Your Precious Metals Could Be Confiscated by the Government

This is very troubling to me. It makes me want to move out of Georgia.

From Mark Nestmann, who is an expert on wealth preservation and international tax planning solutions. He is the author of many books and reports dealing with these subjects.

Link: Keeping Precious Metals Offshore.

An increasing number of Americans are concerned enough about the threat of precious metals confiscation to want to store gold or silver overseas. But laws in effect in 21 states may stand in their way.

I learned about these laws last year when one of my subscribers in Arizona called.

He wanted to buy gold from a foreign dealer for storage offshore, but the dealer refused to sell to him. The reason: the Arizona Model Commodities Act. After some research, I learned that 21 states have enacted the MCA or some variation of it: Arizona, California, Colorado, Georgia, Idaho, Indiana, Iowa, Maine, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oregon, Utah, and Washington.

What if you arrange for a company to purchase gold or other metals on your behalf and that company stores those metals on your behalf in a foreign bank’s vault? While nothing is certain in life (other than death and taxes) a strong case can be made that this is not a “foreign financial account” if the following conditions apply:

  • The company does not itself sell the metals but only brokers purchases and sales
  • The metals are held together in a designated area of the foreign bank’s vault
  • Each bar or coin is identified by a unique, certified number.
  • The bars or coins in the vault are individually packaged and labeled so that it they are readily identifiable as your property.
  • You can take physical possession of the metals at any time.

Naturally, the IRS might disagree with this analysis. And if you enter into such an arrangement, I highly recommend confirming my interpretation with your own tax advisor.

Why Is Goldman Sachs So Profitable?

Matt Taibbi at Rolling Stone magazine tells us why Goldman Sachs is so profitable – with great research and colorful commentary. Journalism is not dead.

After reading the article, I see a superior predator (Goldman Sachs) feeding on naive prey (investors, consumers, banks, regulators, the Federal Reserve) assisted by Goldman Sachs alumni in high positions in government and industry (like Henry Paulson, former Treasury secretary). Goldman Sachs' motto is long-term greed.

If you find the title intriguing – The Great American Bubble Machine: From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression – and they're about to do it again – I recommend that you read the whole article (link below). The next bubble is Cap and Trade.

Thanks to Bill Voegeli for recommending this eye-opening analysis.

Link: The Great American Bubble Machine : Rolling Stone.

What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

The bank's unprecedented reach and power have enabled it to turn all of America into a giant pumpanddump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere — high gas prices, rising consumercredit rates, halfeaten pension funds, mass layoffs, future taxes to pay off bailouts. All that money that you're losing, it's going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where it's going: The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth — pure profit for rich individuals.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.

Cap and Trade…

The new carbon credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.

Here's how it works: If the bill passes, there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy "allocations" or credits from other companies that have managed to produce fewer emissions. President Obama conservatively estimates that about $646 billion worth of carbon credits will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount.

The feature of this plan that has special appeal to speculators is that the "cap" on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison's sake, the annual combined revenues of all electricity suppliers in the U.S. total $320 billion.

Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigmshifting legislation, (2) make sure that they're the profitmaking slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for cap and trade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues.

Emotional Decision Hinder Investing, Research Shows

Source: Today in Investor’s Business Daily stock analysis and business news

Emotion can be your biggest enemy when it comes to investing. In fact, people physically incapable of feeling emotion may have a big edge on other investors, say some scientists.

A study published in June in the journal Psychological Science found that emotionally impaired people are more willing to pursue aggressive growth investing strategies. Researchers asked 41 people with normal IQs to play a simple investment game. Fifteen of the group had suffered lesions on the areas of the brain that affect emotions.

The result? Those with brain damage outperformed those without. The scientists found that emotions led some subjects to avoid risks, even when the potential benefits far outweighed the losses. Antione Bechara, an associate professor of neurology at the University of Iowa, says the best investors are those able to feel no emotions while trading. He called such investors "functional psychopaths." The study’s co-author, Baba Shiv of the Stanford Graduate School of Business, says many CEOs and top lawyers may also share the same ability to suppress emotion in making key decisions.

Antione Bechara, an associate professor of neurology at the University of Iowa, says the best investors are those able to feel no emotions while trading. He called such investors "functional psychopaths."

The study’s co-author, Baba Shiv of the Stanford Graduate School of Business, says many CEOs and top lawyers may also share the same ability to suppress emotion in making key decisions.

"Emotions serve an adaptive role in speeding up the decision-making process," said Shiv. "However, there are circumstances in which a naturally occurring emotional response must be inhibited, so that a deliberate and potentially wiser decision can be made."

Mark Cuban on Digital Copyright

In the MGM vs Grokster case, the fewer than 50 companies who control less than 1 pct of all digital information are trying to take control of innovation in the technology industry and pry it away from the rest of us.

Everything our imagination creates and touches that can be made digital is at risk if Grokster loses.

What innovations will be condemned by law before they have a chance to come to market because they could have an impact on Hollywood and the music industry ? We have no idea and that is a very scary prospect.

Which brings me back to 1980.

The last 25 years have seen unimaginable increases in productivity, creativity, economic development and American pride because amazing people have been able to take amazing ideas and develop them without fear. That fearlessness ends if Grokster loses and the content industry is able is to take on the role of technology gatekeeper.

via Grokster and the financial future of America – Blog Maverick –

The coming global water shortage

Aquifers in India are being sucked dry Several decades ago, farmers in the Indian state of Gujarat used oxen to haul water in buckets from a few feet below the surface. Now they pump it from 1,000 feet below the surface. That may sound good, but they have been drawing water from the earth to feed a mushrooming population at such a terrific rate that ancient aquifers have been sucked dry — turning once-fertile fields slowly into sand.

According to New Scientist magazine, farmers using crude oilfield technology in India have drilled 21 million "tube wells" into the strata beneath the fields, and every year millions more wells throughout the region — all the way to Vietnam — are being dug to service water-needy crops like rice and sugar cane. The magazine quoted research from the annual Stockholm Water Symposium that the pumps that transformed Indian farming are drawing 200 cubic kilometers of water to the surface each year, while only a fraction is replaced by monsoon rains. At this rate, the research suggested, groundwater supplies in some areas will be exhausted in five to 10 years, and millions of Indians will see their farmland turned to desert.

via Link: MSN Money – Invest in the coming global water shortage

In China, the magazine reported, 30 cubic kilometers more water is being pumped to the surface each year than is replaced by rain — one of the reasons that the country has become dependent on grain imports from the West. This is not just an issue for agriculture. Earlier this year, the Indian state of Kerala ordered the PepsiCo (PEP, news, msgs) and Coca-Cola (KO, news, msgs) bottling plants closed due to water shortages, costing the companies millions of dollars.

In this country, shareholder activists already are lobbying companies to share water-dependency concerns worldwide with their stakeholders in their financial statements.

Water, water everywhere, but . . .
The central problem is that less than 2% of the world’s ample store of water is fresh. And that amount is bombarded by industrial pollution, disease and cyclical shifts in rain patterns. Its increasing scarcity has impelled private companies and countries to attempt to lock up rights to key sources. In an article last month, the Christian Science Monitor suggested that the next decade may see a cartel of water-exporting countries rivaling the Organization of Petroleum Exporting Countries for dominance in the world economy.

"Water is blue gold; it’s terribly precious," Maude Barlow, chair of the Council of Canadians, told the Monitor. “Not too far in the future, we’re going to see a move to surround and commodify the world’s fresh water. Just as they’ve divvied up the world’s oil, in the coming century, there’s going to be a grab."

Chrysler and GM Are Living in the Past

Business Week magazine says Ford is the only American auto manufacturer that is facing the reality of higher gas prices. Toyota and Honda are leading the move to fuel-efficient cars, as usual.

The Stalling Of Motor City

Where is Detroit? The last time energy prices shot up unexpectedly, in the 1970s, it was Japan that led the way with profitable, fuel-efficient small cars. Detroit never did figure out how to make them and chose, instead, to make big profits off low-mileage, gas-guzzling SUVs. Now, oil futures are predicting high-priced gas for years to come, and Japan is again out front with innovative vehicles — fuel-efficient, electric-gas hybrids. Advertisement

When will Detroit learn? Certainly Ford gets it. It has a hybrid on sale right now, the crossover Escape SUV (based partly on Toyota Motor Corp.’s (TM ) hybrid engine technology), and plans to sell about 45,000 over this year. But neither General Motors Corp. (GM ) nor DaimlerChrysler Corp. (DCX ) will introduce a single hybrid any time soon and their offerings will be slim for years to come. In the meantime, Toyota and Honda Motor Co. (HMC ) are starting to flood the zone with tens of thousands of different hybrids. The Prius is hot, and Toyota will soon bring out a hybrid version of its Lexus RX and Highlander SUVs. Honda will launch a hybrid version of its popular Accord in December. Booz Allen Hamilton Inc. estimates that hybrids could make up 20% of the entire U.S. market by 2010. Detroit argues that you can’t have mileage efficiency without giving up performance and luxury. Japan is proving just the opposite. Toyota’s Lexus RX will have 270-plus horsepower and better than 27.6 mpg — the current average of a compact sedan.

Detroit is way behind because it hasn’t invested. True, it has enormous legacy costs from retired workers and huge benefit costs from current employees. But managerial shortsightedness is what’s hurting the industry most. The Japanese are on their third generation of hybrid-powered cars. Detroit is barely on its first. As production is ramped up, costs will fall and profits will rise. Hybrids are a technological breakthrough for the Japanese. Unless Detroit invests in innovation, it risks falling behind once again. How sad.

Link The Stalling Of Motor City

The Path to Oil Independence

“With the price of oil above $50 a barrel, with political instability in the Middle East on the rise, and with little slack in the world oil economy, we need a new energy strategy,” says Lester R. Brown, president of the Earth Policy Institute, a Washington, DC-based research institute. “Fortunately, the outline of a new strategy is emerging with two new technologies.

These technologies–gas-electric hybrid engines and advanced-design wind turbines–offer a way to wean ourselves from imported oil, says Brown. If over the next decade we convert the U.S. automobile fleet to gas-electric hybrids having the efficiency of today’s Toyota Prius (55 miles per gallon combined city/highway driving) we could cut our gasoline use in half. No change in the number of vehicles, no change in miles driven–just doing it more efficiently.

With gas-electric hybrid cars now on the market, the stage is set for the second step to reduce oil dependence–the use of wind-generated electricity to power automobiles. If we add to the gas-electric hybrid a plug-in capacity and a second battery to increase its electricity storage, says Brown, motorists could then do their commuting, shopping and other short-distance travel largely with electricity, saving gasoline for the occasional long trip.

This could lop another 20 percent off gasoline use in addition to the initial 50 percent cut from shifting to gas-electric hybrids, for a total reduction in gasoline use of 70 percent.

Moving to the highly efficient gas-electric hybrids with a plug-in capacity, combined with the construction of thousands of wind farms across the country feeding electricity into a national grid, will provide the energy security that has eluded us for three decades, says Brown.

Brown points out that some 40 million consumers in Europe now fill their residential electricity needs via wind energy, with 195 million (half the population of Western Europe) projected to do so by 2020.

In the U.S., a 1991 Department of Energy study reported that three states–Kansas, North Dakota and Texas–have enough harnessable energy to meet all national electricity needs. Wind turbine design has improved enormously since then, with generating costs dropping from 38 cents per kilowatt-hour in the 1980s to 3 or 4 cents today.

This will also rejuvenate farm and ranch communities and shrink the U.S. balance-of-trade deficit. Even more importantly, it will dramatically cut carbon emissions, making the U.S. a model in the climate-stabilization effort that other countries can emulate.

Link THE SHORT PATH TO OIL INDEPENDENCE: Gas-Electric Hybrids and Wind Power Offer Winning Combination

GE Invests in Renewable Power and Efficiency

General Electric appears to be on a power trip of late. First, there’s its emerging leadership in renewables. Over the past two years, it has purchased the skeletal remains of a bankrupt wind company (Enron Wind) and a bankrupt solar company (Astropower). Both acquisitions are now part of the company’s $18 billion GE Energy unit. The wind business unit has become one of the world’s largest producers of turbines, while the solar operation is poised to be a leading player in that fast-growing market.

But renewables, as everyone knows, aren’t enough. As several pundits have put it, there’s the equivalent of several Saudi Arabias worth of oil to be found in energy efficiency — of vehicles, buildings, and industrial processes.

Toward that end, GE has announced a three-year partnership aimed at dramatically increasing the efficiency of American industry by developing wireless sensor networks and systems to improve the efficiency of electric motors, which account for nearly two-thirds of total U.S. industrial energy consumption.

Link Joel Makower: Two Steps Forward: What Goes Around

Investing: Pay Attention to China’s Strategy

Gary Tanashian at the But It Is What It Is website says “Now I get it!”

As long as the US Dollar remains functional as a medium of exchange, China’s hundreds of billions will obviously come in handy as it seeks to secure the natural resources it needs to continue to phase two of it’s rise to industrial powerhouse. Phase one of course being its deft use of a hubris-blinded, superpower trading partner willing to go as deep into debt as necessary to keep up the consumption habits it has come to think of as divine right.

In phase one, … China more and more controls the means of production, and the US controls the means of production of a different kind; that of the world’s reserve currency. In essence the game goes like this: “You keep making cheap stuff (wink wink) and we’ll keep printing this paper (wink wink) and pay you huge amounts of it. Sure, there will be ‘economic girlie men’ out there saying this can’t be done, but LOOK at us, we’re DOING it!”. I don’t doubt there are legions of people taking the attitude of “if it ain’t broke, don’t fix it”, but that’s just the point, it is broke. The fallout is just not obvious to all yet.

But something tells me a strong hint of what’s to come was just flashed for all to see with the above acquisition announcements. China’s planners are not so dumb after all. They’ll use an advantageous labor arbitrage and currency peg to gain global industrial production market share, ship en mass to the largest consumer engine in the world, receive payment in the heretofore most trusted world currency, and for the master stroke, turn around and recycle those dollars into the very commodities, goods and resources that will be necessary for their continued growth and climb to world power.

That’s great for China. They are a patient, industrious and intelligent people. Those descriptors and more used to apply to the US. But with outsourced industries, limited attention spans, and plenty of credit (debt), the US has lost its edge. If you take a deep breath, do the math, and really look at this honestly, you will see the United States, proud former industrial power, is poised to take a big hit when the time is right, when China decides it has offloaded enough paper for the resources it needs. We will have nothing to fall back on but all those dollars sloshing around the global system, and all the debt that every dollar denominates.

It would be wise for individuals to think about making like the Chinese and converting some of those dollars into hard assets, including the ancient currency, gold. Unfortunately, most people will first think of housing and the stock market as a dollar hedge, as each has gone up in value (vs. the dollar) without fail since the Federal Reserve system was established. But this is a new America (and a new paradigm), the one that (wink wink) seemingly doesn’t need to hold itself to the traditional laws of economics. Paper assets such as stocks are denominated in dollar debt. Housing is subject to the bond market’s ability to carry on appearances.

As the inflation/deflation debate rages, in my opinion, only the timing of the dollar’s ultimate demise is in question. Of course, the unimaginable might happen and we might start taking the bitter medicine immediately upon the election or re-election of the next US President, show good faith deficit reduction initiatives in cutting wild cat money creation and spending, collectively wake up to new (or old) ideals and values, and go about fixing our country. In my opinion, what ails us is a simply massive credit and debt binge, and the sloth that such easy access to anything we desired has wrought. If we were to somehow break this cycle, the global economic powers that be might even cut us a break as we pick ourselves up by the bootstraps, as America has always done before.

But how can this happen, when ninety percent of Americans would probably say “What are you talking about you economic girlie man? We got it good!”?

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