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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Wednesday, October 1, 2003 - Vol. 5 No. 116
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In This Issue:
* COMMENT: Going Offshore for the Right Reasons.
* OFFSHORE: Gov. Davis' California Loophole. Bank of Bermuda Expands into Asia. Expats Bank Accounts. Avoiding German Expat Taxes.
* WEALTH: Worthy Advisors. Trust Attacks. Reading Corporate Numbers. Wall Street Classics Reissued. Reform of US Offshore Tax Breaks.
* PRIVACY & RIGHTS: UN Crime Treaty. Canadian Tax Privacy Stolen. Airline Passengers Threatened. Patriot Act News & Boos. E-Spying.
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Guest Comment today is by Mark NESTMANN, the Sovereign Society's editorial director and editor of The Sovereign Individual.
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COMMENT: Going Offshore for the Right Reasons.
Dear A-Letter Reader:
There are many compelling reasons to invest outside your own country, especially if you live in the USA. These include:
1) Top performance. Many of the world's best performing investments are not in the US. Example: an offshore fund we highlighted recently in The Sovereign Individual gained an average of +21.5% annually since 1996- during the worst bear market since the 1930s! And it's not the only top-performing offshore investment. Indeed, every one of the 500 non-US managed mutual funds tracked by Business Week finished second quarter 2003 with positive returns. And more than 96% of them turned in double- digit gains.
2). Lower portfolio volatility. When you invest globally, you reduce the risk to your overall portfolio. That's proven in studies that show investors holding both US and offshore stocks have experienced lower volatility in every five-year period since 1974.
3) Currency diversification. For decades, the US dollar has been losing value compared to stronger currencies. Example: in 1970 a US dollar bought about 4.5 Swiss francs. Today it will only buy 1.35 Swiss francs. While US investors can purchase foreign currencies through a few US banks, offshore banks generally offer higher yields, lower fees and lower minimums.
4) Protection from professional liability and other claims. US persons with offshore investments enhance their protection of assets from lawsuits, civil forfeiture, business failure, divorce, foreign exchange controls, restrictive legislation or political instability. Global investments avoid the US asset tracking network, which permits easy identification of the assets of any potential defendant.
5) Enhanced privacy. The US is one of the few nations lacking a federal statute that protects bank or securities accounts from disclosure except under defined circumstances. Many disclosures that are illegal in other countries, either under international agreements such as the European Privacy Directive, or under national laws guaranteeing financial secrecy, as in Switzerland, are commonplace in the United States.
6) Safety and security. 15 years ago, the US experienced a wave of bank failures unmatched since the Great Depression. Some financial analysts believe that late 1990s excesses soon may result in another round of bank failures. In contrast, the offshore banks The Sovereign Society recommends aren't exposed to risky investments such as third world debt and highly leveraged derivative investments. These banks are in politically neutral countries that don't employ interventionist foreign policy. This makes them much unlikely targets for terrorist attacks such as those that forced the post 9-11 closure of US financial markets on Sept. 12-15, 2001.
These are among the compelling reasons for offshore investment. But the US news media prefers to focus on another supposed motivation: tax evasion. American media continues to trumpet the false message that only "tax cheats" invest offshore, implying that this is somehow illegal.
That's the big lie! It's fully legal to invest or bank offshore, but when you do, don't cheat on your taxes. The penalties are tough, and the IRS constantly is engaged in a global search for unreported offshore accounts.
Ultimately, the value of offshore investing is to create your own "nest egg" that can and will survive lawsuits, changes in public policy, even a collapse in the value of the dollar. And you can do all this -- legally -- to achieve your worthy financial objectives.
MARK NESTMANN
Vienna, Austria
P.S. Sovereign Society membership includes personal accounts in 2 of Europe's premier private banks. To learn how you can benefit from a risk free introductory Sovereign Society membership, click here:
LINK: http://www.agora-inc.com/reports/SVS/WSVSD214/
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COMMENT LINKS:
* Investment flows out of US equities markets. Financial Times. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059480206907
* Business Week Special Report on Emerging Markets. LINK:
http://www.businessweek.com/magazine/content/03_39/b3851701.htm
* Emerging Markets; Magnet for the World's Capital. LINK:
http://www.businessweek.com/magazine/content/03_39/b3851709.htm
* Rewards Without Risk: Invest Internationally.
LINK: http://www.infoplease.com/finance/tips/money/money_intern.html.
* New York Times Slams Offshore Investing.
LINK: http://www.nytimes.com/2003/07/06/business/06TAX.html.
* IRS Crackdown on Unreported Offshore Accounts.
LINK: http://www.irs.gov/newsroom/article/0,,id=108790,00.html.
* FAQs on Reporting Ownership in Foreign Financial Accounts.
LINK: http://www.knaupplaw.com/tdf90FAQ.htm.
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* OFFSHORE *
CALIFORNIA GOV. DAVIS O.K.s DONOR'S OFFSHORE LOOPHOLE
Major campaign contributor exempted from Cal. anti-offshore law. LINK:
http://www.presstelegram.com/Stories/0,1413,204~21479~1664747,00.html
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BANK OF BERMUDA EXPANDS INTO ASIA
HAMILTON: Offshore investment trading goes worldwide.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=13507
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U.K. EXPATS GET BUSINESS BANK ACCOUNT
LONDON: Business bank account that's designed for UK expats. LINK:
http://www.telegraph.co.uk/global/main.jhtml?xml=/global/2003/06/02/fiint102.xml&sSheet=/global/2003/09/23/fin_home.html
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EXPATRIATES IN EUROPE AVOID GERMANY
HESSE: High German 50% income tax keeps expats out. LINK:
http://www.faz.com/IN/INtemplates/eFAZ/docmain.asp?rub=%7BB1311FCE-FBFB-11D2-B228-00105A9CAF88%7D&doc=%7B5B03C211-BEAA-42BD-932E-285E5AC41C33%7D
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* WEALTH *
EXPATS NEED TRUSTWORTHY FINANCIAL ADVISORS
LONDON: Set your sites on advisers who make you feel secure. LINK:
http://www.telegraph.co.uk/global/main.jhtml?xml=/global/2003/06/02/fiint02.xml&sSheet=/global/2003/09/23/fin_home.html
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OFFSHORE TRUSTS UNDER ATTACK
JOHANNESBURG: A South African view and summary of the worldwide
crackdown on sham trusts of all kinds, on and off shore.
LINK: http://allafrica.com/stories/200309300053.html
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TRUTH IN RAW NUMBERS
How investors should research corporate "earnings" and profits. LINK:
http://www.washingtonpost.com/wp-dyn/articles/A8353-2003Sep27.html
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TWO WALL STREET CLASSICS IN NEW EDITIONS
All about stock markets and how they operate; two famous books.
LINK: http://www.newyorker.com/critics/books/?031006crbo_books2
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U.S. CONGRESS TRIES TO REPLACE OFFSHORE TAX BREAKS
US struggles to replace WTO barred $4 billion business tax breaks LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059480233733
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* PRIVACY & RIGHTS *
NEW UNITED NATIONS ANTI-CRIME TREATY
Advocates claim it will curb bank secrecy in criminal cases. LINKS:
http://www.voanews.com/article.cfm?objectID=214435FF-305E-4A06-B5E427C0262FC404
http://www.taipeitimes.com/News/world/archives/2003/09/28/2003069583
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CANADIAN TAXPAYERS PRIVACY STOLEN
OTTAWA: Tax information compromised by computer thefts. LINK:
http://www.nationalpost.com/national/story.html?id=265166B5-49E3-4256-8C34-434D908C8DC5
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U.S. MAY FORCE AIR PASSENGER IDENTITIES
Airlines may be ordered to reveal all flyers to security police.
LINK: http://dc.internet.com/news/article.php/3084711
* Protect your 4th Amendment rights; take the bus. LINK:
http://www.reviewjournal.com/lvrj_home/2003/Sep-28-Sun-2003/opinion/22167818.html
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U.S.A. PATRIOT ACT NEWS & BOOS:
* Move to clean up the Patriot Act is picking up steam. LINK:
http://www.lowellsun.com/Stories/0,1413,105~4746~1664257,00.html
* U.S. Uses Terror Law to Pursue Crimes From Drugs to Swindling
LINK: http://www.nytimes.com/2003/09/28/politics/28LEGA.html
* US banks, customers affected by USA Patriot Act. LINKS:
http://news.mywebpal.com/partners/865/public/news493516.html
http://www.islandpacket.com/news/business/story/2897183p-2668134c.html
* FBI uses Patriot Act to demand reporters notes, news sources.
LINK: http://www.securityfocus.com/columnists/187
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* E-spying on your lover may be illegal, say experts. LINK:
http://reuters.com/newsArticle.jhtml?type=internetNews&storyID=3527514
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER. *
Bob Bauman, Editor * Daniel Aponte, Jr. Research Asst.
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