Every once in a while, an investor with fresh money to invest should pause and ask an important question: “What asset class can I buy that is unquestionably cheap?” The asset class on the bargain-basement table today is emerging markets. Hard to believe, but you can buy most emerging-market stocks today at valuations that are nearly as low as what they reached during the 2008 financial crisis.
I call it the worst law most Americans have never heard of…but you may have heard it called FATCA—the Foreign Account Tax Compliance Act. FATCA demands that every foreign ﬁnancial institution (FFI) in the world turn over account information from its U.S. clients to the Internal Revenue Service. As you can imagine, this can make it difﬁcult for U.S. citizens to offshore their money and keep it safe from the prying hands of the U.S. government.
FATCA, officially known as the Foreign Account Tax Compliance Act, is probably the worst law that most Americans don’t know about…especially if you’re a U.S. citizen thinking of investing outside the U.S. It basically requires you to tell the U.S. government a yearly breakdown of all financial accounts you hold outside the country—from bank accounts to companies to rent-producing real estate.
Not that long ago, you could buy a CD in a U.S. bank and get a decent rate of return…4% or 5% annually was typical. Sure, you wouldn’t get rich this way. But it was a safe and affordable way to build a nest egg. Today of course, times are very different. For nearly a decade, the Federal Reserve has kept interest rates at zero. And instead of paying 4% to 5% annually on CDs, now you’re lucky to get 1%.
Here comes the sun…for consumers as well as investors.The solar power industry has had its ups and downs during the past few years, but it seems to have turned a corner. Indeed, you could say that solar is seeing the light at the end of the tunnel. In June, United States solar facilities smashed their record for power generation. Utility-scale solar power plants—those with a capacity of one megawatt or more—produced 2,765 gigawatt-hours of electricity.
Despite the U.S. stock market’s high profile, its long-term performance has seriously lagged behind some really surprising foreign stock markets. This fact is an important reminder that the most obvious investment choices are not necessarily the best ones. Every year, Swiss investment bank Credit Suisse produces the Global Investment Returns Yearbook in association with the London Business School.
I had heard the stories. About a country where U.S. citizens could secure easy residence, a second passport, and open a safe bank account without even acquiring residence. Well, the stories are true. Based on my travels across the world and my visits to Uruguay, I place this country near the top of my list of livable countries. That is mostly because of its friendly people, but also because it accords everyone the freedom to live in peace as they wish. In addition to having no restrictions on foreigners’ individual ownership of land, it’s one of the only countries on the planet whose constitution guarantees foreigners the right to live there, and to become citizens.
Have you ever thought of offshoring to protect your wealth? If so, you are among the growing number of U.S. citizens looking to do this. And I’m going to let you in on one of the best offshore strategies out there—one that can do what no other offshore strategy can.
Everyone likes to complain about inﬂation, right? But I have news for you: There are big changes afoot that are going to make many of the things you buy not more expensive, but less. Crude oil now threatens to test its price low of 2009. But oil isn’t the only commodity under pressure. Coffee is down more than 40% since its recent peak in October of last year. You know what’s doing nearly as badly as coffee? Copper. Copper has broken not one, but two important lines of support. In July, Goldman Sachs slashed its price target for copper in 2016 by 44%. In fact, all industrial metals are doing poorly. I’m talking copper, aluminum, tin, nickel, iron.
The debt-ridden U.S. government is desperate to keep your money inside the country. That’s why the government will always be spreading misinformation…such as the lie that offshore asset protection is dead. The truth is that, for U.S. citizens and permanent residents, the offshore option is alive and kicking. It’s never been a more necessary part of your personal wealth preservation plan than right now. It’s also never been easier.
First, let’s set the scene: Common legal grounds enabling someone to acquire a second passport include marriage to a foreign citizen or birth in a foreign nation. In some countries like Ireland and Greece blood ancestry is a basis. Then there’s formal naturalization, meaning you apply and qualify for citizenship status.
Scandinavia is one of the most expensive regions in the world… and Norway is usually the most expensive country within Scandinavia. But thanks to a falling oil price coinciding with a rising U.S. dollar, Norway is on the bargain counter. The Norwegian krone recently touched a 13-year low against the dollar, while the shares of Statoil, Norway’s largest oil company, recently bounced off a six-year low (in dollar terms). These multi-year lows offer enticing buying opportunities for the forward-looking investor.
If you were to make your way far below the icy North Pole to the seabed at a certain spot, you would ﬁnd an unusual titanium ﬂag. It’s Russian, and it was stuck there in 2007 by the crew of two mini-submarines as a symbolic land-grab that rivals anything in history. Though it’s not a “New World” that Russia and other Arctic countries are seeking. It’s new oil. And now, with the scramble for Arctic oil heating up, the abundant black gold buried beneath the ice could constitute a fantastic investment opportunity.
When it comes to taking your life and assets offshore, few tools are more valuable than a second passport. I have one, and it makes my life easier in many ways. For example, I am able to enter Brazil and several other countries on my second passport (South African) visa-free, since Brazil requires visas for U.S. passport holders. And when I go to certain countries—ones that aren’t big fans of the U.S.—using my second passport helps me avoid attention.
There are many countries around the world that offer you the right to residence without having to be physically there. The biggest benefit of having residence in another country is the ability to avail of offshore and financial protection strategies that would otherwise be unavailable to you as an America citizen.
One of my favorite scam stories is of the German lady living in Paraguay. Claudia Bettina Muller was arrested last year for printing fake passports in her basement. Police found printing and engraving machines, along with boxes of blank passports and counterfeit government forms. But before I had ever heard of Claudia Bettina Muller or the Paraguayan police caught up with her, I had heard of this scam. I had come across a speaker at an event in Nevada who claimed he could get anyone in the attentive audience a Paraguayan passport in as little as a month. This was possible he maintained, because he had high-level government contacts. The cost was only $45,000. (That’s half of what any of the second citizenship programs I work with charge.) Right then, as he spoke, I knew it was a scam.
Why take your assets offshore with an international structure? Simple. It can make your assets virtually invulnerable to civil judgments. It can also protect you from risks such as civil forfeiture, exchange controls, repressive legislation, or political instability. It’s more difficult for creditors to collect against international assets. No country automatically enforces U.S. civil judgments. Many countries don’t enforce them at all. If you live in the States, a U.S. court can order you to repatriate your international assets. But if you’ve set up your structure properly, you won’t have the power to bring the funds back. And that’s a fantastic incentive for a creditor to settle the lawsuit.
In 1986, I walked into the main Credit Suisse branch in Chicago and told the doorman I wanted to open a Swiss bank account. I was led to a private office overlooking the Chicago skyline and was asked for my minimum deposit. Being just 31 at the time, I played it conservative and started with just $2,000 (about $4,300 in today’s dollars). I was asked to fill out a one-page form and provide a copy of my driver’s license. I gave him a check and away I went. It took all of 20 minutes. In 1986, “offshore” was still exotic. It was something regular people didn’t really do. How things have changed in 29 years.
For U.S. citizens looking to retire overseas, one of the main concerns is their tax obligations. How will the big move affect the taxes they have to pay? And will they still be able to access their retirement income overseas without difficulty? By and large, these issues are more straightforward than you might expect.
Conventional Western views of Africa are of a poverty-stricken continent devoid of modern technology and economic opportunity. But over the past few years, indicators have emerged to challenge this dated and misplaced narrative. The combined GDP growth of Africa makes it the second-fastest-growing economy in the world. Clearly, there are investments on this continent worthy of anyone’s portfolio.
The United States was founded on the principles of personal freedom and individual liberty. Unfortunately, we seem to have wandered far from these standards. In 2013, U.S. National Security Agency (NSA) whistleblower Edward Snowden told us just how far: The government can look into our personal lives via phone records, emails, and our internet histories. The NSA has the capacity to reach nearly 75% of all U.S. internet traffic. It can read the written content of emails and access the information of phone calls made via the internet.
Individual investors in China and India are buying physical gold in ever-growing quantities…and yet the price of gold isn’t rising. What gives? The short answer would appear to be that Western investors remain fairly persistent sellers of gold, thereby suppressing the gold price. The longer answer is that no one really knows. During Asian trading hours, gold has gained a cumulative $738 an ounce since September 2011. But during New York and London trading hours, gold has racked up a loss of $1,177 per ounce. The bigger point here is that the “Asian bid” for gold is large and growing.
In October of last year, China and Russia signed a landmark currency-swap deal allowing Russia to tap into $24.4 billion in liquidity. This was followed by an announcement that the People’s Bank of China would permit trading of renminbi-ruble derivatives and China’s Import-Export Bank extended credit to two sanctioned Russian banks. In other words, China’s doing what it can to help Russia keep its head above water. This is one of the greatest economic chess moves in recent history. And could be one of the greatest investment opportunities in our lifetime.
At the beginning of 2015, the crazy market barber was chasing down every solar stock in town with a pair of shears. But against all odds (and the charts) solar stocks are quickly re-growing these days—and setting up a hell of a trading opportunity for you, too. And you’re looking at a 20% gain in just a few months if you have the stones to pull the trigger today. I backed off solar at the beginning of 2015 because every finance article that wasn’t about the oil crash was about solar power. But in February, solar started looking a little less awful. It started slinking higher, while the major averages had a brownout. That was our clue that something big was brewing. The Guggenheim Solar ETF (NYSE:TAN) is now up 20% since bottoming out in January. That’s a new bull market, baby!
Back in November 2013, the International Monetary Fund (IMF) floated the idea of a “one-off wealth tax” to help pay off the debts of heavily-indebted developed countries, like the U.S., Japan, and much of Europe. Such a tax had been used earlier that year in Cyprus. It wasn’t just the IMF, either: The European Union, the German Bundesbank, and the Bank of England had all been dropping hints that a wealth tax could be coming soon. Ideally (for government, anyway), a “wealth tax” would be imposed on households’ net worth —including their shareholdings and fixed assets such as real estate—but this would pose difficult logistical and enforcement problems. So the most likely scenario is a levy on bank balances, as in Cyprus. Banks would simply be instructed to deduct a certain percentage of the balance—say, 10%—of each savings, checking, or deposit account and transfer it to the government or central bank.
The plain fact is that the world is awash in oil…for the moment. So it’s no great surprise that the oil price is tumbling, as are the shares of oil and gas companies. But I think we’re getting close to a buying opportunity. Global oil supply is already 2.7 million barrels per day (bpd) higher than it was a year ago. Meanwhile, global oil demand is only 700,000 bpd higher than it was a year ago. Don’t panic—this is a seasonal thing. The difference this time around is that we already have a 2 million bpd oil surplus on the market, and production in the U.S. and Middle East looks set to rise through next year. The good news is that not all energy companies are loaded with debt. In fact, some should do quite nicely. But they’re all getting pounded lower now. Of course, that means we’re coming to an incredible buying opportunity in select stocks.
A war looms in Asia, though you won’t have heard of it. This will be a war fought for resources and strategic positioning in the global economy of tomorrow: a war for economic dominance in what is emerging as the most crucial region of the world. The challenge for us—investors—comes in knowing where to go to profit from this new war in Asia. And I know where. Burma…a country less than two years removed from a military junta that ruled, often violently, since 1962. The aging military leaders have finally released their death-grip on power and now businesses from pretty much every major country you can think of—Australia, Japan, China, Canada, Singapore, Korea, India, Great Britain, Thailand—are beginning to swarm to opportunities that exist everywhere.
In October 2014, the tiny Baltic country of Estonia invited people worldwide to register as “e-residents,” opening its digital borders and moving toward a world in which a person’s identity online matters just as much as their identity offline. The eastern European country invited anyone, anywhere, to open a bank account or start a business there. This means that now, anyone with an Internet connection can live their financial life based in Estonia, without being physically present—which is great for business and investment.
My wife, Suzan, and I have lived abroad for almost 14 years, and we’ve had several foreign bank accounts. I wasn’t allowed to write checks on any of them. Not that foreign banks don’t allow check writing—they have all the same services U.S. banks do. But the banks we dealt with in Latin America all seem to be much more serious about signatures than our banks in the U.S.
I’ve raised the prospect of state-sponsored financial tax confiscation many times in the past. It’s becoming a more common government grab than you may have noticed. It happened in Argentina in 2008 and Cyprus in 2012. And last year, Poland followed suit. Could an act of financial tax confiscation happen in America? Could your hard-earned retirement funds forcibly be transferred to federal control to enable more politicians’ out-of-control government spending? The guarded answer is, yes.
Is it un-American to go offshore? In the United States, government officials and the U.S. Internal Revenue Service have for years done their best to convince people that obtaining a second passport is somehow crooked, even unpatriotic. The media persists with this steady drumbeat of negativity, even though the U.S. Supreme Court has repeatedly upheld the legal and constitutional right of U.S. citizens to hold dual or even multiple citizenships. Indeed, a second passport—a second citizenship—is one of the most important tools in any sovereign person’s personal and financial toolkit.
“Chinese stocks have the potential to deliver triple-digit returns within 24 months,” I explained in a recent CNBC interview. That was a bold thing to say on camera… but I believe it’s absolutely possible… In fact, twice in the last decade, Chinese stocks have soared by triple digits within two years. When China goes up, it can soar… In China’s 2006-2007 bull market, Chinese stocks soared by 500%. It soared by more than 100% in its 2009 bull market as well. Importantly, Chinese stocks today are just as cheap as they were when they started their last two triple-digit runs in 2006 and 2009. They are hated, too… Investors have been avoiding them for the last year. Meanwhile, Chinese stocks are now in a definite uptrend. This is the ideal setup for big gains… So how can you trade it?
Contrary to what your broker, banker, or financial advisor has probably told you, you can own just about anything in your retirement account—not just the products they choose to pitch at you (generally stocks and bonds). You can own all sorts of investments within your Individual Retirement Account (IRA)—and 401(k), too, for that matter—including foreign real estate. Most IRA custodians have a list of approved investments that they won’t deviate from. I do understand why they keep options so limited: They must endure grueling audits. If they do anything wrong, they can be fined or shut down by regulators. It’s just easier to say “no” to anything even slightly off the beaten track.
William Francis “Willie” Sutton Jr. was a prolific American bank robber. During his 40-year criminal career he stole an estimated $2 million, and spent more than half of his adult life in prison, escaping three times. In response to a question about why he robbed banks, he famously replied: “Because that’s where the money is!” Willie would find it odd that these days it is more likely that your own government will be the robber that grabs your bank account.
Oil prices have fallen hard this year. The same thing happened in the first half of last year due to soaring production. The reasons for the decline in price are fourfold. Last year, U.S. production rose to its highest levels since the 1990s. Furthermore, OPEC saw its production leap to a nearly two-year high in September, averaging 30.96 million bpd (barrels per day). Meanwhile, the International Energy Agency (IEA) has cut its global oil growth forecasts for 2015 as a result of second quarter consumption sliding to a 2.5-year low.
I walked into the main Credit Suisse branch in Chicago and told the doorman I wanted to open a Swiss bank account. I was led to a private office overlooking the Chicago skyline. Was asked for my minimum deposit. Being just 31 at the time, I played it conservative and started with just $2,000 (about $4,300 in today’s dollars).
Sales for the 1,000 most sought after single-malt scotches have risen around 175% since 2008. That’s based on auction figures compiled by Scottish company, Whisky Highland, which track the market. In 2013, some 20,211 bottles were sold at auction, up from 5,431 in 2010.
Romania acceded to the European Union back in 2007… just in time for the global financial crisis to bite it in the neck. GDP growth, which at a robust 6% to 7% during the previous few years had been among the highest on the continent, promptly collapsed. The economy contracted by a whopping 6.5% in 2009 and remained in the red the following year. It’s been in a state of tentative recovery ever since.
Benjamin Franklin—one of the most astute and beloved of America’s Founding Fathers—once observed: “Where liberty dwells, there is my country.” Whether the people of the United States have remained true to the intent of America’s Founding Fathers is certainly open to question. Since the terror attacks on September 11, 2001, Americans have been subjected to the questionable Patriot Act, massive government NSA surveillance, and a flood of restrictive and questionable laws that curb liberties.
China is changing. That much we all know. And in the last few years a major shift has been in people’s diet. Spurred on by improved incomes, the growing Chinese middle class has developed a hunger for western-style foods—that means more meat and dairy.