Offshore Havens
This is a usual Friday, and all markets went sideways before the weekend.
In the news today…..
10.2% – that is the new unemployment rate. Okay, I admit it. I was wrong (well not yet wrong) because I predicted the unemployment would be 10% by the end of the year, and it went over 10% In October. My only out is that it may come back down by the end of December – but I’m not holding my breath. I admit that I was wrong. And, I am sorry for all those people who have lost their jobs in the US. This is really tragic. The unemployment number, while being a phony number as the true percentage of people who really want to find a job is 17.6% – and the government doesn’t like talking about this bigger number – is worse than I predicted, and this is a true measure of how bad the US economy really is now. The number will only go up through the end of the year and into the beginning of 2010.
Fannie Mae – wants another $15B, making the amount of taxpayer money become $60B. It looks like they will be tapping all of their approved $200B line of credit by the time this housing mess is over, and they will probably come back to the Treasury for MORE. Hope you love paying for all the bad mortgages that were lent out during the housing boom. You can thank your government for this mess. My motto is “Throw the bums out!”
Tonight’s Dinner Conversation…..
Offshore Havens. When you think about this, do you think about the Cayman Islands or Switzerland? It’s where people have been putting their money for a long time and for some really good reasons.
Why would you consider putting some of your money outside of the US as you can invest in overseas investments while inside the US. Here are some ideas:
- Get out of the US Dollar (falling) and into another currency (rising).
- Get a better rate of return on your investment.
- Get your assets out of the clutches of the US Government – they’ve been known to confiscate things in the past, like Gold. (PS – What would you do if the US Congress passed a law that REQUIRED you to invest all your 401K and IRAs in US Treasuries ONLY?)
The US Government is cracking down on these investments because some Americans have broken the law by not reporting they own these investments, and secondly, they haven’t reported the income on their taxes from these investments. That’s tax fraud (not recommended.) The IRS caught UBS doing this red handed for some of their customers and has negotiated a deal with them to stop doing it. The UBS solution? Kick out all Americans from overseas accounts, and don’t open up any new accounts with Americans. They do allow you to invest with them, but only with entities that report your trades to the IRS. There goes the privacy protection. (PS – don’t put your money with UBS).
The IRS just increased the pressure on Offshore investments in IRA accounts. It has declared all offshore investments to be “high risk.” Naturally, this is ridiculous – or maybe all US investments are high risk too. This allows the FDIC and Treasury to put pressure on Trusts that hold American’s assets to NOT invest outside the US.
Here is tonight’s question for you. “Why would you ever consider moving some of your investment assets outside of the US?” For some of you, the answer is “I never would.” But, for others, the answer is a positive one. Why for you?
Here are the last numbers for today:
Dow Jones 30 Industrial – 10,023 (up 17 points)
10 Year Treasury Bond – 3.50% (down 0.03%)
Euro – $1.4848
Gold – $1095 (up $6)
Oil – $77.65 (down $1.97)
Gasoline – $1.92 (down $0.06)