China is going to build an 8 billion dollar oil refinery in Nigeria. It is the first of 3 refineries that comprise a $23bn agreement between NNPC and CSCEC. Nigeria’s state oil company, NNPC, will cover 20% of the cost while the state of Lagos will provide the land. The China State Construction Engineering Corporation, CSCEC, will cover the additional 80% of the cost. Nigeria already has 4 oil refineries but they are run very poorly and are estimated to be operating at only 40% capacity. Due to this inefficiency, Nigeria has to import some refined oil.

China’s dependence on energy (especially in the form of fossil fuels) is increasing dramatically and will continue in a strong upward trend. New power plants will be built, and more energy will be expended. One of the most obvious indicators of the trend for increased fuel demand is the automobile market.

In the past year, China’s car market expanded by almost 40%. Contrast that to the U.S. where new car sales plunged more than 20 percent in 2009 to a 27-year low of 10.43 million vehicles, less than the 12.23 million sold in China during January-November, making the Asian giant the world’s largest car market for the first time. Since the year 2002, about 50% of all motor vehicles in China have been purchased by individuals instead of large corporations or the government previously. As incomes increase, the high annual growth rate of private ownership is expected to accelerate. A new generation of young adults is emerging in China. This generation demands higher wages, better working conditions, and new material possessions.

However the Chinese government is taking steps to slow inflation, curb overspending, and control the economy. China’s economy expanded 11.9 percent in the first quarter. China International Capital Corp. has said that it expects growth to slow to 7.5 percent by the fourth quarter.

More cars mean more fossil fuels. Therefore along with this comes an increased demand for energy, particularly in the form of fossil fuels, which is still the cheapest form of energy available. Moreover it appears the Chinese government is taking steps to obtain that oil independently, even if that means teaming up with Nigeria.

Ed Lowell, contributing writer

Central banks around the world have been diversifying their own reserves out of the US dollar and into other gold and other commodity currencies like the Canadian dollar, Australian dollar and Brazilian real.  This shift in central bank policy around the world can have a significant impact on your wealth if you are completely in US dollars.

Most Americans believe the US is the land of milk and honey and will always be so.  History proves otherwise.  The US has been on a downward slide for many years and as the snowball rolling down the mountain, it has gained too much momentum to stop.

If you have all of your assets denominated in US dollars, now is the time to act.  You don’t want to be permanently tied to the woes of the US economy.  Diversify your assets through ‘geo-arbitrage’. 

From a practical standpoint, this just means to spread your wealth around the world.  Register a company in a low or no-tax jurisdiction.  Open a multi-currency bank account offshore.  Hold some of your investments outside of the US.  Buy real estate and gold.  But the time to act is now.  Tomorrow may be too late.

The Top Ten Reasons You Should Celebrate House Passage Of The Healthcare Bill

10) A nation that can afford trillions in deficits as far as the eye can see can surely afford hundreds of billions more. Right?

9) While many of Bart Stupak’s pro-life constituents might feel he has betrayed his pledge to guard the sanctity of life, they will be getting some nice new runway lights, which is kind of the same thing.  

It’s for the children. The 27-year-old children.

7) New taxes on interest income, dividends, and capital gains will surely spur a renaissance in job-creating investments.  As Paul Krugman might say, it’s textbook economics.

You can read the rest here…

With nearly $1T pledged for this enormous bill, there are only 3 ways the federal government can pay for it; cut spending, raise taxes, or inflation.  And by inflation, I mean printing dollars.  Who here believes the Federal government will cut spending?  Anyone, anyone?  So basically we are looking at the destruction of your wealth through taxation and inflation.  If you don’t believe me, just read your old high school history books.  We only have to look as far back as the ’70’s to see what happened when we printed an extra $100B.  Tax rates skyrocketed and inflation was in the mid double digits.  And $100B now barely covers the congressional furniture and toilet seat budget…

I would like to say that I don’t mean to scare you, but I would be lying.  I want to scare you.  I want to scare you into action.  I personally believe that through true capitalism, the world prospers.  And people like you are the capitalists that make the world go ’round.  But we are on the verge of a major redistribution of wealth, and it won’t be redistributed into the hands of the productive members in society.

In the past coupl of years, public sector jobs have skyrocketed both in number and in pay.  Public sector jobs now average $11.90 per hour MORE than private sector jobs.  And the value of public sector benefits is nearly double.  The only large net employer over the past year has been in government.  Where do you think payroll funds come from?

Entrepreneurs and investors make money.  Bureaucrats consume it.  Period.  The productive members in society create and produce and the taxation from this production pays for government services.  With approximately 50% of the population now no longer paying taxes, we cannot continue on this path.  We are heading for major change.  Maybe not catastrophic, but certainly major change is coming.

And I want you to do something.  Protect your assets.  Protect yourself from litigation.  Protect yourself from over burdensome taxation.  Protect yourself from inflation.  I hope I have sparked some thoughts with you here and encourage you to take action.  Until next time, live well.

I agree with most Americans that the current health care situation sucks.  It truly sucks.  It consumes 16% of our GDP and yet less than 10% of that figure actually trickles down to doctors.  Where is this money tied up?  Primarily in government regulations and litigation.  The mountain of filings and forms that must be filled out is truly a barrier to entry for any aspiring doctor.  Honestly, I cannot imagine wanting to become a doctor right now.

And the grand solution for this disaster?…..Wait for it….More government regulation.  Yes sir ladies and gentlemen, we are going to fix our problem of too much red tape, with more red tape.  3M should figure out how to capitalize on this.  A new analysis by the Joint Economic Committee and the House Ways & Means Committee just estimated that the IRS will add another 16,500 new jobs to examine and audit new tax information regarding the health care bill.  Excellent, just what we needed; more overpaid government workers to harass us each year about an already ridiculously complicated tax system that creates criminals out of citizens who are unable to decipher the code. 

As best I can tell, the CBO, congressional budget office, has yet to produce a reasonably accurate fiscal budget.  Much less predict the future 10 years out.  This new health care bill is proposed to cost taxpayers $938B, but somehow will reduce the deficit by $143B over the next decade.  Huh?  I don’t trust the accountants and economists one bit.  I mean, they never have been right, why start now.

You may have noticed in the past few months when you receive your shareholder ballots that if you don’t reply, your broker will send you several reminders asking for your vote.  I know I have noticed it.  And in years past, you received one notice requesting your vote and if you didn’t reply, that was the last you heard of it.

In July 2009, the NYSE Rule 452 was amended to disallow the automatic broker vote.  What  this means is that if you don’t vote, your broker cannot vote for you.  Pre-July 2009, if you didn’t vote, your broker could cast a vote on your behalf.  And 9 times out of 10, the broker would just vote yes to the board recommendations unless there was a major movement to oust executives.

Historically, only about 30% of the shareholder ballots are returned with a vote.  Which leaves 70% with no vote, and before last year, the broker likely just voted in favor of the board recommendations.  Now, without your vote, the broker cannot vote on your behalf, which makes your vote much more important.  This is great news for the small investor.  We actually have won a small battle against the Wall Street behemoths.

In last night’s speech, I feel like I was listening to my old high school football coach in the locker room pre-game.  It was a lot of rah-rah, but lots of fluff.  He left us with a broad agenda, much of which will never get implemented.  At least I hope most of it won’t.  I am hopeful that his optimism becomes reality, but I’m highly skeptical.

So far he has delivered nothing to improve the lives of Americans, but only burdened our children and grandchildren with huge amounts of debt to repay.  Granted this was initiated by the Bush administration, but he took the ball and ran with it.  In one year the money supply in the US has doubled, which will certainly cause massive amounts of inflation.  He has sent more troops to the middle east, bailed out huge, failed companies that continue to fund his parties campaign, and won a Nobel Prize.  Last week I was in Norway and even they think that is absurd.

One thing that really struck a chord with me in Obama’s speech was his pride in creating 2 million new jobs in 2009.  But where did these jobs come from?  As he stated, these were policemen, firemen, teachers and other public service workers.  He even suggested forgiving education debt for student who enter the public sector.  Interesting.  Maybe he should go back to Harvard for some basic economics courses.

Government is not a producer of economic growth, it is a consumer.  Where do these salaries come from for public service workers?  Taxes and debt of course.  In 2009 under the Obama administration the average private sector job paid $40k per year and the average public sector job paid $70k per year.  The average government worker makes nearly double what the private sector does.

I’m not saying that we don’t need policemen, firemen and teachers, but we do need to be able to pay for them.  And the private sector is the economic growth engine of not only the US, but the world.  The taxes must come from somewhere and without product entrepreneurs and investors to pay the bill, debt is the only option.  We must turn this around.  We are creating wrong incentives and a generation of young people thinking government jobs are where its at.

If we continue to see growth in the public sector and decline in the private sector that can only mean increased taxation for the entrepreneurs and investors.  We will see a brain drain in the US of massive proportions.  It is possible the government is going to limit your ability to work, invest or own assets outside of the US.  This is a scary concept to me.  This is the destruction of liberty.

Now is the time to act to protect your wealth.  You must create an asset protection plan to protect you and your family.  There are numerous ways, regardless of the nature of your assets, to protect them offshore or domestically.  But you need to act now while this is still an option.  Live well.

The GHWIG has broken the income groups into 3 categories; $100k-$200k, $200k-$1m, and $1m+.  From 2007-2008, there was a 24% increase of audits for those earning over $200,000 per year.  The IRS has hired more than 4000 people to increase audit activity and pursue your assets for increase tax revenues.

It is critically important for you take make sure you keep good records for all of your business and investment activities.  This is the easiest thing for the IRS to take advantage of.  It is also important to make sure your asset are properly structured so that you are in full compliance.  This should be revisited every year.  And never talk to an IRS agent without proper representation.  It is best to have a professional.

What the government doesn’t seem to understand is that the high earners in society are the productive business owners and employers.  Anything done to make it more difficult to comply with the ever increasing regulations just removes incentives for the productive in society to continue to produce.  Or worse, they just flee the country to more freedom friendly nations. 

There is nothing illegal or immoral about legally protecting your assets and taking advantage of tax breaks available to you.  But the government seems intent on constantly penalizing you for your efforts.  Make sure you protect yourself from the risks.