are often more orderly than big banks. He says, “Look for a historic bank that has worked well for many years, that has a strong balance sheet and doesn’t do strange things.” And you’ll learn other due diligence tips too.
• Do people who are retiring in the region need offshore accounts, or can they get better services from local banks? An important question for those applying for residence or buying property. It’s answered in this report.

All the above and more is covered in Offshore Banking: Latin America 2009, available free for download in Q Wealth’s Members Area. If you are not yet a member, you can buy access online now for just $87 for a year’s membership. Sign up now and get this info while it’s hot of the press!