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Sovereign Man Notes from the Field Date: April 29, 2011 Reporting From: Lago Ypacarai, Paraguay

In Business, Business/Political Trends Worldwide, Government, Money and Finances, personal and business, Political, Travel on April 29, 2011 at 4:00 pm

Sovereign Man
Notes from the Field
Date: April 29, 2011
Reporting From: Lago Ypacarai, Paraguay

Greetings from paradise (check out the website for photos). We have a lot to cover today, so I want to get right down to it.

First, long-time readers know that I don’t really do public speaking gigs or interviews. We get a lot of requests for these but usually turn them down with few exceptions. Chris Martenson is one of those exceptions.

If you don’t know about Chris, you should– he’s one of the sharpest financial minds out there, and we look at the markets with a similar perspective. Chris speaks routinely with folks like Jim Rogers and Marc Faber, and as we share a similar worldview, I happily sat down with him recently for an interview.

We discussed how the best opportunities now are outside the western world– greater reward, greater freedom, greater adventure. If you have 30-minutes, you can listen to the interview on Chris’s website.

Next, Monte writes, “Simon, I worked for Bolivian president Evo Morales and had first-hand experience with the issues you discussed. Bolivia is taking a dangerous rode to both socialism and hate; our leaders want to improve things by telling us that we have to chase bad guys, i.e. anyone with a dissenting opinion.”

It’s the old ‘us vs. them’ approach: define a clear enemy (them) and people will gravitate towards the side of ‘right’ (us). This is a core principle of psychological warfare; human nature wants to divide the world into two sides and then be on the ‘right’ one, often without fully understanding the issues.

Politicians know that this is an effective tool to rally support for a cause, and history provides many examples. Hitler painted first the Communists, and then the Jews, as enemies of the state in order to build support for his dictatorial control.

The US government applied the same tactic 10-years ago, defining ‘evil terrorists’ as the enemy in order to build support for the erosion of civil liberties in the United States.

Anger and hate may be effective tools to rally popular support, but such polarization rarely leads to solutions… just witness how governments are now defining ‘evil oil speculators’ as the enemy. It’s easy to side with the politicians on this one– after all, everyone hates paying more for fuel.

But will breeding such negativity bring down gas prices? No chance. In the same way, democrats and republicans painting each other as the enemy does nothing to bring down the US debt.

It’s all just a silly charade, one of the primary reasons why things continue to get worse. Policymakers, whether in Bolivia or the developed world, focus on rallying popular support for their agenda rather than on credible solutions that work.

On that note, Chris asks, “Simon, did you see Chairman Bernanke’s press conference this week? You didn’t comment on it, I’m curious about your take.”

The good chairman is a classic example of policymakers relying on poor tools that don’t work. This man has conjured more money than anyone in the history of the world, and it’s not working. His only solution is to keep doing more of the same.

I know a lot of people in the markets who hang on to his every word, looking for some sign that he’s going to change his tune. This is total nonsense. Bernanke has one play, and it’s devaluation. There may be short-term market fluctuations, but his long-term policy of destroying the currency is very clear. Plan on it.

As such, the US dollar has hit record lows against other currencies like the Swiss franc and Aussie dollar which are rightfully viewed as ‘better’ and more stable. Ultimately, though, all fiat currencies will follow the dollar down its road to perdition.

Precious metals are among the few asset classes that can go to the moon without feeling the political heat. Oil will not see $300 without first undergoing coordinated intervention by world governments… but silver can go to $300 without so much as a yawn from politicians.

That’s all for this week; Sovereign Man Confidential members are reminded of today’s teleconference at 2pm Eastern. I’ll be taking your questions and giving you a few personal updates, including what I’ve found here in Paraguay.

Have a great weekend.

Simon Black
Senior Editor, SovereignMan.com
This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

Sovereign Man Notes from the Field Date: April 29, 2011 Reporting From: Lago Ypacarai, Paraguay

In Business on April 29, 2011 at 3:58 pm

Sovereign Man
Notes from the Field
Date: April 29, 2011
Reporting From: Lago Ypacarai, Paraguay

Greetings from paradise (check out the website for photos). We have a lot to cover today, so I want to get right down to it.

First, long-time readers know that I don’t really do public speaking gigs or interviews. We get a lot of requests for these but usually turn them down with few exceptions. Chris Martenson is one of those exceptions.

If you don’t know about Chris, you should– he’s one of the sharpest financial minds out there, and we look at the markets with a similar perspective. Chris speaks routinely with folks like Jim Rogers and Marc Faber, and as we share a similar worldview, I happily sat down with him recently for an interview.

We discussed how the best opportunities now are outside the western world– greater reward, greater freedom, greater adventure. If you have 30-minutes, you can listen to the interview on Chris’s website.

Next, Monte writes, “Simon, I worked for Bolivian president Evo Morales and had first-hand experience with the issues you discussed. Bolivia is taking a dangerous rode to both socialism and hate; our leaders want to improve things by telling us that we have to chase bad guys, i.e. anyone with a dissenting opinion.”

It’s the old ‘us vs. them’ approach: define a clear enemy (them) and people will gravitate towards the side of ‘right’ (us). This is a core principle of psychological warfare; human nature wants to divide the world into two sides and then be on the ‘right’ one, often without fully understanding the issues.

Politicians know that this is an effective tool to rally support for a cause, and history provides many examples. Hitler painted first the Communists, and then the Jews, as enemies of the state in order to build support for his dictatorial control.

The US government applied the same tactic 10-years ago, defining ‘evil terrorists’ as the enemy in order to build support for the erosion of civil liberties in the United States.

Anger and hate may be effective tools to rally popular support, but such polarization rarely leads to solutions… just witness how governments are now defining ‘evil oil speculators’ as the enemy. It’s easy to side with the politicians on this one– after all, everyone hates paying more for fuel.

But will breeding such negativity bring down gas prices? No chance. In the same way, democrats and republicans painting each other as the enemy does nothing to bring down the US debt.

It’s all just a silly charade, one of the primary reasons why things continue to get worse. Policymakers, whether in Bolivia or the developed world, focus on rallying popular support for their agenda rather than on credible solutions that work.

On that note, Chris asks, “Simon, did you see Chairman Bernanke’s press conference this week? You didn’t comment on it, I’m curious about your take.”

The good chairman is a classic example of policymakers relying on poor tools that don’t work. This man has conjured more money than anyone in the history of the world, and it’s not working. His only solution is to keep doing more of the same.

I know a lot of people in the markets who hang on to his every word, looking for some sign that he’s going to change his tune. This is total nonsense. Bernanke has one play, and it’s devaluation. There may be short-term market fluctuations, but his long-term policy of destroying the currency is very clear. Plan on it.

As such, the US dollar has hit record lows against other currencies like the Swiss franc and Aussie dollar which are rightfully viewed as ‘better’ and more stable. Ultimately, though, all fiat currencies will follow the dollar down its road to perdition.

Precious metals are among the few asset classes that can go to the moon without feeling the political heat. Oil will not see $300 without first undergoing coordinated intervention by world governments… but silver can go to $300 without so much as a yawn from politicians.

That’s all for this week; Sovereign Man Confidential members are reminded of today’s teleconference at 2pm Eastern. I’ll be taking your questions and giving you a few personal updates, including what I’ve found here in Paraguay.

Have a great weekend.

Simon Black
Senior Editor, SovereignMan.com
This article appears courtesy of SovereignMan.com: Notes From The
Field, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

Sovereign Man Notes from the Field Date: April 28, 2011 Reporting From: Asuncion, Paraguay

In Business, Business/Political Trends Worldwide, Government, Money and Finances, Opportunity, personal and business, Travel on April 28, 2011 at 4:43 pm

Sovereign Man
Notes from the Field
Date: April 28, 2011
Reporting From: Asuncion, Paraguay

Jim Rogers saw the writing on the wall for America several years ago. He uprooted his wife and family from New York and went where the opportunity was– Singapore. Rogers has famously said that the best career advice he can give a young person setting out to make a fortune today is to become a farmer.

Unlike some news anchors, who seem to take the comment in jest, I believe he is completely serious. Forget investment banking, derivatives trading, or managing a hedge fund. The big fortunes of the coming decade or two may well be made in agriculture.

Those quick to dismiss the notion assume this means toiling in the fields all day from dawn to dusk. Wrong. There are MANY ways of making a buck in farming and agriculture.

Farming itself is just one part of the supply chain. You could supply seeds, chemicals, fertilizer or stock feed. You could breed some exotic variety of cattle or pigs. You could provide logistics services to get products to market. You could even set up a fund to invest in agribusinesses on behalf of others.

There are literally dozens of ways to play this.

I just finished reading an uplifting account of a young Filipino entrepreneur (only thirty-one years old) who’s well on the way to floating his diversified agribusiness company on the Philippine Stock Exchange for P2 BILLION ($46.5 million).

In just 7 years, he’s grown the company, which does everything from selling livestock feed, to running rural supplies stores, to raising chicken hatchlings.

Annual sales have increased 9-fold from P200 million to P1.8 billion. Profits this year should hit P137 million based on company projections. By 2013 they’re targeting P425 million. That’s US$10 million, give or take, in net profit, all from doing something very basic.

Put simply, so little new blood and talent has entered the agriculture business in the past generation that many business practices remain stuck in a time warp.

How many people do you know who majored in agricultural science at university? How may people can you think of who stayed on to run their parents’ farm, or returned to the land to run their own business?

Now, compare that to how many bankers, brokers, accountants, and lawyers you know…

Ten years ago, NOBODY studied geology and people looked at you as though you had two heads if you said you wanted to be a mining engineer. Today, agriculture is in the same boat, and the complete dearth of new talent in the agricultural industry is a sure sign to me of the wide-open field of opportunity.

In the Philippines, so low-hanging was the fruit — if you’ll pardon the pun — that this young entrepreneur I just mentioned was able to double profits at his parents’ farm supply business when he took it over, simply by installing some off-the-shelf accounting software.

You may think this is an extreme example, but I can tell you that there are dozens of countries in the same situation. Paraguay is one of them.

We talk a lot in our discussions about ‘adding value’ as a means to generate income, either as an employee, professional, investor, or entrepreneur. This is an important principle to understand because being able to generate independent income is absolutely necessary to become more self-reliant.

I’m quick to point out that the value creation process is often derived from solving problems– the bigger the problem, or the more people it affects, the greater the value created… and hence, the greater the reward.

Quite simply, there are a lot of problems to be solved in developing markets– lack of modernization, lack of technological know-how, lack of best business practice know-how, lack of financing and appropriate capital management, etc.

These are often second nature to many westerners who typically have both the knowledge and experience to make a big difference, and hence create a lot of value, overseas. One just needs the courage to do it… and prove Jim Rogers right.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

Sovereign Man Notes from the Field Date: April 27, 2011 Reporting From: Asuncion, Paraguay

In Business, Business/Political Trends Worldwide, Money and Finances, personal and business on April 27, 2011 at 1:03 pm

Sovereign Man
Notes from the Field

Date: April 27, 2011
Reporting From: Asuncion, Paraguay

Paraguay isn’t exactly ‘on the radar,’ so to speak. Most people who research living overseas usually end up in the hyped up places like Panama, Costa Rica, or even Ecuador. Those places are fine and good, but Paraguay may truly be a hidden gem for many.

Like Ecuador, you can live well in Paraguay on a very modest budget, almost to the point that it’s obscene. Unlike Ecuador, however, which seems ‘frozen in time,’ Paraguay’s economy is at a turning point. I think it’s in the same position as Panama was about 10-years ago.

Quick background– in 1977, US President Jimmy Carter signed a series of treaties with Panama’s Omar Torrijos in which the United States agreed to hand over control of the Panama Canal to the Panamanians on December 31, 1999.

The US had a long-standing influence in Panama, stationing thousands of troops and injecting billions of dollars into the economy. With the subsequent withdrawal of the US military in the late 1990s, Panama lost a major economic workhorse.

Practically overnight, there were no more soldiers running around town blowing their paychecks, no more officers to rent expensive off-post quarters, no more sweetheart contracts to provide services to the Army. The immediate effect was a painful, albeit brief recession.

By 2001, Panama had hit the reset button for its economy, beginning a steady climb back to prosperity. Paraguay is essentially at this point now… somewhere slightly above ground zero. It’s a small market, but I think there are fortunes to be made here– in property, in agriculture, even in fixed income investments.

Taxes are a complete joke in Paraguay. The suspended income tax is negligible, and property taxes are so low it’s cute. I know a number of property owners here who pay anywhere from $50 to $300 per year for spacious, luxurious properties, or huge swaths of agricultural land.

It also helps that the country has a fairly clear process to welcome all foreigners as residents. Paraguay doesn’t care where you’re from– I’ve seen Russians, Arabs, Europeans, Japanese, Taiwanese, Africans… you name it. As I discussed last week, the biggest step in obtaining Paraguayan residency is a small bank deposit.

We have a global audience here at Sovereign Man– at last check, from well over 100 countries on 7-continents. For the vast majority of these, establishing a small bank account in Paraguay is an administratively inconsequential action. US citizens, however, do have additional regulatory burdens, and I want to remind you about this once again.

[editor’s note: this does not constitute tax advice, so make sure you always check with your own tax and financial advisor]

If you’re a US taxpayer with a foreign financial account, the first form you need to know about is the Department of the Treasury’s TDF 90-22.1, the Report of Foreign Bank and Financial Accounts (or FBAR).

This form is required for any US person (or disregarded entity) with a financial interest or signatory authority over any financial account in a foreign country if the total value of those accounts exceeds $10,000 at any time during the calendar year.

The IRS was kind enough to put out a pretty detailed FAQ about the FBAR. Among other things in the FAQ is interpretive guidance on the recent FinCEN ruling about offshore gold:

“An account with a financial institution that is located in a foreign country is a financial account for FBAR purposes whether the account holds cash or non-monetary assets [such as gold].”

This form must be filed by June 30th every year and reflects financial accounts held from the previous year. In other words, US taxpayers who had a foreign account exceeding $10,000 in 2010 will need to file the FBAR this year by June 30th.

The second form US taxpayers need to be aware of is the 1040 schedule B; those with foreign financial accounts must file the form and fill in boxes 7(a) and 7(b). It’s very simple, and instructions are on the back of the form.

One of the nice things about banking in Paraguay is that the interest rates are far superior to what most other countries are paying right now. US taxpayers must include this interest income on their tax returns, and if you generate interest income in a foreign currency, take into account the currency appreciation.

A lot of people forget to do this and land in hot water.

Needless to say, US citizens still have the burden of paying taxes on their worldwide income, so any offshore activities in Paraguay (or anywhere else for that matter) need to be reported. Failure to report is simply not an option, and I’m sure everyone has better things to do with their time than turn big rocks into little rocks.

The bottom line is, international diversification is a great idea; you get more control and protection over your assets, exposure to stronger currencies, superior returns, and often stronger financial institutions. But do it for the right reasons.

I’ve never understood the mentality of a handful of people who consume so much time and energy trying to hide and conceal their income from tax authorities… if they would just put a fraction of that effort into making more money, it would solve the problem and they’d sleep a lot better at night.

Stay tuned for tomorrow’s letter, we’ll talk a lot more about agricultural opportunities.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

Sovereign Man Notes from the Field Date: April 26, 2011 Reporting From: Manila, Philippines[Editor’s note: Tim Staermose is filling in for Simon today.]

In Business on April 26, 2011 at 1:55 pm

Sovereign Man

Notes from the Field

Date: April 26, 2011
Reporting From: Manila, Philippines[Editor’s note: Tim Staermose is filling in for Simon today.]

Silver’s rise (in US$ terms, at least) over the past several weeks has been nothing short of phenomenal.
The chart has effectively “gone parabolic,” and people I’ve never met have started to e-mail me (in my capacity as a registered investment advisor) for advice on silver.
It doesn’t matter whether it’s silver, tech stocks, emerging markets currencies, or pork belly futures… any time these two events coincide (a parabolic chart pattern, and strangers asking me for advice), it sets off ALARM BELLS in my head.
I’m going to go out on a limb and say that right now, the fundamentals for silver DON’T matter. Many of the latest crop of silver “investors” have no clue about the fundamentals.
To try and divine what comes next, it’s more useful to use a general framework for understanding financial markets than to look at the supply and demand characteristics of silver. Because, right now, the market is being driven chiefly by investor psychology.
It’s a cliché to say it, but ultimately, all financial markets are driven by fear and greed. Actually, I’d argue that they’re driven almost exclusively by fear. Let me explain…

In the initial stages of a bull market, it’s the fear of the unknown that keep the masses out of an asset class.
They think to themselves, “Yes. I can see it’s cheap. I can see the fundamentals stack up. But what if, blah blah blah. Why is no one buying it? There must be something wrong with it. Best to steer clear.”
For those who overcome this initial fear, or skepticism, and do get into the market, once it starts going up and they have a profit, once again their primary, over-riding emotion is fear… fear of losing their profits. Or, even worse. The fear of a profit turning into a loss.
So, what do most of them do? They sell out for a small profit. That’s why it is said that bull markets are constantly climbing a “wall of worry.” And that’s why ALL markets have corrections. Corrections happen when enough people are FEARFUL of losing the gains they’ve made so far, and start to sell out in large enough numbers to temporarily reverse the trend.
Near the top of a bull market, when most have finally overcome their skepticism, and the savvier participants have taken advantage of one of the numerous corrections to buy into the market, fear again comes to the fore. For those not in the market yet, even at this late stage, what finally pushes them in is the FEAR OF MISSING OUT.
All their friends and colleagues are cleaning up in the market. How stupid they would look if they don’t get a slice of the “easy money” too. And so, they pile in like lambs to the slaughter.
I don’t think we’re at that point — yet — with silver. But we are at the stage where many people who are already in the market are FEARFUL of losing their profits.
On this basis, as a student of market psychology, I suspect a correction is overdue. Again, I don’t claim to have any specific fundamental insight into the silver market. I am speaking from a general standpoint.
So what should you do?
If you own physical silver, the logistics of taking profits on your stash are probably quite complicated.
Shipping, and converting a large amount of physical silver to cash temporarily, may not be straightforward.

But there are other ways to soothe your “fear of losing your profits.” You can buy temporary insurance against a correction. Or, if don’t actually own any silver at the present time, you can speculate on a correction.
Long-term ETF positions are risky, but you may consider a short-term position in the ProShares UltraShort Silver ETF (ZSL on the New York Stock Exchange). This instrument is designed to move TWICE as much as silver bullion, but in the OPPOSITE direction.
For example, if silver falls 5% in a day, this security should GAIN 10%. Of course, it works both ways. If silver keeps on rising, then the price of ZSL will lose twice the amount silver rises by.
During this bull market, silver has already seen one “correction,” during the financial crisis, of more than 60%. That was an anomaly. But, a typical 10% or 20% correction would not be surprising to see at some stage — quite possibly soon.
Any time any market has gone parabolic, it has played out that way. (Indeed, a correction may already be underway as I write. I’ve just checked and I see silver is off by more than 3% in Asian trade).
Just so you know, my own money is where my mouth is. I’ve personally bought some call options on ZSL which will make me a tidy gain if silver suffers even a modest pull-back– I put the trade on early in the day on Monday with silver above $48.
I’ll have much more to say on silver, and other precious metals, in future missives, as we see how events unfold.Until tomorrow,Tim Staermose
Editor, SovereignMan.com
This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

Sovereign Man Notes from the Field Date: April 25, 2011 Reporting From: En route from Santa Cruz, Bolivia

In Banking, Business, Business/Political Trends Worldwide, Continental Travel, Jobs, Medical treatment, personal and business, renminbi currency, Sovereign Man on April 25, 2011 at 4:15 pm

Sovereign Man
Notes from the Field

Date: April 25, 2011
Reporting From: En route from Santa Cruz, Bolivia

[Editor’s note: Simon put an unusual amount of photos in today’s letter, you can see all of them online.]

Anyone who has any doubt that central planning and corruption destroys an economy should head to Bolivia. The country is a classic example of a resource-rich nation whose economic potential has been squandered by socialism.

It wasn’t always this way. Bolivia has had several periods of prosperity in its relatively brief history; in the late 1800s, for example, the price of gold began to rise dramatically against silver which was backing many currencies at the time such as the US dollar. (see chart).

Bolivia’s mining industry dates back to the 16th century, and as the country was rich with gold, its economy prospered. The good times lasted until the global depression in the 1930s when Bolivia and Paraguay went to war over the Chaco, each side thinking there was oil underneath the ground.

Following a terrible defeat and a resurgence of tough times, a number of revolutionary movements sprouted around the country. These took hold for several decades, eventually leading to a series of failed military dictatorships that were finally abandoned in the 1980s.

With an inflation rate of roughly 25,000%, Bolivia’s new market-oriented government took immediate steps to liberalize the economy, reduce capital and trade barriers, privatize state-owned companies, and attract foreign investment.

By 1985, the economy was heading back on track, and the prosperity lasted through the early 2000s when nationwide turmoil broke out over the fate of Bolivia’s massive natural gas reserves.

In light of new gas discoveries near Santa Cruz, the government provided concessions to a group of foreign companies who were willing to invest the necessary intellectual and financial capital to exploit the reserves. This move was widely opposed by many Bolivians and resulted in violent protests.

Ultimately, socialist presidential candidate Evo Morales was elected in 2006 and began his tradition of May Day nationalization decrees, starting with the natural gas reserves.

Morales considers himself a champion of the poor, and his stated aim is to distribute the profit from Bolivia’s resources among the people. Certainly, there is a large contingent of the population within Bolivia that lives in abject poverty, and their prospects have changed little over the years.

Socialists like Morales think that you can cure poverty by throwing money at the problem. They believe that by confiscating profits from evil capitalists and sprinkling them among the poor, they can lift people out of poverty.

This is a logical failure. Poverty isn’t caused by a lack of money… it’s caused by the lack of ability or opportunity to create value. Showering poor people with money does not address this problem, just ask any millionaire lottery winner who’s ended up back in the trailer park.

Like an incompetent physician who routinely misdiagnoses an ailment, socialism tries to treat the symptoms of poverty rather than address its root cause. Consequently, these measures ultimately end up as catastrophic failures.

The most common play is to vastly expand the size of government and hire legions of new workers. To give you an example, there is a network of toll roads outside of Santa Cruz. You pay the toll, not for the upkeep of the roads (which are in terrible condition), but to pay the salary of the guy who collects the toll.

Army bases are everywhere in Bolivia. You can’t drive 30 kilometers without passing some sort of military installation where a bunch of jackbooted monkeys are parading around waiting for the Brazilians to invade.

Perhaps the best example is at the airport.

When you want to leave Bolivia, there is first a three-step check-in procedure. Following that, you have to stand in another line to pay the airport departure tax. Needless to say, this revenue doesn’t go to improve the airport, but to pay the salaries of the people who collect the tax.

Following that is the passport border control, another line. Following that is an INTERPOL check, yet another line. Following that is narco-trafficking checkpoint, where they go through your carry-on baggage looking for drugs.

In my case, the inspecting officer actually sniffed my iPad, leading me to believe he was either heeding
New York Fed President Bill Dudley’s culinary advice, or honestly thought that I could manage to pack the circuitry full of cocaine without damaging the touch screen functionality.

After that is yet another line for final customs clearing. The whole process takes 2-hours on a good day.

Each of these people along the way has a job… yet not a single one of them is adding any value or gaining any valuable experience. The net effect of such policies cascading across the entire economy has been unmitigated wealth destruction.

Deep down, Bolivia is a nice country. It’s incredibly cheap, the people are friendly, the women are attractive, and the weather is quite nice. But it truly takes a special person to be able to deal with the constant misgivings and inefficiencies in this centrally planned state.

When I compare Bolivia to it’s southern neighbor Chile– clean, modern, developed, civilized, market-oriented– it’s a night and day difference.

Fundamentally, these are the same people who have taken two completely different paths. One leads to wealth and is a great example of how a pro-market, limited government can benefit society. The other leads to poverty, and is the clearest example of what happens when politicians drive an economy.

Where do you stand– is it possible to eradicate poverty by giving out money for free? Let me know what you think.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

eFoods Global – Your best Food choice for your Preservation..

In Business, Food and Staples, Home Projects, Opportunity on April 24, 2011 at 2:22 pm

Hey Folks; will you and your family be prepared to preserve yourselves when the going gets real rough. Will you have enough Food Reserves to prevail for at least 6 months up to 2 years??
You can help yourself right here with the best food staples you can get to help you through the worst of times. Maybe your relatives and neighbors too…Look into it, you won’t be disappointed.

Yours and mine food prices are on the march. I went to the market yesterday and again experienced another price increase of my last visit. The cereal prices are on an upswing just like the gas prices at the pump. What used to cost $40.00 now costs $60 to $70.00 with out question. A small investment in the above named product may just be the key to helping you and me when the end of the month comes along and the old checkbook is running on empty. Gonna give that some serious thought for sure. You and I will save on gas too because the stuff is delivered and we won’t have to move out of the house. Savings just might be two fold….Yea, I know that delivery can be expensive but formulate a plan and that cost can be resolved maybe.
WE must get a plan, the costs are just gonna keep rising, especially, if this government of our keeps permitting folks to use more and more of our corn for fuel. The cereal prices will never stop escalating.
Speaking of fuel, what are your thoughts regarding the benefits that have been given Brazil and Petrobras??? Our 2.5 billion dollars for oil exploration for their benefit and the permitting of drilling in the Gulf of Mexico with the use of a large area for oil storage here in our backyard is not making sense and should not be allowed. Where do we fit in, just putting up the $$$$$$ is all, nothing else..What gives????

Time to get rid of the EPA and all the Presidents CZARS….Let’s get that done this time around…..Happy Easter to ALL….

Sovereign Man Notes from the Field Date: April 22, 2011 Reporting From: Santa Cruz de la Sierra, Bolivia

In Business, Business/Political Trends Worldwide, Expatriation, Government, Money and Finances, Offshore accounts, Opportunity, Taxes, Travel on April 22, 2011 at 4:40 pm

Sovereign Man
Notes from the Field
Date: April 22, 2011
Reporting From: Santa Cruz de la Sierra, Bolivia

Fortune smiles upon Santa Cruz. With abundant natural gas reserves that generate immense wealth for the local economy, some of the best weather in South America, and more beauty queens per square block than anywhere else on the planet, Santa Cruz should indeed a fantastic place to be.

Enter Evo Morales, Bolivia’s socialist president.

After his election in 2006, Morales helped pushed a new constitution through national referendum, that, among other things, restricted private land ownership and declared all natural resources to be the exclusive dominion of the Bolivian people (managed by the state, of course).

Morales took off on a nationalization binge, taking over assets owned by France’s GDF Suez, UK’s Rurelec, Italy’s Telecom Italia, Spain’s Repsol YPF, Brazil’s Petrobras, France’s Total, Switzerland’s Glencore, and a host of other international resource companies.

Each time this happens, Morales declares a major victory for the Bolivian people, promising to redistribute the wealth and improve everyone’s quality of life.

There’s just one problem with this model: Politicians make terrible CEOs.

They excel at destroying productive capacity, not creating value. They have absolutely no idea how to run companies or manage assets, so even if the goal is to redistribute profits among the people, they don’t know how to generate profits to begin with!

If they’re lucky enough to make any money at all, they first line their pockets with cash and then sprinkle the remaining crumbs among their constituents.

Over time, the assets get neglected. No money is allocated for development, maintenance, and exploration… until one day, all they’re left with are dry holes in the ground.

This is already happening in Bolivia, which ironically just sent a major delegation to the recent PDAC mining mega-conference in Toronto to lobby for new foreign investment.

These people must crazy– first they steal all the foreigners’ assets, then come back to the table and ask them for more money?

It’s easy to chuckle about the goings-on in Bolivia and think ‘that could never happen here.’ But fact is, it can happen everywhere, even in your home country. Politicians only know how to confiscate wealth, not create it… and the more desperate they become, the more they’ll take.

On that note, let’s start this week’s questions with MEH, who asks, “Simon, where can I find information about moving an IRA or other retirement savings overseas, if possible?”

If you’re a US taxpayer with an IRA, one of the best decisions you could ever make is to move it overseas. The country is going further and further into debt, and they’re running out of options fast.

The $5+ trillion sitting in managed retirement accounts is too irresistible for politicians. Just like Evo Morales, they want to take over private assets and manage them ‘for the benefit of the people.’

What a bunch of baloney.

The best vehicle to move retirement accounts offshore, away from the politicians’ control, is called an Open Opportunity IRA. You can also do a lot of really interesting things– buy gold, buy foreign property, and really boost your investment returns. You can read more about this here.

Next, Dr. Adel asks, “Simon- I am a surgeon practicing in LA. I’m tired of Los Angles and the deteriorating medical system in the States. I’m looking for a place to relocate and Paraguay sounds like it may be a good place. Is there is a need for a foreign doctors in Paraguay?”

Definitely. The nice thing about the healthcare industry is that it’s in high demand everywhere in the world. Paraguay does have a need for more qualified physicians, and the certification hurdles are much, much lower than in other countries that I’ve seen.

The other advantage is that there is a loophole in Paraguay’s residency procedure that streamlines the process for foreign professionals who commit to working in Paraguay. You could be on your way to second citizenship in no time.

Last, Norman asks, “Simon, regarding the recent article about learning new skills, what do you think are the most critical languages to learn in the 21st century? I imagine Mandarin is one, Spanish is probably another (especially in the USA), are there any others?”

True, conventional wisdom will say Mandarin, Russian, Portuguese, and Spanish. Any of these would make a fine choice. Remember, though, the idea is to be able to add value internationally. It’s one thing to recognize that there is a lot of wealth in Russia, Brazil, and China… but think about where the action will be.

In resource-rich southeastern African nations like Tanzania, Rwanda, Mozambique, and Kenya, they speak Swahili (which is a really beautiful language, by the way). In Sudan, they speak Arabic. In Kazakhstan, they speak Kazakh (and Russian). In Mongolia, they speak Mongolian.

These may all prove to be exceptionally useful as well, particularly if you’re aiming to be a go-to facilitator on the ground.

Have a great weekend.

Simon Black
Senior Editor, SovereignMan.com

This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

Sovereign Man Notes from the Field Date: April 21, 2011 Reporting From: Asuncion, Paraguay

In Business, Continental Travel, Expatriation, Money and Finances, Opportunity, personal and business, Travel on April 21, 2011 at 1:55 pm

Sovereign Man
Notes from the Field
Date: April 21, 2011
Reporting From: Asuncion, Paraguay

A friend of mine here in Asuncion owns one of the leading investment firms in town. We were having drinks at my hotel the other evening talking about events around the world and thinking about what might happen next.

At one point he told me, “You know, I really feel like the decline of the dollar is going to cause a lot of problems in the world– rising prices, currency imbalances, social unrest… I feel very safe here in Paraguay though because we have everything we need: food, water, and energy.”

He’s right. Paraguay, usually overlooked, really does have just about everything that it needs. There is so much land here available for livestock or crop production, and the country sits atop one of the world’s greatest freshwater aquifers.

Meanwhile, businesses are feverishly growing alternative fuel crops, and Paraguay also boasts the largest hydroelectric facility in the world with an annual capacity of roughly 90 TWh; they use only a tiny fraction and export more than 85% to neighboring Brazil.

Paraguay’s economy has benefitted from rising commodity prices and overall regional growth… and despite the government’s occasional left-leaning saber-rattling on behalf of the rural poor, politicians generally tend to stay out of the way.

Paraguay’s tax burden (as a percentage of GDP) is among the lowest in the world at around 12%, the same as Hong Kong. It’s 28% in the US and averages 35% among OECD members. For this reason, Paraguay is a mini tax haven… but not on anyone’s radar.

Paraguay’s individual income tax (first established in 2010, then temporarily suspended) is only 10%; it affects only the higher income earners, and it only applies to income sourced within Paraguay, not worldwide income.

I’ve read a few blogs that say Paraguay does not have an income tax. This is simply incorrect… one of the many inaccuracies I’ve been seeing lately from new monkey see, monkey do expat sites.

The Internet is both a blessing and a curse… and this is the curse– massive factual inaccuracies. The digital world has created a wiki-reality: if enough people believe it, then it must be true.

Internationalization is a rising trend and a lot of new ‘experts’ are jumping on the bandwagon. Unfortunately, this is leading to a lot of misinformation that gets recycled over and over across the blogosphere like a series of rip-off infomercials.

Here’s the truth– establishing a second residency overseas is a great idea; it ensures that you have a place to go should you ever need to leave your home country, and it can even lead to an eventual second passport. Note: “second residency” doesn’t necessarily mean that you have to spend time there.

Places like Paraguay are ideally suited for a second residency. Why? Because of the country’s political stability, energy and agricultural sustainability, low tax environment, and straightforward immigration procedure.

Make no mistake, though, there is an immigration procedure. Some people seem to think that you just show up, put some money in the bank, and apply for a passport. This is utter nonsense, and I always get a chuckle when I read such advice from people who obviously have little experience in the country.

I wrote about this at length in February’s premium letter and even flew one of my local Paraguay contacts to our recent offshore workshop in Panama. Needless to say, he was a popular guy at the event and has been quite busy in the past few weeks assisting many of our subscribers with their own residency here.

In the interest of accuracy and hopefully stopping the spread of misinformation, I’d like to provide a short summary of Paraguay’s immigration procedure:

1) Obtain necessary documents from your home country, including a clean police report, birth certificate, marriage/divorce certificates as applicable. All need to be certified by the Paraguayan consulate that oversees the document’s issuing jurisdiction.

You’ll also need to provide a bank reference letter, and, depending on your passport (US and Canadian), a tourist visa to Paraguay.

2) Travel to Asuncion and submit your application in person. Among other things, this requires establishing a local bank account with at least $5,500. Local bank rates are currently around 4% in USD, up to 12% in local currency. You’ll also need a medical screening and various other requirements on the ground.

3) The permanent residency application takes up to 4-months to be approved, though it can be much less if you use a well-connected facilitator.

4) After three years as a permanent resident, you are entitled to apply for naturalization.

Clearly there are a lot more details and many situations that must be reviewed on a case-by-case basis. For example, do you hold a different citizenship as your country of birth? Do you require proof of funds? These may impact the situation.

As with most things, immigration procedure in Paraguay is all about who you know. The right contacts in Paraguay really streamline (NOT circumvent) the process.

Naturally, everyone pretends to be well connected. I can’t tell you how many places I’ve been where people claim to have an ‘in’ with the President.

Just like relying on misinformation, working with the wrong people is a surefire way to lose money… or worse… get caught up in some illicit forgery or bribery scandal. It’s simply not worth it.

Trusted contacts are worth their weight in silver.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

Sovereign Man Notes from the Field Date: April 20, 2011 Reporting From: Asuncion, Paraguay

In Business, Expatriation, Money and Finances, Offshore accounts, Opportunity, Travel on April 20, 2011 at 2:58 pm

Sovereign Man
Notes from the Field
Date: April 20, 2011
Reporting From: Asuncion, Paraguay

My friend Arthur Tyde in the Philippines once quipped over dinner, “Manila is what Hong Kong would look like if it were turned over to the Mexicans…” I’ve always chuckle when I think about that.

If I may impose on the analogy, I would describe Paraguay as what Arkansas would look like if it were turned over to the Philippines: part tax haven, part agricultural powerhouse, in a better fiscal position than its peers, slightly underdeveloped, cheap, and lots of potential.

Nobody really knows anything about Paraguay. Ask your neighbors, they’ll probably think it’s in Africa.

The first thing you should know about Paraguay is that the country is the size of California. It looks tiny on a map– probably because it’s surrounded by Bolivia (the size of Alaska), Argentina (the size of Mexico and Central America), and Brazil (the size of the United States)– but there is a LOT of land here.

That is exactly what’s attracting companies like Monsanto, Philip Morris, Cargill, etc… cheap farmland. Staple exports from Paraguay include cotton, soy, tobacco, coffee, sugarcane, corn, beans, peanuts… you name it.

In northwestern Paraguay is the ‘Chaco’ region. It’s no man’s land. You might get water, you might not. You might get roads, you might not. You might get title, you might not. But boy is it cheap… You can pick up hundreds of acres for just a few thousand dollars, and they’re happy to take US dollars.

(as an aside, I find this incredible because Paraguay’s currency, the guarani, has appreciated 25% against the dollar over the course of the year… and it’s data points like this that make me believe that the financial system as we know it absolutely has to reset…)

Chaco property is typically used for cattle operations, though there are now several fuel crop candidates like Jatropha (used in producing biodiesel) that are showing tremendous resilience.

The other interesting thing about the Chaco is that Paraguay actually fought a war with Bolivia over the region. Early in the 20th century, locals were convinced that there was oil underneath the brush land. There wasn’t. 100,000 people died fighting for grazing land.

The valuable agricultural land in Paraguay is in the east of the country. Why? Because that’s where the water is.

The Guarani Aquifer is among the largest underground water resources in the world with roughly 10 QUADRILLION gallons (10 million billion) under the earth. The aquifer supplies Paraguay, Brazil, Argentina, and Uruguay with the most vital of all natural resources.

By comparison, however, land in Eastern Paraguay is much cheaper than its regional neighbors. It’s expensive by local standards, but I have yet to see anything for more than $1 per square meter (roughly $4,000 per acre), and most of what I’ve looked at is in the neighborhood of $0.15 to $.40 per square meter ($600 to $1600 per acre).

This is an opportunity. Farmland is an inflation hedge that is often described as ‘gold (or silver) with yield’; its prices tend to mirror agricultural commodities, and it generates income from the crops that it produces.

Relative to its peers, though, Paraguayan farmland is substantially cheaper. In one extreme example, a piece of land in Brazil right on the border with Paraguay was selling for roughly $2.50 per square meter. Just over the Parana River in Paraguay, the same type of land was selling for just $0.80 per square meter.

Those unfamiliar with the region may cite political differences, currency fluctuations, or cultural norms. They might even start quoting efficient market hypothesis, claiming that something must surely be wrong with the Paraguayan property.

Tell that to the Brazilians and Argentines who are buying property in Paraguay. Or to the multinationals.

Paraguay is where the value is. As an inflation hedge, this is like buying silver for $15 instead of $45.

Sure, Paraguayan farmland might be more like the lesser-known 3-ruble Saint George the Victorious silver coin from Russia, instead of the more famous American $1 Silver Eagle, but the bullion value is just the same.

I’ll have a lot more information
in an upcoming Sovereign Man: Confidential about how to make lucrative agriculture investments in Paraguay– effectively, how you can buy silver for $15/ounce.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

This article appears courtesy of SovereignMan.com: Notes From The
Field
, a free newsletter dedicated to individual freedom,
internationalization, asset protection and global finance. For a
complimentary subscription, visit http://www.SovereignMan.com

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