Offshore Asset Protection BLOG - Bob Bauman

What We May Be

In "Hamlet" (circa 1601) William Shakespeare sagely noted: "Lord! We know what we are, but we know not what we may be."

Nevertheless, each New Year's the world media engages in a mild form of entertainment by attempting to predict events for the next 365 days.

I don't intend to join their prognostications, except to say, we are likely to suffer more of the same, based on all the current sad indications -- more and bigger government, more and bigger taxes, spending, debt and deficits, more and greater depredations against our remaining, but rapidly, diminishing liberties.

How's that for a cheery 2009 look ahead?

The Chairman’s Wisdom

I am indebted in many ways to my good friend, the Chairman of the Sovereign Society, the noted author, Jack Pugsley, but also for the following wisdom which he shared with us on New Year's Eve a few years ago:

The Sovereign Society was conceived by a group of individuals who shared the conviction that peace and prosperity would be optimized when every individual's property is rightfully his or hers to keep, control, and dispose of.

Having witnessed over our lifetimes the relentless expansion of government and the concomitant erosion of individual liberties, it was clear to us that the preponderance of aggression against private property did not come from criminals or from foreign nations, but from citizens’ own governments and judicial systems.

As Voltaire summed up the process 240 years ago: "The art of government consists in taking as much money as possible from one party of the citizens to give to the other."

Most still believe government is a protector, and it grows because people believe it will cure the social ills that plague us. In fact, it is the source of our problems. By restricting individual liberty, by preventing individuals from freely producing and exchanging goods and services, and by taxing and inflating, government has become the source of social conflict.

Sovereign Society Credo

Now in its eleventh year, The Sovereign Society has grown to a membership of nearly 30,000 in many countries around the world. The principles around which the Society was conceived are built into its Credo are even more relevant today:

* THAT individual liberty is the highest good in any society;

* THAT every individual has the natural right to keep, control, and dispose of his or her justly acquired property;

* THAT individuals are not the property of the government of the political jurisdiction in which they are born or reside;

* THAT individuals are sovereign unto themselves;

* THAT to whatever extent government interferes with the free exchange of goods or confiscates the property of citizens, it reduces the wealth of the nation;

* THAT when government takes from one to bestow on another, it diminishes the incentive of the first, the integrity of the second, and its own moral authority;

* THAT it is the right and responsibility of each individual to defend justly acquired property from unjust and arbitrary seizure, expropriation, and taxation;

* THAT the goal of The Sovereign Society is to encourage and help individuals achieve and maintain individual sovereignty over their own lives and fortunes.

Join Us

This new year 2009 is one more chance for you and I to fight this oppression and show others the way to a freer, more moral society. We invite you to join us in the struggle for liberty.

New Spanish Citizenship Law Offers EU Possibilities

The descendants of those exiled from Spain during the Spanish Civil War (1936-39) and during the subsequent rule of the late General Francisco Franco may claim Spanish citizenship under legislation that took effect last week.

The Spanish government expects half a million people, many of them living in Latin America, to be eligible for dual citizenship under the new measure, the Spanish newspaper El País reported. Those applying for citizenship must present proof of their parents’ or grandparents’ place and date of birth, according to the web site of the Spanish Justice Ministry.

The government plans to accept applications until December 2010. Those deemed eligible will not have to renounce their other national citizenship, a change from former Spanish law that forbid dual nationality

Dual Nationality

Dual nationality, a topic I frequently write about, simply means that a person legally is a citizen of two countries at the same time, qualified as such under each nation’s law.

Under American law this dual status may result automatically, as when a child born in a foreign country to a U.S. citizen becomes both a U.S. citizen and a citizen of the country where he or she is born. Or it may result from operation of law, as when a U.S. citizen acquires foreign citizenship by marriage to a spouse from another nation, or a foreign person naturalized as a U.S. citizen retains the citizenship of their country of birth.

Contrary to popular belief, Americans don't have to give up their U.S. citizenship or surrender their passport if they acquire a second citizenship. U.S. law and Supreme Court decisions support the right of an American to enjoy dual citizenship.

Historic Controversy

The new Spanish citizenship law covers the period from July 18, 1936, to Dec. 31, 1955, which includes the Spanish Civil War from 1936 to 1939 and the first decades of Franco's rule which ended with his death in 1975.

The act is part of the "law of historical memory," a controversial law passed last year by the Socialist government of Prime Minister José Luis Rodríguez Zapatero aimed at encouraging Spain to resolve issues from its bloody 20th-century history. Many Spaniards oppose the law as a needless stirring up of old animosities.

This new law could produce many applicants because Spain is a member of the European Union. That means acquiring Spanish citizenship allows a person to live, work and travel in any of the 27 EU nations, giving them a free run of the continent.

Tough Older Laws

The new law is a departure from much stricter Spanish naturalization law.

Prior to this exception citizenship by naturalization could only be acquired with difficulty. Persons with no ties to Spain had to reside in the country for at least 10 years.

Persons who were nationals of Portugal, the Philippines, or certain South American countries need only reside for two years, a back door approach to quicker citizenship.

Persons who were born in Spain, who married a citizen of Spain, or who were born outside of Spain of a mother or father who was originally Spanish, needed only to reside in Spain one year before being eligible fort citizenship. These laws remain in effect.

The new law also creates an exception to the existing Spanish prohibition against dual citizenship.

Spanish law requires most naturalization applicants to renounce their existing citizenship and to swear an oath of allegiance to Spain. Dual nationality is recognized only if the applicant’s home nation has a dual nationality treaty with Spain. Currently, such treaties exist with Chile, Peru, Paraguay, Nicaragua, Guatemala, Bolivia, Ecuador, Costa Rica, Honduras, the Dominican Republic, Argentina, Colombia, and Venezuela. Those of Spanish-Jewish descent were also allowed to hold dual nationality.

Other Nations Grant Exceptions

The changes in Spanish law adds a new political category to the exceptional qualifications for obtaining citizenship imposed by some other nations.

For example, one also can secure dual citizenship and a second passport based on ancestry if your parents or grandparents were born in nations such as Ireland, Italy, Poland, Lithuania or even the United Kingdom. Jews are allowed to obtain Israeli citizenship based on their religion.

If one can afford it, one can also secure an immediate second citizenship (at a high price) from the only two nations that still offer "economic citizenship" -- the Commonwealth of Dominica and St. Kitts and Nevis, both in the Caribbean area.

The Passport Book

If you want to know more about dual citizenship and second passports, you can read all about them and scores of countries in The Passport Book which I authored, now in its sixth edition. Click here to learn more.

Year End Tips: Six Ways to Protect Your Assets Right Now

As we at the Sovereign Society have been telling folks for over ten years now, if you have wealth, you need wealth protection.

And procrastination can steal more than your time - it can destroy your wealth. So act today. Just a few simple steps - plus some offshore advantages - can ensure that your hard-earned assets remain yours and can be passed on to your family and loved ones.

And, for Americans, these steps are especially important to consider now, with the likelihood of drastic tax and law changes coming under an Obama government.

1) Keep a low profile. Owning assets in your own name too often is like throwing chum in the water for the circling schools of sharks -- lawsuit-happy lawyers and litigants. If people think you're rich, your chance of being sued skyrockets.

One way to lower your profile is not to title your assets directly in your own name. Instead, use a privacy-protected offshore corporation, family foundation or an asset protection trust (APT) to hold title. In many places such ownership is not a matter of public record.

2) Shrink the target. Let's say you own a number of rental properties. A tenant slips and falls at one of these places and decides to sue you. Unless you take precautions, total damages could amount to the value of all your rental properties. Whether it's a rental property, a restaurant, or something else, segregate risks - consider creating a separate corporate entity for each liability generating asset. Especially, never mix large liability-generating assets. For example, an apartment house should not be owned by the same company that owns a trucking company.

3) Going offshore adds a strong layer of protection. Whether it's in a Swiss or Liechtenstein life insurance wrapper, retirement annuity or an Isle of Man or Panama asset protection trust, placing your assets offshore puts them out of reach of most frivolous lawsuits. Even litigants with an ax to grind usually are ready to settle for pennies on the dollar when they find out how difficult it is to locate and collect your money offshore.

For example, if you place your 401k or other retirement plan in a suitable jurisdiction - Panama or Switzerland, for instance - it can be configured to be essentially claim and judgment proof, plus it is covered by strict financial privacy laws that are non-existent in the United States.

4) Get Good Advice. Avoid pushy domestic and offshore hucksters - the ones claiming falsely that you can lower your tax bill to zero if you just put all your money in their "pure trust," a "constitutional trust" or a "corporation sole." Well, you might not pay any taxes, but only because these hood winkers will take all your money and run with it. And you could go to jail.

And avoid those Bernie Madoff types who promise you the moon on investment returns. The rule is - if it sounds too good to be true, then it is too good to be true.

Always work with carefully vetted bankers, investment advisors, financial experts, and legal professionals from select tax and asset haven jurisdictions. Always check references and do your due diligence homework on a service provider before sending them a single penny. Asks us if you want recommendations for good, solid contacts.

5) Pass on your legacy with an offshore trust. In most cases, while an offshore trust will protect your assets, it won't reduce your U.S. tax bill. However, an offshore trust can incorporate provisions that can reduce future estate tax liability. It can protect your wealth, notwithstanding efforts by the U.S. or other governments, to discourage legal offshore financial transactions and investments.

Frivolous litigation, expensive legal defense costs, outrageous jury awards, and government privacy invasions and asset forfeiture all create an urgent need to protect your family and business wealth. An APT can do all that and more.

6) File all returns and reports. certain path to asset loss is ignoring U.S. tax filing and reporting requirements or giving inaccurate or partial information. Get a good CPA who knows the reporting and other rules.

Almost every nation now has "know your customer" laws that require bank account applicants to prove their identity, the source of their funds and their life story. Cash transfers of US$10,000 or more are reported electronically to the U.S. government. U.S. persons, on their IRS Form 1040, must say if they have an offshore account, and if activity therein exceeds US$10,000 an annual U.S. Treasury Form TD F 90-22.1 must be filed. Lying or failure to file these reports are separate felonies.

We at the Sovereign Society can and will help you with all of the above (and more) asset protection devices. Our executive director, Erika Nolan, myself and our Sovereign Society editors often have visited many tax and asset protection havens. We've made strong banking, legal, trust and other professional contacts that are useful to our members with offshore business and financial interests.

That’s another good reason why you should protect yourself and your wealth by joining this unique organization that, for more than a decade, has shown the way for sound offshore banking, prudent investing and real financial peace of mind -- the Sovereign Society.

Taxpayers Forced to Seek Haven

For the ten years of our existence, the following has been our Christmas Day A-Letter editorial. The comment is by SAINT LUKE, the Apostle, (who was not a member of the Sovereign Society Council of Experts) and appears in his Gospel 2:1-20. For myself and for the staff of the Sovereign Society, we wish you a very Merry Christmas and a Happy Hanukkah.

And it came to pass in those days, that there went out a decree from Caesar Augustus that all the world should be taxed. And this taxing was first made when Cyrenius was governor of Syria. And all went to be taxed, every one into his own city.

And Joseph also went up from Galilee, out of the city of Nazareth, into Judea, unto the city of David, which is called Bethlehem; because he was of the house and lineage of David: to be taxed with Mary his espoused wife, being great with child.

And so it was, that, while they were there, the days were accomplished that she should be delivered. And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid Him in a manger; because there was no room for them in the inn.

And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And, lo, the angel of the Lord came upon them, and the glory of the Lord hone round about them: and they were sore afraid.

And the angel said unto them, Fear not: for, behold, I bring you good tidings of great joy which shall be to all people. For unto you is born this day in the city of David a Savior, which is Christ the Lord. And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger.

And suddenly there was with the angel a multitude of the heavenly host praising God, and saying, Glory to God in the highest, and on earth peace, good will toward men.

After 700 Years Andorra Open to Foreign Investors

Bloomberg News reports that the government of the Principality of Andorra is opening up investment in resorts and other businesses to foreign investors for the first time in seven centuries.

The rumored goal is to plug a national budget deficit but, in my opinion, this new opening to the world doesn't means that Andorra is about to change what is arguably the strictest bank secrecy policy in Europe, (a view confirmed by an old friend who has lived there for many years).

In the past part of the government budget has been financed by loans from Andorra’s five commercial banks until rising private defaults curbed this lending.

All Andorran banks now are locally owned and one of their major attractions, especially for foreign depositors, is a bank secrecy law so tight that the country is one of only two in Europe still on the blacklist of the Financial Action Task Force (FATF) of the Organization for Economic and Community Development (OECD), because of their refusal to share tax and other information with other governments. (Monaco is the other one still on the FATF list).

Outside Investment Welcome

Foreigners, previously restricted to owning no more than a third of any Andorran company, can now hold up to 49% in its main industries, including luxury clothing retailers, real- estate developers and ski resorts. They will be able to own 100% of companies in 200 industries the government wants to develop, such as research firms and Internet commerce. Prime Minister Albert Pintat said the government aims to remove all foreign investments restrictions within six years.

Along with lifting this curb on foreign investment, the Andorran government paid the usual lip service of now wanting to be seen as an “investment haven” and not a “tax haven.” That has become ritual language in a public relations effort to appease the OECD/FATF without really yielding financial privacy. In fact, Andorra levies no taxes on foreign income and, all things considered, is one of the better tax havens in the world.  They rely on revenue from about 10 million visitors a year for more than two-thirds of their $4.1 billion economy, less than half the size of Malta’s, the smallest state in the European Union.

Hidden Andorra

Andorra is a tiny, mountainous country of about 83,000 souls…with no taxes, no army and no poverty.

Nestled between Spain and France high in the Pyrenees, this is a residential tax haven for very wealthy foreigners who enjoy winter sports. If you live in this independent nation 20 years you can become a “privileged citizen” and enjoy all rights of citizenship except voting. Citizenship may be somewhat difficult, but you can establish immediate residency fairly easily. Just move in and apply for a resident’s card. But you must rent or own property in order to stay.

Andorra consists of 185 square miles. It’s about one-fifth the size of Rhode Island. Andorra’s rugged terrain consists of gorges and narrow valleys surrounded by mountain peaks that rise higher than 9,500 feet above sea level. It is an independent nation-state governed by 28 elected members of the General Council.

Banking Evolution

Over the past 50 years, Andorra has evolved. It’s transformed from being a very poor mountain mini-principality, into a sort of duty-free shopping center with ski resorts and banking secrecy. And it’s all thanks to the growth in purchasing power from the middle class in Cataluñ, the neighboring Spanish province. There is no income or estate taxes for anyone living in Andorra.

The banks now require anyone who wants to open an account to appear in person. Lawyers cannot open accounts for them. U.S. persons who reside here are not allowed to have any U.S. securities in their Andorran bank accounts because the banks don’t want to be bothered with excessive time and costs for U.S. reporting and SEC visits. Non-U.S. securities and investments are no problem. There are several banks. The three largest are Credit Andorra, Andbank and Banca Mora.

With political and economic stability, no labor problems, virtually no unemployment, and the lowest crime rate in Europe, remote Andorra could be your safe haven away from the modern world’s problems. But bring warm clothes and plan on driving because the only access is three hours by road from the nearest airports in Barcelona, Spain or Toulouse, France. (A new airport in Andorra le Vella for small planes will be ready sometime next year).

Best Offshore Uses: Quick tax-free residence, duty-free bargains, banking in strict financial privacy, skiing nine months of the year

For more information about Andorra and many other tax havens, see my book, Where To Stash Your Cash, Tax Havens of the World.

Singapore: Switzerland of Asia

Singapore may face more political pressure from the United States and other tax hungry welfare countries over its role as an offshore financial center catering to wealthy foreigners, the country's prime minister admitted last week.

Prime Minister Lee Hsien Loong told journalists that U.S. pressure on some European countries to loosen banking secrecy laws and open their banks to greater scrutiny may lead to still more European money flowing into Singapore in the short term. "But I expect Singapore to come under pressure too," he said in response to a question on whether pressure on countries such as Switzerland and Liechtenstein will help Singapore.

Singapore's government has previously denied suggestions that the country is or wishes to be known as a tax haven. But it offers tax breaks to foreigners and has adopted strict bank secrecy laws patterned after Switzerland. It has been promoting itself as a rival financial center to Hong Kong to attract banks such as UBS, Credit Suisse, Julius Baer, and Citigroup to manage money for rich local and foreign clients.

Cash Flows to Singapore

"In the past 10 years, a lot of money from outside of Asia has moved to Singapore from Europe, Latin America, the Middle East, Russia and Central Asia," said Edmund Leow, a principal at the law firm of Baker & McKenzie, Wong & Leow in Singapore.

Many of the worlds wealthy have moved from traditional tax havens of the Caribbean, Switzerland and the Channel Islands to Singapore. One of the prime reasons for this movement is pressure in those places from Organization for Economic Co-operation and Development (OECD) member countries, most notably the United States. Local Singapore bankers expect this pressure probably will grow once president-elect Obama takes office in January.

Escape from the EU

In Europe money is being moved out of Switzerland to avoid paying withholding tax on interest income as required by the European Union, even as the EU is calling for more and expanded taxes. In Asia, even in the face of the global recession, huge wealth has been amassed with funds from the region, particularly China, Indonesia and India, and those funds dominate the bulk of Singapore's private banking business.

Singapore's private banking assets under management have grown over the past few years by an average of 20% each year and now are estimated at US$200 billion, according to the Monetary Authority of Singapore (MAS). Private banks have fueled the growth by expanding their wealth management services, most notably in the setting up of trust companies.

Trusts Use Growing

"Unlike the Europeans, Asian clients previously did not have full knowledge of what trusts can do such as the complicated tax structures," said Mr. Leow. "As the trust industry develops, it will not only grow in terms of the number of trusts or customers or assets under management, but also in terms of sophistication." With business from wealthy clients still growing in this English common law jurisdiction, Mr. Leow said Singapore's greatest task would be to manage its clean and well regulated image both at home and abroad.

Join Us

Our executive director, Erika Nolan, myself and several Sovereign Society editors have visited Singapore. We've made strong banking, legal, trust and other professional contacts that can be useful to our members with Asian business and financial interests.

That’s another good reason why you should protect yourself and your wealth by joining this unique organization that, for more than a decade, has shown the way for sound offshore banking, prudent investing and real financial peace of mind -- the Sovereign Society.

Forbes Notes Panama's Prosperity

A leading U.S. financial magazine, Forbes, has taken note of something we've been talking about for months  -- the fact that the Republic of Panama, one of our favorite offshore jurisdictions, so far has escaped the worst impact of the worldwide recession harming other nations.

The Dec. 8th edition of Forbes sees three important factors producing Panama's seeming immune from the global financial mess.

Construction, Canal & Colon

First, the Panamanian construction sector remains in hyper-growth mode as it has been for several years, even though there are sign the condo fever is waning in Panama City. Forbes notes that U.S. retirees are attracted by the comparatively lower cost of living, the ease of a dollarized economy, the presence of many English-speaking expats and locals and the proximity to the United States.

A second major factor is the Panama Canal widening construction project that is boosting the nation's economy, the largest infrastructure project in Latin America with a tentative tag price of $5.2 billion. Already underway, the project is pumping money into the local service-based economy, which should easily reach the 7-8% growth in 2009 according to International Monetary Fund projections.

The third important reason for prosperity is the massive income generated by the Colon Free Zone, (second in size only to Hong Kong), representing almost 8% of the Panama economy.

Last year, bilateral trade between the U.S. and Panama totaled $4.1 billion, up by nearly one billion over 2006. One third of Panama's imports come from the United States, and 36% of its total exports are bound for the United States.

Continuing Boom

Panama's economy grew by 9.2% in the 3rd quarter over the year ago period, helped by expansion of agriculture, manufacturing and services, the government reported Monday. Between July and September GDP grew to $4.73 billion, up $400 million from the same period in 2007.

Panama's economy is expected to grow 9.5% in 2008 and at least 7.5% in 2009, as the impact of the consumer slowdown in the United States begins to hit global trade. Transport, including shipping through the country's famous canal, accounts for about a fifth of Panama's gross domestic product.

According to the government, other growth sectors continue to flourish including the construction sector, which has transformed Panama City's skyline into a mass of skyscrapers. In the third quarter, the construction sector grew 28.8% over a year ago, accounting for just over 5% of GDP, but a sign of slowing was shown in a 30% construction decline in September compared to a year ago.

Panama has posted 23 consecutive quarters of economic growth, growing gross domestic product by 11.5% in 2007, which is double the pace of the rest of Latin America and well ahead of the United States. These numbers rival powerhouse China in terms of national GDP growth.

But one veteran local observer urges caution: "I am amazed that they can state that even though the condo bubble appears to be bursting, Panama is doing 'brilliantly'. When stories like that come out you can be sure things are not as rosy as they would like you to think."

You Can Visit This Leading Offshore Haven Soon

We have long advocated Panama as an excellent offshore tax and asset haven. Since the 1920's it has adopted business and finance friendly laws and its territorial tax policy imposes no taxes on income earned outside Panama. As the banking hub of Latin America, Panama also offers strong financial privacy and bank secrecy and has no tax treaties with any other nation.

For those who want a "first hand" view of Panama, a special limited number, "Panama Profit Expedition" is planned January 18-24, 2009 by our associate, Opportunity Travel.

You can contact them, email at info@opptravel or phone toll free at 1-800-926-6575 ext. 105, or direct at 1-561-243-6276 ext. 105. For more information click here.

* To learn all about Panama, you need a copy of my special three--part Panama Money Secrets.

When In Doubt -- Choose Switzerland

I often have reported on the steady flow of corporate relocations by many companies from the United Kingdom (and elsewhere) to Switzerland.

In most cases the motivation for these moves has been the lure of reduced Swiss corporate taxes, compared to the high taxes in places happily being abandoned.

U.S. Companies Moving Out

Now comes the news that the threat of president-elect Obama's anti-tax haven legislation is prompting several major U.S. companies to move their offshore incorporation status from tax haven Bermuda to Switzerland.

The move to Switzerland will help the companies preserve the tax benefits they had in Bermuda and the Cayman Islands, while using Switzerland's tax treaty with the U.S. to shield them from possible adverse legislation from the incoming Obama administration and the next Democrat-controlled Congress.

Bermuda imposes no corporate income tax but no U.S. tax treaty. Switzerland has a corporate income tax, but doesn't levy it on profit earned by subsidiaries overseas.

Conglomerate Tyco International Ltd. and oil industry contractors Foster Wheeler Ltd. and Weatherford International Ltd. announced their moves last week. Transocean Inc., a big offshore driller, received shareholder approval Monday for a similar move. The board of Bermuda-based insurer ACE Ltd. earlier this year approved a "redomestication" from the Cayman Islands to Zurich.

Not A Tax Haven

Relatively low tax rates, respect for financial privacy, and attractive, low business tax laws have given Switzerland a reputation as a "tax haven." But Switzerland is not a low tax country for Swiss residents or their domestic companies, although tax rates are much lower than in the surrounding left-leaning socialist EU nations, such as France and Germany.

Swiss policy makers have changed the Swiss cantonal tax codes to make Switzerland even more attractive to foreign businesses. (Each of the 26 Swiss "cantons" or provinces set their own corporate and other tax rates.) This has caused envious European Union high tax advocates to complain that Swiss low taxes are "unfair tax competition."

It is true that foreign investors can avoid many Swiss taxes by choosing certain types of investments that escape Swiss taxes. The tax system is strictly "territorial," meaning that the government does not tax income that is earned outside Switzerland, even if it is not subject to tax in other jurisdictions.

Corporate Attraction

As I have noted before, this emerging trend has attracted a major increase of new companies to Switzerland in the past few years. According to one recent study, 40,000 new companies were established in Switzerland in 2007. An impressive third of these companies were foreign firms. Many of Switzerland's 26 cantons have seen the numbers of their registered companies jump by more than 50%.

Along with these extra low tax incentives, Switzerland already has the largest number of double tax avoidance treaties with other nations. Under these treaties, Switzerland gives you credit for corporate taxes you pay in another country against the corporate Swiss taxes you may owe.

Deserved Reputation for Stability

The Swiss successfully have played the role of bankers to the world for centuries. A survey of private banks a few years ago found that the single most important factor in Switzerland's financial success is its reputation. This inspired trust rests on the old saying that "a good name is better than riches." Switzerland has enjoyed both.

Even in the current global recession, Swiss banks still manage one third of all assets the world's offshore wealth.

Total cash assets of the Swiss banking system are estimated at US$2 trillion or more, while the total value of security deposits is well over US$3 trillion. Assets under Swiss management have risen significantly in recent years, reaching a high of US$4 trillion in 2008, according to the Swiss National Bank and the Swiss Bankers Association. Only two major Swiss banks, UBS and Credit Suisse, suffered from the subprime mess, while the other nearly 400 banks have had few problems.

You Too?

In my opinion, president-elect Obama and his new administration may try to bully offshore tax havens, but mighty Switzerland is neither a traditional tax haven nor an easy pushover. Historically, from Hannibal to Hitler, the Swiss usually have managed to defend themselves successfully.

And let me suggest that you may want to emulate those corporations that are re-directing their financial activity to Switzerland.

The Sovereign Society can recommend Swiss banks for your account, independent financial and insurance and annuity advisors and even explain possible residency.

For the insider facts on all these attractive Swiss financial possibilities, you can read my book, Swiss Money Secrets.

Keynes In A Nutshell

The late, great American humorist, Will Rogers, observed many years ago that the phrase "in a nutshell" was used appropriately by politicians to summarize complex ideas because, he said, "...that's where a lot of these ideas come from -- a nutshell."

In keeping with the Rogers nutshell theory, there was an appropriate lead article in Sunday's New York Times Magazine annual "ideas issue," written by someone named Robert Skidelsky, identified as the author of “John Maynard Keynes: 1883-1946: Economist, Philosopher, Statesman.”

Skidelsky tried to explain the economic theories of his famous but dead subject, the long-time hero of big spending, big government liberals for decades. Skidelsky ended, as the prescient Will Rogers knew he would, by writing: "This, in a nutshell, was Keynes’s economics."

The author claimed that "the great economist John Maynard Keynes....is justly enjoying a comeback," an apparent reference to president-elect Barack Obama's plan to spend trillions on a panoply of his favorite big government projects in the mistaken Keynesian theory that government deficits and debt will somehow cure what ails the American economy.

Arm Yourself With Truth

Fortunately for you, dear reader, you can not only arm yourself for the coming verbal wars, but also become the most knowledgeable person on your block by viewing the Cato Institute's Dan Mitchell's excellent new video, bluntly entitled "Keynesian Economics Is Wrong: Bigger Government Is Not Stimulus."

Produced and published by the Center for Freedom and Prosperity, it runs a short seven minutes long and exposes the fraud of Keynesianism in simple but extensive detail. It should be made required viewing in every Capitol Hill office, as well as the Office of Presidential Transition.

I urge you to view it and you might also want to support the Center for Freedom and Prosperity in this and their other worthy endeavors.

Levin Sees Quick Anti-Tax Haven Law

The U.S. Congress, soon to be in increased control by the Democrats, will waste no time in helping President-elect Barack Obama to fulfill his campaign promise to "shut down the tax havens," Senator Carl Levin (D-MI) predicted last week.

Levin, the long-time Senate leader in attacking tax havens, predicted that his legislation, the Stop Tax Haven Abuse Act,. S. 681, first introduced in 2007, will become law next year with the support of the President Obama, who was one of the bill's original co-sponsors.

At the time Senator Obama claimed: "This is a basic issue of fairness. We need to crack down on individuals and businesses that abuse tax laws so those who work hard and play by the rules aren't disadvantaged."

"The President-elect has co-sponsored our bill, which goes after the misuse of these tax havens, the avoidance of taxes by American taxpayers, individuals and corporations using the Cayman Islands and all these other places to avoid paying their bills to Uncle Sam," Sen. Levin said in an interview broadcast on Bloomberg Television last Friday.

I predicted as much some weeks ago when I wrote: "As we have been warning for the past year, president-elect Barack Obama is about to fulfill his campaign promise; he is reported ready to crack down brutally on international tax havens as soon as he assumes office on January 20, 2009."

Invented Fictions

It is not too much to say that Senator Levin is a fanatic when it comes to his often irrational attacks on tax havens. He has created numerous false myths to support his radical views.

Among these myths is Levin's constantly upped estimate that as much as $100 billion in revenue owed under U.S. tax laws goes uncollected annually because of assets hidden offshore. Levin started with $40 billion, went to $50 billion and more recently has settled on the $100 billion un lost taxes figures -- all numbers invented by him and his Senate staff without a shred of proof. Even the IRS commissioner declined to endorse these preposterous figures.

Economic Warfare?

Typical of Senator Levin's wild claims is his statement that "tax havens are engaged in economic warfare against the United States and honest, hardworking American taxpayers. In my opinion that is a patent and absurd lie.

Big spending, high tax politicians such as Carl Levin, resent these jurisdictions because globalization has made it much more difficult to impose confiscatory tax rates. Indeed, tax rates have dropped dramatically since 1980, in part because havens have facilitated greater tax competition among nations.

Daniel J. Mitchell, senior Cato Institute fellow specializing in tax issues, has pointed out that competition from tax havens has reduced taxes worldwide and that the leading tax havens (for non-citizens) in the world are, in fact, the United States and the United Kingdom.

In February 2007, Sen. Levin and then Senator from Illinois, Barack Obama, introduced their bill, ironically, along with co-sponsor, liberal Republican Sen. Norm Coleman, now locked in a close recount of votes in Minnesota. (Coleman played along with the Democrats on this and other issues and is now getting his reward).

Destroyer of Rights

Senator Levin has a long history of attacks on the financial privacy and individual rights of Americans.

Start with the fact that in the post 9-11, 2001 congressional panic, Levin somehow conned the gullible Bush White House into adopting some of the worst parts of the PATRIOT Act. These Levin provisions helped destroy Americans' financial privacy and gave government police virtually unchecked power over domestic U.S. financial and banking activity.

Bad Bill

In the case of "The Stop Tax Haven Abuse Act," among other enormities, the bill creates an unprecedented blacklist of 34 offshore jurisdictions presumed to be "tax evasion" sites. U.S. Internal Revenue Service court filings, identifying these 34 locations as "probable locations for US tax evasion", were used as the basis for the list.

This illogical presumption is based only on the fact they have high degrees of financial privacy guaranteed by law. The bill gives the U.S. Treasury secretary free reign "to take special measures against foreign jurisdictions and financial institutions that impede U.S. tax enforcement." It also requires all U.S. banks and other financial institutions to act as spies and report to the IRS any offshore financial activity by clients.

A companion Levin-Obama bill even goes so far as to curtail centuries-old legal rights to create and operate freely offshore trusts, corporations, and other entities traditionally used to protect assets. Ignoring the U.S. Constitution and the presumption of innocence, the senators legislation would force any American with offshore financial activities to prove their actions do not involve illegal tax evasion.

A Case for Tax Havens

In most case, tax havens are free and independent jurisdictions. These countries freely are making their successful way in this world of global economics by offering low or no taxes on foreigners who do business there. Unlike the United States, where Levinism has systematically destroyed financial privacy, tax ands asset haven nations, such as Switzerland and Panama, guarantee financial privacy by law.

If Senator Levin's prediction is correct, (and the political and congressional odds are that he is), his radical bill soon could become law. The only obstacle would be a possible Senate filibuster by conservative senators. But the bill will be falsely portrayed as a means of gaining $100 billion more each year in supposedly lost taxes. How many senators have the guts to expose this lie and vote no?

Last Word

So, having been warned, there is still a window of opportunity before Big Brother's anti-offshore law comes into effect. Consider exercising your rights while they still exist...

It is legal to have and use an offshore bank or other financial account. It is legal to create and donate assets to an offshore asset protection trust or family foundation. It is legal to form and operate an international business corporation (IBC). It is legal to acquire dual citizenship and a second passport. It is legal voluntarily to end U.S. citizenship and thereby remove yourself from the U.S. tax system. It is legal to purchase offshore life insurance and annuities that allowed deferred taxes. It is legal to invest in offshore mutual and hedge funds, precious metals and real estate.

If you want more information on any or all of these points, I tell you in detail here, Where To Stash Your Cash.