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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Monday, October 10, 2005 - Vol. 7 No. 204
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In This Issue:
* COMMENT: The Best Trade You'll Probably Never Make.
* OFFSHORE: Bahamas Financial Doldrums. Panama Rights of Possession.
* WEALTH: End Marxist Taxes. Dutch Flat Tax. Forbes New Book.
* PRIVACY & RIGHTS: American Police State. U.S. Business Wakes Up.
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COMMENT: The Best Trade You'll Probably Never Make.
Dear A-Letter Reader:
We're playing a waiting game with the US dollar. Some very smart people
say it's peaked; others that it is just coiling up to move higher. I'll
wait and see; it's unusual to see gold and the greenback both rally
sharply at the same time, and this kind of disconnect could be a portent
of a seismic economic shift to come. In the meantime, there are much
more certain trades - like the one that Kathy and Boris recommended to
Money Trader subscribers last week. It should return 55% per year even
if the currencies involved go nowhere.
Now, it's becoming kind of obvious that Kathy and Boris really know what
they're doing. 17 of their 21 trades have been profitable - an amazing
81% winning track record.
And now they're using their "synthetic currency options," which allows
subs to double or even triple their normal gains. But I understand why
you may be reluctant to take their advice. Trading foreign currencies
just seems a bit, well, "foreign" to some people.
Even when you can do it for as little as a few hundred dollars a trade,
without commissions, with total trade costs often of just 3/100th of 1%,
and with less volatility than stocks. Even when you can get far higher
yields than you would with stocks... and get the potential for triple -
digit capital gains to boot. Despite all the advantages of correctly
trading the currency markets, the only time most people will deal with
foreign currency is on their vacation.
Anyhow, if you are one of the investors who joined The Money Trader, I
congratulate you. You recently received this trade - along with many
other winners. On top of that, you just placed an order to grab up to
20.5% gains on Thursday! But if you're one of the many who just can't
wrap their minds around currency trading... let me take one more shot at
it. And let me tell you a bit about the best trade you may never make.
Japan is one half of the equation.
* Although the Japanese economy is performing considerably better than
last year, its economy is slowing down. After growing 3.3% in the
second quarter, Japan's economy is only expected to grow 2.4% this year
and 2.3% next year.
* Deflation has been dragging on the Japanese economy for more than
even years. The relatively strong second quarter growth made many
investors think that deflation would end - but now with the economy
slowing down, that bet looks more iffy all the time.
* And while we've seen oil prices pull back sharply, fundamental forces,
including production destruction in the Gulf of Mexico and rapidly
growing economies in China and India, will likely turn up the heat under
oil prices soon. Japan imports all of its oil. When oil goes higher
again, we can expect the Japanese economy to take a turn for the worse.
And all the hope that has been built into the Japanese yen could go
rushing out.
Where will that international capital flow? Probably to the other side
of the equation: Australia.
* The Australian economy continues to be red hot, supported by the
insatiable demand for commodities from China and Pacific Rim.
* Unemployment has hit a 27 year low rate of only 5% - this in a country
famous for its very lavish welfare benefits.
* Retail sales, too have increased by 0.6% in the latest month while
wages have risen at the fastest pace in over eight years and consumer
confidence has hit 6 month highs.
All of this translates to a central bank that isn't about to lower rates
anytime soon. In fact, if economic numbers continue to improve, the
Royal Bank of Australia may raise rates yet again, attracting more
yield seeking speculators to the currency.
The Australian dollar (AUD) presently offers a 5.5% rate of interest
while the Japanese yen (JPY) still yields 0%.
So, if you sell the Japanese yen and buy the Australian dollar, you sell
an economy that's weakening, buy an economy that's strengthening, and
get a terrific yield differential as well.
Even if AUD/JPY simply stays in place, for traders who use conservative
10:1 leverage in the FX market, the return could be an astounding 55%
per year.
At a time when leading stocks are having their heads handed to them on a
platter...at a time when Wall Street is running hip deep in red ink...
that's a pretty darned good rate of return.
That sounds easy. Of course, just as important as knowing when to get
into a trade is knowing when to get out. I've traded the markets for
over a dozen years. I've traded stocks...funds...options, futures
options...you name it. Let me tell you, I wouldn't trade the FX markets
without the guidance of Kathy and Boris.
As I said, contrary to what most people imagine, the currency market is
actually MORE accessible and affordable than the stock market. (The
stock market, for instance, typically has higher trading costs... and
mutual funds can have minimums of $10,000 or more. No such minimums or
commissions in the currency markets.)
Yet, trading currencies with consistent success ain't easy. But, with
an 81% success rate, Boris and Kathy are making it look easy.
Good luck and good trades.
SEAN BRODRICK, Investment Director
The Sovereign Society Ltd.
E-mail: seanbrod@bellsouth.net
P.S. If you're ready to take the plunge ...if you're ready for options
that pay interest and never expire, trading without high commissions,
low barriers to entry and choosing your own level of risk and leverage ...
if you're ready to sign on with our top-notch currency traders at The
Money Trader, click here.
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* FROM THE EDITOR'S DESK, BOB BAUMAN SAYS:
OFFSHORE:
* BAHAMAS FINANCIAL SERVICES SHAKY
NASSAU: In trying to please Washington and FATF, The Bahamas financial
services sector has pleased no one and lost much business and its
standing for many as a preferred offshore tax haven.
* Bahamas financial services platform shaky.
LINK: http://www.thenassauguardian.com/bixex/323897196846377.php
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* Czech financier arrested in Bahamas for half billion fraud.
LINKS: http://www.caribbeannetnews.com/2005/10/07/bribing.shtml
http://www.thenassauguardian.com/national_local/304166456261239.php
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* PANAMA PROPOSED RIGHTS OF POSSESSION LAW
PANAMA CITY: The Congress is debating a proposal that could seriously
affect land titles of islands and other areas where "rights of
possession" exist rather than clear titles. Local and foreign land
owners see the bill draft as a threat to their ownership.
* Proposed law #132 regulating land on islands. LINK:
http://primapanama.blogs.com/_panama_residential_devel/2005/10/proposed_law_13.html
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WEALTH:
* END THE MARXIST PROGRESSIVE TAX
The Wall Street Journal notes that tax competition is encouraging countries
to adopt pro-growth flat tax systems. Most interesting, the article states
that nations grow faster with a flat tax and that the so-called progressive
income tax is a Marxist invention. LINK:
http://www.freedomandprosperity.org/blog/2005-10/2005-10.shtml#064
* Advisors recommend fat tax for the Netherlands. LINK:
http://www.blackenterprise.com/yb/ybopen.asp?section=ybng&story_id=83077275&ID=blackenterprise
* Forbes is back with new flat tax book. LINK:
http://www.theunionleader.com/articles_showfast.html?article=61320
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PRIVACY & RIGHTS:
* THE AMERICAN POLICE STATE
A former high official of the Reagan administration warns that America
is perilously close to becoming a police state, with habeus corpus,
detention without charges, denial of the right to counsel and torture
all destroying the rule of law as a protection of the innocent.
* The Police State Is Closer Than You Think
LINK: http://www.lewrockwell.com/roberts/roberts127.html
* New law would exempt US military spies from Privacy Act. LINK:
http://about.upi.com/products/perspectives/UPI-20051006-105238-8736R
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* BUSINESS FINALLY WAKES UP TO PATRIOT ACT THREAT
6 business groups, including the US Chamber of Commerce and the
National Association of Manufacturers, are urging Congress to limit
PATRIOT Act powers; require federal agents to prove a link between
the records they seek and terrorism, the right to challenge orders that
are "unreasonable" or "oppressive" and removal of gag orders that
prevent discussing warrants issued under the Patriot Act.
* Business groups split with Bush over Patriot Act.
LINK: http://www.wstm.com/Global/story.asp?S=3945351&nav=2aKD
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LINK: http://www.agora-inc.com/reports/TWP/WTWPFA19
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER.
* Bob Bauman, Editor * Daniel Aponte, Jr. Editorial Asst.
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cannot certify the absolute accuracy of referenced articles nor do we
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* Nothing herein should be considered personalized investment advice.
Although our employees may answer general customer service questions,
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* LEGAL NOTICE: This document is based on SEC filings, current
events, interviews, press releases and knowledge gained as financial
journalists and may contain errors. Investment decisions should not be
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