For many of you reading this, you may already have an offshore bank account and possibly an offshore company in a place like Seychelles, Belize, Nevis, Cook Islands or Hong Kong.

However, there are clearly a large number of you still sitting on the fence and unsure of why you would ever want an offshore bank account.  There is also quite a few of you who aren’t even sure if it’s legal for Americans to set up an offshore company or offshore bank account.

To respond to the second question first, the answer is simply – yes.  There is a lot of fear propagated from big brother and the media intent on scaring you out of moving money offshore.

This is primarily for two reasons;

1. This is protectionism at its finest and big brother wants to control your money and forcibly take 30-50% of your income through taxation.  If your cash is held offshore, they fear you won’t pay and they won’t be able to collect.
2. With the fractional reserve banking system, for every $1 you take out of a US bank, that removes $10 from the money supply in the US economy.  No politician or central banker wants that.

To answer the first question, I will illustrate with two stories.  Both stories are factual with only the names and some details changed for privacy reasons.

Mike called me a few weeks ago to discuss his financial problems.  You see Mike is facing a $1.2M IRS tax lien.  This may or may not sound like a lot to many of you, but for him, this is a very big deal.

The trouble started over 10 years ago.  Mike was a good ole country boy.  He owned a small house on a couple of acres, a 50 acre farm left to him by his parents, and for income he owned and managed a small used car lot.  His wife worked as a school teacher and their combined income at the time was around $75,000 per year.

Mike and his wife were frugal people and never spent more than they earned, were debt free, yet lived a good comfortable life.

The problem arose from the operation of his used car lot.  Mike’s business was a typical used car lot selling clean, well maintained Japanese cars that were between 3-7 years old.  It was a good niche because the new car dealerships would take them on trade, but wouldn’t sell them on their own lots.  So they went to auction where Mike would pick them up at wholesale prices.

As with most ‘buy-here-pay-here’ used car lots, Mike offered his own financing to his ‘less than credit worthy’ buyers.  If properly managed this can be a pretty lucrative business as they charge exorbitant interest rates, require 30% down payments, and the buyer pays weekly.

If the buyer misses a payment, you shut the car down with a hidden electronic shut off switch and repo in the middle of the night only to resell the car again next week.

In this business it is typical for people like Mike to run into cash flow problems.  If tight on cash, they are unable to restock their lots, so they go to lenders who specialize in buying the book of notes from used car dealers.

This is where Mike’s troubles began.  The ‘businessman’, who agreed to buy Mike’s notes, also took it upon himself to start a new company using Mike’s personal information – social security number, date of birth, etc.

This scoundrel, Lester, was gracious enough to offer Mike a good deal buying these notes at a discount allowing Mike to increase cash flow for buying more cars.

Of course Lester also used this same company he created using Mike’s personal information to buy notes from many other used car lot owners.  After a couple of years, Lester was earning a very nice profit, but as you may imagine he was not reporting any of this to the IRS.

After a couple of years, Mike received a letter from the IRS saying he owed $500,000 in back taxes from his note buying business.  Good ole country boy Mike hadn’t earned enough to owe that kind of money in taxes over the past 10 years combined.

Knowing he was innocent and convinced this would be easy enough to prove to the court, Mike showed up defending himself against the IRS.  Long story short, Mike lost his temper in court and was sent to jail for 6 months for contempt.

During this time, Mike’s bank accounts were seized by the IRS and tax liens were placed on both his house and his farm.  The bank account seizure and property liens were completed before Mike was even found guilty and convicted of tax fraud.

At the direction of Mike’s lawyer, he plead guilty and was released from jail for time served and was required to submit himself to psychiatric evaluation which resulted in a permanent criminal record with an insanity plea.

This record along with the insanity plea prevents Mike from ever getting a US passport and makes it very difficult to find reasonable employment.  Ten years later, Mike is still fighting this battle.

My second story involves a friend of mine, Steve.  Like Mike, Steve was just a normal guy living a normal life.  He was married with 3 kids, nice house, nice cars, and good job in the IT sector with a good low 6 figure income.

Steve was also a frugal guy and had saved up a pretty decent nest egg.  Everything seemed to be going well for him.

Unfortunately Steve did not realize that his wife, Matilda, was not nearly as happy as he was with their normal suburban life.  Matilda was a nurse and happy with her career, but very unhappy with life at home.

We don’t really know what happened, but either she was bored with Steve or was just swooned by Sylvester, but either way she was receiving the majority of her affections from outside the boundaries of her white picket fence.

Sylvester was a sly cat.  He convinced Matilda that she deserved a better life and he was the one to provide that for her.  Together they devised a scheme to boost their own nest egg by depriving Steve of his lifetime of hard work.

Once the timing was right, Matilda registered a complaint with the police department against Steve for spousal abuse (completely false charges) and shortly thereafter filed for divorce under those grounds.  Matilda was a great actress and the police took the bait – hook, line and sinker.

Steve was arrested and hauled off to county jail.  He was held without bond because Matilda convinced the court that if released he would unleash his violent urges in retaliation against her and the children.

During Steve’s ‘vacation’, Matilda maxed out each and every credit card they held jointly.  Most of them were just cards tied to Steve’s credit, with Matilda as a secondary card holder.  She also wiped out their joint bank accounts and in the divorce settlement, Matilda was awarded the house, the cars, and an alimony payment that was 75% of Steve’s previous income.

I say previous income, because as you can imagine once Steve was in county lock up, his old job fired him.  After all, who wants a wife-beating criminal on the payroll?

In just a matter of a few months, Steve went from a happy husband and father with a sizable savings account, great job and nice house to an unemployed, penniless criminal that cannot see his own children and more debt than he can ever possibly pay off.

I am certain many of you are saying to yourself, “Nice stories, but that kind of thing would never happen to me.”  I can tell you that Mike and Steve said the same thing right up until the time it was too late.

Back to the original questions, “Why would you ever want or need an offshore bank account?”  For Mike and Steve, an offshore bank account held in a private offshore company name would have been an excellent insurance policy against the problems that eventually befell them.

Mike could have set up an offshore Seychelles IBC and opened an offshore bank account in the company name to use for his savings account.

This offshore savings account could have been the nest egg he kept outside of the reach of the US court system allowing him a financial backdoor in the unlikely event that he is ever a victim of identity theft.

Steve could have done the same thing setting up a Cook Islands LLC and offshore bank account for his savings and investment portfolio.

This offshore bank and brokerage account could have been Steve’s “Global Escape Hatch” in the unlikely event that his wife went off the deep end with Sylvester the cat.

These are but just two stories I could give out of countless tales from people who thought, “This would never happen to me,” until it did in fact happen to them and they wished they had already set up an offshore company and offshore bank account as a means of financial insurance.

I wrote a recent article titled, “Svetlana Takes Victor to the Cleaners” that discusses a unique opportunity to set up an offshore Seychelles IBC and European bank account.  This is a very low cost way to begin setting up your own asset protection plan.

Call today for your free 30 minute asset protection consultation.  Until next week, live well.

Living in Eastern Europe, I am somewhat sheltered from this, but with Facebook and all of the news outlets it’s impossible to avoid the implications of what’s going on with this movement.

The OWS movement reminds me of a scene from the movie ‘Network’ starring Peter Finch where he plays the role of network anchorman, presumably modeled after Walter Cronkite.  Click here to watch the scene.

Finch repeatedly says, “I’m mad as hell and I’m not going to take it anymore”.  This was during the ‘70’s when the US was suffering from a recession, high inflation, high gas prices, and record high unemployment.  Sound familiar.

Today is a different world though.  We live in the age of Facebook, Twitter, text messaging and blogs.  We have reached a point of worldwide group consciousness never before seen in the history of mankind.

You can’t even burp in public anymore without someone recording the video on their iPhone, uploading it to YouTube and then sharing it with their 730 Facebook friends within seconds.

Some people believe the revolutions in Egypt and Libya wouldn’t have happened if it weren’t for social media.  I tend to agree.  It provided a virtual medium for people to organize and plan for their civil (and sometimes not so civil) disobedience.

I personally have been dismissing the OWS movement as a bunch of ignorant, lazy, out of work 20 something hippies who don’t understand how the world works.  To some extent, this is the case.

But admittedly, I have been wrong to dismiss this movement as short term hippie protest against capitalism.  I feel the anger is misplaced toward Wall Street and the majority of the blame lies in Washington.  I would feel a bit better if it were labeled, ‘Occupy DC’, but regardless there is merit to their protests, and it shouldn’t be dismissed.

People are angry with the current state of affairs, and rightly so.  Maybe they don’t understand the underlying causes of the ongoing economic crisis, but nonetheless they have the right to be disenchanted with the way things are being handled.

I am sure many of you (if not all) agree that something is just not right today with the world.  There is something out of sync.

We are angry that our elected officials have no fiscal responsibility and continue to rack up government debt that will drag down American productivity and decrease the quality of life for generations to come.

We are angry that huge corporations that fund political parties are not allowed to go bankrupt while our businesses suffer in the downturn.  We are angry that our neighbor stopped paying his mortgage 2 years ago but still lives happily in his house while we continue to pay a mortgage payment on a house that is worth half of what we owe on it.

We are angry that big corporations have record amounts of cash on their balance sheets, but still refuse to hire.  We are angry that the US seems to be turning into a fascist police state robbing you and me of our personal freedoms.  We are angry that we used to have great 6-figure jobs and now have to work 2-3 shit jobs just to make ends meet.

We are angry that old ladies and children are subjected to intrusive pat downs by bullying TSA agents when they want to fly cross country and visit family.  We are angry that politicians get to vote on the citizens’ healthcare and social insurance plans while they get to opt out in favor of much more lucrative plans for themselves.

We are angry when we go fill up our gas tanks for $90 and then read about the subsidies the oil companies receive.  We are angry when we hear stories about companies like Halliburton who received billions in government contracts that were never put up for public bid – especially when we know the former US Vice President was also the former CEO of Halliburton.

Clearly I could go on and on.  There is much to be angry about today.

The potential exists for the OWS movement to be the beginning of a US revolution.  Not in the sense that the people take up arms and storm the White House, but in the economic sense that people are fed up with the system and they stop feeding the beast.

This is essentially what has been happening in Greece over the past few decades.  Greece has a long history of stupid government.  In 1922 the Greek finance minister declared that each drachma would be cut in half and the balance of value would be replaced by 20 year bonds paying a 6.5% coupon.

Imagine you had 10k drachma in your bank account in 1922 and the next day you have 5k drachma and a 5k bond paying 6.5% interest for 20 years.  On the surface this sounds ok, but in reality the Greek government paid the coupon payments for a few more years then defaulted on the bonds.

Between 1940-1944, Greece re-denominated the drachma several times and created inflation that amounted to 160,000,000,000% during that period.  As you may imagine, the people developed a severe distrust for the Greek government.

It’s not hard to understand why so many Greek business people ran the majority of their businesses in the ‘black market’ and outside of the watching eyes of the incompetent policymakers.  Effectively the Greeks decided to stop feeding the beast.

They said, “I’m mad as hell and I’m not going to take it anymore”.

What comes next though is critically important.

What do you intend to do about it?

Do you plan to join the OWS crowd all across America and hold up signs protesting your anger?  Do you plan to build a bunker under your house and stock it with water, can foods, gold, guns and ammo?

Or do you plan to protect the wealth you currently have and position yourself to profit from the market inefficiencies that are abundant today?

Obviously I am a big believer in proper asset protection planning.  It is critically important to create a veil of privacy around your assets to keep the wolves at bay.  A properly structured asset protection plan consists of limited liability companies (LLC), limited partnerships (LP or FLP), and asset protection trusts or living trusts to ensure your estate can pass on to your heirs without government interference.

I am also a big believer in providing value.  Is your skill set sufficient for the globalized job market?  Maybe you can learn a new language, get your master’s degree, learn how to write html code, learn to build wordpress sites, become proficient in options trading, or educate yourself on reading financial statements.  The options for improvement are virtually endless.  But sitting on your laurels does nothing to improve your own situation.

I recently talked with a friend of mine who saw a significant downturn in his business, so instead of whining and complaining then collected unemployment, he researched the job market.  What he found was that in a certain part of the country the job market was booming due to recent oil and natural gas exploration.  He packed up the car, moved there and got a blue collar job making about $80k per year.

Another friend who runs several different web stores went on a buying spree picking up website businesses selling for 1X profit.  Yes, 1X profit.  Sometimes even less.

I’ve got a couple of friends who have been buying up houses in a couple of specific markets for less than 50% of their sales price just 3 years ago.  They are buying only newer houses, renting them out, and selling them as investment property to investors around the world.  Then they do the property management on the backend.

Even my 15 year old daughter has taken it upon herself (sorry, I’m a proud papa) to leverage her skills into freelance work.  She recently started taking jobs on Odesk writing and promoting a couple of fashion blogs.  This is work she can do from anywhere in the world, it’s completely virtual.

There are thousands of available jobs on sites like Odesk or Elance and many people make their living doing various types of freelance work.  For those of you looking for higher paying jobs, a quick search on ExecuNet showed thousands of available jobs both in the US and abroad paying well into the 6 figure range.

The point is that there is opportunity everywhere.  In the ‘70s after the stock market crashed the majority of passive investors fled the equities markets.  But many people built great wealth buying at that time.

I’ve said it many times, but where turmoil exists, opportunity persists.  Personally I’d rather profit from the crisis instead of stock my bunker.

Over the past week I have been working with one of my asset protection clients developing a strategy for him to minimize his risk.  He is a commercial real estate entrepreneur with a fairly large 8 figure net worth.  Every time I work with successful entrepreneurs like him I can feel my optimism growing.

The world truly revolves around entrepreneurship.  You are the dreamers, visionaries and ultimately the creators of economic growth and prosperity.  You are then ones responsible for constantly improving the welfare of the billions of inhabitants on this planet.

So while I may seem doom and gloom at times, it is all in an effort to awaken you to some of the harsher realities in today’s world.  Truth be told, I am an eternal optimist.

I guess you could say I am bullish on the ingenuity and creativeness of entrepreneurs, but very bearish on governments and politics in general.

I found this recent statement by Lon Fuller, a noted legal philosopher and Harvard professor.  I thought it was relevant to what I call ‘The Great Reset’;

Lon Fuller argued that in order to create and maintain a system which can properly be called a ‘legal system’; a certain procedural requirement should be satisfied.  These are (1) that there should be rules in the first place as opposed to ad hoc judgments; (2) those rules must be made known to all those affected by them; (3) rules should not have retrospective effect; (4) the rules should be understandable and; (5) consistent and; (6) should not require the impossible of people; (7) the rules should not be changed so frequently that people cannot orient their actions by them; (8) the rules as announced should coincide with the actual administration of those rules.  Fuller claims that the absence of any of the 8 basic premises of a legal system do not just result in a bad system, but no legal system at all.

America was established as a place where people could come to be free from overzealous governments, religious persecution, and economic constraints.  America was founded as a Republic; or rule by law.

If you take a look at just the US tax code, we are failing miserably with our legal system.

Regardless of the failure of the political machine in America, I am very optimistic about the future.  If there were an option trade to be made here, I would be buying calls on entrepreneurship and puts on stupid statist political agendas.

Right now is the best time in mankind’s history to be an entrepreneur.  I’ve said it many times; ‘Where Turmoil Exists, Opportunity Persists’.

With the explosion of the internet, you can now work from anywhere in the world.  Just five short years ago, it was very, very difficult to earn a living online.  Today, the opportunities are unlimited.

Just this week my 15 year old daughter got a freelance job (using Odesk) working for a clothing company promoting their blog, writing articles, and posting product pictures.  I was bagging groceries at that age hoping some desperate housewife would tip me for bringing groceries to her car.

A friend of mine, MJ Demarco (author of the book ‘The Millionaire Fastlane’ – highly, highly recommended!), says that in today’s world it’s all about providing value.  While that may seem a bit cliché, most people seem to just want to make money.

MJ recommends finding an unfulfilled or under-fulfilled need in the marketplace and adding value.  The majority of people today follow the traditional path and just want to find a job that pays money.  They seem to forget the part about providing value.  (MJ also runs a forum called ‘The Fastlane Forum’ for people looking to connect with other like-minded people).

My daughter found a way to provide value to her employer by offering her services.  Every day I see opportunities where a need is unfulfilled or under-fulfilled and providing value in this marketplace could give you freedom from the traditional 9-5 life.

Here in Eastern Europe, I have noticed that nearly everyone either speaks English or wants to.  Of course the best time to learn a language is when you are a child, so an English language pre-school would be ideal.  I’ve yet to find one.  They may exist, but they are few and far between.  Need?  Check.  Value?  Check.

A business associate of mine runs a law firm in Panama.  He has found that Americans are becoming more and more leery of the US financial system.  He has negotiated a deal with a credit union in Panama to accept US clients (very few accept foreigners).  This credit union pays 4% interest on basic savings accounts and up to 9% on retirement accounts.

If you put $100,000 in a retirement savings account today and added $10,000 per year for the next 20 years, you would end up with over $1M.  Keep in mind, this is held in cash, no risky investments – no stocks, bonds, options, real estate, etc. – only cash.

Where else can you get 9% a year risk free?  Did I mention there has never been a credit union failure in Panama?  Ever!  (If you would like a free introduction to my lawyer friend, email me here and mention Panama credit union in the subject line).  Need?  Check.  Value?  Check.

Another friend of mine, Jason, found there was a sever lack of quality in the investment research business.  He found there were a lot junk newsletters written by inexperienced traders and investors.

So Jason decided to find some of the top traders in the US with a long and verifiable track record of success and publish their research.  I am personally using one of his publications with much success (click here if you want to watch his free intro video).

For those of you that have chosen to live an expat life, you know that your ability to earn a living abroad was a very critical part of that decision.   If you have the knack for trading, this becomes a viable option for work.

I am personally using Chuck Hughes’ research.  I have been an options trader for several years.  Chuck’s trading methods are very similar to my own, and I have learned a lot about minimizing my own risk and maximizing gain using his options strategies.  For me, this was an investment in my trading education.

Yesterday I made a trade using his recommendation (by the way, I don’t make blind trades on someone else’s recommendations – I always do my own research to verify).  For every $5800 I put into the trade, my maximum gain was $796 and my maximum loss was $170.  This is for a maximum of a 9 week holding period (basically 2 months).

If it reaches max gain, this is over 82% annualized return.  If it reaches max loss, this is about a 17% annualized loss.  For most traders, this is a very, very good risk/reward ration.  If you are interested in learning more, click here to watch Chuck’s free video.  Need?  Check.  Value?  Check.

Day after day I speak with clients and friends who constantly amaze me at their capacity to reengineer their lives and their businesses to provide more value in today’s marketplace.

One friend is taking advantage of recent law changes related to medical marijuana and opening a high tech grow center to supply the local dispensaries.  Trust me; he’s not your ordinary farmer – or pothead for that matter.

Another friend just emailed me about the difficulty he has experienced in finding long boards (skateboards) in Finland.  He has done some research and found there is demand, but very little supply. He is talking to some US manufacturers about importing their product.

I provide value (or attempt to anyway) by offering you an alternative insight into the world of economics.  I help clients minimize their risk through customized asset protection planning.  I also inform you of various opportunities as they arise that can be of great benefit to your quality of life.

What is your value proposition?  Are you one of those people that just want to make money, or are you truly looking for ways to add value to the lives of others?  What are you doing today to improve upon what you did yesterday?

For those of you not inclined to read the musings of Barry O and his legal minions, let me summarize his $447B plan for you.

• Cutting the payroll tax for employees and 98% of businesses
• Payroll tax holiday for adding workers or increasing wages for small businesses
• Expanding the SBA backed loan limits
• Tax credits for hiring unemployed veterans
• State funding for preventing layoffs, modernizing schools, improving infrastructure, and expanding broadband access
• Extending unemployment benefits
• Tax credits for hiring long-term unemployed workers
• Mortgage refinance programs
• Fully paid for by the President’s long term deficit reduction program

Well folks, doesn’t that make everyone feel better?  The Obamessiah rode in on his white stallion to save the day.  We are lucky to have him…

I don’t want to go into all of the details since you can find that on the site mentioned above or on any number of other news sites, but there are many fallacies in his logic here.

For example, $35B is targeted towards saving the jobs of 280,000 teachers.  Simple math tells me that taxpayers are paying $125,000 for every teacher job saved.  While I certainly value the work that teachers do, the price seems a bit high.

Another point of interest is the President’s plan to cut payroll taxes in half.  Considering that the Social Security Administration is now paying out more in benefits than it collects in revenue, does it really make sense for the President to propose a plan to cut its primary revenue source in half?

Based on the average estimate of several top economists, the jobs plan will create about 1.4M jobs.  Again, my simple math tells me this comes out to be over $300,000 per job.  Considering the median income in the US hovers around $40,000, where is the remaining $260,000 going to end up?

As I review the Obamessiah’s jobs plan, the thought that keeps sticking in the back of my mind is, “This is like putting a band-aid on a bullet hole.”

The US, as well as the rest of the modern world, is bleeding.  The bloodshed is coming from unscrupulous politicians looking to save their own asses and the asses of their campaign donors.  The free money era is coming to an end ladies and gentlemen.

Do you really think it’s a coincidence that Barry O proposes a jobs plan aimed directly at the middle class with one year left before the presidential election?  He is trying to buy political goodwill with the weak minded masses.

I am all for tax cuts and helping small businesses, but every proposal by this administration just increases the amount of red tape and thus the size of government.  Sure, it sounds nice to give tax credits and payroll tax cuts to small business, but who do you think is going to regulate this?

Voila, looks like the IRS is hiring again.  In addition, small business owners are now going to have to hire more accountants and lawyers to maintain compliance which increases their own cost of doing business.

Maybe I’m a naïve simpleton, but why not give a tax holiday for repatriating offshore profits held by US companies?  There is over $1.2T in profits held by US companies in offshore entities that will remain there as long as the US penalizes companies for creating efficient structures to compete globally.

Of course a big argument here is that the big corporations won’t actually use this money to hire new workers, but instead give it back to shareholders in the form of dividends or share buybacks.

My view is that even if corporations refuse to use this money to hire one single worker and use the money instead for shareholder enrichment, they would now feel richer and spend money more freely.  This would create an increase in consumption and companies would then need to hire anyway to meet demand.

But again, maybe my simple mind just doesn’t understand the way the world works.

Here’s another idea for the government – get the hell out of the way.  Eliminate agencies and departments that offer no increases in economic productivity and completely revamp the tax code.

In business, you want to create incentives for your workers to do the right things.  You pay operational people incentives based on profitability, you pay sales people incentives based on sales, you pay production people incentives based on productivity, and so on.

If you want to provide the right incentives as a nation, you need to start with a tax code that provides the right motivation.  Right now the tax code is so overly complex, it effectively makes all of us criminals by default.  It is virtually impossible to be 100% tax compliant.  Read Barry O’s jobs plan and you will see what I mean.

America became the world’s superpower because it was an innovative place where people could come and be free to run their businesses as they chose and not be restricted by oppressive government regimes.

America has now become what it was originally rebelling against.

We need to start at the foundation with a tax code that provides the right incentives.  A consumption based tax in the form of a national sales tax used alone or in conjunction with a low flat tax would immediately put this country back on the  path to prosperity.

I would propose either a national sales tax of 25% alone, or a 15% sales tax in addition to a 10% personal income tax.  Eliminate the corporate income tax, capital gains tax, investment income tax, death tax, and nearly every other tax that we probably aren’t even aware of.

Ahhhhhhhhhhhhh, ok – back to reality.  That was good to get off my chest.  But we all know the likelihood of this utopia becoming a reality is nil.

I would encourage you all to assess your own personal situation.  Are you well positioned for the world in the ‘Great Reset’?   Do you have the skills necessary to thrive in today’s economy?  Are you living the life you dreamed of as a kid?

Today is the day to take responsibility for your life.  Sure, I rant about governments and stupid politicians every week, but I am a firm believer in using this knowledge to improve your life and increase your wealth.

The quality of your life depends on how you react to what the world throws at you.  Are you living life on your terms?

Call today to schedule your free 30 minute asset protection consultation.  Until next week, live extraordinary.

We have partnered with EscapeArtist to now run their asset protection portal – EscapeWealth. I am very excited about this project as it allows us to partner with the world’s leading information portal for freedom minded individuals.

This week we published our first Ezine with 12 articles about such topics as offshore trusts, 2nd passports, privacy, protecting your retirement accounts, trading and investing, and a very unique business opportunity that can be run from anywhere in the world.

So instead of going through my usual rant about the current state of affairs and offering suggestions on asset protection planning, I will just encourage you to just read this month’s Ezine for the details.

I would also encourage you to subscribe to our mailing list so that you can get this Ezine delivered each month directly to your inbox. Enjoy.

On one of the monitors I keep 4 different charts from my trading software up at all times. The 4 charts are; gold futures, crude oil futures, S&P500 futures and Nasdaq futures. All of them show the front month.

As many of you are aware, gold is trading around $1500/oz and oil is hovering around $100/barrel. Last night while working on another project, I glanced over to my charts screen and gold was at $1370/oz and oil was at $89/barrel.

I’m fairly certain my heart stopped beating for at least 10 seconds. Keep in mind, this would be a roughly 10% downward move for both gold and oil – in a matter of minutes.

Luckily I noticed my software was going through an automatic update and it reverted back to the closing prices of a few months ago. Whew! My heart resumed normal operation.

But it got me thinking, what would cause a 10% move in gold in a matter of minutes? If you have even a basic understanding of Econ101, then you would know there must be a huge seller in the marketplace.

Of the larger gold hoarding nations in the world, who would want or need to sell? The largest gold reserves in the world are;

1. United States ~286M oz
2. Germany ~ 120M oz
3. IMF ~ 101M oz
4. Italy ~ 86M oz
5. France ~ 86M oz
6. China ~ 37M oz
7. Switzerland ~ 37M oz
8. Russia ~ 27M oz
9. Japan ~ 27M oz
10. Netherlands ~ 22M oz

Right now the total gold reserves in the world are about 1.1B oz. This means the US is by far the largest single owner of gold with about 26% of the world’s reserves. At $1500/oz, this means the US owns about $429B worth of gold.

Of the top 10 gold hoarders in the world right now, the only one I can imagine unloading would be the US. With the US fast approaching its debt ceiling of $14T, the only options are to get congress to raise the debt ceiling or sell assets.

Of course I find it rather ironic that the largest creator of monopoly money in the world is also the largest owner or real money – gold. But I digress…

Truthfully, the likelihood of the US selling its gold is pretty low. Just because they are scamming the world doesn’t mean they don’t know what real money is.

I’m not Chicken Little – I don’t believe the sky is falling. At some point though, reality will sink in with the people and they will realize the US government, and in effect the world, is in bad fiscal shape.

There is a reason commodity prices are soaring – the quantity of US dollars has more than doubled in the past couple of years far outpacing the level of productivity. Anytime there is more cash than stuff, prices rise.

The only reason we have seen oil prices slide over the past few days is the commodity exchanges have raised the margin requirement on oil futures contracts. It’s basically the same situation I wrote about in last week’s newsletter, The Black Crow Event.

I am confident there were some backroom phone calls made between the Fed, the Treasury, and the commodities exchanges that prompted the increase in the margin requirement on oil futures contracts. This is nothing more than government manipulation to control the slide of the US dollar.

Mark my words; there will be more pain to come before positive change occurs. We will see federal and state income tax increases, nationalization of IRA’s and 401K’s, increases in property taxes, currency controls to limit the movement of wealth, QE3-33, full socialization of healthcare, and many other measures not mentioned and probably not even considered yet.

I ask you, “What are you doing to protect yourself, your wealth, and your future generations?”

1. Have you hedged your portfolio risk?
2. Are your skills viable in tomorrow’s economy?
3. Does your business provide something of value in tomorrow’s economy?
4. Do you have a good rolodex of contacts to pull from for new and interesting opportunities?
5. Have you protected your retirement accounts?
6. Have you diversified your wealth or are you 100% tied to the US?
7. If you own real estate, have you minimized your litigation risk or do you own property in your own name?
8. Have you developed your own asset protection plan that addresses litigation risk, taxation, and continuity of your estate?

If you answer no to any of these questions, I implore you to take action now, before it’s too late.

I received several emails and calls in regards to this newsletter with questions and concerns about what was outlined. One email in particular summed up the majority of the questions so I will post it here;

Lamar said (I have posted the exact email),

Very interesting although many of the tax savings tips are valid right now there are a few concerns that investors need to be aware of with an offshore trust or account.

Many of the mega millionaires, Trump, Huizenger, use these strategies as part of their tax and estate plans however they will usually put their excess assets in these type of risky situations.

1) The money or asset is located and subject to the rules of the country in which it is located. Recently many investors in an offshore trust lost all of their money when the bank which held their trust money located in the country where the trust was located closed its doors. The bank was owned by the dictator of the country. He emptied the accounts for his own personal use. Investors had no recourse because many of these countries do not have a regulatory agency they can go.

2) As you have seen the IRS and federal government are closing many of the free tax haven doors of these offshore countries. There is no guarantee that when you are ready to give this money to your heirs that the US will not be able to tax it.

3) You need to have $5 to $10 million for this to really be beneficial and be willing to take a risk of losing it. Buyers beware, you have no control of the assets in this trust, the trustee’s do and no control over the going on’s in the country in which it is located. No recourse.

As with any investment you need to fully understand the risks and opportunities associated with it. Every investment has a place and time and is fit for an individual. You just need to make sure it fits your needs.

I need to keep this newsletter short and sweet, so I will address these concerns directly.

First of all, I want to note that with any type of offshore planning, thorough care is necessary as mistakes are easy to be made. Lamar is not completely incorrect with his concerns. If the planning is done incorrectly, these things can be handled improperly and expose you to risks.

1- It is not necessary for your trust and your assets to be held in the same country. For example, you could establish a trust in the Cook Islands that owns your business in Monaco and your bank account in Luxembourg. This minimizes your country risk by segregating the asset with its country of ownership. Our firm also has a hybrid trust that gives you the best of both worlds – offshore asset protection and estate planning benefits without the initial reporting requirements of offshore assets. I am a firm believer in internationalizing yourself and your assets. Don’t put all your eggs in one basket, no matter if that basket is in the Cayman Islands or the United States.

2- There is one thing I know about predicting the future – 50% of the time I am wrong. Of course there is no way for us to tell the future and what happens with tax policy in years to come, but I do know that if you move ownership of your assets to an offshore trust which now owns assets in various other safe countries, it significantly reduces the ability of the IRS to attach your heirs’ future assets. From the last newsletter, keep in mind that your heirs were not grantors of the assets held in trust; they are merely beneficiaries. As such, these assets would never be in their taxable estate, only any income that is repatriated.

3- This $5-10m number is completely false. Based on Lamar’s concerns, I can see where he would see this to be a minimum threshold; however I have clients with significantly less than that amount who have found offshore estate planning to be very beneficial. The control issue is the one I hear most often when dealing with trusts. It is a valid concern because the trustee now has title to the property held in trust. We use large professional trust companies in various countries for this task. They earn their living off of their fees generated from thousands of clients. It is not in their best interest to try to ‘steal’ your stock portfolio or your apartment building in Phoenix when that would destroy their reputation and crush their business. Not to mention the legal hurdles they would encounter trying to take possession of your property. It’s much simpler for them to just take your fees year after year along with their thousands of other clients. Another way we eliminate the control issue is by having each asset owned by a separate entity – like an LLC or IBC. With you as the LLC or IBC manager, you retain managerial control of the asset, while the trust owns the equity in the LLC or IBC. By injecting this additional layer in your estate plan, you retain all control of your assets while still getting the asset protection and estate planning benefits offered.

Yesterday, I spoke to a woman who mentioned that she realizes it is something she needs to do, but is struggling with the idea of spending the money on a service with no intangible product and no immediate
gain.

I absolutely agree. It’s difficult to write the check when you have no pending litigation and no immediate threat. After all, there is always tomorrow to get that done. Today I want to address the importance of getting it done.

Sigmund Freud would have called this the ‘pleasure principle’. This idea was originated by Freud in modern psychoanalysis, although Aristotle touched on it hundreds of years earlier in his ‘Rhetoric’;
“We may lay it down that pleasure is a movement, a movement by which the soul as a whole is consciously brought into its normal state of being; and that Pain is the opposite’.

Essentially Freud and Aristotle are saying that we make our choices based on the immediate gratification of needs and the immediate avoidance of pain.

This could also be called the ‘procrastinator’s doctrine’ (I made that up myself).

I find this every week when dealing with existing or potential clients, both from a pleasure and a pain perspective. Frequently I get calls from people who are being sued and want to know what they need to do to protect their assets – avoidance of immediate pain.

Unfortunately, in most cases they are too late. These people are in jeopardy of violating fraudulent conveyance laws. Fraudulent conveyance is a civil cause of action brought on by creditors against the debtor who has attempted to transfer assets out of his name to avoid financial loss.

The most common fraudulent conveyance is to family members and friends. I cannot tell you the number of times I have spoken to people who said, “I don’t have to worry about my investment portfolio; I transferred that into my wife’s name” or “I moved all of my investment properties into my father’s name.”

In fact, you do have to worry. This is the easiest form of ‘asset protection’ to unwind. The courts can easily grab those assets from your wife or father just as if they were yours, which in fact they are.
The flip side to this equation is that people are reluctant to take the necessary steps to develop their own asset protection plan because of the immediate pain of spending the money and the time involved – again avoidance of immediate pain.

Of course there is no immediate gratification to asset protection planning. It is completely counterintuitive to Freud and Aristotle’s ‘pleasure principle’.

However, Freud also constructed the idea of the ‘reality principle’. This is the psychoanalytic concept that describes the circumstantial reality that compels a man to defer this immediate gratification.

Freud proposed that, “an ego thus educated has become reasonable”. In other words, with maturity we no longer let the ‘pleasure principle’ guide our immediate actions, but take account of reality and realize we must sometimes postpone immediate pleasure for more long lasting positive outcomes.

This is akin to buying health insurance. You pay your monthly premiums and yet you receive no immediate pleasure from the purchase. And you certainly don’t wait until your doctor tells you about your malignant brain tumor to call Blue Cross for a policy quote.
As we mature, we realize that we must do things now that benefit us in the future. Asset protection planning is like health insurance. It gives you peace of mind knowing your assets have been placed within a veil of privacy keeping the wolves at bay.

If you have assets you cannot afford to lose, you need asset protection planning; plain and simple. The world is in turmoil and the risks are numerous.

You cannot read the news and watch the world markets over the past few weeks and not think we are living in the ‘Great Reset’. With political unrest still going strong in Libya, Egypt, Saudi Arabia and most of the rest of the Middle East, you must realize the world is changing underneath our feet.

Japan has a debt to GDP ratio over 200%, and now much of the country is in shambles. Japan is the 3rd largest economy in the world and the 4th largest exporter in the world. With a debt burden already so high, how can they afford to rebuild? This will have significant long term implications.

Europe has gone quiet over the past few weeks due to difficulty in competing with Libya and Japan for headlines, but their problems have not vanished. Portugal, Spain, Italy, Ireland and Greece are all train wrecks and Germany is tired of bailing them out. We will see the end of the European Union as it currently stands.

The US debt has now grown to over $55,000,000,000,000 (that’s 55 trillion dollars; I just used the zeros for effect). That is nearly $700,000 per family. The Federal Reserve is now the largest holder of US debt, and growing. We no longer have enough outside creditors willing to loan us the money to continue our free spending ways.

So where will the money come from to fund the US government?

• Raise taxes – it’s a guarantee
• Large US corporations – this will happen, but will have a negative impact on small business because it will tie up bank capital
• Default – not likely, too easy to print money
• 401k/IRA accounts – I see this as a likely response. The government is already considering this option under the guise that they are offering the people safe retirement savings to prevent the ‘evil’ corporations from robbing us again. Most likely this will result in legislation that mandates a percentage of US based retirement funds to be held in US treasuries. There’s nothing like having the ability to legislate your own demand…
• QE3-16 – I would bet money we will see another round, or 12, of money printing after the June expiration of the current QE2. This is the easiest and most politically feasible action for the policymakers to take

All of the above items are game changers in the world economy. If you think these things have nothing to do with you and have no impact on your life, think again. What are you doing to protect your own future?

Just like in a company, if you want your employees to do the right things without having to micromanage them, you must create the proper environment with incentives to do the right things.  In a company you want to create a situation where the employees do what you want without having to constantly tell them what to do.

In the US, we need to do the same thing, but on a larger scale.  We need an effective tax code that gives the right incentives to invest and be productive.  Right now we penalize good investment and reward bad investment and consumption.  In order to change this, it will take massive change at the core level.

The people need to be educated.  The problem is generations of people now have an entitlement mentality and the democratic voter base gets larger with every increase in government spending.  It is a brilliant move by the dems to broaden their voter base and force the productive members of society to carry the burden.   But eventually the mule’s legs will break.  And when that happens, there will be no one left to carry the burden.

We are living in Ayn Rand’s novel, “Atlas Shrugged” right now.  Now we must chose to either protect ourselves or continue to fight the battle.

Snowe is talking about HR 4213, so aptly named the “American Jobs and Closing Tax Loopholes Act of 2010″.  Ironically, the loophole that looks to get closed is going to destroy inflows of investment capital into small businesses.

Basically this new act has a provision that requires S-corporations to pay as much as 15.3% payroll tax on all  reinvested earnings.  This is the same tax that is paid to workers (although the worker pays half – 7.65%), but now will be applyed to any net income regardless of whether it is paid out or not.

This is in addition to the regular income tax that small businesses must pay.  Keep in mind the top tax rate in 2010 is 35% federal and going to 39.6% in 2011.  In addition, for earners over $200,000 single or $250,000 married, there is an additional 3.9% medicare tax.  And we haven’t even talked about state taxes yet.

For a high earning small business owner in the US, their tax rate could be as high as 65-70%!!!!  Talk about incentive for productivity…

While this may all sound like negative news, the time to plant multiple offshore flags is now.  I know this legislation is only proposed at this moment and subject to change, but the fact remains that US political leaders (and I use this term lightly) are increasingly looking to boost federal and state revenues by taxation as opposed to promoting increases in productivity.

This leads to confusion and uncertainty in the business world.  We need consistency in order to be productive.  Who wants to invest heavily in their business when they don’t know when the next law will get passed that taxes them into oblivion?  Or when the next sovereign debt default is going to happen and the US is the one confiscating retirement funds, ala Argentina 2001.

Now is the time to take action.  Plant multiple flags.  Diversify your assets.  Establish your business offshore and take advantage of low or no-tax jurisdictions.  Establish residency and/or citizenship in another country.  Remember, buying healthinsurance after a heart attack is too late.  Don’t make that  mistake with your wealth.