Very Bad Money

A New York Times book reviewer writes today: "At a time when the Cassandras of finance are looking like realists, there is no gloomier prophet than Kevin Phillips. The author of 13 previous books including at least one classic, The Emerging Republican Majority (1969), Mr. Phillips sees a perfect economic storm coming. The final pages of his bleak new book, Bad Money, tell of an "unprecedented" number of Americans planning to leave the country or thinking about it. Readers of Bad Money may come away with a similar impulse to flee."

That Americans are fleeing is hardly news to our members and readers.

For the decade since our founding, we at the Sovereign Society have noted sadly that each year upwards of 400,000 U.S. citizens and resident aliens leave America to make a new home in some other nation. Admittedly, that number pales against the millions clamoring to get into the U.S., legally and otherwise.

But there's a huge difference in the economic status of these two groups.

Those seeking admission (or just crossing our borders) are, by and large, poverty stricken persons desperately trying to better their lot with a new life in the promised land. They'll settle for low paying jobs, welfare, free education for their kids, and U.S. taxpayer subsidized housing and health care.

Tax Base Is Leaving

But a large part of the 400,000 exodus is made up of wealthy people seeking to escape the growing tax and regulatory tyranny aimed right at them by the United States government. And it is this gusher of fleeing rich people who take with them U.S. wealth -- and the U.S. tax base. These are the very people who pay for the all those programs the new immigrants covet.

Two years ago next month I referred readers to what was then Kevin Phillips' latest book, American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century. In it he put together an amazing array of historical, religious, economic and political data to argue that the U.S. was about to join its imperial predecessors on the downhill slide - Rome, Spain, the Netherlands and Britain.

But what was particularly prescient of Phillips in his 2006 book was one of the two major reason he saw, (his first was the decline in industrial and manufacturing base), as causes for America's decline -- an increase in what he called "financialization" of all sorts of intangible financial services that replaced tangible production.

Slow Moving Train Wreck

This astute observation was made well before shocked Americans and the world were to learn about the sub-prime mortgage crisis and before scores of billions of dollars worth of bank and financial losses -- due in large part to the phony "financialization" Phillips warned against.

As Phillips showed, a lot of these modern "financial services" consist of little more then creating new forms of debt, then pushing all those debt papers around while collecting fees for doing nothing really productive.

In his new book, Bad Money, Reckless Finance, Failed Politics and the Global Crisis of American Capitalism, (Viking Press 2008), Phillips brings us up to date on what one security analyst quoted in the book calls "one of the slowest moving train wrecks" in history.

Phillips gives an overview of the current debt debacle and notes that the 1980s were the start of "three profligate decades," when the expansion of mortgage credit and the invention of financial instruments like collateralized debt obligations (CDO’s) led to an orgy of leveraging and irresponsible speculation. Greenspan's Federal Reserve kept the bubble afloat with easy money, while federal regulators and credit and bond ratings agencies looked the other way.

By 2007, total American indebtedness was three times the size of the gross domestic product, a ratio that surpassed the record set in the years of the Great Depression. From 2001 to 2007 alone, domestic financial debt grew to $14.5 trillion from $8.5 trillion, and home mortgage debt ballooned to almost $10 trillion from $4.9 trillion, an increase of 102 percent.

The Offshore Solution

With the dollar shrinking in value daily, with American freedoms and civil liberties curtailed by unconstitutional monstrosities such as the so-called PATRIOT Act, with deficit government spending continuing unchecked, is it any wonder reasonable Americans who have the means are considering life elsewhere?

Ten years ago we saw this coming. That's how the Sovereign Society came into being.

We offer our members a detailed road (and trans-oceanic) map to profitable offshore investments, to greater freedom offshore; a step-by-step explanation of legal ways to protect assets, lower taxes, and -- yes -- how (and where) to move your residence and/or citizenship offshore -- if that's what you want.

Wherever real freedom can be found, that's where freedom lovers should be.

To find out all about places where you may be able to lower or avoid taxes legally, click here http://web-purchases.com/190STHOW/W190H723/