Issue 52 – Spring 2009

The event was such a success that we are running a second seminar in Bantry in on October 9th, 10th and 11th 2009, at the Bantry House Hotel – a beautiful old building with spectacular gardens and views out over the sea. Visit www.qwealthreport.com/events.php for updates on this event. One of the great benefits to attending a meeting like this in person, rather than relying on emails or telephones, is that it is so much easier to create and set up new business ventures, or to share in existing ones with other delegates. A lot more can be done in person than over the Internet, and you have the benefit of knowing all your conversations are private. On top of that, Irish hospitality is second to none, so you are guaranteed a warm welcome and an enjoyable experience! Some delegates followed our advice and explored the area, which is renowned as one of the most beautiful SUCCESS IN BANTRY! locations in Europe. They came back with hair-raising tales Welcome to issue 52 of the Q Wealth of roads that led up into mountains, disappearing into the mist and reappearing into bright sunshine…which was Report! very appropriate for many who had come feeling great Apologies from your co-editors for the delay in this issue. It concerns over the current recession, but left the event has been a busy time for us all and we have been focused feeling the warm glow that finding a new direction brings. on working with our clients recently: but the next issue of As ever, the October event will be first-come first served, QWR will be out very soon and you can all rest assured that so please register your interest early to avoid your subscriptions continue on for the full number of issues disappointment. We look forward to seeing you there! that you enrolled for, irrespective of the timing of those issues. In the meantime, don’t be distracted by all the media hype about doom and gloom: recessions come and go, just like One of our focuses was our first Strategies for Success winters do, and those who prepare for spring will find the Seminar in Bantry, Southern Ireland at the end of March. We seeds of success germinating soon. Swine fever will are happy to report that this was a hugely successful event, disappear from the radar, just as SARS and all the other with readers from all over the world attending and enjoying “pandemic” illnesses did. It’s all just smoke and mirrors. the relaxed surroundings of an Irish hotel (so relaxed that Keep your focus on your own world: on enriching your life some delegates thought they had gone through a time warp in all ways. That way you create wealth for yourself and for to the 1960’s!) at the edge of Bantry Bay. others too, which is the key to feeling really great. Delegates were treated to a number of presentations on Until next time: our best wishes, residency, tax, banking and incorporation from Peter The Editors. Macfarlane, as well as an indepth look at computer security. Thomas Bolther captured everyone’s attention with his stories of making millions in real estate in a number of Inside this Issue different countries, Derek Armstrong (who has an article on Page 2 Real Estate Riches page …of this issue of QWR) outlined the reasons for Page 3 capitalising on some excellent opportunities both at Finger on the pulse for Freedom, Wealth and Privacy auctions and elsewhere, and Richard Cawte led us all on a Page 4 Offshore Services in Panama journey that truly opened the mind to alternative lifestyles Page 7 Foundation of Crisis and ways of thinking. Page 12 Expat living in Costa Rica

Our seminars are informal and relaxed and everyone has a Page 14 Was it Peak Oil that pricked the bubbles? chance to have personal consultations with the presenters Page 18 Switzerland with Oxo Cubes and to ask questions throughout the event. So, if you are looking to increase your income, create long term Page 19 Preparing for civil unrest in America investment vehicles, manage your assets in tax-efficient Page 20 Is now the time to buy at UK Auctions? ways, or simply to meet up with other PT’s and like-minded Page 24 Bulletin Board people, do come along to one of our events soon. 1 WEALTH CREATION Real Estate Riches by Richard Cawte

o it’s a bad time to invest, right? Everyone is talking the My rules of thumb in the current market: buy at well below Smarkets down: especially the UK property market. I’ve market value (30% or more) and make sure the cash flow heard predictions of a further 30% drop from current on your rentals is considerably higher than the mortgage positions, which are somewhere in the region of 25% you will be paying. This will cover any increase in interest below where they were two years ago…So what do we do? rates in the UK over the next year or two. For instance, if Sit around and wait for the market to fall and turn again? Or you calculate that the rental surplus allows for an interest get in now and take the risk? rate of 10%, you can be fairly sure you will be making money month by month for some time to come. (I’m with It’s the age old question: when should I take the leap? And Robert Kiyosaki on this one: an asset is only an asset if it is the answer is always: when no one else is! That is the way putting money into your pocket irrespective of capital to make really good money. growth: anything else is a liability.) I’ll add a caveat to that: so long as you buy at the right Don’t buy residential properties with negative or very low price and know what your short, medium and longterm cash flow – especially with interest rates so low at the strategies are. moment. The difference is huge both materially and psychologically. Long term readers of QWR and delegates who have attended our seminars will know that both Peter and myself Right now you can invest with as little as £1,000, which is a predicted the collapse of the banking system some years refundable reservation fee, and there are some ago. (Around ten years ago to be precise!) It was always staggeringly good opportunities to be had. That’s because just a question of time, because what the major banks repossessed properties are hitting the market now – and were doing was a confidence-trick…the original will continue to do so for the next 12 months or so. This “con”…because they relied on the confidence of investors may well have the effect of driving values down a little, but to keep on turning up and asking no questions whilst they if you choose your areas carefully and buy with at least lent way beyond their own or the investors’ means. As soon 30% discount, you will be in a strong position. as that confidence dried up, their bubble was burst. If you are concerned about your credit rating or getting a Two years ago, I recall advising delegates at a seminar mortgage in the current climate, our associates help with “not to invest in the UK property market yet” “Wait for a this. In any event, you pay nothing until you have your couple of years” were my exact words. Well, a couple of Decision in Principle: so there is zero risk at the front end. years on I still hold to those words, so long as you buy at For those of you who are looking for larger investments, we the right price and have good cash-flow on your rentals (in have access to portfolios of $10million and above both in residential) or high ROI’s (in commercial). residential and commercial. These are to be purchased by individual buyers/companies and again, our associates can Investing with no money down assist with financing on these. We currently have some excellent opportunities for Is now the BEST time? That I can’t say. But I can say it is a investors in many different countries, including the UK, good time: because there are still not many people doing where we have managed to create a specific programme it…which, as you all know, is one of my principles of for readers looking to start a portfolio with either no or very successful wealth creation! little investment required. For more details, please email me on [email protected]

Welcome to The Q Wealth Report

he Q Wealth Report is a wealth education newsletter written by We are a group of people who share a vision of a world in which Big T experienced practitioners of wealth creation, investment and Brother government has less and less influence, a world in which asset protection techniques from all over the world. individuals are free to travel, make money and enjoy their lives without It is not long since the majority of people believed the world was flat. restraint. We believe that the future for mankind is one in which We know this is not the case. It is not long since all people believed people respect both each other and their environment. that travel to the Moon was impossible. We now know differently. We hope through the pages of The Q Wealth Report to make a difference. State run education and government run media would have us believe About the Editor that money is hard to come by and that only those who are already wealthy can become mega-rich. They would also have us believe that The Q Wealth Report is edited by Richard Cawte PhD. increasing measures to curb our freedoms are for our own good, and Richard Cawte has been editor of The Q Wealth Report since its that we need to be monitored and controlled all the time. launch in 1998. Now read in over 120 different countries, The Q Writers of The Q Wealth Report believe something very different. We Wealth Report has established itself as the worlds leading wealth believe that as long as each of us is pursuing our own freedoms education, asset protection and lifestyle newsletter. without harming others, we should be free to do what we want. We A passionate campaigner for Liberty, Individual Sovereignty and believe the less government control over our lives the better. We know Freedom of Speech, Richard has spoken at seminars all over the there are plenty of opportunities for everyone to be as wealthy and world. Richard is a published poet and award-winning playwright. He healthy as he or she wishes and that the key to personal success lies also runs a highly successful mentoring service for people wishing to in each of us taking responsibility for our lives. follow their dreams and create life as they wish it be be.

2

FREEDOM Finger on the pulse for Freedom, Wealth and Privacy by Peter Macfarlane, non-resident banking and asset protection expert and joint editor of The Q Wealth Report

“We’re disillusioned.” “Fed up with the way things are.” ‘They’ used 9-11 to take away our civil rights. Now ‘they’ have “Obama stands for oppression.” used the financial crisis to take away a lot of our financial hose are just a few of the many comments people send rights and our very own money! Who do you think is paying Tme every single day. People are out there desperately for the huge bailouts going on now? You, of course, dear searching for the kind of material we publish about reader. You are taking on debt in the name of future Freedom, Wealth and Privacy. Ever since we started offering generations. Your kids growing up in this system will either be our free five part Secrets of the Super Rich course by e- burdened with debt for several generations, or the system will mail, we have also sent out an additional e-mail soliciting have to go bankrupt. I predict the latter. feedback from readers. Plus, as most readers of this article Fortunately, the secret is out. You can opt out of the system. will know, I encourage all paid subscribers to approach our More and more people are voting with their feet, taking their office for free informal advice, consultations and referrals. pounds and dollars offshore where it can still buy something Please be assured that, although at times another member of value. They are still a tiny minority, but a very fast growing of staff will reply, I personally read each and every one of minority. these comments. And any consultations about offshore Some of us are more natural gamblers than others. Some are banking, investing, asset protection and so on are happy moving offshore on a shoestring budget, confident in channeled to me (other topics are handled by other their abilities to make money and create long term wealth… members of the Q Wealth Experts panel) from a new offshore, tax-free base somewhere in paradise. We’ve been getting a lot of new subscribers recently. So Although we’re originally from the UK, you won’t have missed you can imagine my workload. I’m sorry if you have the fact that we are pretty keen on Latin America these days. contacted me and there has been a delay replying. But I Your money goes further and the quality of life is better. love this work and I think it’s the only way to keep my finger Above all, there is less stress… and you can make money on on the pulse. If I were a politician I would call it “listening to the internet by managing your capital, or through active the grass roots.” e-commerce businesses, or even manage onshore real estate portfolios from offshore with a big tax advantage over And what a strong signal is coming from those grass roots your competitors. these days! People want out. They want out of the USA, the UK, Australia, Canada and many other places. But what Others will move offshore for purely ideological reasons. It’s they are opting out of is not so much the countries, but the about getting the government out of our hair. Escaping the system. And I use the singular intentionally even though I’m culture of fear. Even many people who are in the system are referring to many countries. The system has become totally disillusioned. I liked the recent comments of Dame Stella oppressive. Fortunately, Q Wealth is dedicated to Rimmington, former head of the British Secret Service MI5 empowering individuals to regain control of their lives and (the real life version of ‘M’ portrayed by Judi Dench in the escape the ratrace that is the first or developed world today. Bond movies) who said of the terrorism threat: “It would be better that the government recognised that there are risks, rather than frightening people in order to be able to pass How to subscribe the The Q Wealth Report laws which restrict civil liberties, precisely one of the objects Subscribing to The Q Wealth Report is very easy. of terrorism.” A full year’s subscription to the hard copy edition is I couldn’t have said it better myself. I opted out of this rotten £67 / US$137. system a long time ago and you would never get me back. A 2 year subscription in hard copy is £97 / US$197. Offshore is more a state of mind than a place. A physical Each year you will receive a minimum of four issues and email subscribers move, maybe a second passport, brings the most benefits. also receive the Q Bytes email updates throughout the year. But you can start moving offshore, start creating that safety To secure your subscription to The Q Wealth Report, the world’s finest wealth net or back-up plan, without leaving home - especially if your creation, asset protection and lifestyle newsletter, send your cheque/money profession or business is portable. Now is the time. Don’t order made payable to Q Wealth Limited to the address below. We accept delay any longer, otherwise you will lose some of the cheque or cash payments in any major currency. Or you can telephone or fax us with your credit card details for immediate action. advantage. The word is out! (C) 2009 Published by Q WEALTH LIMITED, Bougainville House, PO Box If you are looking for practical advice on Freedom, Wealth 1487, Port Vila, Vanuatu. and Privacy, you have come to the right place. Here at The Q Please direct all correspondence to London communications office: Wealth Report we don’t believe in scaring people. Like Dame Q WEALTH LIMITED Stella, we believe that we should all be prudent and Suite 404 Albany House, 324-326 Regent Street, London W1B 3HH recognize there are risks - and a lot of those risks have to do United Kingdom with the financial and political system that we cannot control. Phone: +44 20 3384 1993 UK But rather than sitting crying to ourselves, or trying to swim 1 866 394 8944 USA/Canada toll free against the current, let’s do something about it. That’s why Fax: +44 20 3051 4777 UK you are here. Join us on the journey by checking in for the [email protected] regular updates at the Q Wealth blog. website: www.qwealthreport.com www.qwealthreport.com/blog 3 OFFSHORE Offshore Services in Panama

EIGHT IMPORTANT THINGS YOU SHOULD KNOW to give you impartial advice, especially if you are not THAT YOUR PANAMA OFFSHORE LAWYER MIGHT NOT asking for it. And remember that Panama lawyers are TELL YOU qualified only to talk about Panamanian laws. It is not their responsibility to know anything about the legal Before setting up a Panama IBC or bank account, system in your home country. offshore corporation or foundation, there are a few potential pitfalls you should really know about. But So if you want to be sure if a Panama corporation or most Panamanian offshore service providers and bank account is right for you, at least ask your lawyer to lawyers will not warn you about these! Q wealth’s explain things properly in language you understand… offshore banking and wealth management expert make sure you really drill down to the details of what Peter Macfarlane will help you navigate through this you are getting into. Ask him or her to explain the exact maze so you can protect rather than risk your purpose and nature of each document in the sheaf of assets… papers being handed over, especially if you don’t understand Spanish. Panama can trace its history as an “offshore” business and banking nation back nearly a century. It deserves its hard-won reputation as a premier international financial Understand Annual Obligations center. Investors from all over the world, ranging from You are the best one to look after your interests. So be freedom and privacy minded individuals to multi-national sure to understand all the Corporation’s annual corporations, benefit from Panama’s tax-free and obligations and keep an eye open to make sure they are business friendly environment. They do so by setting up being complied with. corporations, foundations, trusts and now LLCs under Panamanian law. For example, there is a fee of a few hundred dollars called the ‘franchise tax’ that each and every Panama It’s also true that Panama has embraced the internet era corporation has to pay to the Panamanian government by becoming a hub for international trade online, quite each year. Then there are the fees for registered agent, apart from the physical goods moving through the registered office, nominee directors and the like. Some canal. E-commerce is buzz word in Panama City these providers are very efficient about billing each year, but days. others are not. Your provider might forget about you But… in paradise not everything is quite what it seems. altogether… or he might even die. Or (unfortunately Some things are not black and white. Some of the ways rather common) he might invoice you for the franchise of doing things – and not doing things – in Panama tax but not hand it over to the government. might surprise people, particularly those who are not Any of these things will cause your Corporation to cease used to doing business in Latin cultures and legal to be in Good Standing. You probably won’t notice systems. Forewarned is forearmed, as they say. So here immediately. But it could cause problems down the road goes. Here are six things you really should know about when you need to make changes to the structure or before you do business in Panama. obtain some official document. You will then be hit with a lot of fines and extra charges, and a big mess to sort Panamanian lawyers will always out. If your corporation is not in good standing, your recommend Panama bank could freeze the account. It may sounds obvious. But you would be amazed how In short, make sure you understand all the obligations many people decide to come to Panama on a whim and and annual costs? And always ask for written receipts, do business here without comparing other options. It including a copy of the official government receipt may also sound strange to say this in a report that is confirming payment of the franchise tax. specifically about Panama… and believe me I consider Panama to be the home of my business… but the truth Panamanian lawyers are not like is there are a number of other pretty good tax havens American or British lawyers around the world. Some of the best tax mitigation, asset protection and financial privacy strategies involve mixing There are some world class Panamanian law firms with and matching several different offshore banking havens. excellent reputations, and there are some really good boutique law firms and individual lawyers. There is also 99% of people who offer to sell you Panama a rather large contingent of bad Panamanian lawyers. corporations are in business to do just that. Whether it is the right thing for you in your circumstances does not Rules governing lawyers may be very different from really figure in their equation. What is important to them what you are used to. For example, Panama lawyers is making the sale. That’s not necessarily bad, just may not be subject to the same guidelines on conflict of something you should be aware of. Don’t expect lawyers interest. 4 OFFSHORE Offshore Services in Panama

You should be aware that it is not typical in Panama for Other clients ask “which is the Panama bank with the lawyers to handle clients’ funds or provide escrow lowest minimum opening deposit?” Most banks, as it services. Some law firms do so, but Panamanians would happens, don’t really have any fixed minimum. But they probably not expect it. It does not provide the same are also not interested in opening accounts with small level of security you might expect back home. If the deposits that are never going to see much activity. Too lawyer does not follow your instructions, you will have many dreamers open accounts with $1000 and never do limited recourse. Panamanian lawyers are unlikely to anything with them. This is a waste of time for banks. carry and liability or professional negligence insurance. Some people make the mistake of thinking that North For real estate transactions, consider using a title Americans are the main users of Panama as an offshore insurance company. banking center, and that everybody who looks Latino It is therefore really important to ask around for must be Panamanian. But that’s not really the case. recommendations, which brings us to the next point… Panama is the financial hub of Latin America. Most of the “offshore” money in comes from other Latin Relationships and Culture Count Americans, like Colombians and Venezuelans. And the ones who are banking in Panama probably have a lot In Panamanian culture, business depends much more more money than you do. Yet their home governments on personal relationships than what you might be used are not the ones pressuring and threatening the to back home. That is why, for example, it’s very hard Panamanian government and banks about transparency, just to walk into a bank unknown and open an account. information exchange and tax evasion. You need an introduction from a local professional. You then need to get to know your banker as a person and Of course if you are going to invest seven figures, build up a good relationship with him or her. banks will roll out the red carpet for you. Money talks. Money can even cause rules to be bent, as Panamanian Your application for an account and the services you bankers know very well. want won’t be judged by a computer that’s online to your credit score, as it might be back home. Bankers If you were the bank manager, would you rather take a will judge the person sitting in front of them – including $1000 deposit that could cause potential legal problems things like how they behave, talk and dress. for the bank? Or $1,000,000 from a Venezuelan that is less likely to? Put that way, perhaps you can understand They will also look at the business plan/cash flow why the banker thinks he is doing you a favor in opening forecast - in other words, how much business you a small account for you. It’s therefore important to be expect to be doing with the bank. It is better to respectful, businesslike and professional. Don’t overestimate your turnover than to underestimate it. They constantly complain or make annoying (to the banker) will probably ask you questions about it to see how comparisons to your home country’s banking system serious your plans are, and whether you really know suggesting it is better. It isn’t, or you wouldn’t be what you are talking about. considering doing business in Panama! Bankers tend to think that they are doing the client a favor, not the other way round. If you want to bank in Nominee Directors Can Take Over Panama you have to get used to this. Control Your Company if You Don’t It’s also the reason why it’s almost impossible to open Structure Things Right bank accounts in Panama by mail. Some people say you can’t open Panama accounts by mail at all. We It’s customary in Panama, where corporations require know you can and we have seen it done. But we do NOT three directors, to register secretaries of law firms as recommend it. If you want to open an account by mail nominee directors of companies. The reason for this is for your Panama corporation, it’s better to open an that directors are registered in public, on the internet, at account in a different country. www.registro-publico.gob.pa (As opposed to most other “offshore” jurisdictions where the names of the directors Money Talks – Especially When it are not made public.) So using nominee directors Comes to Bank Account Opening achieves the privacy that most clients are seeking. Another obvious one really… but I see too many people Then, the directors typically issue a Power of Attorney to who get frustrated that a bank turned down their $1000 the client who will have signatory power over the bank opening deposit. They think that “the customer is always account. Many lawyers will tell you that you are, right.” As they are new clients, banks should be happy therefore, protected because you are the only one with and welcome the business, even to the extent of signatory power over the bank account. That is not bending rules for gringos to make the process easier. however the whole truth. 5 OFFSHORE Offshore Services in Panama

It’s not a lie, because you are the only one authorized to However, before deciding whether or not to issue bearer give instructions on the bank account… for the moment. shares on your company, there are two pitfalls to be BUT consider this: If you open an account in Panama aware of: the nominees do have to sign the bank’s application forms, not in their role as signatories but as directors. If Banks and other financial institutions like brokerages are the nominees wanted they could revoke your Power of required by law to identify the beneficial owner of Attorney and inform the bank. The bank would then have accounts. Needless to say, in the case of bearer shares no legal alternative but to refuse you access to the it can be impossible for banks to keep track of who is company bank account, and let the directors appoint the legitimate owner. For this reason, it may be very whatever signatory they want to give instructions in the difficult to open a bank account if you opt for bearer future. (The bank could also choose to refuse the shares. Though I do know a few banks who will still signatories and close the account, but they would be accept this form of ownership. obliged to pay the balance to the company via its Bearer shares are valuable documents and they need to directors, not to you) be kept very safely. If they are lost, stolen, or The fact that directors are only nominees is not accidentally destroyed, it can be a very complicated recognized by any law in Panama. Being a nominee legal process to get everything back the way it should director is not a regulated profession – you are generally be. dealing with low-skilled workers who are not always A more secure and private alternative to bearer shares reliable or honest. is holding ownership of your Corporation through an Fortunately, there is a simple solution to this problem. anonymous Foundation. This adds an extra layer of Just don’t tell the nominees, nor your law firm, nor the privacy, but also of course an extra cost too, which must people who are selling you the company, at which bank be considered. you are opening an account. That way there is no risk that they can go and lay claim to it. Out of sight, out of Be Careful What You Say mind. To do this, you will have to find a bank that will accept exclusively your full, unrestricted power of Finally, I don’t know if it’s the humidity that makes people attorney and allow you yourself to carry out the entire let down their guard… or maybe it’s the heady account opening procedure, without the people in combination of alcohol, cigars, casinos, and the Panama having anything to do with it. For practical attractive young ladies who hang out in them. But if I purposes, no bank in Panama will accept this want entertainment in Panama, I can just head over to a arrangement. Even if you have a Power of Attorney, in few well known expat hangouts, order a beer and be Panama the directors must always sign to open an sure of overhearing people’s offshore business plans account. broadcast loudly in English. I can’t think of a better way of improving your chances of ending up someplace you Therefore if you want to protect your privacy and don’t want to be (like engaged in a one-to-one security to the full, you should use nominee directors but conversation with a representative of the tax authorities, you should keep any bank accounts holding significant for example). assets out of Panama, and well hidden from anyone involved in the incorporation or management of your Panama is still Peter Macfarlane’s favourite offshore company. business and banking centre. If you understand the potential pitfalls above, you will be well placed to benefit I must add that nominee directors stealing bank from all the opportunities Panama has to offer to accounts is not a daily occurrence. The vast majority are increase your freedom, wealth and privacy – including honest and professional. We are talking about a the new office of one ofPeter’s recommended banks theoretical risk here. For small bank accounts this risk is (see sidebar). Peter’s firm Peter Macfarlane and acceptable. But it is a risk, and you as the beneficial Associates S.A. have been active in Panama for many owner have a right to understand it. years and Q Wealth members are entitled to a free Bearer Shares Can Cause Problems introductory consultation with Peter. For further details of how to arrange this please refer to Peter’s site Bearer shares, which have been regulated or outlawed www.petermacfarlane.net or contact the Q Wealth in most offshore jurisdictions, are still common in offices in London. Panama. Bearer shares appear on the surface to be an excellent privacy tool. In short, whoever holds the share In other news from Panama, an Andorran bank has certificate is the legal owner of the Corporation… recently opened offices in Panama City’s Torres de las something like cash. Americas. See the article on page 17. 6

GEOPOLITICS Foundations of Crisis by Doug Casey, Chairman, The Casey Report, Casey Research, LLC

Everybody wants predictions. The following article does arrive much sooner. That’s the good news. a little better than that, in that I wrote it back in The bad news is that within the longest trend in history, November of 1997, outlining several theories of history, the ascent of man, there is plenty of room for setbacks, and pointing to a logical way of anticipating what will and much of history is a case of two steps forward and likely happen to the world at large over the next one back. My gloomy short-term outlook, and my generation. reasons for maintaining it, is recounted here monthly. As you will read, the methodology I relied upon for Whether it’s right or wrong, from an investor’s point of anticipating the events that are now unfolding – 11 years view, the short term is more relevant than the long term. later – were actually quite accurate, confirming, in my Notwithstanding Warren Buffett’s great success in going mind at least, that now is a time to be very cautious in for the long term, Keynes was right when he said that in your personal and financial affairs. the long run we’re all dead. History shows that goes for civilizations as well as people. The problem is that our The article that follows is unaltered in its text from the civilization is probably just now on the cusp of the long original, though I have added some current term. commentary in bold italics. “Don’t know much about the Middle Ages, look at the Hari Seldon: Where Are You When We pictures an’ I turn the pages. Don’ know much about no Need You? rise and fall, don’ know much ‘bout nothin’ at all” Isaac Asimov’s classic Foundation trilogy centers “Wonderful World,” Sam Cooke. around a scientist, Hari Seldon, who invents a science called psychohistory, which allows the fairly accurate he lyrics quoted above probably describe the prediction of broad trends in society going for centuries Taverage American’s knowledge of history about as into the future. Seldon lives on Trantor, the planetary well as any academic study. Not only don’t they know capital of a galactic empire; the entire planet is covered anything about it, and think it’s irrelevant, but what they with a high-tech version of Washington, D.C., devoted to do know is inaccurate and slanted. And they must not nothing but taxing and regulating the rest of the galaxy. think very much about the future either if the amount of Seldon forecasts that the empire will collapse and consumer debt out there, mostly accumulating at 18% Trantor turn into a gigantic ghost town. And of course interest, is any indication. that’s what happens, because it’s a novel, and that One point of studying history is that it gives you an makes for a good story. It’s a good story because it’s indication of what’s likely to happen now, if you can find credible, and it’s credible because people know nothing an appropriate analog in the past. This is a tricky lasts forever, and there is a cyclicality to everything; business because as you look at factors contributing to birth, youth, maturity, senescence, and death. These a trend, it’s not easy to determine which ones are really stages are shared by everything in the material world, important. Making that determination is a judgment call, whether it’s a person, a city, a civilization, or a galaxy. and everyone’s judgment is colored by his worldview, or It’s just a question of time and scale. Weltanschauung as the Germans would have it. From that point of view everyone knows the future, i.e., Let me briefly spell out my Weltanschauung so you can we all know that everything eventually dies. But we’d like more accurately determine how it compares with your a bit more precision on the timing of their lifecycles. own, and how it may be influencing my interpretation of Some gurus believe, or appear to believe, they can the future. actually predict the details of the future; I consider them knaves. People who actually do believe them should be I’m intensely optimistic about the long-term future. It considered fools. That said – Nostradamus, astrology, seems to me a lock cinch that the advance of channeling, tea leaf reading, and the like aside – I do technology alone – and nanotechnology in particular – think the best indicator of what will likely happen in the will result in a future of incredible abundance and future is what has happened in the past. That may seem prosperity, and that alone will solve most of the like an obvious statement, but it’s not. There have problems that plague us. Space migration, intelligence traditionally been three ways of looking at the problem; increase, and life extension will be commonplace call them theories of history. realities. These things, plus the growth of both knowledge and its accessibility and the concomitant rise Oldest is what might be termed a chaotic view, which of the individual from the group, will constantly diminish presumes mankind doesn’t have any ultimate destination politics as an element of life. The future will be much but is wafted on the wings of Fortune or hangs by the better than anything visualized on Star Trek, and will thread of Fate. Subject to the arbitrary will of the gods, 7 GEOPOLITICS Foundations of Crisis by Doug Casey, Chairman, The Casey Report, Casey Research, LLC

whether it’s the Old Testament’s Yahweh, or Homer’s suggest you get a copy of The Fourth Turning while it’s Zeus, the future is unpredictable, and prophecy or an still in the stores. That’s also true for my own Crisis oracle gives you as good a read as anything else. I Investing for the Rest of the ‘90s, which has several discount this theory heavily. chapters on related subject matter, and Arthur Herman’s just-released The Idea of Decline in the West, which A second ancient view is that everything is cyclical, and also bears on the subject. With 50,000 new books therefore somewhat predictable. History may be viewed published every year, very few stay available for more like a giant sine wave that’s possibly headed than a few months. If something has appeal, you should somewhere, but the direction is unknown. Or history is buy it now, because it may be hard to come by when really a circle, constantly repeating itself, much like the you have the chance to get into it. (Of course, I was four seasons of the year. There’s a lot of wisdom to the wrong on that point — websites such as Amazon and cyclical view. Alibris.com now make it easy to pick up many older The third view sees history as a linear sequence, one books.) that’s actually headed somewhere. That view holds a special appeal for followers of evangelically oriented Generations religions, particularly Christians (many of whose beliefs have an apocalyptic tinge) and Marxists (who were, until Generational conflict has been recognized since ancient lately, given heart by the “scientific” inevitability their times. The twist here is the discovery of several things views would prevail). The linear view ties in with the idea that have previously eluded observers. One is that the of Progress, that (more or less) every day and in every well- known conflict between fathers and sons is only way, things are getting better and better – although half the story; there aren’t just two generational types there’s also a subculture populated mostly by deep that alternate (e.g., liberal and conservative), but four. ecology, animal rights, and anti-technology types who The reason for looking at it this way is that a human life believe things are headed to hell in a hand-basket. But can be conveniently divided into four stages: Childhood, they all believe we’re headed somewhere in a more-or- Young Adulthood, Midlife, and Elderhood. Throughout all less straight line. There can be a lot of truth to the linear of history, a long life might be considered to be 80 to view, certainly if you look at the technological progress 100 years, with each of the four stages equaling a of mankind over the past 10,000 years, and this view quarter of it. prevails today. Just as each person’s life holds four stages of about My own view is a synthesis of the cyclical and linear 20 years each, each generation comprehends a group theories. I see history evolving towards an incredibly of people born over about 20 years. Members of a bright future, but cyclically suffering setbacks, cyclically particular generation tend to share values and ways repeating the same patterns along the way. To me of looking at the world not only because their parents history looks like a spiral, heading off in a specific also shared a set of views (which the kids are direction, but always covering the same ground in a reacting to), but because every new generation different way with each revolution. experiences a new set of events in a way unique to them. They hear the same music, see the same events, That’s one reason The Fourth Turning, (Broadway are exposed to the same books. Members of a Books, NY, 1997) by William Strauss and Neil Howe got generation share a collective persona. There appear to my attention; we’re all drawn to those who see at least be four distinct archetypal personae that recur part of reality the way we do. The book is an throughout American history. And throughout world extrapolation of their last work, Generations, and history as well, although that’s a bit beyond what I hope notwithstanding its literary faults, is simply brilliant. I’ve to explore here. never met Howe, but did have lunch with Strauss once about five years ago. The way I see it, although they’re It also seems, throughout history, that there are periodic both conservatives, neither of them has any particular crises. About once every century, or about when each of economic, political, or social philosophy, and they’re not the four generational types has run its course, a trying to grind an ax. Their books are a value-free look cataclysmic event occurs. It generally takes the form of at U.S. history, and their conclusions are more credible a major war, and it generally catalyzes a whole new as a result. epoch for society.

Their basic hypothesis is one I suspect Hari Seldon The four mature generations alive today each represent would recognize, and my thoughts are built on the an archetype. Let’s review them from the oldest now research Strauss and Howe have done over the years. I living, to the youngest. 8

GEOPOLITICS Foundations of Crisis by Doug Casey, Chairman, The Casey Report, Casey Research, LLC

Hero Archetype summed up as “bad.” They’re oriented toward survival, which is partially a result of their being underprotected The “GI” generation, born between 1901 and 1924, as children. When they become parents, they react and includes basically all living people in their mid-70s and become overprotective. They tend to be savvy, practical, older. They grew up and came of age in the midst of the tough, and amoral. most traumatic years in human history: the 1930s and ‘40s. This was a time of catastrophic financial and The kids born between 1982 and perhaps 2002 should economic collapse, world war, political dictatorship, be another Hero archetype. My own experience with genocide, and virulent ideology, among other them is that they’re shaping up that way. Represented by unpleasant things; a period of intense turmoil. The times clean-cut, straight-arrow Power Rangers. Quite a required them to be civic minded, optimistic, regular reaction to the sewer-dwelling Mutant Ninja Turtles that guys who could be counted on to do the right thing, fit were analogs for the previous generation. They’re “‘can in, and see that everybody got a square deal. As a do” kids, programmed to do the right thing in a smoke- consequence of what they’ve been through, they tend to free, drug-free, eco-sensitive, politically correct world. be indulgent parents. As kids they’re “good”; as adults Like all Hero types, they respect their elders, do what they’re selfless, constructive, and communitarian. Hero they’re told without much questioning authority. That’s archetypes encounter a Crisis environment in Young just the type of person you want to have fighting a war Adulthood; assuming they survive it, the odds are the for you, and that’s probably just what they’ll wind up rest of their lives will be lived in growing economic doing. Just like the last Hero types, the GIs. (Iraq was prosperity, leading to a leisurely retirement. first. Iran next? Or will it be Saudi Arabia?)

Artist Archetype It’s risky to characterize everyone born in a certain time frame as sharing a persona; after all, people are Meanwhile, another generation was being born at the individuals, not ants or atoms, each like the other. But it’s height of the Crisis – something that seems to occur really no different than characterizing people by the roughly every 80-100 years – from 1925-42. This country they’re from. There’s no question in my mind that generation, the “Silent,” watched these titanic events people share characteristics by virtue of the milieu in happen but were too young to take part in them. They which they live, and that’s true of time as well as were relegated to being protected, while trying to be geography. Take a look at the people you know by age helpful in the limited ways available to them. They’re groups, and see if they don’t roughly fit the brief overprotected as children, when they might be descriptions. characterized as “placid”; they tend to underprotect their own children as a reaction. As adults they’re The interesting thing is that through about 400 years of sensitive, well-liked, sentimental, and caring. American history, it’s possible to see these generational types repeating themselves. It’s not an accident. The Prophet Archetype characteristics of each type shape the next generation, as well as current events. And events leave a further Next came the group we call the “Boomers,” born from imprint on all of them. 1943 to 1960. This was the first generation born after the Crisis was over, and they grew up in an environment Making an Example of the Boomers where their parents (mostly GIs and early cohort Silents) felt obligated to protect them from all the trauma of the Just as every generation has its own persona, the preceding years and were desirous of giving them all character of each generation evolves as it moves the things they never had. As kids they’re seen as through life. The Boomers are perhaps the most relevant “spirited.’’ Later in life, they tend to be narcissistic, example of this. First they were Mouseketeers and presumptuous, self-righteous, and ruthless. Born after a Beaver Cleaver clones. Who could have guessed they Crisis, their Childhood years coincide with a rebirth of would mutate into Hippies and even Yippies as they society, and their Elderhood coincides with another reached Young Adulthood, reacting against everything Crisis. More on them below. they’d grown up with, everything their parents worked so hard to give them. Nomad Archetype They came of age during a period that might be called The fourth generational type is represented by today’s an Awakening, and it’s recurred on schedule five times “Generation X,” born 1961-81, during what might be so far in American history. Awakenings are times of called an Awakening period when the Boomers were in religious and moral ferment, when the youth tend to the limelight. As a consequence, they were overlooked challenge prevailing cultural values pretty much across and a bit abandoned. Their reputation as kids can be the board. Young adults were into New Age things this 9

GEOPOLITICS Foundations of Crisis by Doug Casey, Chairman, The Casey Report, Casey Research, LLC

time around, in the 1960s and ‘70s. At the time it WW II, circa 1943. We’ve had other wars, and they were seemed utterly shocking and completely new, but that traumatic enough; that’s the nature of war. But the War was only because nobody then alive had seen the of 1812, Mexican, Spanish, World War I, Korean, and previous Utopian Awakening in the 1830s and ‘40s, the Vietnam wars had nothing to do with the country’s Pietist Awakening of the 1740s and ‘50s, the Puritan survival as an entity, as a civilization. They were optional Awakening of the 1630s and ‘40s, or the Protestant wars, sport fighting, if you will, by comparison. Wars Reformation of the 1530s and ‘40s. that occur at a secular Crisis, a “Fourth Turning” to Strauss and Howe, when a Prophet generation is acting Like all the generations before them that grew up in as elder statesmen, with Nomads as operational similar times, they eventually put away the things of their commanders, and Heroes as front line soldiers tend to youth. But who guessed that their next mutation would be total wars that have an ideological underpinning. be into Yuppies, whose motto was not “Peace and Love” They’re life-and-death struggles not just for the or “Revolution for the Hell of It,” but “Shop Till You Drop” individual participants, but for the civilization as a whole. and “He Who Dies with the Most Toys Wins” as they moved into midlife. That major wars occur at such long remove from each But even now the acquisitive mania that characterized other probably isn’t an accident. Really catastrophic the ‘80s is ebbing, now that the first cohorts of Boomers wars, from at least the days of Troy on down, have are crossing over 50. You can already see the signs of usually been the Great Events that resound through their next stage of evolution, in the judgmental behavior living memory. The Great Event of a century forms the of people like William Bennett (George Bush) and Dan thought and character of everyone alive when it Quayle (Ann Coulter) on the “right,” and Al Gore and happens, influencing them relative to the stage of life Hillary Clinton on the “left.” They did sex, drugs, and they’re in at the time. Perhaps that’s why a people will rock ‘n’ roll in the ‘60s. They believe they’ve fought the collectively do its best to avoid a repeat, at least while war of good against evil in both Vietnam and the there’s anyone still alive who saw the last crisis. segregated lunch counters of the South. They know they (It’s been said that war is a force that gives life were the first generation to have traveled widely thanks meaning. And I think that’s true, although it’s perverse to the jet, to have been brought up by television, and that the most destructive and idiotic activity that it’s had the telephone as a given. They’ve been there, done possible to engage in would just have to be the most that, and now that they’re getting older, they’re going to important. Maybe, after the orgy of self-indulgence and e sure that everyone else benefits from their wisdom mak conspicuous consumption that has characterized the – like it or not. past couple decades, Americans collectively feel they The Boomers are an archetypal Prophet generation, a need to prove something. There has to be some type born after a secular crisis, just in time to create rationale for the current war hysteria other than pure another one. Get the image of a grim elder, with a well- stupidity...) defined vision of what’s right and wrong, calling down In any event, the way the current generations line up wrath, and laying down the law for a troubled nation in relative to historical analogs, an excellent case can be chaotic times. That’s the type of person who tends to made the U.S. is approaching another time of secular lead countries into wars, as well as through them. crisis, a Fourth Turning, with an expected due date of Interestingly, the Boomers in America have their 2005 – seven years from now – plus or minus a few counterparts abroad today, especially in China, where years in either direction. The Stamp Acts catalyzed the they grew up during the Cultural Revolution. Two American Revolution, the election of Lincoln catalyzed ideologically driven, righteous groups running two such the Civil War, the Crash of ‘29 catalyzed the powerful and alien cultures is almost a guaranteed Depression/WW II era. What might precipitate the formula for a millennial-sized crisis. Which should elements now floating in solution? The answer is, appear, coincidentally, sometime shortly after the practically any random event that’s sufficiently traumatic. millennium. (We’re right on schedule.) Any of the theses of current disaster/action novels and So What’s Next? movies will do nicely. Perhaps the accidental or intentional release of a super plague vector. The The real watersheds in history, crises that make or break crashing of an airliner into the Capitol during a joint a civilization, occur roughly every 100 years. The most session. (Close, but not quite.) An all-out assault on the recent ones in American history that will resonate IRS computers by an armed group – or perhaps the without looking up the facts in a reference book are the computers just melting down due to the Year 2000 Revolution, circa 1782; the Civil War, circa 1863; and Problem. Perhaps a financial disaster that cascades into 10 GEOPOLITICS Foundations of Crisis by Doug Casey, Chairman, The Casey Report, Casey Research, LLC the Greater Depression. In any of these, or a hundred (I bought property in both places shortly after this was other scenarios, the federal government would almost written, and have been rewarded with a quadruple in certainly act precipitously and with a heavy hand, which both instances – considerably better than would have would bring on a whole other set of consequences. been the case in the U.S.). (In the historical context, 9/11 will be viewed as the Strauss and Howe suggest you look to diversify in all opening kick-off for the coming Crisis... and the things, so everything won’t go bad at once. Brace for the messianic overreaction of Bush and his cronies as the collapse of public support mechanisms. Set your roots catalyst for turning things from bad to worse. It may be with your family, because people you can rely on will be that Hurricane Katrina, for instance, a completely at a premium. Heed emerging community norms, bond accidental event, may be blamed for providing a pin to with like-minded people, and return to basic, classic burst the financial bubble – which would be a pity, virtues. This is sound advice any time, but critical if since the neocons could then blame it, not you’re rigging for heavy weather. themselves.) Assuming you wanted to stay in the U.S., you’d rather be There’s no way of telling where the Crisis will lead, or on some land near a small town, and far away from a how it will end. That’s going to depend not only on major city. You’d want to be self-sufficient in as many exactly who’s in control, but what they do, whom they’re ways as possible – freeze-dried food. etc. Perhaps up against, and a hundred other variables we can’t even Howard Ruff will make a comeback with advice like that, anticipate. One thing that seems certain is that real which seems quaint today. But then I’m nothing if not a crisis brings out strong (although not necessarily wise) contrarian. leadership. Because of its age and size, it will come (In hindsight, the original article could have been a bit from the Boomer generation, and it will be in the mold of more specific – other than the suggestions about Roosevelt or Lincoln – both very dangerous precedents. Argentina and New Zealand. Personally, I believe that The Boomers in Elderhood will be dogmatic, harsh, unassailable wealth is the best protection against puritanical, and quite willing to burn down the barn in global crisis. For it to be unassailable, your wealth order to destroy whatever rats they see. Admix that must be at once substantial, free from threat of attitude to a time resembling the Revolution, the Civil confiscation, divorced from the whims of the masses, War, or WW II, overlain with today’s ethnic strife, and located in a country or currency that has a good urbanization, financial overextension, and powerful, risk/reward profile. Unfortunately, the U.S. doesn’t compact new weaponry in the hands of foreign fanatics make the cut. out to teach the Great Satan a lesson, and it’s a real witch’s brew. In the first instance, the single best way to build wealth now, while there is still time to do so, is in carefully If things evolve over the next decade as they did in past selected gold and other resource stocks. In order for it analogs, it will be a very un-mellow time indeed. That’s to be free from the threat of confiscation, at least some assuming things end well, and there’s no guarantee they part of your wealth needs to reside in a country where will, as many foreign countries have discovered you don’t. To state the obvious, I would be very throughout history. We’ve been uniquely blessed. cautious about traditional stocks and bonds until we What to Do see how things shake out. Rather, get positioned in gold and silver stocks now, ahead of the curve, then Strauss and Howe aren’t financial types, and their sell out for a big profit to the panicking masses and advice is nebulous along those lines. To sum it up, their move an increasing percentage of your wealth into suggestion is to learn to swim with the tide by not tangibles such as gold, silver, and maybe, as part of a hoping the current good times last forever; the chances diversified portfolio, real estate in especially attractive of the good times are coming to an end now. They’d areas – but only after the bubble has decisively burst.) also advise not sticking your head up above the crowd, something that is always very risky when times are in A Parting Parable turmoil; remember what happened to Japanese- In case you have any doubts, I buy the theory outlined Americans during the last crisis. They suggest that there will likely be a resurgence of nationalism, much as was above and its many ramifications that there isn’t room to e here. It really is scary to think that we could the case during past crises. It won’t be a good time to explor be a maverick in the U.S., a thought that makes places again experience a real Crisis with a capital C; I’m not like Argentina and New Zealand look even more talking about just a bear market in stocks. If it happens, appealing. continued on page 21 11 RESIDENCY AND LIFESTYLE Expat living in Costa Rica by Shannon Roxborough Easy living, beaches and affordability attract expats; Costa Rica is a bigger draw than it’s ever been, admired financial privacy, a favorable tax climate and laissez-faire as much for its enviable lifestyle as its luscious scenery stance on business welcomes PTs and entrepreneurs. (what locals call pura vida, the ‘pure life’). Which means f Latin America is the new Riviera of Western that, on any given day, more than a few of its two million IHemisphere, Costa Rica is its Croatia, a place with annual visitors asks themselves: What would it be like to intense ambition, awed by its own progress, the good— live here? an expat-friendly atmosphere, breathtaking coastlines, So before you pack up your life and begin house hunting near-perfect weather—and the better—a roaring in Costa Rica, remember: Your dream is shared by many economy, low taxes, strict banking secrecy. It’s easy to others. The influx of deep-pocketed foreigners with cash see why the country is called “Switzerland of Central to burn has pushed up real estate prices several fold. But America.” Indeed, Costa Rica’s town of Nuevo Arenal, even though Costa Rica’s prices have risen considerably, which overlooks Lake Arenal, has a cluster of Swiss-style they are still much cheaper than comparable properties in chalets that appear to have been transported from the places like south Florida, southern California, Costa del Alps to the midst of this volcanic tropical landscape Sol, Spain or Algarve, Portugal. In Guanacaste beach where capuchin monkeys and toucans roam freely. communities like Playa Hermosa, luxury two-bedroom, two-bath condos start at $250,000; in Playa Naranjo, a With its spectacular beaches, lush mountains, hedonistic 2,500-square-foot villa with a pool, a three-minute walk pleasures and low-stress lifestyle, Costa Rica has long from the beach is selling for $350,000. Those who prefer been a magnet for visitors. This is where North American a more urban feel can settle in the San Jose suburb of and European eco-tourists regularly arrive to marvel at its Escazu, where homes routinely sell for between $250,000 untamed natural beauty and rainforests teeming with and $650,000. Pioneers should consider the virtually wildlife. Costa Rica has become the quintessential Latin undiscovered (and infrastructure-lacking) Osa Peninsula Mecca for expats and foreign second home buyers, a in the south, where prices are a mere fraction of those on distinction previously held by Mexico. A haunt of British the north and central coasts. pirates during the 19th-century, Costa Rica (population 4 million) now attracts expatriates and immigrants by the Settling in Costa Rica is a pretty straightforward affair. To planeload—it is home to an estimated 300,000 be granted pensionado (pensioner or retiree) status, all Nicaraguans, 40,000 Americans, 40,000 Chinese, 20,000 that is required is spending four months out of the year in Cubans, 5,000 Brits and 5,000 Canadians. The celebrity the country (they need not be consecutive) and providing set have become fixtures, too. Hollywood heavyweight proof of a stable monthly income of $600 or more. Legal Mel Gibson and supermodel Gisele Bundchen are said to residents are entitled to access the country’s low-cost own homes on the Nicoya Peninsula in Guanacaste on and excellent health care plan (many doctors are U.S.- the northern Pacific coast. High-profile musical talents educated). Britney Spears and Sting have also been spotted here. A Welcoming Business Environment San Jose is a sprawling, unsightly metropolis considered Economically, Costa Rica has undergone a miraculous by many to be the most cosmopolitan of Central transformation since the mid-1990s and is now something American capitals (though Panama City would argue of a rarity in Central America: a tech-savvy, stable and otherwise). Home to one-third of the country’s residents, it prosperous democracy—Ticos enjoy the highest standard is a jumble of office towers, shopping malls, bustling of living in region—largely surrounded by poor, struggling markets, U.S. fast-food chains and steamy, anything-goes and politically and socially shaky neighbors. nightspots. Not surprisingly, tourism is the country’s top source of Expats’ cultural influences have altered many locals’ employment and investment. But in an effort to diversify sensibilities, resulting in a new breed of Ticos (Costa its economy, the Costa Rica has implemented farsighted Ricans) infatuated by all things American and European. policies to attract business, industry and investment, all Thanks to satellite-beamed episodes of CSI, Lost and while carefully maintaining a delicate balance between Grey’s Anatomy and the growing popularity of American preserving natural resources and cashing in on economic and British rock and pop music, foreign popular culture opportunity. has become part of the mix in this cultural cornucopia This tolerant open-door policy is increasingly making society. Costa Rica a magnet for foreign capital. Several A Lifestyle Haven multinational corporations have already set up shop, Less than three hours from Miami, sandwiched between including microchipmaker Intel, consumer products the Caribbean and the Pacific, it boasts not only long company Procter & Gamble and pharmaceutical giant stretches of sand-fringed coast but a famously agreeable GlaxoSmithKline (Intel’s exports alone account for 20% of climate with year-round temperatures that average 72 Costa Rican exports and nearly 5% of the country’s degrees. For decades Costa Rica was a well-kept secret; GDP). More are certain to follow. when Americans began trickling in the 1970s most But even with an attractive business climate, stable people hadn’t even heard of this place. No longer. Today government and highly literate workforce, Costa Rica 12 RESIDENCY AND LIFESTYLE Expat living in Costa Rica by Shannon Roxborough doesn’t expect to challenge Brazil or Argentina as a major That doesn’t mean that legions are suddenly closing out Latin American business hub. But it does manage to their Swiss accounts and transferring their money to punch well above its economic weight. Costa Rica. The offshore industry is, after all, still in its For enterprising types and privacy seekers who want to infancy and has a long way to go before it can get in on the ground floor before regulations are legitimately lay claim to status as a wealth-management tightened, now is clearly the time. capital. But its reputation as a safe harbor for assets is growing. And while Costa Rican authorities have taken So, what makes Costa Rica so attractive for business? some steps toward increasing transparency in recent Among other things, tax rates are low. Corporations pay years, its core principles of confidentiality remain intact. no income taxes if their revenues are derived from outside Costa Rican borders. The country has also While privacy is facing setbacks in some traditional tax established low-tax Export Processing Zones and other havens, Costa Rica is a nation that still values financial incentive programs that apply to a wide range of discretion and the rights of individuals to grow and industrial and service sectors (special mention is given to protect their wealth. So, even though the country isn’t electronics companies). considered an official tax haven by most, its reasonable tax policies and lack of the official label give it obvious Incorporating in Costa Rica advantages over other offshore jurisdictions—chiefly, its Incorporating in Costa Rica provides a high degree of low profile as a fiscal sanctuary. anonymity since there is no legal requirement to disclose The U.S. government continues to lock horns with the companies’ beneficial owners and there are several other Central American nation over its status as an offshore advantages of establishing a corporate presence there: base for online gambling, but for now, Costa Rica is 1. Corporation names may be in any language so long notably absent from the OECD’s list of tax havens, though as they include the suffix of “Sociedad Anonima” U.S. Congress’ proposed Stop Tax Haven Abuse Act lists (abbreviated S.A.). it as an “Offshore Secrecy Jurisdiction” and one of 34 2. Corporations who do business exclusively outside of “probable locations for U.S. tax evasion” (it comes as no Costa Rica are not required to file financial statements. surprise that all places with low taxes and respect for 3. Businesses with no operations in the country are not privacy are considered by the U.S. and European Union required to hold annual meetings of partners or to be threats). directors. All said, Costa Rica is a high-profile tourist and expat 4. There is no minimum requirements or maximum limits hotspot that effectively doubles as a low-key, PT-friendly for authorized capital. playground. Those “in the know” recognize it as an emerging world-class tax and asset protection haven and 5. Directors and corporate officers can be of any prefer to keep it to themselves, but it’s only a matter of nationality and reside in any country. time before the word gets out. Tax, Privacy and Wealth Management Considerations Shannon Roxborough, editor and publisher of the new Bureaucrats have set out to create an atmosphere to global lifestyle magazine Borderless Living, is former encourage the region’s wealthy to move their assets to correspondent with Money magazine. A widely-published Costa Rica by attempting to carve out a new niche in the freelance writer and independent international consultant global economy through generous tax incentives and for more than 20 years, he specializes in living and strict bank secrecy (Costa Rican law forbids its financial retiring abroad and offshore planning. institution from divulging information about clients or their Visit www.BorderlessLiving.com assets). The state-run banking monopoly ended in 1995 and there are currently more than 200 private financial Costa Rica Resources institutions in Costa Rica, including a fast-growing Recommended real estate agent: Coldwell Banker Coast offshore banking sector. to Coast Properties (506-670-0805; Individuals looking to reduce their tax burden will www.coldwellbanker.com). appreciate Costa Rica’s easy-going tax regime, which Suggested attorney: The law firm of Tacsan y Umaña does not go after any personal income earned abroad. (506-223-6140; [email protected]) has a capable And despite being in a region known for its poverty, English-speaking staff that is able to provide legal advice corruption and turmoil, Costa Rica is increasingly serving and services, such as handling real estate transactions. as a refuge for old money—primarily from troubled Cuba Peter Macfarlane & Associates S.A., the firm of our very and Venezuela—seeking a safe haven from high taxes own joint editor and non-resident banking expert Peter and instability. It is also slowly becoming a draw for Macfarlane, is able to provide advice and incorporation upwardly mobile professionals and business proprietors services in Costa Rica. Peter frequently shuttles between from throughout Latin America who find the country more Panama City and San Jose, the region’s twin financial hospitable to their personal and commercial interests than centres. Contact [email protected] or visit back home. www.petermacfarlane.net 13 GLOBAL FINANCES Was it Peak Oil that pricked the bubbles? by Stephen Hamilton-Bergin

etween 1999 and 2002 I wrote a series of books definition cannot be confined or controlled by external Bcalled the no 19 bus. They were edited during 2003 influences. The failure of communism is a perfect and published March 2004. modern example. Thus one could say that the free markets are actually working perfectly because they The first volume was a novel set in the specific time are, in effect, ensuring that the present system will period 2007. In other words I was projecting out about collapse and free us from the burdens of government four years from the final editing. It followed the lives of intervention. There is no doubt whatsoever that nine characters as they learnt to live with a deep Governments around the world will soon be entering recession, the collapse of Wall Street and a some kind of twilight zone in the uncharted territories of stratospheric Oil price that had caused mass inflation in sovereign chapter elevens. Of course what happens in both food and fuel. Virtually every prediction I made in the vacuum that is created is pretty scary but anything these books is either our present reality or fast has to be better than this! becoming one. In order to see all this clearly without resorting to crystal The Second book, published in 2004, was a research balls all you have to do is detach yourself from your book which investigated the science behind Peak oil own individual connection to the system. With this and the third little book, called “Creating Tomorrow” detachment it is possible to see that collapse was was published in 2004. This book was divided into two actually built into the materials which formed the parts. The first part predicted that the War in Iraq would foundations of the system. cause political upheaval a loss of oil production. The second part included my philosophical predictions for This is not the time or place to analyse capitalism. This the much longer term. Andre Malraux; the eccentric is the time and place to promote the fundamental idea philosopher who became a French government minister that all market systems will tend towards equilibrium once said; given enough Time. This is also the time to let go of old conceptual balls and chains and embrace original free “Either the 21st century will be spiritual or it won’t exist.” markets, free thought and a world in which we do not The momentum behind the system’s present unraveling need a nanny state to tell us how to behave, what to do is in direct arithmetical proportion to the energy that and how to do it. was invested in making it grow beyond any natural or sustainable possibilities. Very shortly we are going to witness some really fundamental changes. To many people it will seem that Whilst we live death is a dream. When we die life is a the world is descending into a primitive chaos from dream. It is just the same with the end game in any which there will be no escape but this is merely the first system which has developed past its prime. As the fear that arises when the familiar is withdrawn from daily system slowly unwinds the main ingredient in the service. Now we have to deal with an entirely different systems thinking is self survival. At any cost. In this ball game. case we are talking about the political system and the financial system as being joined at the hip. If you Money will be redefined and resurrected in numerous control the financial systems you control or at least novel ways which will allow us to actually manufacture determine the direction by which the power structures what most of us really want. Before long we will develop evolve. Those most aligned with the system are the the ability to conduct our individual lives within an least capable of seeing its failures. At the same time economic free trade system which is not governed by the powers that be are the least capable of solving the some central political agency. Unfortunately when I say problems because they created the problems and before long I am talking about a generation or two! For simultaneously they are in total denial that they were the present we will all have to stand back and see the responsible. It is truly fascinating to watch the world destruction of vast amounts of money. It will be a very turned upside down. challenging time to insure our wealth.

Now we have a scenario where everything possible is From about 1995 I have predicted this crash. I being done to try and repair the system but specifically chose 2007 as the initial collapse. The final paradoxically the actions being taken are actually the dénouement arrives around 2012/2013. So it should be most effective means to destroy the system. In other a very interesting few years. In order to understand this words the present power structure is attempting to fully you will have to study my work on futurology and shore up the foundations of its power base by trying to the relationship between hydrocarbon energy systems take control of the free market but the free market by and the world’s financial systems. 14 GLOBAL FINANCES Was it Peak Oil that pricked the bubbles? by Stephen Hamilton-Bergin

Many people could see that folks in the USA and the as a stratospheric increase in the oil price closely UK couldn’t keep using their homes as ATM machines followed by the financial credit bubbles bursting indefinitely but everyone was surprised at how long the followed by a collapse in the Oil price and a deep scam could be kept running at full throttle. recession leading to an even greater unwinding. In 2003 I foresaw and wrote about the collapse of the US The most critical point to understand is this: car industry and I reckoned the Dow Jones would hit 5000. Energy systems underpin financial systems. Am I a Gloomster? No. I am the complete opposite! I Of course, in retrospect, we can now all see that the saw the present Global unwinding as the perfect money being pumped into the system was finding answer to Global warming! After all, the world was increasingly exotic homes in the financial NINJA trying to arrange how to use far less hydrocarbons but underclass. [ NINJA stands for No Income No Job and couldn’t get its act together. Now here we are. No prospects] Geological nature has already ensured we get the best As you might imagine I am constantly being asked how possible crisis at the best possible time. I could see the crash coming, why I chose 2007 and The next question must be; where to next? The answer what is coming next! is simple. Firstly we have to understand that it is Firstly: Peak Oil. I imagine most of the readers of this impossible to know where the financial system is going well informed magazine are aware of Peak Oil but I will, until we understand where our energy [fuel] systems with breathtaking brevity define it for you. are going. In 2007, around July, the World produced about 86 million barrels of conventional oil per day. The Peak Oil was the day when the Planet Earth pumped oil market tightened and the speculators moved in. out a certain amount of Oil and every day after that, Although an individual speculators main role is to make until the end of all the Earths Oil, it never had a more money from an opportunity their collective role is to productive day. reveal structural weaknesses or shortages in the market. Almost simultaneously the World started to I believe this occurred around the third quarter of 2007. enter a spiral nosedive. The flaws in the system were I predicted that it would happen in 2003. How did I do exposed. The asset and credit bubbles were severely that? I studied the Earth’s Oil geological systems pricked. A recession was induced. The recession country by country and then literally Oil well by Oil well. deepens. Oil demand collapses. The Oil price collapses Then I threw in my understanding of Geo Politics which but the recession is still deepening. The first question is summed up in the observation; “Politicians are for a futurologist is this. universally ignorant because they are so individually arrogant, self interested and entirely absorbed in How deep can the recession go and how much will the dealing with any immediate crisis rather than any recession reduce the demand for oil? possible future one.” Then I chucked in some guerilla warfare like oil pipelines being blown up in Iraq and Next question. How are oil supplies going to hold up Nigeria. Then I felt the amazing Momentum in the over the next five to ten years? The answer is simple. world’s energy systems [Especially in China and India.] The world’s major Old Oilfields are depleting at a rate of Finally I studied the oil projections of the world’s major between four and six percent a year. New Oil energy agencies, which, back then, in 2003 were production is going to be minimal. Most future oil predicting that oil production would steadily increase at exploration and mega Oil projects have been, or will be, about two per cent a year until 2025 [at about 120 cancelled. Thus it seems virtually certain that the next million barrels per day] and that the price of Oil would oil shockwave will appear around 2012 /2013. This is be also totally stable hovering between 31 and 34 assuming a very deep and extremely painful unwinding dollars a barrel!! Can you believe how utterly wrong between 2009 /2010 and a mild recovery occurring these world experts were? In fact the International around 2011. Thus around 2012 we will have another oil Energy Organisation {IEO} is so embarrassed by the shockwave only this time it will be far more intense and failure of their predictions they have removed much of far more destructive. It will come at a time when the the original documentation from their public website! economy is weak and just starting to recover and it will Oh what a devious little world we live in! coincide with Government fiscal deficits of such enormous and unmanageable proportions that From this concoction I concluded that an oil shockwave Governments will go bankrupt. Hurrah! From the debris would arrive in 2007. This first shockwave would arrive individual libertarian entrepreneurial capitalists will start 15 GLOBAL FINANCES Was it Peak Oil that pricked the bubbles? by Stephen Hamilton-Bergin

to create new banking and credit systems. Capitalism there is going to be a fantastic series of opportunities and capital adventure will not die. It will be for investments in both oil and perhaps more specifically reinvigorated. Governments will be powerless. Their Oil related products. This is why it is so important to coffers will be empty and their ideologies as bereft of have knowledge of how all the inter-related elements of treasure as the treasury is bereft of good solid cash. the total economic system are working. You cannot look They won’t have coffers of cash or Gold but coffins full at things in isolation. Let me give you a prime example. of impecunious memories. How did they not foresee Many people are not aware that oil and especially Gas that every action they took only assured their own not only provide the energy for industrial production they destruction? Oh! Yorick! Doth thou not see mortality are also the source for five thousand everyday objects. framed in the round forever returning to unwind the Oil is of course the main ingredient in all plastics and mischief men make upon one another! paints but it is also the main ingredient in fertilizers and pesticides. When the Oil price skyrocketed recently the Business opportunities will be plentiful. Safe Havens? I direct knock on effects on food and soft commodities will depart with one long term business suggestion. I was enormous. Now this year cocoa beans have gone would create a consortia of wealthy individuals and up in price quite dramatically. Why? Part of the reason is then buy from Stihl [One of the best German tool weather, as always, but a significant element in the price makers] thousands of strimmers and chainsaws and all rise was the increasing cost of fertilizers and pesticides. the necessary spare parts. I would then negotiate a Thus the two main producing countries started to use stupendously excellent price with Stihl because instead less of them [due to cost] and this had a direct effect of buying and then immediately selling these items I on production and hence the selling price. If I am would instead spray them with Oil wrap them in correct and the next really dramatic oil shockwave is Clingfilm and lock them away in one of the many coming around 2012 this will mean that all products containers which are now for sale for next to nothing related to these products will see dramatic price rises. due to the shipping crisis. Then I’d wait. How long We may flirt briefly with deflation this year but in the would I wait. Who cares? I would have the most medium term the price of all oil related products will be tangible solid assets imaginable. When the next oil upwards. wave strikes us in 2012/2013 energy costs will not just soar there will be actual physical shortages. Steel and Lastly; some people will have noticed that as the Oil Aluminum and many of the other ingredients necessary price collapsed and oil investment collapsed so did for the assemblage of fine machine tools will either be investment in renewables. It was interesting to note that hard to get and/or expensive. Inflation is likely to be rife the iconic investor T Boone Pickens has been “calling” and money quite possibly more and more worthless. Peak Oil for a few years. He made major investments in So, whilst money inflates itself away to nowhere I’d be energy and especially in massive wind farms. However sitting on the most tangible and desirable assets in the wind farms are now being put on hold alongside all market place. If you don’t like the idea of strimmers other major energy infrastructure investments. Wind why not buy a couple of JCB’s and shrink wrap them turbine technology will have another renaissance around for your children. the time of the next oil shockwave and one of the best investments you could look at is specialist suppliers to The best thing about this idea is; wind turbine manufacturers. Bearing makers in A> You would help Stihl stay in business as you would particular are going to be in huge demand and although take a major part of their production but not bring the industry is relatively small it is highly specialist and it immediately to market. will certainly be highly desirable. Meanwhile any organic food technologies will also be in demand as mono B> You would have at your disposal some of the most culture and agro farming is hit by input costs. useful and helpful tools that will be required for all Permaculture? Automatic irrigation systems? Polythene the small sale manufacturing and food growing and Polypropylene pipe manufacturers? There is an that we are certainly going to need in the not so enormous potential in areas which are now small but distant future. You would not only get wealthy you which will be the first to really start expanding. Best of would have created, with your foresight, a all nearly all these technologies and investments are tremendous community asset. You could therefore beneficial to society as a whole. On a negative note I’d feel proud as well as rich and who could ask for avoid ethanol or alternative liquid fuels. The energy more than that. math simply doesn’t add up and subsidies will be in Of course if Peak Oil has been and gone and if the oil short supply whilst government fiscal deficits are in depletion scenarios I have mapped out are correct then freefall. 16 GLOBAL FINANCES Was it Peak Oil that pricked the bubbles? by Stephen Hamilton-Bergin

Finally I would like to wish readers a successful and Regards Stephen Hamilton-Bergin 4th January 2009 enterprising 2009. Capitalism is not dead it is simply re- inventing itself. Q wealth is the only “wealth organ” I If you would like to order my books you can go to my have encountered which manages to blend some website www.no19bus.org.uk spiritual philosophy with individual freedom to live Here you will find further details of my work and an economically independent lives. My next book deals order form. with the way In which money and spirituality can be reconciled. It is called PSALMS which is an acronym for For the moment I accept most international traded Parallel Spiritual Alternative Money Systems. I hope my currencies. I will let you know well in advance when next article for “Q Wealth” can cover how this system such currencies are no longer to be trusted. Before we could function. run out of time I will also be providing the framework for alternative money systems and I will probably be I’d like to thank the editors of Q wealth for the privilege helping institute the theoretical frameworks for free of writing for their most excellent magazine and hope to banking. So don’t worry. We will find ways to trade be invited back again. whatever the buggers do.

Offshore Services in Panama

Banco Credit Andorra (Panama) has recently opened The bank also has a new office in Montevideo, Uruguay, offices in Panama City’s Torres de las Americas, having received a license on December 20, 2008, where following the granting of a Panamanian banking license it is also the second Andorran bank present (Banca in 2008. Operating under an international license, Credit Privada d’Andorra has had a presence in Uruguay for some years). Andorra joins Andbanc as the second Andorran bank in Roca noted that Panama’s location and the area’s Panama. Banca Privada d’Andorra, a third Andorran economic development were strong reasons to open an bank, has already received authorization for a office here. The move, according to press releases, will representative office and is expected to open a full also let the bank work with European clients who “want branch within months. to develop projects in the area.” According to Credit Andorra management, the business Faced with new international challenges and paradigms, strategy is to focus on asset management, offering the Banco Credit Andorra Panama President clients a broad spectrum of offshore banking and acknowledged that the bank would adapt its services to financial services as well as offshore financial advice. be more advisory, with simpler banking products focused on risk management and global solutions. Credit Andorra is the leading private bank in the According to Roca, Panama’s excellent compliance with Principality of Andorra (read more on Andorra in Q international regulatory standards, such as those Wealth Report edition 50), where it has a 40 percent designed to prevent money laundering, was another key share of the Andorran retail banking market. The bank factor. He recalled the words of Panama’s emphasizes professional service while working closely superintendent of banks, Olegario Barrelier, who noted with family businesses, as well as small and medium- at the bank’s opening that Panama and Andorra are sized firms. both small countries that have had to reinvent Miquel Valls Roca, President of Credit Andorra’s themselves in order to move forward. Panama operation, said that Panama would be the In 2007, Grup Credit Andorra reported 13 billion euros company’s gateway to Latin American opportunities. The of managed assets with 638 million euros in reserve, a opening of Banco Credit Andorra Panama is part of net profit of 128 million euros and 460 employees. Grup Credit Andorra’s internationalization strategy, which seeks to grow and strengthen the company’s business beyond Andorran borders. The new bank sees If you are interested in opening an account at Credit Latin America as its best hope for expansion, given the Andorra, Andbanc or Banca Privada d’Andorra, whether common language and of course the threats to banking in Panama or in one of their other offices, Peter secrecy in its Andorra home market which may be Macfarlane & Associates are able to help you. Please scaring off its traditional European clientele. contact [email protected] initially. 17 RESIDENCY AND LIFESTYLE Switzerland with Oxo Cubes

Following on from our report on Residency and Second Due to its middle-class society, economic stability and use of Passports in Uruguay in the last issue, here is an article by referendums, Uruguay has proudly called itself the Switzerland Derek Sambrook giving some further background information of South America (not to be confused with Costa Rica’s claim and context on Uruguay, including its interesting banking of being the Switzerland of Central America) where Brazilians system that was recently attacked by the OECD. We feel that and Argentines particularly have kept their money in its banks. Uruguay and Paraguay are countries you will be hearing more I was reminded recently by a visiting lawyer from Argentina and more about as the recession bites further…. that his country’s tax authorities (not just the OECD) regard taxpayers with suspicion if they have bank accounts in he South American continent’s smallest country, the Uruguay. TEastern Republic of Uruguay, to give it its proper name, The banks have had to endure political and economic was making the international headlines until it recently agreed upheavals, such as a period of dictatorship (1973-1984) and to join the list of countries willing to co-operate under qualified when the financial system fell victim in 2002 to Argentina’s circumstances in tax investigations instigated by member US$95 billion default and devaluation which caused a run on states of the Organisation for Economic Co-operation and Argentine deposits in Uruguayan banks. Development. At the time the private banking sector represented a quarter of This tiny territory famous a century ago for its Fray Bentos the country’s economy. Since then the banks have recovered corned beef and Oxo cubes is also known for its banking and and operate within a very liquid banking system with low credit like so many other countries in Latin America, Uruguay has an risks. interesting history. It is a tale of two nations struggling for supremacy over the country during which its indigenous A Doctor’s Prescription population, the Charrúa Indians, were either eradicated or Besides banking, Uruguay has a history of producing first forced to leave, thus making Uruguay the only country in Latin class beef as well as high quality wool, resulting in increased America today without an indigenous population. exports (and prices). In the previous century production was First the Spanish arrived in 1516 and the explorer, Juan Díaz bolstered by two world wars, including the Korean war, and by de Solís, including most of his party, was promptly killed by 1950 the country accounted for 3.5% of all Latin American the Charrúa Indians. During the 17th century, however, the economic activity. The era has been called Uruguay’s golden indians, who were enjoying a period of prosperity, ceased age, capped by its victory over Brazil in the 1950 football hostilities and began trading with the Spanish. Little did they World Cup Final – 20 years after it staged and won, playing know what lay ahead. Argentina, international football’s first World Cup tournament.

The Portuguese entered the scene and clashed with the It has had less success with Brazil and Argentina in the case Spaniards such that during the seventeenth and eighteenth of trade and would probably agree with Charles de Gaulle: centuries the territory changed hands several times. Although “Treaties, you see, are like girls and roses: they last while they Uruguayan independence in 1825 was fully recognised by last”. The Mercosur Customs Union was formed in 1991 by 1828, the country came under constant military threat during Argentina, Brazil, Paraguay and Uruguay and the Union’s the nineteenth century from Argentina, Brazil and England. permanent secretariat is today based in Montevideo, The English already had strong commercial interests in the Uruguay’s capital. Although things went well at first, Uruguay region which were made even more vital after Napoleon’s and Paraguay were often sidelined, with the two larger Continental Blockade against England was imposed in an countries sometimes making bilateral deals with each other. attempt to cut off his arch-enemy’s access to trade. Consequently, whilst Uruguay’s exports have doubled since 2002, sales to Brazil and Argentina have fallen significantly. Once the threats passed, however, and Uruguayans were left The country now only purchases 38 per cent of its imports to their own devices, two main political parties emerged, from Brazil and Argentina, some 5 per cent less than nine namely, the land-owning Blancos (Whites) and the urban years ago. In fact, discouragingly, by 2005 intra-Mercosur Colorados (Reds). Under José Battle y Ordoñez, who was exports represented only about one-eighth of the four twice president (1903-7 and 1911-15), the country became countries’ total exports. Latin America’s model welfare state. Since the fateful banking events of 2002 Uruguay has enjoyed Despite George Bernard Shaw’s view that every man over forty steady growth which has enabled it to prefinance its debt until is a scoundrel, the president brought in legislation which 2010; the country, in fact, has recorded average annual imposed the eight-hour working day, social insurance and free economic growth of 8 per cent for the last 3 years. secondary education. As a consequence of this, Uruguay, for Significantly, Uruguay has overtaken Argentina as an exporter a long time, has been the continent’s most egalitarian country. of beef and has more than halved its previous exposure to The population has access to a wide range of political views Argentina for trade and foreign currency deposits. delivered through more than 100 private daily and weekly newspapers, not to mention the availability of over 100 radio Clearly, the economic landscape has changed significantly stations and some 20 television channels. The rights body, and an over dependency on Argentina has long ended; this is Reporters without Borders, said last year that Uruguay was just as well as that country might be heading towards another free from the “media polarisation” found in many other South debt crisis midst the worst global economic downturn in American countries and, therefore, scored highly in press perhaps 75 years. It follows that 2009 is fraught with freedom rankings. uncertainty for Uruguay and a significant slowdown for its 18

RESIDENCY AND LIFESTYLE Switzerland with Oxo Cubes regional trading partners, not to mention lower commodity Batlle (a direct descendant of José Batlle y Ordóñez) knows prices (Uruguayan farmers have been earning four to six times all about them. He was faced in 2000 with a deep regional more for soya than from raising cattle) as well as more costly economic crisis, including an outbreak of foot-and-mouth that credit (with less access to it), will all take their toll. In March decimated beef exports; public disenchantment at that time 2005 Tabaré Vásquez from the Broad Front coalition became has been blamed in large part for the country’s dramatic president. A cancer specialist and former mayor of political shift since. Montevideo, he is the country’s first leftwing leader and History reveals how circumstances can determine any reflects the regional trend towards the emergence, in varying politician’s fate and I suspect that it will again be economic, degrees, of left-wing government, such as in Brazil, rather than political, events that will concentrate voters’ minds Venezuela, Chile and Argentina. The doctor’s prescription for in Uruguay. The World Cup tournament is also held in 2010 the body politic includes taking a moderate political course and a victory on the field and at the polls for his party would and alleviating poverty. Since coming to office he has restored surely be just what the doctor ordered. diplomatic ties with Cuba which were broken by his predecessor, Jorge Batlle, following Uruguay’s sponsorship of Author Derek Sambrook is based in Panama where he is a United Nations human rights vote criticising Cuba. The Managing Director of a British-managed trust company ensuing war of words between the two countries rivalled some licensed under the fiduciary laws of Panama. Derek is a of Hugo Chavez´s rhetoric and at one point Fidel Castro former member of the Latin America and Caribbean Banking described Batlle as that “hungover, abject Judas who presides Commission as well as a former offshore banking, trust over Uruguay”. company and insurance regulator. He has over 40 years Just as Uruguay has won the World Cup twice, perhaps the private and public sector experience in the financial services country’s first left-leaning party will again take power in March industry. His website www.trustservices.net provides a broad next year. Events in 2009 will be the key and former president range of related essays. Preparing for Civil Unrest in America Legislation to Establish Internment Camps on US Military Bases by Michael Chossudovsky

he financial meltdown has unleashed a latent and The Protest Movement Temergent social crisis across the United States. When people across America, whose lives have been What is at stake is the fraudulent confiscation of lifelong shattered and destroyed, come to realize the true face of the savings and pension funds, the appropriation of tax revenues global “free market” system, the legitimacy of Wall Street, the to finance the trillion dollar “bank bailouts”, which ultimately Federal Reserve and the US administration will be challenged. serve to line the pockets of the richest people in America. A latent protest movement directed against the seat of This economic crisis is in large part the result of financial economic and political power is unfolding. manipulation and outright fraud to the detriment of entire populations, leading to a renewed wave of corporate How this process will occur is hard to predict. All sectors of bankruptcies, mass unemployment and poverty. American society are potentially affected: wage earners, small, medium and even large businesses, farmers, professionals, The criminalization of the global financial system, federal, State and municipal employees, students, teachers, characterized by a “Shadow Banking” network has resulted in health workers, and unemployed. Protests will initially emerge the centralization of bank power and an unprecedented from these various sectors. There is, however, at this stage, no concentration of private wealth. organized national resistance movement directed against the Obama’s “economic stimulus” package and budget proposals administration’s economic and financial agenda. contribute to a further process of concentration and Obama’s populist rhetoric conceals the true nature of macro- centralization of bank power, the cumulative effects of which economic policy. Acting on behalf of Wall Street, the will eventually resul in large scale corporate, bankruptcies, a administration’s economic package, which includes close to a new wave of foreclosures not to mention fiscal collapse and trillion dollar “aid” package for the financial services industry, the downfall of State social programs. (For further details see coupled with massive austerity measures, contributes to Michel Chossudovsky, America’s Fiscal Collapse, Global precipitating America into a bottomless crisis. Research, March 2, 2009). “Orwellian Solution” to the Great Depression: Curbing Civil The cumulative decline of real economic activity backlashes Unrest on employment and wages, which in turn leads to a collapse At this particular juncture, there is no economic recovery in purchaisng power. The proposed “solution” under the program in sight. The Washington-Wall Street consensus Obama administration contributes to exacerbating rather than prevails. There are no policies, no alternatives formulated from alleviating social inequalities and the process of wealth within the political and economic system. . concentration. continued on page 22 19 WEALTH CREATION Is now the time to buy at UK Auctions?

Q Wealth’s real estate man Thomas Bolther has said We have heard that some banks and receivers have that more fortunes will be made in real estate over the been withholding their stock in order to try and sell them coming five years than in any other business. At our privately in bulk, and to avoid swamping the market and recent Q Wealth Event in Bantry, Ireland, UK property driving prices down further. If I were a cash buyer and investor Derek Armstrong gave us a unique insight into buying in bulk I would expect the most favourable terms. what he calls “No Money Left In” deals. Those with as Perhaps the shear quantities involved mean that it is little GBP £20,000 capital available for a few months can impractical to sell through the auction houses in the buy rock-bottom UK properties and expect to refinance timescale required by the vendors. This situation cannot them within a few months, taking the seed capital out to last for long and is also part of the logjam created by move on to the next deal. This strategy, as rentals the lack of liquidity. If buy-to-let mortgages were easier finance the mortgages, is an excellent way to build up and quicker to obtain, and at reasonable LTV’s, then fast a portfolio of UK rental properties with surprisingly there are plenty of investors and professional landlords little capital – which you then hold for long term growth. ready to take on the challenge. Derek and his partner Donna are your man and woman What you need to consider on the ground in the UK, finding you these deals for a small commission. Derek takes up the story... It is essential to decide what type of property you are going to buy before you start looking. Sounds obvious, ith motivated sellers becoming increasingly keen but believe me, there are so many to choose from that Wto sell and BMV companies advertising anything you simply must narrow your search or you will give up up to 30% discount off the RICS valuation, you may long before you find anything of interest. My advice is to wonder why you should even consider auctions as a stick with what you know. As you need to be able to act source of good deals. quickly, a little prior experience will go a long way. If you have previously bought terraced houses in the North- Auctions can be full of nasty surprises such as un- East then that’s what to look for, as you will be far better mortgagable properties, other peoples mistakes, and placed to identify the good from the bad. hidden small-print, so why bother at all? Well, like most things, when the odds appear stacked against you, You must also decide how you are going to buy - cash therein lies the opportunity. Most people are put off by or finance, and understand the implications of each. all the potential problems, which is why there are gems If you are a cash buyer, congratulations – you have waiting to be discovered by anyone willing to put in the eliminated 90% of the problems you might otherwise time and effort to find them. face, but if you intend to mortgage the property at any Discounts are difficult to quantify until you have had a time in the future (or sell to someone that does) then you valuation report (which could be the subject of an entire will still need to do your due diligence and check its article in itself), but can be in excess of 50%. With suitability for lending purposes. lenders dropping their LTV’s to 70-75% this still leaves If you are relying on a mortgage then you must know room for some creative financing even if you have to what mortgage products are available, the interest rate wait six months. and rental coverage requirement, the lending criteria, Even though the auction rooms might still appear to be and lending policy, for each lender you are busy, you may be surprised that the number of active considering. We are all used to conducting our due bidders is small, and how many of those are true diligence in order to calculate whether a property will professionals? work for our particular purposes, but it is also essential to know whether you are likely to be successful in Why now? obtaining a mortgage offer, and not just for credit- Because auction houses are becoming far more realistic worthiness. with their reserve prices and are setting guide prices Lenders can be fickle at the best of times and we are a accordingly. By lowering the expectations of the vendor, long way from “the best of times” right now, so don’t much like other BMV, they know they are more likely to assume anything. Some lenders will not lend on a achieve a sale. property that is above a commercial unit, or that has any December and January are quiet months for the auction commercial element. Lenders also have maximum houses and at the same time we are told that exposure limits and will not lend on a development repossessions are increasing, so expect the floodgates where this has been reached. They also have “no go” to open over the next few months. areas, such as Thamesmead in London. 20 WEALTH CREATION Is now the time to buy at UK Auctions?

Many of these issues may only relate to flats, but be representation” for those that do not have time to visit aware that many have featured and sold in recent auctions themselves, and are establishing an investment auctions and I always fear that the buyer is unaware that pool for a unique way to benefit from auction property their purchase is potentially un-mortgageable. It is also without the hassles of direct ownership! true that many lenders will not entertain such things as We tailor our sourcing to your specific requirements, “flying-freeholds” and unusual methods of construction, carry out due diligence, viewings all over the UK as well as more obvious structural defects. (through an established network), and attend auctions It is advisable to use a broker with the necessary on your behalf. You choose the elements of our service experience and ask them to check with your chosen that complement your situation, and we work together lender that the property of interest is suitable for lending for mutual success. Whether you lack the time or purposes before committing to a survey. If it all stacks experience, if you are excited by the opportunities that up then obtain your DIP before contemplating bidding. are presenting themselves right now then we will help you make the most of them. Finally, remember there is a very good reason that “auction” is an anagram of “caution”. It’s very much a We have a dedicated team of solicitors and brokers at case of ‘buyer beware’, but with the right people on our disposal who understand the auction process and your side you will be able to navigate to a profitable procedures. From straightforward cash purchases, outcome every time! through bridging and re-mortgaging, to the more creative techniques that we are sometimes able to How to buy NOW whatever your level employ. of experience, situation or location In the first instance please contact Richard Cawte, My partner and I purchased many properties at auction [email protected] You can also visit last year for our own portfolio and are now actively Derek Armstrong and Donna Searle’s site seeking clients that would benefit from assistance in www.auction-insider.co.uk sourcing the right auction property, “buyer

Foundations of Crisis by Doug Casey, Chairman, The Casey Report, Casey Research, LLC continued from page 11 again saw Death, whom he approached and asked why he had stared at his servant in such a threatening way. I promise you stocks and mutual funds will be about the Death responded, “I wasn’t threatening him. I was just farthest things from most people’s minds. very surprised to see him here in Baghdad, since I have At the same time, there’s no point in feeling terrorized. an appointment with him in Samara later this afternoon.” This stuff has been going on since the dawn of history. (Strange, the location for the proverb, in that this was So let me leave you with a parable. I could appropriately well before the current war). quote Ecclesiastes (To every thing there is a season, and a time to every purpose under heaven: a time to be born, and a time to die, a time to plant, and a time to *** pluck up that which is planted, etc., etc.). But everyone knows that reference. Let me rather give you John There is no doubt that we are now in the Crisis stage… O’Hara. At the beginning of O’Hara’s novel Appointment which, according to Strauss and Howe’s “Turnings” in Samara, he tells a brief parable, which I’ll summarize: theory, may last another decade or more. Is there any There was a merchant in Baghdad who went to the way to escape this economic tsunami unscathed? market with his servant. There they saw Death, who In fact, there is: market “riptides,” big economic trends stared at the servant in what seemed a threatening way. that have always made money for those bold and Later the servant said “Master, lend me a horse. I shall farsighted enough to seize them. Those trends are what ride to Samara, and there Death will not find me.”The The Casey Report focuses on. To learn more, visit: merchant did so, then returned to the market, where he www.caseyresearch.com 21 FREEDOM Preparing for Civil Unrest in America Legislation to Establish Internment Camps on US Military Bases by Michael Chossudovsky

continued from page 19 The proposed internment camps should be seen in relation to the broader process of militarization of civilian institutions. The What is the way out? How will the US government face an construction of internment camps predates the introduction of impending social catastrophe? HR 645 (Establishment of Emergency Centers) in January The solution is to curb social unrest. The chosen avenue, 2009. There are, according to various (unconfirmed) reports, inherited from the outgoing Bush administration is the some 800 FEMA prison camps in different regions of the U.S. reinforcement of the Homeland Security apparatus and the Moreover, since the 1980s, the US military has developed militarization of civilian State institutions. “tactics, techniques and procedures” to suppress civilian dissent, to be used in the eventuality of mass protests (United The outgoing administration has laid the groundwork. Various States Army Field Manual 19-15 under Operation Garden Plot, pieces of “anti-terrorist” legislation (including the Patriot Acts) entitled “Civil Disturbances” was issued in 1985) and presidential directives have been put in place since 2001, largely using the pretext of the “Global War on Terrorism.” In early 2006, tax revenues were allocated to building modern internment camp facilities. In January 2006, Kellogg Brown Homeland Security’s Internment Camps and Roots, which at the time was a subsidiary of Halliburton, received a $385 million contract from the Department of Directly related to the issue of curbing social unrest, cohesive Homeland Security’s Immigration and Customs Enforcement system of detention camps is also envisaged, under the (ICE): jurisdiction of the Department of Homeland Security and the Pentagon. “The contract, which is effective immediately [January 2006], provides for establishing temporary detention and processing A bill entitled the National Emergency Centers Establishment capabilities to augment existing ICE Detention and Removal Act (HR 645) was introduced in the US Congress in January. It Operations (DRO) Program facilities in the event of an calls for the establishment of six national emergency centers emergency influx of immigrants into the U.S., or to support the in major regions in the US to be located on existing military rapid development of new programs... installations. www.govtrack.us/congress/billtext.xpd?bill=h111-645 The contract may also provide migrant detention support to other U.S. Government organizations in the event of an The stated purpose of the “national emergency centers” is to immigration emergency, as well as the development of a plan provide “temporary housing, medical, and humanitarian to react to a national emergency, such as a natural disaster. assistance to individuals and families dislocated due to an (KBR, 24 January 2006, emphasis added) emergency or major disaster.” In actuality, what we are dealing with are FEMA internment camps. HR 645 states that the The stated objectives of U.S. Immigration and Customs camps can be used to “meet other appropriate needs, as Enforcement (ICE) are to: determined by the Secretary of Homeland Security.” “protect national security and uphold public safety by There has been virtually no press coverage of HR 645. targeting criminal networks and terrorist organizations that seek to exploit vulnerabilities in our immigration system, in our These “civilian facilities” on US military bases are to be financial networks, along our border, at federal facilities and established in cooperation with the US Military. Modeled on elsewhere in order to do harm to the United States. The end Guantanamo, what we are dealing with is the militarization of result is a safer, more secure America” (ICE homepage) FEMA internment facilities. The US media is mum on the issue of the internment camps Once a person is arrested and interned in a FEMA camp on US soil. While casually acknowledging the multimillion located on a military base, that person would in all likelihood, dollar contract granted to Halliburton’s subsidiary, the news under a national emergency, fall under the de facto jurisdiction reports largely focused their attention on possible “cost of the Military: civilian justice and law enforcement including overruns” (similar to those which occurred with KBR in Iraq). habeas corpus would no longer apply. What is the political intent and purpose of these camps? The HR 645 bears a direct relationship to the economic crisis and potential use of these internment facilities to detain American the likelihood of mass protests across America. It constitutes a citizens under a martial law situation are not an object of further move to militarize civilian law enforcement, repealing media debate or discussion. the Posse Comitatus Act. In the words of Rep. Ron Paul: Combat Units Assigned to the “...the fusion centers, militarized police, surveillance cameras Homeland and a domestic military command is not enough... Even In the last months of the Bush administration, prior to the though we know that detention facilities are already in place, November 2008 presidential elections, the Department of they now want to legalize the construction of FEMA camps on Defense ordered the recall of the 3rd Infantry’s 1st Brigade military installations using the ever popular excuse that the Combat Team from Iraq. The relocation of a combat unit from facilities are for the purposes of a national emergency. With the war theater to domestic front is an integral part of the the phony debt-based economy getting worse and worse by Homeland Security agenda. The BCT was assigned to assist the day, the possibility of civil unrest is becoming a greater in law enforcement activities within the US. threat to the establishment. One need only look at Iceland, Greece and other nations for what might happen in the United The BCT combat unit was attached to US Army North, the States next.” (Daily Paul, September 2008, emphasis added) Army’s component of US Northern Command 22 FREEDOM Preparing for Civil Unrest in America Legislation to Establish Internment Camps on US Military Bases by Michael Chossudovsky

(USNORTHCOM). The 1st BCT and other combat units would issue of civil unrest. They are also part of the logic behind the be called upon to perform specific military functions in the establishment of FEMA internment camps under HR 645. . case of civil unrest: NSPD 59 (Biometrics for Identification and Screening to The 1st BCT’s soldiers also will learn how to use “the first ever Enhance National Security) goes far beyond the narrow issue nonlethal package that the Army has fielded,” 1st BCT of biometric identification, it recommends the collection and commander Col. Roger Cloutier said, referring to crowd and storage of “associated biographic” information, meaning traffic control equipment and nonlethal weapons designed to information on the private lives of US citizens, in minute detail, subdue unruly or dangerous individuals without killing them. all of which will be “accomplished within the law”: (See Gina Cavallaro, Brigade homeland tours start Oct. 1, “The contextual data that accompanies biometric data Army Times, September 8, 2008). includes information on date and place of birth, citizenship, current address and address history, current employment and Under the proposed withdrawal of US forces from Iraq under employment history, current phone numbers and phone the Obama administration, one expects that other combat number history, use of government services and tax filings. units will be brought home from the war theater and Other contextual data may include bank account and credit reassigned in the United States. card histories, plus criminal database records on a local, state The evolving national security scenario is characterized by a and federal level. The database also could include legal mesh of civilian and military institutions: judgments or other public records documenting involvement in legal disputes, child custody records and marriage or divorce – Army combat units working with civilian law enforcement, records.”(See Jerome Corsi, June 2008) with the stated mission to curb “social unrest”. The directive uses 9/11 and the “Global War on Terrorism” as – the establishment of new internment camps under civilian an all encompassing justification to wage a witch hunt against jurisdiction located on US military facilities. dissenting citizens, establishing at the same time an The FEMA internment camps are part of the Continuity of atmosphere of fear and intimidation across the land. Government (COG), which would be put in place in the case It also calls for the integration of various data banks as well as of martial law. inter-agency cooperation in the sharing of information, with a The internment camps are intended to “protect the view to eventually centralizing the information on American government” against its citizens, by locking up protesters as citizens. well as political activists who might challenge the legitimacy of In a carefully worded text, NSPD 59 “establishes a framework” the Administration’s national security, economic or military to enable the Federal government and its various police and agenda. intelligence agencies to: Spying on Americans: The Big Brother “use mutually compatible methods and procedures in the Data Bank collection, storage, use, analysis, and sharing of biometric and associated biographic and contextual information of Related to the issue of internment and mass protests, how will individuals in a lawful and appropriate manner, while data on American citizens be collected? respecting their information privacy and other legal rights How will individuals across America be categorized? under United States law.” The NSPD 59 Directive recommends: “actions and associated What are the criteria of the Department of Homeland Security? timelines for enhancing the existing terrorist-oriented In a 2004 report of the Homeland Security Council entitled identification and screening processes by expanding the use Planning Scenarios, pertaining to the defense of the of biometrics”. Homeland, the following categories of potential “conspirators” The procedures under NSPD 59 are consistent with an earlier were identified: June 2005 decision which consisted in creating a “domestic “foreign [Islamic] terrorists” , spy service”, under the auspices of the FBI. (For further details see Michel Chossudovsky, Bush Administration creates “domestic radical groups”, [antiwar and civil rights groups] “Secret State Police”, June 30, 2005) “state sponsored adversaries” [“rogue states”, “unstable Working hand in glove with Homeland Security (DHS), the nations”] proposed “domestic intelligence department” would combine “disgruntled employees” [labor and union activists]. FBI counterterrorism, intelligence and espionage operations into a single service. In June of last year, the Bush administration issued a National Security Presidential Directive (NSPD 59- HSPD 24) entitled The new department operating under the auspices of the FBI Biometrics for Identification and Screening to Enhance would have the authority to “seize the property of people National Security (For Further details see Michel deemed to be helping the spread of WMD”: They would be Chossudovsky, “Big Brother” Presidential Directive: “Biometrics able to “spy on people in America suspected of terrorism or for Identification and Screening to Enhance National Security”, having critical intelligence information, even if they are not Global Research, June 2008) suspected of committing a crime.” (NBC Tonight, 29 June 2005). Adopted without public debate or Congressional approval, its relevant procedures are far-reaching. They are related to the This article is supplied courtesy of www.globalresearch.ca/ 23 BULLETIN BOARD

ONGOING EMAIL CONSULTANCIES For those of you who are new to Q Wealth Report, you may like to know that co-editors Peter Macfarlane and Richard Cawte offer a personal email consultation service for readers looking for ongoing advice throughout the year. Peter’s expertise in the areas of banking, residency and corporate structuring combines perfectly with Richard’s guidance towards a balanced approach to creating health, wealth and fufilment. For more on this service, please email Peter on [email protected] Richard Cawte offers full or part time mentoring to individuals looking to transform the quality of their lives. His approach uses techniques once taught at mystery schools updated for the modern era, and is designed to help you balance left and right brain activity, logic and imagination, for optimum use of the mind. For more of Richard’s work visit www.richardcawte.com ADVERTISE HERE! Below you’ll find two offers from readers of the The QWR: one to buy and the other to rent. If you would have something to offer QWR readers, please email us on [email protected] with any suggestions. MAKE AN INSTANT 50k GAIN IN SLOVAKIA! Tatra Golf, Ski Here is one opportunity that is bucking the trend in one of the top ten investment hotspots in the world right now. Tatra Golf, Ski & Spa Resort is a development based around an established golf club with easy access to three major ski resorts. I have assignable contracts for a one-bed apartment and an adjoining studio apartment, both secured in 2007 with an additional 8% off the developers off-plan prices. The development is adjacent to the existing golf club, and the spa will make use of natural hot springs. You can get a feel for the surroundings from the club website www.blackstork.sk and select the appropriate language version. Slovakia is one place that is still showing strong growth in contrast with most of the rest of the world. The development was originally due to complete in 2008 but has been enhanced in order to satisfy demand. Completion is now expected late 2009. The value of the units has already increased by over 40%. The developers website is www.tatragolf.sk - just click on EN in the top right for English translation. The reservation fees and 30% deposit are paid and mortgages are available for the rest. There are three different rental guarantee schemes. The original PDF is available to anyone that is interested in making an offer. I will accept payment in sterling, euros or dollars. Please email me at [email protected] in the first instance. I am only selling in order to cover increased completion costs on another project, due to a reduced LTV from a UK lender, so serious enquiries only please. Current value of the apartments as quoted by the developer is: 145,000 EURO incl. VAT and 104,000 EURO incl. VAT The original deal was offered in the local currency but Slovakia has since adopted the euro. For clarity, all figures have been converted to euros: Original Price equivalent to 177,377.57. 30% Deposit Paid. Legals Paid. Current Value 249,000 Increase = 40% I am looking for offers around 30% of current value so the investor benefits from the capital growth on the remaining 70%. A win/win situation! The investor is therefore getting the apartments for 199.108,00 which is equivalent to a 20% discount, or 50,000. The value will continue to increase and may be well above the current value on completion. RENT A HOLIDAY HOUSE IN TURKEY Situated in South West Turkey on the Aegean coast, Altinkum, in the town of Didim is a rapidly growing holiday resort and has 30 beaches surrounding it. As well as it’s beautiful beaches and beauty spots there are ancient towns, culture and a wonderful climate. I thoroughly recommend Didim’s local market and boat trips where you can discover the beaches, coves and bays. Didim’s new Marina is due for completion this summer and will be a fabulous addition to the town providing a 625 berth yacht marina, heliport, customs and special shopping centre, gulet cruises and tour boats. Didim has recently been given the ‘go ahead’ for a £22.8 million golf resort and residential village ona 70 acre site between Didim and Akbuk. It will include an 18hole Golf Course, Driving Range, Putting Green, 420 bed accommodation with 5* Hotel, Restaurant, Club House and Swimming Pool with swim up bar. Clover Court holiday apartment is situated near to the ancient Apollo Temple and about 10 minutes by shuttle bus to the beaches. The ground floor apartment consists of one bedroom which sleeps up to 3 people. The living/dining room consists of a single sofa bed and a double sofa bed and therefore total sleeping capacity is 6 persons. A bathroom with shower, sink and toilet, patio with table and chairs overlooking the pool and a Kitchen complete with microwave/combination cooker, 2 ring gas hob, kettle, toaster, fridge, washing machine, crockery etc. The complex has an outdoor pool with slides, crazy golf, indoor pool (for the winter), restaurant and more (please see website below). www.deesholidayhomes.tk Email: [email protected]

24