The only thing standing in the way of a complete devaluation of the US dollar is Alan Greenspan...and on January 31, 2006, he retires.

Find out exactly how the combination of 18 years of Greenspan's loose monetary policy, $8.06 trillion US national debt, and the revaluation of China's currency is forming the 'perfect storm' that not even Ben 'Printing Press' Bernanke can stop - and the one investment that will keep you afloat when the storm hits...

LINK: http://www.isecureonline.com/reports/MTR/EMTRFC02/

 Superstars & Cinderella's

Dear A-Letter Reader:

"Uncertainty and expectation are the joys of life". So said William Congreve, the 17th century playwright.

My tendency in offshore matters is to dwell more on the pleasures of expectation and avoid, as far as possible, the perils of uncertainty. This brings us to Panama's trust and foundation laws. Banking and offshore companies have been the superstars of Panama's offshore services, whereas in the past, trusts and foundations have taken on the role of Cinderella. This is changing as asset protection strategies become increasingly sophisticated.

Panama's trust legislation was originally enacted back in the 1940s, based on the common law trust. In 1984 more modern and flexible legislation was introduced. A trust today can be established for any lawful purpose and execution of the trust deed can remain private, unless real estate in Panama forms part of the corpus. Then the trust's existence must be recorded at the Public Registry.

A trust deed must be executed by both its creator and the trustee before a notary public The trust falls within the privacy protection given by law to other financial services in Panama; trustees (and their employees) are bound by strict confidentiality and breaches can mean both prison sentences and substantial fines. Settlors, trustees and beneficiaries can be companies rather than individuals and even though the trust is managed in Panama, the choice of law governing its administration can be that of another jurisdiction. Trusts created under a foreign law can adopt Panamanian law. In all other respects Panamanian trusts are indistinguishable from those of most jurisdictions, even if they are governed by civil law and not common law.

The foundation law in Panama, however, is far more recent, having been adopted in 1995, patterned after the laws of Liechtenstein. The foundation offers a flexibility of operation that is most attractive.

What is the difference between a trust and a Panamanian foundation? The foundation thinks like a trust but has the personality of a company, except that instead of having shareholders, it has beneficiaries. It cannot, however, conduct commercial activities in its own name and normally uses a company which it controls 100% for such purposes. Being a fiduciary arrangement, it is very similar to a trust, having a founder (settlor), charter and regulations (trust deed), foundation council (trustee) and beneficiaries. Like the Panamanian company and trust, certain of the foundation's activities can be kept confidential. Although the charter is required to be recorded at the Public Registry, the accompanying regulations (detailing such matters as beneficiaries, benefits and the powers given to the foundation council or other parties) are not. Once the charter is registered, the foundation in Panama takes on the complexion of a corporate body.

The only details regarding the foundation which cannot be kept private which will appear in the Public Registry are the name of the foundation, its place of domicile, details of the initial corpus (a minimum of US$10,000 in whatever currency chosen), the names and addresses of foundation council members (either 3 individuals or one or more corporations), details of the local Registered Agent (a lawyer or law firm in Panama), the objectives (including the general application of assets), its duration (can be perpetual), how beneficiaries are selected, confirmation that the charter can be modified and, finally, the manner in which liquidation of the foundation is to be dealt with in the event of  dissolution.

By switching foundation council members for directors and noting many other similarities, it is easy to see how the Panamanian foundation has a DNA similar to a company but is readily identifiable with a trust also. Panamanian foundations are increasingly popular but, just like the business of managing offshore companies, the issue of supervision arises. If professional trustees need licensing, why not professional foundation councils? Buyer beware.

Derek Sambrook, Trust Services SA.
Panama City, Republic of Panama
E-mail: marketing@trustserv.com
Web site: http://www.trustserv.com/index1.htm

Go Go Gold

From the Editor's Desk, Bob Bauman says:

Gold prices have climbed to their highest level in almost 25 years, and analysts are predicting further gains. Last week prices rose as high as $518.92 an ounce in Asian trading, a level not seen since April 1981. Some analysts expect a correction in prices eventually. When it came, prices could fall by as much as $30 in one day, they say.

A number of factors have combined to push precious metal prices higher. Many investors are buying gold to protect themselves against inflation and a drop in the values of the US dollar and Japanese yen. Demand for jewelry, and speculation that Asian and European central banks may cut US dollar holdings in favor of gold, have also been upped demand. Precious metals are seen as a haven when currencies weaken and inflation accelerates because investors are worried about the value of their stocks and bonds being eroded. As a result, some analysts are forecasting that the gold price could rise to as much as $525 an ounce next year. Prices hit a record of $873 an ounce in January 1980.

 Ireland's Cosmetic Tax Surgery