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Weekly
Update Bulletin On-Line.........
.. In The News and Readers Write In (with our answers to Questions).......... |
| INVESTMENT
NEWS & NOTES:
. As indicated previously, interest rates have started to creep up in the Dominican Republic and as such, The Guardian Investment Group reports an expected estimated increase in the yield on the US Dollar Cash Reserves Series up to the 9.50% or possibly 10% range (currently 9.02%), to take effect in late November or early December. In part, this is due to favorable negotiated yields with some of the local banks for large CD deposits owned by the fund, coming up for renewal and reinvestment in mid November. . http://www.theguardiangroup.com/ . . In an effort to bring our clients new investment information and offer innovative and sound ideas, we are in the process of putting together a new section devoted to nothing but investments and banking. With this in mind, we recently discovered a Secret Back Door for Americans who want to own offshore mutual funds. This back door allows Americans to establish an offshore account with some of the most popular household investment names around (Fidelity, Franklin-Templeton, Janus and more) - all offshore and all tax-free. You only need to know how to fill out the application form - there are no reference letters from your banker or priest, no tax id number, no passport copy. However, some of these investment products do carry a minimum, which ranges from US$10,000 up to US$50,000. But, all things considered, it is still a way for Americans to invest offshore with names they know - hassle free. Since it would seem that the IRS does not know about it yet (and we do not want to tell them either), we request any readers or clients that have an interest, send us an email indicating Secret Back Door in the subject line with name, address, telephone fax and email. We will in turn send out the information to you. Send your requests to: info@ascotadvisory.com - You can also use our reply form found on our web site. . Also, if you are an American that has had some trouble getting an offshore account open, and want to read our full article on the above topic, visit the follow link: . http://www.ascotadvisory.com/Offshore_Investments/Back-Door.html . Are you an American that owns your own business, or are an executive of a company? Are you looking for a way to legally, under IRS regulations, to shelter up to 99 percent of your salary or earnings? Then you need to know about the new 412i retirement plan legislation, passed this year by the US Congress. You also need to contact us to learn more and get started. You can send an email if you like to either info@ascotadvisory.com or js@ascotadvisory.com - Place a note in the subject line - 412i plan - and we will refer you to a highly qualified and reputable US based financial planner than specializes in this product. . In our opinion, this is the ONLY positive thing the American politicians have done all year to help taxpayers. Here are some key points: . You can shelter up to 99 percent of your salary or earnings. ALL of the contributions are tax deductible, regardless of the amount. It is approved in writing by the IRS, as opposed some other plans that only have a tax opinion letter. The plan must be administered through a US insurance company (the plan we are referring to is with one of the oldest and most secure insurance companies in the United States). It offers flexibility in that account holders can take a lump sum at retirement, or elect to either take a monthly income (or continue deferring funds for a later date). Also, existing plans, such as 401K and other types of defined benefit plans are not penalized and can in fact be frozen (with the choice to use the 412i plan going forward). Sub Chapter S business owners especially, and our clients that are paid a consulting fee from a non US Company should investigate this option as well (as a way to shelter any income paid into the US). . . IN THE NEWS: . . Do You Bank in Guernsey, Jersey and the other Channel Islands? If you are an American you MUST read the following from Dow Jones News (sent in by one of our readers): . US, Jersey To Sign Tax Info Exchange Agreement Monday . WASHINGTON -(Dow Jones)- The U.S. and Jersey, one of the Channel Islands, will sign a tax information exchange agreement on Monday (November 4, 2002), the U.S. Treasury said Friday. U.S. Treasury Secretary Paul O'Neill will meet in Washington with the president of Jersey's policy and resources committee, Senator Pierre Horsfall. Treasury already has signed similar agreements with Guernsey and the Isle of Man, two other island jurisdictions located in the English Channel between France and the U.K. . http://www.nasdaq.com/asp/quotes_news.asp?textpath=\\News2\news_www\Nasdaq\news \35\2002\11\01\200211011304DOWJONESDJONLINE000417.html&cdtime=11%2f01%2f2002 %20+1%3a04PM . . READERS WRITE IN: . . JOHN - A relatively short expose of why America's politicians should be impeached just before being put in solitary with hard labor to pay back what they steal. I am just amazed nothing EVER CHANGES FOR THE GOOD OF THE WORKERS WHO FUND THIS RIP-OFF! . http://www.nationalreview.com/nrof_comment/comment-riedl110102.asp . EDITORS REPLY: Thank you for the article and the information. As we have stated before, it would certainly seem that politicians continue to forget that the money they spend belongs to the people they are suppose to serve. Ironically enough, there is a movement all of a sudden in the US regarding the accountability of people who run publicly traded companies. Perhaps they should apply the same standards to politicians, taking away their US Government pension (and their personal property) for putting the country into the mess that it is in. And not the politicians that are currently in office, but ALL of them that previously have voted to borrow money needlessly, and put the US national debt where it is today. . . Another Reader Writes: . Here's a link that predicts what an invasion of Iraq might produce. I provide it because I think its on target. http://www.southerncaucus.org/bushbarbarossa.htm . Now take a look at where Iraq, Iran and Afghanistan are on a map. Russia and China are the two largest powers in the area yet only Russia is participating in anti terrorism efforts. Afghanistan actually shares a sliver of a border with China. The Russians have been invited to join the US in combating terrorism. That's a euphemism for using the military to invade the oil rich area of the world. Afghanistan will one day get a pipeline running through it to provide the Russians with a way to move their oil out of the Caspian basin and to world markets with US oil companies as the middle man. The pipeline is what Chevron was negotiating with the Taliban about when they finally realized that the deal wasn't going to happen. It would take another approach entirely to put that pipeline in place and the US military was contracted for the job. . Note that the Chinese haven't been invited to the party. Note also that the Chinese are projected to become the worlds leading importer of oil within the next decade. From their perspective, the future looks like they will be getting oil from a US controlled cartel. I predict that sooner or later, the Chinese will object to having their energy sources controlled by the US military. . Currently, the US forces in Afghanistan apparently aren't a threat to the Chinese because we haven't heard any concerns they may have in that regard. If US forces, bases, weaponry, intelligence, etc increase in the area, at some point the Chinese may determine that those offensive forces are a threat to them, being so close to their border. I feel that the US and China are on a collision course either over oil or a US military build up in their neighborhood. When that becomes obvious to Boobus Americanus, Panama is likely to feel the effects. Hutchison Wampoa is a front for the Chinese Military. Everyone knows it. Hutchison Wampoa is perceived to controls both ends of the Panama Canal. One day soon US interests will want to reacquire control over that waterway. . Panama is also a banking center. The US imperial adventure will require funds to fuel it. Boobus Americanus already believes that Panama is a drug transit point and money-laundering center. It wouldn't take much to convince them that invading Panama preemptively is the noble thing to do to secure the waterway, stop the flow of drugs, shut down the money laundering and to top it off get at the billions in assets stashed in their banks. I mention all this because I believe Panama is an invasion target in the not too distant future. Anyone with assets there is likely to wake up one morning and discover that any secrecy they were relying on has disappeared. Anyone wanting real estate in Panama should wait till after the invasion when prices will be much lower. . EDITORS REPLY: First and foremost, thank you for your letter. On the subject of a money-laundering financial center, I can only say the following. According to a variety of news articles over the last decade, it would seem that there is more money laundering going on in New York and with US banks than anywhere else. When I was working on Wall Street many years ago, everyone in the financial services industry heard rumors about the Bank of New York laundering money for the Russian Mafia, and that was just one of many things long before it hit the newspapers. I can tell you more stories like this about some of the nonsense I have seen and heard, but I do not think it to serve any useful purpose to do so. Recently, it was reported that the Taliban, or Taliban sympathizers and fund raising organizations had US bank accounts and US investments. So, to say that money laundering or funds used for illegal or illicit activities is ALL domiciled in offshore tax havens is not only foolish, but also naive. However, as you pointed out, what is reality and what the common masses believe are two different things. . On the topic of the Chinese military and Hutchison Wampoa, anything is possible, but I do not think it significant. I remember watching a film many years ago, which I think it was titled Spies Like Us. In any event, in the film, the supposedly fictitious ACE Tomato Company was a front for the CIA. It was amusing, but the truth is that art often imitates life. The CIA previously had (and may still do) a number of dummy corporations in Panama they were using to wash all the money from arms and drug sales so it could be funneled to the rebels in neighboring Central American countries. Remember Ollie North and Contra-Gate? . I honestly do not know what may or may not happen going forward, but how many wars can the US wage at the same time? They are already in Afghanistan, pretty much on a very long-term basis. Now the talk is Iraq. They will be there for quite awhile as well. Next you are suggesting that they are going to invade Panama? After that – perhaps Venezuela, because they don't like Chavez and want Venezuela's oil? Why - Simply because they do not approve of their economic policies or foreign relations? The only Chinese I have seen in Panama are the ones that own small grocery stores and Chinese restaurants. Maybe they all have a cache of weapons in the freezer, right below the frozen wontons. I could not say - I never looked. Either way, the US has got to stop this ridiculous mindset, as a foreign policy. Despite what some might think, the US is just one of many nations on the planet, and is not in charge of the world (as many arrogantly would like to believe). Ironically enough, it is a so-called super power that claims to be tolerant of other ideas and opinions, fosters democracy, and one that supposedly respects the sovereignty of other nations. If this is going to be the permanent foreign policy of the US going forward (take military action whenever they do not like a foreign leader or economic and political policies of another nation), my advice is to invest in the stocks of private security companies in the US. If you think Arabs running around the US are a problem, and difficult to track, you have not seen anything yet if the US Hispanic and Chinese population decides to turns violent and commit terrorist acts. Heck, it is not even foreign groups, but guys like Timothy McVeigh and this current sniper character in Maryland. Both were Americans, and the later a former US soldier no less, who are shooting people and blowing up public buildings. No, I tend to think the US has enough internal social and economic problems at the moment, and for some time to come, to be foolish enough to take on even more problems. But, if this is the case, also get yourself another passport or citizenship (assuming you are a US citizen, or even a British citizen). . A US passport is wonderful for visa-free travel, that is to say, to get you into other countries easy enough. But traveling on your US passport may prohibit you from getting out alive once you are there. Americans often think the rest of the world hates them out of jealousy, meaning they are jealous of the so-called wealthy American standard of living, etc. Not true, in fact it is exactly the kind of things you are predicting that causes the hatred towards Americans. It is always individual citizens that pay for the sins of the politicians, is it not? The guy in power has bodyguards and VIP service. It is always the poor dopey tourist or businessman that gets killed. . As for Panama, if I were the president of Panama and what you are predicting is assumed to be accurate, I would invite the Chinese military in lock, stock and barrel (I would even give them free freezers for their wontons). Heck, the Chinese are more capitalist now than the Americans, and the Americans are moving more towards a dictatorial socialist state than ever before. Go figure. The former commies are reading Forbes, and the Americans are reading George Orwell’s Animal Farm (and applying the same principals). . . Another Reader Writes: . Help - There are a few online firms selling second citizenships in many countries, as you know. They even offer things like change of name amongst other things and tout this as a great way to travel on one of these second citizenships. I am not a US citizen but travel to the US frequently on pleasure and business. DO you have any articles on some of these programs? I am quite interested. . After digging into some of these offers it appears that the second citizenships are being obtained from officials from these countries who are trying to get you name into all the right systems as though it was legally applied for in the right channels. What is the down side of depending on this type of citizenship for say - retirement or traveling? I am interested in places like Panama and Costa Rica. If I get this type of citizenship for me and my wife, (we presently do not have any children) - Will children born to us in the future be entitled to this dual citizenship? What are some of the down sides of traveling with a second identity? I have not been able to find many references online about this. I do not really have anything to hide but value my privacy and this could ultimately provide this but do not want to risk problems at borders etc. I think it could be complicated traveling, switching passports and managing the issue with tickets on other names etc for trips. . EDITORS REPLY: A very good group of questions. However, we first must define what are basically three programs in existence (or did exist as the case may be). The first are some of these official and government sponsored instant economic citizenship programs (Belize, Granada, Dominica, etc.). Basically, you donate anywhere from US$50,000 on up to the local government, must of course pass the rigorous application process, and then you get your citizenship (often within 30 to 90 days). However, these programs of course have either disappeared altogether, due to pressure from the US Government who did not like to see their citizens gaining a new fairly good visa free travel document so quickly, or have been changed to such an extent that they no longer look attractive (I hear Dominica now wants US$150,000). Dominica, by the way, is an English speaking island nation in the Caribbean that is not affiliated in any way with the Dominican Republic (a Spanish speaking nation). . Next we have the regular programs and processes that all countries have in place, which allows for application to immigration for RESIDENCY, with the ability to convert that status to Citizenship or Naturalization at some later date. Each country is of course different, and has their own set of rules, requirements, time frames, etc. The norm or standard to get citizenship in many countries is 5 to 7 years. However, there are some exceptions, which do allow for Naturalization much quicker (the Dominican Republic is one such example). These processes, by the way, are not anything special other than they are the regular programs and policies each government has in place to allow for foreigners to become residents (and later on citizens if you so choose). Which is to say, they are not any special or new fangled programs as previously mentioned above (instant or economic citizenship). However, one very important point is, that going this route means you are moving through very legal and normal government channels (which is what we offer, by the way). You cannot ask that they change your name on the documents (they will not) as they are using your existing passport or legal identity documents in the process. However, this does not necessarily mean they are going to wave a red flag to your home country either (that all of a sudden you have permanent residency status or citizenship somewhere else). . The last program, which unlike the two listed above, is what I will call a black market under the table situation. Meaning, you are NOT going through official government channels in regards to the process and your documents. So, you read an advertisement someplace offering a REAL passport from country X, complete with new name and so on. All well and good, and it is quite possible that the passport is very REAL, freshly stolen out of the passport office, but it may or may NOT be officially and legally registered in the computer system (which will bring you a world of trouble later on, especially when you try to renew it). This is not to say that all people offering these deals are not legitimate, or that your passport is not going to appear in the government system. Just keep in mind that it could be the case. Also, keep in mind that there is no legal and official file in immigration either. These deals usually involve Joe (our fictitious name for an attorney or government official in country X) who has a buddy, cousin, whatever working down at the passport office or in government somewhere. You pay Joe, and Joe promises wonderful things within 30 days. Joe is supposed to get your passport, but let us suppose he does not. Who are you going to complain to? The local government where you are trying to get this done? What will you say? I gave Joe money under the table to get me an illegally acquired passport, and he stiffed me? Just understand the risk involved with these kinds of deals. Also, if Joe tells you that you cannot use the passport to enter and leave country X, be very afraid. That is an instant tip off that your passport is not registered. . Many countries in the world do recognize DUAL CITIZENSHIP, and the US also is one country that does as well. Obtaining residency status in another country does not in any way jeopardize your existing citizenship and obtaining a second citizenship usually will not as well. There are some quirky things in the US regulations about joining a foreign army and so on, but I tend to think this does not apply to most people. However, the US State Department does say that if you have dual citizenship (along with a US passport), then you are required to use and demonstrate your US passport when entering and leaving the US. As a very real and very practical example of this, I know of many Americans who have become Panamanian and Dominican Citizens (and in fact have children, born in a foreign country, who have dual citizenship as well). When they leave Panama (for example), they use their Panamanian Passport and when they enter the US, they give their US Passport. This is what is done and it is very legal to do so. . What advantages do you gain by having dual citizenship? Well, first off, you get to travel as a non-American, which these days could be a life saving necessity. Germany, for example, started to segregate American and British travelers last year in their airports - sending them to separate departure terminals, etc. Why? The logic was that if the Arab Terrorists wanted to retaliate and kill US or UK citizens, then at least German Citizens (and everyone else) hopefully will not be in the same place to get caught in the crossfire. So, traveling as Mr. Citizen, from some small non-violent country (that is not involved with carpet bombings or is involved with supporting military coups in other countries because they do not like the current political leaders) is always to your benefit. . The other issue is of course investments. As we have indicated earlier, many banks, brokers and mutual fund companies (outside of the US) will NOT accept US citizens as clients. Not because they are legally prohibited in any way from doing so, but because they do not want the hassle and bother of having to deal the American tax authorities. So, again, being something other than a US citizen might get you a warm reception (as opposed to being told in a polite way to get lost). . . Another Reader Writes: . Hello John - Do banks in Dominic Republic offer the same investments in Euro as they do in US$? . EDITORS REPLY: Yes. Some of the local banks in the Dominican Republic have started to offer both Euro-denominated savings accounts, along with certificates of deposit as well. Although, the interest is not as attractive as it is in US Dollars. In addition, we can also suggest the new guaranteed principal fund from the Appleton Group out of Dublin, which is available in Euros. . Another Reader Writes: . John - Enjoy your newsletter. I notice a lot of US Tax questions and misinformation thrown around by all. A more simple and direct education on the subject is presented on one website very clearly, within a legal concept acceptable by judges, lawyers and CPA's and most importantly the Federal District Courts. Unwind the deception and go to the following website for the clear picture, in laymen legal terms. Have you ever been to the website: TaxableIncome.net? If not, you can see the US Income Tax System as it is lawfully set up as opposed to it's present day unlawful enforcement by a bunch of treasonous bagmen known as the IRS. The truth as is exists on this website would go a long way in helping your readers understand the truth. The 861 Argument as well as the questionable jurisdiction of the Federal District Courts to try Federal Income Tax Cases is winning on a regular basis for those who have informed themselves and taken up the fight. Most of the Federal Courts will uphold the law against the IRS if you present the motion or the defense in a proper manner for them to rule on it. The short coming here is the American people not wanting to break away from TV long enough to learn the truth and stop the unlawful application of the 1040 tax upon the masses. . EDITORS REPLY: Well, as always, thank you for your letter. However, I honestly have not seen any one person in the US Government or the Judicial System that appears to be interested in the legal arguments others have brought forward. As well, no one seems to be interested in changing the existing status quo either. You used the term fight, and that is exactly what I think you will have on your hands. They have the guns, personnel and keys to the jail cell. All you have is logic, and perhaps a very reasonable legal argument. I salute you for your efforts, but just know up front what you are getting involved with. My opinion is, why fight? Why should I have to fight? It is much easier, less costly (when you consider the legal expenses) and much less stressful to take my money out and take myself out. In other words, simply go live in some other country where you are not taxed to death and can live in peace. If enough people voted with their feet (and their money by putting it somewhere else tax free) there would be no one left to tax, harass or lock up. Then you would be left with high priced political leaders, with no one around, at least not the middle class, to follow them. What a concept. In the words of Nancy Regan - Just say No (and get on a plane). At least, that is my opinion. . . On the subject of Panama from our last update: . I received my Pensionado (retiree residency status in Panama) 3 months ago. In that period of time, have had a successful facelift at less than one fourth the cost quoted in (where I came from in the US) - implants finished, same savings, had a root canal and crown done for $700 less my 15 % pensionado discount. I have saved enough money on the work done and prescriptions to pay for my living here a year. It cost me a very reasonable amount - all fees including my attorney to get my pensionado. Which by the way, I learned about in your newsletter. Keep up the good work. I Look forward to it every week. Signed: Alive and well in Panama. . EDITORS REPLY: Thank you for your letter. . . Another Reader Asks: . I am interested in purchasing some real estate in the Dominican Republic but I am in need of financing. Do you know of financial resources for lending foreigners monies for purchasing property?? . EDITORS REPLY: Well, the truth of the matter is that the Dominican Republic is a wonderful place to invest because of the interest rates (tax free does not hurt either), but the flip side of the coin is the high rate to borrow money. I honestly do not think you want to pay 18% in US Dollars to borrow or up to 40% in pesos either. Many of my clients take a home equity loan in the US at 6% interest and use that money to pay cash for a second home in the DR. Some take the excess and invest it in Dollars or Pesos, making enough to pay off the fixed US monthly mortgage payments, and have money left over to spare. If you can borrow money at 6%, invest it at 9% (tax free) - the result is not rocket science. . .. This information has been compiled and presented by John Schroder of Ascot Advisory Services, for the benefit of clients and readers. Ascot Advisory Services provides assistance with such matters as offshore company formation, Panama Foundations, offshore banking, and special services in the Dominican Republic regarding residency, free zone applications, etc. For more information: |