Tag Archive | "Credit Suisse"

Insane Risk


Low interest rates are leading investors to take insane risks.   A  Wall Street Journal article “A Battle Brews Over Negative Rates on Mortgages” (1) tells that due to European interest rates  near or below zero there are proposed laws in Spain and Portugal that would cause lenders to owe money to borrowers.

If interest rates are below zero, banks would have to make mortgage payments to borrowers instead of vice versa.  The banks not surprisingly are fighting this.  Any fool who thinks about human nature for even a minute realizes that no economic system like this will work.  The Western world is build on a capitalistic system where capital creates income not expense.

The problem is not the borrower paying the bank. The problem is the bank not paying depositors any interest in the first place.

Zero interest has created some insane investments.

For example, the Swiss bank, Credit Suisse, launched an unusual new bond that would pay investors relatively high interest rates.  The catch is Credit Suisse could take the investor’s principal if rogue trading, information-technology breakdowns or even accounting errors by the bank lead to massive losses for the bank.

This is simply insane. In essence, investors are insuring the bank against its own mismanagement.

Credit Suisse is the same bank that has in recent years been caught up in a variety of scandals involving its role in helping wealthy U.S. and German customers evade taxes, its apparent violations of U.S. laws prohibiting dealings with countries such as Iran and Sudan, and its involvement in selling toxic subprime mortgage securities to investors. It pleaded guilty to a federal criminal charge related to the tax issue and was forced to pay a penalty of $2.6 billion.

In 2012 the (USA) SEC  charged Credit Suisse Securities with misleading investors in offering of residential mortgage-backed securities.  Credit Suisse agreed to pay $120 million to settle the SEC’s charges.

In 2014 according to a BBC article, Credit Suisse admitted to misleading investors and violating securities law in the way they operated dark pools.  Credit Suisse paid $60m and another $24.3m relating to other violations.  The New York Attorney General and the SEC have both censured the banks.

Bloomberg News reports (4) that this year a Credit Suisse wealth manager and the bank face criminal accusations of fraud.

The article says: The timing is terrible for Switzerland’s No. 2 bank.  Its new CEO, Tidjane Thiam, is betting its future on managing money for the rich.  Wednesday, he announced plans for more cuts at its investment bank.  He also told Bloomberg Television he was blindsided by risky debt and illiquid positions taken at the trading unit that he expects to contribute to a loss for the bank in the first quarter.

The story tells about criminal complaints against Credit Suisse accusing the bank of money laundering and “churning” accounts to boost its revenue with unnecessary trades.

These are just a few of Credit Suisse’s recent misdeeds. There appear to be many more, but these alone make it seem irrational and irresponsible to accept this bank’s risk of mismanagement.

Yet low interest rates are getting investors to look at investments like this.

This would seem to not be our problem since Credit Suisse is only offering these investments to large qualified institutional investors.  Regretfully these investors include hedge funds, asset managers and firms that pool capital from pension funds.  Higher yields make pension managers look better, until something goes wrong, a likelihood that seems too possible to me.  This means your pension, or your bank or your insurance company many call bonds such as this your asset.

What is the reward for taking such risk?  The bonds are expected to pay a “mid-single digit” interest rate.  Take on Credit Suisse’s risk of mismangement for 5% or 6%?  That is really nuts. This is why we each need to keep as much control of our own investing as we can.   This is why we need a purpose for our our investments and always need to seek value.

Gary

(1) http://www.wsj.com/articles/in-spain-and-portugal-bankers-and-borrowers-fight-over-negative-rates

(2) http://www.wsj.com/articles/new-fromcredit-suisse-bonds-for-self-inflicted-catastrophes

(3) http://www.bbc.com/news/business-35456219

(4) http://www.bloomberg.com credit-suisse the jailed banker

Gain Comfort, Time and a Value Edge With Pi

If you subscribe to our Purposeful investing Course today, you’ll get our Value Investing Seminar online FREE

The goal of our seminar is not to make money one time, but show how to repeatedly find special profit opportunities that enhance safety as they increase profit.

Learn an investing strategy that reduces stress with slow, worry free purposeful tactics that cash in on financial rather than economic news.

I am sending this report “How to Grab Sequential Value Profits” to subscribers of the Purposeful investing Course (Pi)  this weekend and want to give you a chance to  save $517.90 if you subscribe to Pi.

The annual fee for Pi is $299.  I have reduced this to $197 in this special offer.  You receive the updated for 2017 $29.95 report “Three Currency Patterns For 50% Profits or More”.  You receive the $39.95 report “Silver Dip 2017”.  You also receive the $49 report “How to Grab Sequential Value Profits” plus our $297 online seminar for total savings of $517.90.

Subscribe to a Pi annual subscription for $197

Learn from the Value Investing Seminar, our premier course that we have been conducting for over 30 years.  Tens of thousands of delegates have paid up to $999 to attend.  Now you can join the seminar online FREE in a special offer described below.

This three day course is available in sessions that are 10 to 20 minutes long for easy, convenient learning.   You can listen to each session any time and as often as you desire.

The sooner you hear what I have to say about current markets, the better you’ll be able to cash in on perhaps the best investing opportunity since 1982.

seminars

Tens of thousands have paid up to $999 to attend.

Improve Safety – Increase Profits

Start this weekend.  Learn how to improve the safety and profit of your savings and investments by selecting diversified, good value investments in a multi-currency portfolio during stock market downturns.  Few decisions are as important to our wealth as the value of the markets and currencies we invest in.

Double Risk

Many investors missing the great long term risk, the falling US dollar.  The greenback has been strong for the past five years, but this is temporary.   The dollar’s strength came after the great recession of 2009 just as there was a temporary dollar strength after the great recession of the 1980s.  In the 1980’s that dollar strength lasted five years.  Then the dollar collapsed over 50% versus major currencies.  Now the greenback is in a similar place.

The strong US dollar and low interest rates created  a bigger than normal stock breakout, but the US market has been in an overall bear trend since 2000.  Now both, the market and the greenback are scheduled to fall.

This year I celebrate my 51st anniversary in the investing business and 49th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns can create war.

Here is the war stock cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WWIII) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Details in the online seminar include:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios). His big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to under perform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term, under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn what I am doing with my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.

We’ll update the good  value markets for the beginning of 2017 next week, but the markets included in this 2016 portfolio are:

Norway
Australia
Hong Kong
Germany
Japan
Singapore
United Kingdom
Taiwan
South Korea
China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

The online seminar also reveals how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.

The seminar also discloses the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and the service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

I share the results of this test in the seminar.  The savings that can be gained on any purchase of country ETFs has the potential to be more than the cost of the seminar.

gary-scott-seminar

I have good news about the cost of the seminar as well.   For almost three decades the seminar fee has been $799 for one or $999 for a couple. Tens of thousands paid this price.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

The Purposeful investing Course (Pi) teaches exactly what to do in situations such as we are seeing in global stock markets now.   This course is based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy Repeated Wealth

Pi’s mission is to make it easy for anyone to have a strategy and tactics that turn market turmoil into extra profit.

Pi reveals investing secrets and the sciences that make investing easy, safer, less time consuming and increases the chances of profit.

One secret is to invest with a purpose beyond the cash.  Another tactic is to have staying power.  This means not being caught short and having to sell during a period of loss.  This also means having enough faith in a strategy that we stick to the plan.  When we invest with purpose, doing what we love, and when we believe in the basic mathematics of value, we enjoy the process more and are more likely to hold on during down times, when most poor investors panic and sell.

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my (almost) 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:

#1:  Current book to price

#2:  Cash flow to price

#3:  Earnings to price

#4:  Average dividend yield

#5:  Return on equity

#6:  Cash flow return.

#7:  Market history

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout 2017 with you.

This analysis forms the basis of a Good Value Stock Market Strategy.   The analysis is rational, mathematical and does not worry about short term ups and downs.   This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

A country ETF provides diversification and cost efficiency by spreading one simple, even small investment into a basket of equities in a good value stock market.  The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.

Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

For example in the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

I did well then, but always thought, “I should have invested more!”  Now those circumstances have come together and I am investing in them again.

The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar.  The two conditions are in place again!   There are currently ten good value (non US) developed markets,  plus 10 good value emerging markets.

Pi shows how to easily create a diversified, worry free portfolio in some of these good value markets using Country Index ETFs.

The current strength of the US dollar is a second remarkable similarity to 30 years ago.   The dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I have created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but you’ll receive the report, “Three Currency Patterns For 50% Profits or More” FREE when you subscribe to Pi.

Plus get the $39.95 report “The Silver Dip 2017” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Silver Dip 2017” about a new leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The low price of silver offers special value now so I want to send you this report because the “Silver Dip 2017” offers enormous profit potential in 2016.

Subscribers who acted on the report when it was originally issued  picked up a fast 54.1% profit.  The report updates what to do in 2017.

Save $517.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns For 50% Profits or More”, the $39.95 report “Silver Dip 2016”, the $49 report “How to Grab Sequential Value Profits”  and our latest $297 online seminar for a total savings of $517.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the first monthly issue of Pi and the three reports Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free purposeful investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the three reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Gary

 

 

Quantum Wealth & Independence


This is the official holiday for the 4th of July so here is a thought about independence and freedom.

Technology has robbed the world of a lot freedom… just as it has added great freedom in other ways.

HK-waterfront

Technology allowed me to live in Hong Kong in the 1970s.

Technology has brought us the freedom to see the world in an instant… to speak to the world in an instant… to message the world in an instant… to travel the world… to buy and sell with those who offer the best deal… plus ever so much more.

Yet the same technology has allowed governments everywhere to restrict privacy and in many instances lifestyle.

For example… US legislation has slowly created such a burden on overseas banks that to serve US citizens most overseas banks will no longer accept Americans as customers.

london-house

Technology allowed me to live in London and …

Manx-waterfront

work in the Isle of Man in the 19080s.

Our newsletters and later this website have warned about this problem for nearly 4o years as we have observed the gradual erosion of American access to global banking.

The first clues of our restricted freedom came clear back in the early 1980s when overseas mutual funds started dropping American investors. I saw the results of this myself. The 2nd book  I wrote about global investing “Three Confidential Reports About Making Money Abroad”  recommended several overseas mutual funds including Action Suisse (A Swiss fund that invested in Swiss shares) and Deutscher Investment-Trust (a German fund investing in German shares). These were great funds for that time as the Swiss franc, German mark and these stock markets were exploding.

I invested in these funds and was making triple digit returns when my Swiss banker at that time, Credit Suisse wrote and said…”Sorry we have to sell these funds for you because you are an American.  Thank you very much.”

Since that time Swiss bankers and banks globally have been fighting a rear guard action against more and more legislation that does not make it illegal for Americas to bank overseas…. just financially impractical.   The cost of complying with all the legislation is so high that overseas banks can’t charge enough.

The beginning of the end came in in 1996, when the USA concluded a new double taxation agreement with Switzerland, which, among other things, regulated the conditions for administrative assistance in matters of taxation. Switzerland agreed to provide assistance with regard to “tax fraud and the like”.

“And the like.”  Three infamous words.

This extension of the concept of “tax fraud”  was like a ticking time bomb. US  authorities simply had to wait for some bank and in this case it was UBS to act in a way so the US authorities could expand their control over non US banks.   Thus banking secrecy was well and truly dead not in 2009, but already in 1996.

UBS activity allowed the US government to pile so much additional paperwork on overseas banks that other banks in other countries began closing down American accounts as well.

A Daily Telegraph article “Lloyds Bank hit by Obama tax purge”  shows what happened to Americans (even those who had lived in England for decades) says:  Lloyds Banking Group is ditching American customers based in Britain pending a crackdown on international tax evasion planned by President Barack Obama.

This week American private client account-holders at Lloyds’s received letters informing them of an “important change in policy regarding clients who are resident, domiciled or linked to the United States by property or asset holdings”. They were told the bank had “no choice” but to “cease acting as your investment manager.  One letter sent to Bank of Scotland’s portfolio management division, which is now part of Lloyds, said: “The USA has a mature regulatory environment governed by its Securities and Exchange Commission. These regulations mean that we are not licensed to manage portfolios for US clients”.

The letter added: “Unfortunately we cannot offer an equivalent service from within Lloyds Banking Group.” Clients have been advised to transfer their assets.

One recipient, who has lived in the UK for over 25 years, said: “After all this time, I’ve suddenly been told I must take my money elsewhere and I don’t understand why. Now I’m scared that other banks won’t take me on either.”

There you have it.   Americans are totally free to bank abroad… yet many cannot because the cost of compliance is so high. This is true in many other fields.    There are some great natural health products available that aren’t offered because of the high cost of  FDA approval. The list could go on.

This is not a unique American phenomenon by the way. European food supplements are even more restricted than in the US.

What can we do to maintain  freedom?

Freedom is an attitude and lifestyle we choose… not something legislated so we can use technology to help us be free as citizens of the world which I recommended in my first book (written in the 1970s) “Passport to International Profit”.

Here is an excerpt from that book.

Don’t be a Shooting Duck

This is the first story in the second chapter of a book, Passport to Profit, I wrote in 1979. Does this now apply to you?

Having a Harbor

Doesn’t everyone dream of having some safe harbor for the ultimate escape? A completely dependable last line of defense, so that when everything else falls to pieces, one can drop back inside this cozy little shelter and enjoy a safe snug comfortable life. Certainly it is sensible to have one. In fact, to my way of thinking, anyone who doesn’t have quite a few safe harbors is not only playing a dangerous game he doesn’t have to play, he is missing one of the greatest contentment’s of life..confidence.

Duck in the Pond Theory

We would all have our own little partnership with our own little pond if we were ducks. The pond gives us water, food, shelter and peace. We, in turn, give it ducks. For what is a pond without ducks? We clean it, eat up unnecessary plants and in general keep everything in tiptop condition. However, every once in a while the hunters arrive. Very quickly the rules of the partnership change. You see, the pond as your partner has a limited range of powers. Whether it likes it or not, a new partnership is about to be imposed upon the pond. It will be forced to join in a hunter/pond partnership and part of the rules of that relationship is that the hunters can shoot at the ducks on the pond. This not only throws you, the duck, into an unrequested, unwanted hunter/hunted partnership but threatens to terminate quickly your duck/pond partnership.

It’s possible if you are not careful that you will become a diner/dinner partner on the wrong end of the fork. Logic dictates what to do in a situation like this. Since your pond partner is no longer dependable because the rules are about to be changed, you should take the initiative. Rule #1 of the Duck in the Pond Theory is in fact “Don’t be a sitting duck when the shooting starts”, so you’ve go to decide what to do.

All too often in real life, people get too upset with change to use logic. Their first reaction instead is dismay. They sit there wallowing in disappointment, shock and anger because their pond has let them down. Or even worse, they sit there looking at the gun barrels and choose to blind themselves to the reality of the situation, saying this is some sort of joke or the hunters are really looking for rabbits or the pond won’t let this happen.

Rule #2 in this theory is “be realistic”. If you don’t accept partnerships change daily or ignore the limitations of your partner; you are not capable of deciding when to run for your harbor. You’ll lie to yourself and probably to your partner. This gums up the whole works. You’ll mess up a fairly clean machine by adding unwanted, useless nuts and bolts which do nothing but clog everything up.

The human mind/body partnership has an almost unlimited capacity to ignore its eyeballs, to adjust reality to match its desires. This inbred flaw causes humans to ignore reality and expect the world to revolve around them. Being realistic is accepting that no person, thing or partnership is indispensable or permanent. Realism is recognizing change and accepting it when no one is able to stop it.
If, by being realistic, you recognize that as much as you love your pond and as much as the gun barrels look harmless, that the shooting is not far away, you must act. You must get off the pond. Where do you go?

Rule #3 of the theory is to be sure you have another pond to go to. I call it having a positive pond factor. The more places you have to go, the more positive your pond factor.

Technology allows Merri and me to live on a remote Blue Ridge farm…

global-citizen

in Florida…

global-citizen

and Ecuador now.

global-citizen

Until next message, where we learn how to find other ponds, may your pond be a good one.

Gary

One bank that still welcomes Americans is Jyske Bank. They spent years (and probably millions in legal fees I might add) figuring out all the ways to make it possible for them to serve Americans.  This is why I am pleased to be speaking at their 9th  Global Wealth seminar.

See details on how to join Merri and me at Jyske’s bi annual Copenhagen seminar here Global Wealth Management Seminar.

emerging-markets

Join us on the waterfront restaurants and coffee shops along Nyhavn as we learn about global investing in Copenhagen.

How We Can Serve You

How to Have Real Safety

Regain Real Security

There is a path to true security.

I was reminded of this once when I made a horrible mistake.  Almost!

The supposed error?  Letting my mind wander six decades back to an hour I spent with a girl.

Learn from this near disaster, seven most powerful sources of wealth, health, security and fulfillment in this era.

The girl was pretty and blond.  Terry was her name. My imagination spanned decades returning to my Oregon roots seeing her as if she were there.

We were 11 or 12 and had known each other since we started Rockwood grade school.  Just buddies, our non-romantic friendship lasted 12 years, from first grade till high school’s end.  Then she went off to Pepperdine College in California.  I started traveling the world.  Never saw her again.  I hope her life has gone well.  But until that reflection I’d never thought much of Terry in so many years.

What could have been the tragic error was letting that memory touch my heart.  Two kids, walking on a crisp, Pacific Northwest autumnal afternoon.

We walked down a sun filled, pine needle covered, dirt path.  Huge, fat, green Douglas firs lined the road.  Traffic was no problem, not many cars.  Crossing Stark Street we turned left, hiking three blocks to 182nd.  There we passed an old clapboard candy store.  I can still hear the wooden sidewalk of that store slap beneath my feet, felt the soggy planks sag and smelled astringent pitch from the fir trees.  Then we turned right, up 182nd for about a mile.  There was Terry’s house.

I carried on, walking through a big field, waist high grass turned straw brown by an early frost.  There were dozens of paths made by who knows what.  Animals perhaps or countless generations of other kids walking home alone from school.  I chose one following it to another wood of tall, rough-barked fir.  Crossing one more field, I climbed a rock wall, struggled through a barbed wire fence (my Mom hated that fence ripping my jeans).  I was home!

Sweet simplicity, that dream.  Two kids holding hands, walking on a dirt trail under a crisp, but blue, sunny sky.  Pure innocence.

My tragic error was looking back.  I returned to Rockwood, Oregon with Merri and my kids to show them this part of their roots.  Following the route, Terry and I had walked were the candy store, grange hall, old wooden buildings and their home spun honesty and charm.

Instead we found six lanes of fast, frantic traffic and road rage.  McDonalds, KFC, strip shopping centers.  The car radio blared warnings of local gangs and drive-by-shootings. Beauty, innocence, sweet simplicity, replaced by drive ins and drive bys.  Gangs and drive-by shootings replacing a tender walk in the sun.  Good bye memories, good bye.

How can our kids walk in places like this?  How can we return to those old feeling of security and comfort?

How can any of us possibly keep pace in this world that’s moving so fast?  Then something inside snapped. “There has to be an answer for honest, hard working folks to enjoy the wonderful opportunities of today and regain what we’ve lost over the past forty years”, I swore to myself.

How can we keep up, without having such a fast paced life we turn into machines?  Where do we find time for God, family, charity, and our friends?  How can we rediscover those sun filled, pine needle covered, dirt paths we want to walk?

“There has to be places that are still innocent and pure”, I thought.  “There has to be a way of life that does not pound us with stress”.

This thinking led me to begin reviewing the thousands of economic and business experiences I have shared with readers over the decades.  This started a search for a simpler way of life and a better place to earn and protect our wealth.

By digging, asking and observing, traveling and talking to investors and investment managers all over the world I found that there are true paths to real security in the here and now.  That knowledge helped me develop courses on how to have natural health, everlasting wealth and purposeful investments.

This knowledge helped Merri and me invest in stocks and real estate all over the world.  It helped us find and develop Merrily Farms into a sanctuary here on Little Horse Creek.

That almost error led us to create an entire portfolio of information on how to keep pace, get ahead, enjoy our modern society but, to enjoy life wherever you choose without having to move too fast.

I want to share this information with a special few in our summer course in the Blue Ridge Mountains where the air is dry, crisp, with a bright sparkling sun.  Our North Carolina woods is a place where we can once again walk down sun filled, pine needle covered, dirt paths beneath huge, fat, green fir and hemlock.

We start the course with this question that can help us get our lives back.

“What would you think in the last 30 seconds of your life if you were the richest man in the world but were unhappy?”

This quote is from the opening slide of our Value Investing Seminar, “How to Secure Your Future With a Value Breakout Plan”.  This a vital question because few investors think about the value of comfort and happiness.  Yet the truth is, those who are comfortable and happy with their investments are likely to make good investment decisions.  If not, no matter how much money an investors has, changes are, they’ll lose.

Bring Value and Purposeful Investing Together

value

Join us to learn how to make safety and profit easier and less time consuming so we can focus on our individual purposes in life.

Become an International Club member and join like-minded souls, who take a positive view and think outside the box for better health, greater income and safer, more profitable investments. Share ideas on how to add value to everything and make 2016 -2017 your best years yet.

In 2016 Merri’s, David’s and my mission is to share our 50 years of experience in international business, investing and living to make ourselves happier, healthier and wealthier.

To reach a wider audience we have shifted our seminars online including the seminar “How to Secure Your Future With a Value Breakout Plan”.

Here is a partial syllabus of this seminar.

  • Three common sense ideas:   Avoid lines.  Go where you are a name not a number.  Decide who you are and what matters to you.
  • Why three economic trends that have make smart investors rich every 30 years are ready for cashing in now.
  • How to look for short term problems that create long term value.
  • Update on the best ten markets for safety and profit.
  • How to diversify in value with Country ETFs.
  • The value of time in investing and life.
  • The economics in cyber wars. How to look back at the economics of war to see ahead.
  • Great new innovations that will ignite a 16 year bull market from 2016 to 2032.
  • The next great fuel.
  • Timing long cycles, economic cycles and seasonality.
  • Investing in Demographics.
  • Trading Down, the biggest global trend ahead.
  • Hidden Inflation .
  • How to protect against pension loss.
  • The Silver Dip 2016. When and how to invest in gold and silver . How to double your position with loans.
  • How to spot currency distortions and borrow low to deposit high.
  • How, Why When & Where to bank abroad.

Club membership is for an entire year and the recorded seminar is just one high point.

In 2016 and 2017 we are conducting online seminars about value investing, natural health and how to write to sell.

International Club members receive all the online seminars free.

In addition club membership includes:

  • Personal investing Course (Pi), normally $297, FREE
  • Self Fulfilled How to be a Self Publisher, normally $299, FREE
  • Eventful Business, normally $349, FREE
  • International Business Made EZ, normally $299, FREE
  • Report “Three Economic Conditions for 50% or More Profit,” normally $29.95, FREE
  • Report “Silver Dip 2015” normally $27, FREE
  • Three online Value Investing Seminars, normally $477, FREE
  • One online Natural Health Seminar, normally $119, FREE
  • One online Writers Camp, normally $299, FREE

Annual International Club (one year) Membership  $1,199

Annual International Club (one year) Membership four quarterly $375 payments

Merri and I have been organizing courses, seminars and newsletters about international and Super Thinking  lifestyles for over 30 years.  The importance of this sharing… by like minded souls… was reinforced when a delegate from a course sent an email that said:

My Dearest Merri and Gary, Thank you for your most gracious hospitality last weekend. I am just thrilled at being a part of your group.  You and Gary were exactly as I imagined you to be, warm friendly, kind, considerate, genuine, helpful, fun, sincere, what else can I say……I felt so comfortable in your presence and learned so much in your course. I was sad to leave the farm that Sunday afternoon.  You made us all feel so welcome and cared about.  You were so kind to make arrangements for a ride with the other delegates from the Charlotte Airport.  They were so nice to me and so helpful, by the time the weekend was over I felt like they were my long lost brothers. Monday morning we all had breakfast at the airport together and I was so sad to see them go, I was sad the weekend was over, perhaps sad is not the right word for how I was feeling perhaps Gratitude is a better way to describe it.  Grateful for having the opportunity to share the weekend with such wonderful, like minded Human Beings, in the beautiful mountains of North Carolina. Thank you Merri and Gary.  Thanks to you I now have new hope and a new direction to move forward in my life.   I know by attending your classes and conferences that through education and due diligence I will make the right choices.

I invite you to be a member of the International Club.

Let’s prosper in these times of change. Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year?  Join us online.

Club members receive everything we offer in 2016 and 2017.

Annual International Club (one year) Membership  $1,199

Annual International Club (one year) Membership four quarterly $375 payments

Gary

Ecuador & International Banking Update


Here is an important Ecuador & international banking update created by the wonderful world of mobility in which we live.

Our global mobility provides huge benefits… broadens our horizons and enriches mankind through global trade.   Yet being global also creates some problems… one of them is banking.

This site recently posted a message about Ecuador banks that began with, “I do not trust Ecuador Banks.”

This is not a slight on Ecuador.  This statement is a comment on the realities of trying to maintain control of one’s own wealth in an era where almost all governments are increasing control over money.

The banking article was followed by  another article stressing  the importance of diversification in Ecuador Diversified.

Here is a reminder of the importance of this information.  A couple of years ago I purchased a block of buildings in Ecuador planning to resell them.  I am according to plan selling them now and recently received a payment.

My attorney wrote this to me:

They deposited funds in my account last Wednesday to pay for the condo and asked me to send to you.  There is a 2% tax on money going out of Ecuador which was recently established, plus bank commissions.  I will wait for your instructions  to wire these funds to you.

There previously was a 1% tax but it has now been increased to two percent. This increase is not a big deal but a step in the wrong direction and a reminder that we should never trust any one country, currency or banking system.

I just sent our Ecuador Living subscribers an alert about one more Ecuador banking problem.  Ecuador Living subscribers click here.

Learn how to subscribe to Ecuador Living here.

Hence my mantra to have what I call a “Six Point Command Posture” which is to:

Live in one country
Bank in a second country
Invest in many countries
Earn in two or more countries
Use a company incorporated in a fifth country
Take a second residence

Where to Bank

Knowing where to bank is a growing problem… especially for Americans.  Non Americans should read this article any as you’ll see that you are not exempt from this problem either.

Americans are being crushed between a rock and a hard spot.

The Rock. Many US banks will no longer accept Americans residing overseas because they have a foreign address. This has been caused by the US Patriot Act.  Banks have to know their clients so they refuse to accept (or keep) clients with overseas addresses, even Americans who have banked with them for decades, but change their address.  The following banks have been sited as closing accounts with just 30 days notice of long term customers just because they took on a US address: Ameriprise, Bank of America; Bank of New Hampshire; Citibank; Citizens Bank; Edward Jones, St. Louis; E- Trade; Fidelity Investments; INGDirect; JPMorganChase; Morgan Stanley; National City Bank in Riverview, Michigan; Provident Bank, Maryland; Smith Barney; T. Rowe Price; USAA Federal Saving Bank; Vanguard mutual fund; Wachovia; Washington Mutual; Washington Mutual Investment, Spokane; WellsFargo; Zions Direct.

The Hard Spot. At the same time the IRS has created a set of regulations that discourage non US banks from accepting Americans.

Many Swiss and British based banks will no longer accept Americans.

Here’s an excerpt from a 13, June 2009 Telegraph article entitled “Lloyds Bank hit by Obama tax purge” by By Louise Armitstead:   Banking group drops American customers in UK ahead of costly proposals to stamp out tax evasion  Lloyds Banking Group is ditching American customers based in Britain pending a crackdown on international tax evasion planned by President Barack Obama.

This week American private client account-holders at Lloyds’s received letters informing them of an “important change in policy regarding clients who are resident, domiciled or linked to the United States by property or asset holdings”. They were told the bank had “no choice” but to “cease acting as your investment manager.”

One letter sent to Bank of Scotland’s portfolio management division, which is now part of Lloyds, said: “The USA has a mature regulatory environment governed by its Securities and Exchange Commission. These regulations mean that we are not licensed to manage portfolios for US clients.”

The letter added: “Unfortunately we cannot offer an equivalent service from within Lloyds Banking Group.” Clients have been advised to transfer their assets.

One recipient, who has lived in the UK for over 25 years, said: “After all this time, I’ve suddenly been told I must take my money elsewhere and I don’t understand why. Now I’m scared that other banks won’t take me on either.”

The Brits are no the only group shedding US account holders.

A July 12, 2009 USA Today article entitled “Some foreign banks drop U.S. clients because of UBS flap”  by Kevin McCoy explains how other banks have booted Americans as well.  An excerpt says: The closely watched Justice Department court fight to get the names of 52,000 suspected American tax evaders from Swiss banking giant UBS has prompted some other foreign banks to drop U.S. clients they once welcomed, tax experts said Monday.

Eager to avoid a similar struggle with federal prosecutors, banks including Credit Suisse and HSBC in recent weeks have notified American clients they must close their offshore accounts or transfer them to the institutions’ U.S.-based operations, where tax reporting requirements are far stricter.

“Overall, the international banking community, and particularly the offshore banking community, has been very friendly to American account holders,” said William Sharp, a tax law specialist at the Sharp Kemm law firm in Tampa. “That changed in the past couple of months as a result of the UBS case.”

The Dutch were early in dropping American clients.

ABN AMRO, a huge, Dutch based, international bank gave all clients  with U.S. passports within 30 days notice in 2008 and then closed their accounts because of the  high costs to comply with U.S. regulations.

Expect this problem to get worse! Beginning in 2010 stronger US reporting rules will force even more overseas banks to stop accepting Americans.  They simply cannot afford to fill all the obligations.

Americans should not feel totally alone…nor should non US investors feel totally safe from being shut out of a banking center.

According to the British Times Newspaper, Barclays Bank used the US anti-terror laws to shut down the personal bank accounts of British citizens who were working for Iranian owned businesses.

The bank enforced anti-Iran sanctions under the US Patriot Act.  Accounts of Iranian owned companies that operated completely legally in Britain were shut.  But Barclays went much further. They amazingly shut down accounts of directors of these companies and even more amazing they shut the personal accounts of ordinary staff members, including clerical officers, computer engineers and bank tellers, just because they worked for an Iranian owned company.

Here is an excerpt from a June June 6, 2008 Times of London article entitled, “Barclays bank rejects customers to comply with US terror law:”  Barclays began the account closures in February, shortly after reports from industry sources that US Treasury agents had been touring the City of London putting pressure on financial institutions to withdraw from any form of business that might have Iranian links.

One source told The Times that City banks had been warned that they would lose access to the US market if they continued to deal with Iranian businesses. Barclays has extensive business interests in the United States.

Case study: Cast out in the supermarket

Chris was doing the shopping in Tesco when Barclays rang to tell him that his bank account was being closed. Later that evening his wife was told that her Barclays account, which she had held for 25 years, was also being closed.

Chris, 46, works in IT for Bank Saderat, and his wife is in the accounts department of Melli Bank. Both institutions are Iranian-owned. “They said it was because of sanctions but I knew there were no British sanctions on the banks. I asked them if they were responding to US laws and they said they didn’t have to give me a reason,” he said.

The couple opened new accounts with one of Barclays’ rivals but they had difficulty transferring standing orders, especially Chris’s child-support payments. He said: “I know that UK banks are being pressured by America to stop all dealings with Iran but what impact will it have to shut an English bloke’s account with an English bank? The Iranians won’t give a monkey’s. What upsets me is the lack of respect Barclays have for their customers.”

This last comment hit me strongly… the lack of respect many of the big banks have for their clients.

This is one reason I have enjoyed banking with Jyske Bank in Denmark for more than 20 years.  Jyske is big and well managed enough to be very safe, but small enough to provide genuine care and attention to the individual.

This is why I was not surprised that a number of years ago, Jyske made the decision to spend a lot of time, energy and money to comply with US law so they could continue to serve US as well as non US investors around the world.

This shift though has created some confusion. For example a Reader from the Netherlands sent me this note:  Hello Gary, Since beginning of this year we are subscribed to your newsletter. In your articles we read that it is possible to go to Jyske Bank and start doing multi-currency for about 30,000 dollars. We were very enthusiastic about this philosophy and asked the Jyske Bank for information. However we were very surprised when we got information back including the message that we have to start with $150,000 euro. Can you help us and maybe clarify the misunderstanding about this starting amount?  Thank you very much in advance!

The services and minimums required by Jyske Bank Private Bank (JBPB) for non US investors differs from those offered by Jyske Global Asset Management (JGAM) who serves US investors.

Jyske Global Asset Management (JGAM) offers Americans managed accounts, advisory accounts and IRA services to US clients.

JGAM’s managed accounts provide Americans with access to international investments in all currencies, traded on all stock exchanges.

There are two levels of managed accounts for US investors:

Mutual Fund Managed Accounts, $50,000 to $200,000.  Accounts from $50-200,000 are mainly  invested in mutual funds and ETF`s in order to get the appropriate diversification.

Individual Investment Managed Accounts from $200,000 up are mainly invested in individual securities as trading costs are not prohibitive for this size of account.

There are two forms of advisory accounts for US investors.

Advisory Accounts for US Residents.  Accounts for US residents are available and provide access to investments in currencies, commodities and US listed securities.

Advisory Accounts for Americans who are resident outside the US.   US citizens who are resident outside the US (proof of residence is required) have access to investments in currencies, commodities and all international investments in all currencies, traded on all stock exchanges.

The minimum required to start an advisory account is $25,000.

Because the minimum annual fee is  $1,000 JGAM recommends an initial deposit of minimum $50,000.

IRA accounts are managed accounts with more conservative investments than those in a normal  managed account.  IRA accounts require a minimum investment of $50,000.

Jyske Bank Private Bank offers the following services to non US investors.

Non US Clients can open accounts with minimum deposit of Euro 150,000 (approximately 220,000 USD), or equivalent in another currency.

JBPB works with six profiles:

Income profile. A low-risk profile, invested in currency accounts (cash) and/or traditional bonds.

Stable profile. A low-risk profile, invested in bonds (incl. high- yielding bonds), a small equity part.

Balanced profile. A medium-risk profile, invested in equities and bonds (main emphasis on bonds).

Dynamic profile. A medium-risk profile, invested in equities and bonds (main emphasis on equities).

Growth profile. A high-risk profile, invested mainly in equities and a lesser share in bonds.

Aggressive profile. A high-risk profile, invested almost exclusively in equities.

There are six managed strategy funds (available only in Euro) for investors who want managed services with minimum deposits of US$ 220,000. These six funds are based on the principles of asset allocation and match the investment profiles above so all investors can attain risk diversification, risk management with even a limited investment.

There is a full Discretionary Portfolio Management service for investors who want managed services with US$ 350,000 and above. This service is also based on the six strategies above. Jyske Bank will invest and manage the clients portfolio in close cooperation with the Bank´s experts and their network of international partners. These strategies are offered in EUR, USD, GBP, DKK and SEK.

Investors, who do not want managed services, and have accounts of US$ 220,000 or more, can wish to engage in an active dialogue with their advisers and be very involved in the decision-making process. based on the client’s investment profile. They can invest in currency accounts in a large number of currencies, all tradeable equities and bonds, mutual funds and commodities.

Here is one huge feature I like very much about both JBPB and JGAM…  No Jyske employees in  management, advisory services or any employee receives any kind of bonus pay. This eliminates any temptation for hidden agendas to exist.  Employees have no incentive give any advice or take any action that is not in the client’s best interest.

Technology has given great mobility to our wealth. This mobility is good for the individual and the global economy… but governments do not like this as they wish to control our finances.  The tension created by this struggle between the individual and the collective has created a never ending thrust and counter thrust of regulations and adaptions to these rules.  It is harder to maintain a diversified global portfolio than it used to be… but the effort is still worthwhile.

Gary

The greatest asset of all is the ability to earn wherever you live, which brings everlasting wealth.

This is why we offer our course Tangled Web… How to Have an Internet Business.

A clear mind and healthy body are also a vital assets… plus a second language is a powerful diversification tool.

This is why I am giving everyone who enrolls in our North Carolina or Ecuador International Business & Investing seminar in October or November our “Tangled Web… How to Have an Internet Business Course” (offered at $299) free.

Here are comments from a reader about the way we help:  Thank you for your inspiration and information outlining foreign banking and retirement.  Your comments and suggestions are welcome for planning the steps to evaluate the early stages of living abroad.

Sept. 17-21 Ecuador Super Thinking + Spanish Course

Sept. 23-24 Imbabura Real Estate Tour

Sept. 25-28 Ecuador Coastal Real Estate Tour

Join us with Jyske. Learn more about global investing, how to have an international business and diversification in Ecuador at the seminar.

Oct. 9-11 IBEZ North Carolina with our webmaster  David Cross & Thomas Fischer of JGAM

October 16-18 Ecuador Southern coastal tour (early sign up before Sept. 1, $499 per person).

Oct. 21-24 Ecuador Import Export Tour

Oct. 25-26 Imbabura Real Estate Tour

Nov. 6-8 IBEZ Ecuador Seminar

Nov. 9-10 Imbabura Real Estate Tour

Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador seminar or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799

Read the full articles:

Lloyds Bank hit by Obama tax purge

Some foreign banks drop U.S. clients because of UBS flap

Barclays bank rejects customers to comply with US terror law

Bank Privacy Gone


The problem of getting Bank Privacy is gone.  Now the problem is being able to get a good international bank at all.

The problem is that Americans have lost control of their wealth.

An insidious form of of loss has been taking place for decades and now we are in the end game.

The theft has taken place in the same way the Nazis robbed the Germans of control.

A German industrialist once explained how the Nazi’s took over when he explained that very few people were Nazis.  However many enjoyed how the Nazis brought back an external German pride.  Most were just too busy to care.  The majority let it all happen at an early stage.   Too late the realization came that the Nazis were in total control.   See how this has happened to your wealth here.

This is what has happened to American wealth.

Now we are in the end game.  I have been warning about this problem of reduced bank privacy for over 2o years… first in my printed books and newsletters… later at my web site.

Here is what I wrote at this site almost nine years ago to the day, July 13, 2000.

More on the loss of bank privacy

Bank privacy no longer exists. Some years ago I wrote about the insidious tactics that the US and other governments have used to erode financial privacy and personal liberty and pointed out that the problem is that the government does not attack the individual but puts the pressure on the overseas financial institutions. The current additional move by the US government to collect tax is just one more small step.

The message below shows that one of our readers does not understand this yet. After his message I put my comments below.

“Gary  How can a non-US institution, and there must be many thousands of them in hundreds of countries, be “forced” to comply with the IRS and become a tax collector for them? I would think that most of them would tell the IRS to stick it. Or simply ignore it. Sounds more like scare tactics for US “taxpayers.”

The problem began in the 70s when the SEC sued an investment manager in the US who was managing an overseas mutual fund which kept all its money in Switzerland. The SEC demand to the Swiss bank (Credit Suisse) that they return the money (it was many millions) to the US. The Swiss bank pointed out that the fund had not broken any law and that they had no legal way to return the money.

The US simply seized an equivalent amount of Credit Suisse’s money in the US. The was the beginning of the end of bank privacy. The simple fact is for an international bank to operate it must hold accounts in the US, England, Germany, Japan, etc. This makes these institutions vulnerable to the authorities in each country.

Now we can see that this bank privacy problem has grown so serious that more and more international banks will not accept US investors.

Excerpts from USA TODAY article entitled “Some foreign banks drop U.S. clients because of UBS flap”  by Kevin McCoy shows how far the loss of bank privacy has grown.

The closely watched Justice Department court fight to get the names of 52,000 suspected American tax evaders from Swiss banking giant UBS has prompted some other foreign banks to drop U.S. clients they once welcomed, tax experts said Monday.

Eager to avoid a similar struggle with federal prosecutors, banks including Credit Suisse and HSBC in recent weeks have notified American clients they must close their offshore accounts or transfer them to the institutions’ U.S.-based operations, where tax reporting requirements are far stricter.

“Overall, the international banking community, and particularly the offshore banking community, has been very friendly to American account holders,” said William Sharp, a tax law specialist at the Sharp Kemm law firm in Tampa. “That changed in the past couple of months as a result of the UBS case.”

The owner of an HSBC account in Jersey, one of the English Channel islands, recently received a 45-day notice to close the account, said Robert McKenzie, a tax law specialist at Arnstein & Lehr in Chicago. A client with an offshore Credit Suisse account got a similar notice, he said.

Some foreign banks elsewhere now avoid offshore business with Americans because they know the Justice Department plans “to extend this effort to other jurisdictions beyond Switzerland,” said Martin Press, a tax expert at Gunster Yoakley Valdes-Fauli & Stewart in Fort Lauderdale.

It was a smart move. Overseas banks do not vote and do not lobby in Congress.   US banks of course do not mind the competition getting kicked.

A few writers, (ourselves included) have been sounding the warning… in our case for decades.

Yet we are small potatoes and this never reached the majority of the public awareness.

The freedom to bank abroad has never been removed. Conditions have just been set so overseas banks cannot serve Americans.

Clever.  This leaves US investors with fewer ways to protect against inflation created by irresponsible spending.

The loss of bank privacy is not as bad as the loss of being able to use competent international banks.

Fortunately some banks like Jyske Bank (the Danish bank I have worked with for decades) has taken the time and considerable expense to qualify to serve US customers and actively accept them.

One way to overcome this problem is move.  Live and/or retire outside the US. Retire in Ecuador or somewhere you enjoy… as many Germans who saw what was coming did before the Nazis took total control.

This is one reason why so many Americans are moving abroad. See more at America Moving Abroad.

Gary

Join us at our North Carolina farm this July or October for our International business & investing seminars below. Learn more about early retirement and Ecuador.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 21-24 Ecuador Import Export Tour

Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

See the entire article Some foreign banks drop U.S. clients because of UBS flap at http://www.usatoday.com/money/industries/banking/2009-07-12-ubs-secrecy-case_N.htm

Multi Currency Bank Risk


Multi currency investing and multi currency banks reduce risk.

During this current credit crisis, it makes sense to pay attention to ways to bank risk as well as investment and multi currency risk.

Eleven US banks have failed in 2008, seven of them since mid July.

Now a Warren Buffett owned insurance company has stopped insuring bank deposits above the federal $100,000 guarantee. This withdrawal of insurance shows that many insurers and bankers are worried about future bank failures.

One of many reasons I have banked with Jyske Bank (beyond the fact that they are multi currency experts) for many years is their strong safety ranking.

I like the fact that Denmark has ranked high in Moody’s and other country ratings as one of the safest countries in which to bank.

However, recently one Danish Bank had problems.

Thomas Fischer at Jyske Bank sent me this note in July 2008:

“Hi Gary, I just want to keep you informed that this morning Roskilde Bank (a Danish regional bank) had to ask the Danish Central Bank for support. It is the 9th largest Danish bank and it has been hit hard as it has been involved in the Danish real estate market. The share dropped 45% this morning. Some other smaller regional banks have seen their share prices falling between 10-20%. Jyske Bank has dropped 1.3% The Central Bank will probably put Roskilde Bank up for sale either the entire bank or parts thereof. The bank will not be allowed to collapse and the clients are thus not going to lose any money but it is obvious not good timing to get a situation like this. Thomas”

Thomas was correct and shortly after the Globe and Mail reported:

COPENHAGEN — Denmark’s central bank unveiled an $896.8-million U.S. bailout of Roskilde Bank acting to confine the negative effect of the struggling bank on the Danish financial system. The central bank stepped in after Roskilde, Denmark’s eighth-largest retail bank by market share, failed to receive any offers after putting itself up for sale in the face of bigger than expected writedowns on real estate loans.

The article outlined that Roskilde was extraordinary as a Danish bank in
that it was heavily exposed to the property sector and that other Danish banks in general were well prepared in a deteriorating Danish economic situation.

The Danish Central Bank had no expectations of any other banks suffering
similarly.

In fact a June 2008 report from Denmark’s National Bank says:

Denmark’s domestic and foreign central-government debt has the highest rating from Standard & Poor’s (AAA), Fitch Ratings (AAA) and Moody’s
(Aaa). Standard & Poor’s, Fitch Ratings and Moody’s affirmed the rating
in September 2007, December 2007 and April 2008 respectively with an
unchanged stable outlook.

Analytical reports and specific ratings on individual government secu-
rities are available on the websites of respectively Standard & Poor’s
(www.standardandpoors.com), Fitch Ratings (www.fitchratings.com) and
Moody’s (www.moodys.com).

Jyske Bank also ranks well on its own and has a stable outlook at this time. unlike most major banks. Here are current rankings:

Bank Rating Outlook
Jyske Bank A+ Stable
Citigroup AA- Negative
Deutsche Bank AA- Negative
Goldman Sachs AA- Negative
JP Morgan Chase AA- Negative
Credit Suisse A+ Negative
Lehman Brothers A Negative
Morgan Stanley A+ Negative
UBS AA- Negative

As can be seen, Jyske Bank is doing well. Jyske is the only bank on the list with a stable outlook. All others are on the watch list for down-grading.

Note that Jyske Bank has the same rating as Morgan Stanley but a better outlook.

Jyske Bank’s rating is better than Lehman (after today probably much better), the same as Credit Suisse and one grade below the others. However, it’s very seldom that S&P give a rating above A+ for a relatively small bank like Jyske Bank. The other banks on the list benefit from their size but this does not tell much about how well they are run.

If you have any questions on how Jyske Bank you can see the bank’s home page www.jyskebank.dk/english and read the latest semi-annual report.

US investors should contact Thomas Fischer at fischer@jgam.com

Non US investors should contact Rene Mathys mathys@jbpb.dk

The thousands of other reasons I like Jyske are the people that work there.

An article at scienceblog.com entitled “Happiness is rising around the world” says that Danes are the happiest people in the world.

The article says:

People in most countries around the world are happier these days, according to newly released data from the World Values Survey based at the University of Michigan Institute for Social Research.

During the past 26 years, the World Values Surveys have asked more than 350,000 people how happy they are, using the same two questions.

Data from representative national surveys conducted from 1981 to 2007 show the happiness index rose in an overwhelming majority of nations studied.

The 2007 wave of the surveys also provides a ranking of 97 nations containing 90 percent of the world’s population. The results indicate that Denmark is the happiest nation in the world and Zimbabwe the unhappiest. The United States ranks 16th on the list, immediately after New Zealand.

Economic growth, democratization and rising social tolerance have all contributed to rising happiness, with democratization and rising tolerance having even more impact than economic growth. All of these changes have contributed to providing people with a wider range of choice in how to live their lives—which is a key factor in happiness.

“The results clearly show that the happiest societies are those that allow people the freedom to choose how to live their lives,” Inglehart said.

As an example, Inglehart points to the tolerant social norms and democratic political systems in Denmark, Iceland, Switzerland, the Netherlands and Canada all of which rank among the 10 happiest countries in the world.

In my opinion this happiness shows through at Jyske. Our dealings have always found the staff to be helpful, cheerful and willing to take an extra step to help make us as their customer happy as they are

Until next message, may you be happy too.

Gary

Join me and Thomas Fischer from Jyske Global Asset Management in North Carolina to learn more about economic trends.

International Investing and Business Made EZ North Carolina

We’ll have lunch at the farm and enjoy the leaf change.

farm colors

Thomas Fisher speaking to our delegates at the farm.

seminar-roses

orange-roses

multi-currency-meeting

Delegates enjoying a private conversation with Thomas Fischer during a coffee break at the farm.

This is the most beautiful time of the year on the Blue Ridge.

multi-currency-meeting-in-autumn