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Welcome to the November 2011
Premium Edition of The Dollar Vigilante
Volume II, Issue 5 / November 2011
Dear fellow vigilante,
Just when it seemed world events couldn't possibly evolve at a faster rate, it does. In the last month, since the last full
TDV letter, Moammar Ghadaffi has been brutally murdered (to much laughter from Hillary Clinton), Barack Obama has
announced a withdrawal out of Iraq, Greece has partially defaulted and been bailed out by the Eurozone and the
Occupy Wall Street movement has gone global.
That, and much more. Let's not waste any time. The following are just some of the topics we cover this month:
Occupy Wall Street grows from nothing to a worldwide movement in a matter of weeks
Will the US devolve into Army versus Police?
There is no Euro crisis. How can you have a crisis when it is already dead?
The Downgrade Wars continue, now moving on to Italy and Spain after Greece
Are we on the verge of peace and prosperity as the US Govt is too indebted to continue its wars?
We show how the US "Super Committee" cuts are still just a drop in the bucket
Guess which metropolitan center in the US is now the wealthiest in the US? Hint: It isn't Wall Street
We analyze US activities in the middle east and north Africa and the new wars in Somalia and Uganda
Don't cry for Argentina. Really, don't. Any country this economically stupid deserves what it gets
Ed Bugos shows how Ludwig von Mises predicted the Occupy Wall Street movement nearly a century ago
Ed Bugos also features his latest junior gold mining stock pick for the TDV Portfolio
We interview Mark Nestmann about how to sever your ties completely with your country of birth and become free in
more ways than one
Private Parts shows how the "War on Drugs" is failing in Afghanistan
In health, you won't believe what they put in your breakfast cereal
And, much more!
If you don't have time to read it right now you can get a high level overview from Wordle:
Regards,
Jeff Berwick
Chief Editor
The Big Picture
by Jeff Berwick
OCCUPY WALL STREET... OR SOMETHING
In June of this year, in an article entitled, "Riots & Mobs Coming to a Town Near You", we made the case that riots and
protests that had been fomenting around the world would soon be coming to the US. In response, we received many
emails from people accusing us of being alarmists.
How quickly the world can change in the internet era. As early as a month ago we made no mention of Occupy Wall
Street because at that point it was only a few hundred people in New York City - with the very first protest being held on
September 17th and only an estimated 100-200 camping out overnight.
The first larger scale event occurred when a march on the Brooklyn Bridge resulted in over 700 arrests on October 1st.
Two weeks later and tens of thousands of demonstrators in 900 cities worldwide had joined in the protests including
cities like Auckland, Hong Kong, Tokyo, São Paulo, Paris, Madrid and Berlin as well as dozens of US cities including
Chicago, Phoenix, Oakland and Minneapolis.
And, as we write, OWS looks like it may be on the verge of a major escalation.
MILITARY VERSUS POLICE?
In many "third world countries" the corruption of government is regularly on display. Often, different factions of the
government actually war amongs themselves for control. In Mexico, as example, the local city police usually fight
amongst the state police and the federal police (federalis). The police, in Mexico, like most places, are very corrupt
and the people, stupidly, in response, ask for the government to protect them from these government agencies. The
military is usually sent in to "clean up" the police forces. But, in truth, they are all corrupt and and they generally just
struggle for power amongst themselves.
We are beginning to see hints of this happening in the US. In the last few weeks there have been a number of high
profile military versus police exchanges (see 1 Marine versus 30 police officers).
Then, in Oakland, during an Occupy Wall Street event, 24-year-old Iraqi war
veteran Scott Olsen was critically injured by police causing an outcry by the
military community. Whether this will be an event that sets off larger scale
riots is yet to be seen but it very well could be a death during an OWS
demonstration that does it.
Keep an eye out for more anger from the large amount of current and former
military, many of whom who have been left in dire financial straights after
years of deployment and returning to a country in the midst of an ongoing
depression with over 20% unemployment.
For a moment, we thought this eventuality had already occurred when we saw
the headline, "Marines Storm Reddit After Occupy Oakland Shooting of Scott Olsen". Until we realized Reddit wasn't a
place, it is a website.
THERE IS NO EURO CRISIS
In 1955, with a European union plan in the works for the first time, Russell Bretherton, an English Civil Servant was
dispatched to Brussels to inform European ministers what Britain thought of plans for an ambitious new European
treaty. He advised them, “Gentlemen, you’re trying to negotiate something you will never be able to negotiate. If
negotiated, it will not be ratified. And if ratified, it will not work”
Bretherton could probably not have imagined how powerful the elite bankers would become in the subsequent
decades. It was negotiated. It was ratified. But, he was correct on the last one. It will not work.
In 2011, this is not a supposition, it is a fact. That is why the press admonishments of a "Euro crisis" are silly. It would
be like a doctor stating that a man, already dead for weeks, is having a health crisis. Of course, he is not. He's dead.
The problem, plainly put, is that no debt-based fiat currency system in a democratic environment can work for long.
The only way it can hobble from crisis to crisis, instead of rapidly collapsing, is if the nation who issues the currency
continues to print more currency to fool the market into thinking that, for a period of time, everything is just fine.
Bretherton was right and continues to be right. It will not work.
All that you really need to know about the "agreement" reached on October 27th is that not much of the real problem
was dealt with. The real problem is the unsustainable amount of debt that Greece and most of the eurozone countries
owe. All that was decided, for certain, on October 27th was that private holders of Greek debt will take a 50% haircut.
However, because the largest owners of Greek debt are the European Central Bank (ECB) and other public entities,
the total amount of Greek debt that will be reneged upon is approximately 20%.
All the rest of the items in the deal were maybes and future plans to possibly do something down the road. They intend
to increase the European Financial Stability Fund (EFSF) from its current $220 billion to $1 trillion. And they are giving
the banks until 2012 to raise additional capital (most likely from the EFSF and ECB) to fill the holes left in their balance
sheets by the Greek bond writedown. Both of these will involve money printing.
In other words, the fundamental problem of too much debt was not dealt with and the problem will be papered over with
money printing. We wonder just how many times this needs to be done before the deflationists give up. Even the
European politicians, the ones most sensitive to inflation and hyperinflation issues due to their recent histories with
hyperinflation, continue to favor inflation over a system collapsing debt default.
George Soros is now on record as stating that this debt deal will collapse within 1-90 days. Sounds about right.
DOWNGRADE WARS
Both before and after the Greece debt-cut arrangement, the wolves began closing in on some of the other bankrupt
Euro nations... nations that are much, much bigger than tiny Greece.
Fitch Sliced Spain and Italy's Credit Rating, cutting Italy's rating to A+ from AA- and lowered Spain to AA- from AA+.
Moodys gave a massive triple downgrade to Italian Govt debt, from Aa2 to A2, and lowered the outlook to negative.
We continue to call for a fracturing of the eurozone, literally at any moment... or a complete collapse of the euro.
Rumors have it that Germany is already making plans to revert back to the Mark. Holding euros in a European bank
account continues to be sheer insanity.
FREEDOM AND PEACE NOT BY CHOICE BUT BY DEFAULT
For the first time since the late 1970s the US Government is showing signs of buckling to its massive amount of debt
and deficits. Private Parts commented in his October 22nd commentary, that of the Big Three (social security,
medicare/medicaid and defense), he believes that defense will be cut first as the US budget deficit reaches its limits.
Some, albeit small, retracement of the US military seems to be in progress offering hope for freedom and peace in the
future as the US military is retraced. Although, many of the troops scheduled to leave Iraq will mostly be redeployed
elsewhere in the Gulf.
Many cities and states, including Chicago, are also considering halting the prosecution or illegality of marijuana due to
budget constraints. And Congress is even considering allowing foreigners to attain visas when they purchase high
priced homes much as other countries do to attract capital.
So, we are witnessing a potential drawdown of military, legalization of marijuana and an opening of the borders. Not
because that is the right thing to do. Only because it has to.
In this sense, a collapse of the US Government could be a harbinger of peace and prosperity for much of the world.
That is, if the US can survive millions of unemployed government worker riots and countless others who relied on the
government for survival causing massive unrest.
US BUDGET CUTS ARE STILL NEXT-TO-NOTHING
In the la-la land of congress, however, they are mostly still living in a dream world of endless deficits and debt. As of
the end of October, the Treasury’s debt “subject to limit” had reached $US 14.897057 trillion. In the less than three
months since the "debt ceiling crisis" was resolved, more than two-thirds or $US 603 billion of the US government’s $US
900 billion in Treasury debt limit increases had been used up. During this time, the “Super Congress” committee is
mandated to release their recommendations by November 23.
The committee is tasked with coming up with a plan to cut $US 1.25 - 1.50 TRILLION off US deficits over the next
ten years. To show how ludicrously small the cuts are, those cuts are over ten years, the US Treasury debt has risen
by almost half of that amount in less than three months alone.
US DEBT EXCEEDS GDP PER CAPITA FOR FIRST TIME SINCE AT LEAST 1980
U.S. government debt per capita is expected to exceed the nation's per-capita gross domestic product this year, for the
first time since at least 1980, according to the Internaional Monetary Fund. "It's a milestone in an unsustainable trend,"
said Robert Bixby, executive director of the Concord Coalition.
Add that chart to our pile of "unsustainable" charts.
Is it any wonder that in six consecutive weeks, from the beginning of September to mid-October, foreigners sold $74
billion in treasuries, according to Zero Hedge, or more government bonds in a sequential period of time than ever
before.
FOLLOW THE MONEY
Like a dying star, collapsing in upon itself and engulfing everything around it, the end of the American empire is
beginning to draw in all of the fiat currency and wealth from the rest of the economy to its center, Washington, District of
Criminals.
According to the latest Census figures released in October, Washington, D.C. is now the wealthiest metropolitan area in
the United States outpacing places that actually create things, like Silicon Valley. And even outpacing the financial
centers around New York.
It's products? Pork barrel spending. Rent seeking. Political bribes (donations). And more hot air than would blow up a
thousand Hindenbergs.
Occupy Wall Street protesters would do well to go to Washington, D.C., to find the true source of most of their
problems.
AMERICA IN THE MIDDLE EAST
Don't let the US withdrawal from Iraq lead you to believe that the US will withdraw from the middle east and north Africa.
In the same week in which the withdrawal was announced, Obama already invaded another country, Uganda. And, as
mentioned above, he has already began to place the displaced Iraqi troops throughout the middle east. The fact is
that he would never have done it if it weren't for the Iraqi Government stating that on January 1, 2012 they will begin to
treat the American forces under their legal system. In other words, every single American troop would have been
arrested for, or being a party to, kidnapping, assault, murder and theft.
One of the most important videos released in the last decade is this interview with Wesley Clark, which we brought to
your attention in the June issue of TDV. In this interview, Wesley Clark states that only 9 days after 9/11 - before they
even had announced who they believed was behind the attacks - the plans were already in place to attack, in order,
Iraq, Syria, Lebanon, Libya, Somalia, Sudan and finish off with Iran.
Iraq is complete. Syria is currently undergoing a revolution. Lebanon was attacked by the US proxy state (or is it the
other way around), Israel, in 2006. The US is currently undertaking drone attacks into Somalia according to the New
York Times and the US Military has confirmed that it has undertaken a "secret, new war in Somalia". In the same report
it states that the entire region has become "drone alley" and will likely soon affect Sudan.
What must Iran be thinking?
According to the New York Times (October 11, 2011) – Washington accused Iranian Al-Quds for hatching a plot, to
assassinate Saudi ambassador in the US – and to bomb Israeli embassy in Washington DC and both Saudi and Israeli
embassies in Argentina. To carry out this new 9/11, allegedly, Iran did not hire the usual western pasty, the non-existent
Al-Qaeda, but a US-Iranian used-car salesman and Mexican drug cartel.
This plot was so obviously false that it was laughed at from almost every semi-independent news outlet. It was not
accepted as true by anyone and disappeared from the news the next day.
They are going to have to try harder to make up a reason to attack Iran. And, they probably will.
Hopefully this does not come in the form of a dirty bomb in an American city... something that is almost to be perfectly
expected at this point.
MOAMMAR GADAFFI MURDERED
In the meantime, Mexican billionaire and TDV friend and subscriber, Hugo Salinas Price, stated that "the real reason he
(Gadaffi) was ousted was that he was planning an all-African currency for conducting trade. The same thing happened
to him that happened to Saddam because the US doesn’t want any solid competing currency out there vs the dollar.
You know Gaddafi was talking about a gold dinar."
How is it that anyone who opposes central banking, the Federal Reserve or the US dollar standard (Abraham Lincoln,
JFK, Hussein, Gaddafi) are so quickly taken out. Yet, evil monsters such as Dick Cheney can go through five heart
attacks and he is still wheeled around Washington in his black cape?
SAUDI ARABIA THE LYNCHPIN IN THE MIDDLE EAST
While most eyes are on Iran as being the powderkeg in the middle east, Saudi Arabia, which is a US installed regime, is
in a high state of volatility.
Much of the middle east around this US Government installed regime is in a state of revolution, leading the Saudi
Government to try to bribe the Saudi people with such things as allowing women the right to vote.
But, when bribes don't work, governments resort to guns. Saudi police opened fire against anti-regime demonstrations
in eastern Saudi Arabia in October. Clashes broke out in Qatif and Awamiyah in the Eastern Province after government
police opened fire to disperse hundreds of protesters chanting slogans against Riyadh policies.
These, more than any of the other major developments in the region, are developments that should be watched
carefully from a geopolitical viewpoint. A fall of the Saudi regime would leave the status quo of the last seventy years,
since World War II, in tatters.
DON'T CRY FOR ARGENTINA
Really, don’t cry for this country. Any country this stupid deserves
whatever it gets.
After managing to keep its currency, the “peso moneda nacional”,
backed by gold and silver, from 1881 to 1969, a period when the term
“rich is an Argentine” was a popular phrase, for nearly 100 years,
Argentina went off an official gold standard in 1929. The peso
moneda nacional finally collapsed in 1969 leading to the “peso ley” –
meaning the legal peso - in 1970 at a ratio of 100 pesos ley to 1 moneda nacional. Sure, every country can go
through fiat currency baby steps, you might think.
Argentina then hyperinflated the peso ley to death so that, by 1983, it was exchangeable at 10,000 pesos ley to 1 new
“peso argentine”. Two hyperinflations inside of 15 years? Now we are starting to witness a propensity towards self
destruction, which is the dictionary definition for the word “stupid”.
But, then, in 1992, to hyperinflate the peso argentine, less than ten years later, to the point where the “peso
convertible” replaced the “peso ley” at a ratio of 10,000 pesos convertible to 1 peso ley can only be indicative of a
national brain damage devoid of any and all cure.
And so, by 2011, with the current form of the Argentine peso entering yet again into a state of hyperinflation, with
inflation rates near 40% - although any economist who states this being fined or jailed – and re-electing the socialist,
backward government in charge in October, there can be nothing more to be said for this country. The peso will cease
to exist at some point in the coming months and the Argentine people will have no one to blame but themselves, yet
again.
And now, in recent weeks, with the Argentine government announcing that all mining and oil company profits from the
country will have to be repatriated to Argentina into the peso shows that the company is headed for the currency
controls of yet another faltering currency.
Does this mean that Argentina is a bad place to live for the next few years? We don’t think so. Along with the
propensity to hyperinflation in this country comes another national feature: the ability to survive hyperinflation. When
the current version of the peso collapses your average Argentine will shrug his shoulders and say, “otra vez”? Again?
Would we be the owner of Argentine pesos in an Argentine bank account? Of course not. Would we invest in the
country? Ed Bugos has made a point of not recommending any Argentine gold mining companies for this very reason.
Would we build a house in a quiet, northern Argentine province where the government is so inefficient that they could
never a reasonable threat? Sure.
The real threat over the next few years will be the cold, hard, efficient governments, like the government of the US.
American citizens are tracked, reported and can even be taken down by drone robots nearly worldwide. Argentines?
Their only governmental fear is just that of another collapse… something that has become so common that not many
even pay much attention to it anymore.
GOLD
With all that is going on in Europe, those who believe in the statist, fiat money system and who think gold is a
barbarous relic would assume that many of the indebted European countries would be selling their gold to pay off their
fiat debts. That has been far from the case.
As can be seen in the following chart, European government gold sales dropped dramatically after the first wave of the
financial crisis in 2007-2008.
Sales have continued to fall dramatically. In the last year, only Germany sold a very small amount (0.8 tonnes). The
only other seller? The IMF:
GOLD STOCKS
The gold stocks were under severe pressure throughout September. But, as was reported at lemetropolecafe.com,
nearly half the volume in most of the major gold stocks was shorting – typical of the financial establishment playing
games with the market. As of September 26, 2011 the following activity was reported by lemetropolecafe.com:
Barrick (ABX) 34% of volume was shorting;
Agnico Eagle (AEM) 43% of volume was shorting;
First Majestic (AG) 54% of volume was shorting;
Anglo Gold (AU) 52% of volume was shorting;
Gold Corp (GG) 35% of volume was shorting;
Newmont (NEM) 37% of volume was shorting;
Pan American (PAAS) 32% of volume was shorting;
Royal Gold (RGLD) 27% of volume was shorting;
Silver Wheaton (SLW) 32% of volume was shorting;
Silver CorpMetals (SVM) 49% of volume was shorting.
Whether this shorting activity was conducted to take the market’s eye off of other problems in the financial sector or it
was done for big players, like Goldman Sachs, who recently moved into Canada with their dark pool to get positioned
cheaply, remains to be seen.
Over the last few months we've had many commentaries as to the bullish case for gold stocks, and especially the junior
golds. This continues to be the case.
In the last few months the majors have continued to buy up juniors. In October, Agnico Eagle bought Grayd Resource
Corp. in a deal valued at $275 million CDN. Prior to that, in late September, Detour Gold bought Trade Winds in a deal
worth $84 million CDN.
CONCLUSION
You could not have imagined a more gold bullish world than the one we currently live in. The eurozone is dead. The
middle east is in revolution. The US Government and US dollar is in its death throes. And the youth of America have
finally awoken to their plight and are beginning to fight back.
An early start to a potentially brutal winter may be a saving grace to the US Government and its corporatist, fascist
financial system from all out riots and turmoil. If so, prepare for a spring and summer of 2012 that will look nothing like
anything we've seen in the western world ever before.
Economic Analysis
by Ed Bugos
INFLATIONISM SPAWNED THE OCCUPY WALL STREET MOVEMENT
“In the first place, all the aims of inflationism can be secured by other sorts of intervention in economic affairs, and
secured better, and without undesirable incidental effects. Secondly, there is no kind of inflationary policy the extent of
whose effects can be foreseen. And finally, continued inflation must lead to a collapse. Thus we see that, considered
purely as a political instrument, inflationism is inadequate. It is, technically regarded, bad policy, because it is incapable
of fully attaining its goal and because it leads to consequences that are not, or at least are not always, part of its aim.
The favour it enjoys is due solely to the circumstance that it is a policy concerning whose aims and intentions public
opinion can be longest deceived. Its popularity, in fact, is rooted in the difficulty of fully understanding its
consequences…. Inflation is the true opium of the people administered to them by anticapitalist governments and
parties” – Ludwig von Mises
Ludwig von Mises was one of the rare scholars who predicted the 1929 crash, and later much of what went down in
Europe in WWII. That's important because one of the demands of science with respect to a given theory is that it has
to be able to predict outcomes. The Austrian Business Cycle Theory (ABCT) has been doing this ever since Mises first
updated and formalized the old currency school doctrine - the currency school (19th century) did not have a complete
theory of the value of money - it over looked (country) bank deposit liabilities in calculating the money supply. Ludwig
von Mises did a lot of work on the theory of the value of money and banking. His American successor Murray Rothbard
did a lot of work on the history of banking in the US. If you haven't read their work you are deprived of great knowledge
in this area.
For those who are interested I would recommend the following, all available for free below:
Mises: The Theory of Money and Credit (his original work on this was written around 1912)
Mises: Human Action (1949 -German language edition was published a decade earlier)
Rothbard: What has the Government Done to Our Money
Rothbard: Mystery of Banking (1983)
Rothbard: History of Money and Banking in the US Colonial Era to WWII
The quote I started this article with demonstrates that Mises also anticipated some of the confusion that is inherent in
the Occupy Wall Street (OWS) movement...specifically in the anti-capitalist factions. He likens the policy of inflation,
which in his terms (and mine) means the expansion of the supply of money (relative to the demand for money) and
concurrent manipulation of the interest rate, to a drug administered to the people. Indeed, it cannot be a coincidence
that the NY Fed administers this policy through its System Open Market Account, or SOMA for short. That was the
name of the drug people took in Aldous Huxley's famous dystopian novel, Brave New World.
Unfortunately, as Mises points out, one of the downsides, which is an upside for the implementer of the policy, is that
nobody can really predict the course it will take in destroying the currency, and most people simply do not understand
the policy anyway. Perversely, as usual with the state, that is the main reason that statists prefer it to a more direct
form of expropriation: taxation. After all, the inflation policy is also a tax in that it redistributes wealth from savers and
fixed wage earners to banks, government and wall street - including speculators, investors or borrowers who
understand the process and can expropriate some of the benefits for themselves by their actions (investing wisely for
example may protect the investor from the ravages of the inflation policy…likewise borrowers pay back devalued
money). And while at first pass it would seem by this definition that creditors (i.e. bankers) cannot benefit from the
policy if they are receiving devalued dollars for a loan made in yesterday's dollars, this is only true if you are not a
fractional reserve bank under the bank holding company act. Fractional reserve banks like the policy because it allows
them to collect interest on funds that belong to someone else, and hence it expands their asset base quicker.
What Mises realized was that the business (or boom-bust) cycle was caused by intervention into money and credit - the
manipulation of interest. Yet, what most people see is that the recession is caused by the reckless behavior of
capitalists like Goldman Sachs and Lehman. In many cases it's like the liberals who prefer to block out the coercive
reality of taxation because they are sold on the government's ability to spend those funds in the public interest. Most
people are simply anticapitalist to begin with - because of their likely statist indoctrination (public schooling) this is
unavoidable - and they simply chose to ignore the fact that the US banking system is one of the most regulated
banking systems on the planet. Moreover, it is usually only the few who have the capacity to think of the more remote
causes of the phenomena they observe.
Ultimately, the Goldmans and the Lehmans could never do what they did under a more competitive environment. They
used the referee, as Max Keiser puts it, to their advantage in order to expropriate "rents" (extra market income). Why
do they need the referee? To protect them from free market competition... which they do with the use of the coercive
apparatus. It sings to Lew Rockwell's portrayal of America's economic policy as a marriage between right wing statism
(the use of the state to achieve the agenda of big business and conquer foreign markets) and left wing statism (the use
of the state to regiment industry and promote income/wealth redistribution)...or simply put, economic fascism.
My point is that the Goldmans and Lehmans couldn't do what they did if they didn't have the ability to use the state to
protect and subsidize their interests. In order to make it work requires, as Mises said of what it took to abolish the gold
standard, "The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in
some countries even executioners."
However, the biggest ideological proponents of the inflation policy happen to be the socialists (and other statists)
hostile to the free market system that has rained plenty on the world for the last two centuries. Such a policy has
nothing to do with free market capitalism. We already know that a genuinely competitive banking industry - free of
statist regulation/partnership - could not inflate for very long without risking collapse because no individual bank would
take the risk knowing there is no central bank to sustain it or a government willing to bail it out.
Often it is pointed out that the Federal Reserve was created in 1913 because the 1907 crisis proved that free market
banking was unstable. However, as Rothbard's history of banking aptly demonstrated, there has never really been free
banking anywhere in the world... not even in the United States. He also showed how the banking interests lobbied and
conspired for years before the Fed existed to create it. When the crisis of 1907 happened, Morgan only had to put his
money where his mouth was and the whole nation socialized his loss. Free unhampered banking and unfettered
capitalism are concepts that have never been tried in the real world. They are not utopian to be sure. It just takes
people realizing how the financial elites are pulling the wool over their eyes - by making out like the referee is a good
guy, for example!
The central bank (Federal Reserve in the US) is a public policy arm of the government, even though it is privately
chartered. The ability of the banks to inflate requires a central bank (funded by savers and wage earners), legal
tender laws and government protected monopoly on the issue of notes (money). This requires coercion. Where's the
check? The most reliable though not perfect check is competition. The solution to our problems is more competition.
More free market. Less government.
What is happening in Greece only attests to the fact that governments have over extended themselves in the pursuit of
bankrupt socialist ideas. Why do we keep lobbying for them as the solution to problems clearly caused by the use of
the coercive apparatus by planners and inflationists? The answer my friend is blowing in the wind... the answer is in
Mises's quote above. Inflation is a bad policy. It benefits no one in the long term... not even its biggest proponents.
The US is sick. It has become addicted to the boom policies. Politicians dole out promises like there's no tomorrow
because they know that if they get elected they will be able to dispense "soma" far and wide.
There are many who claim that the OWS movement is not anti-capitalistic. If that were true I'd be ecstatic. But I'm
skeptical based on what I've seen so far. Let us hope that the result will not be more legislation, more income
redistribution, or more inflation and taxes. If the movement is not to be politicized by the most skillful lobbiests it needs
to make its message more apparent and uniform. It must stop pointing at greed and banking, and must demand the
repeal of all the legislation that takes economic power out of the consumer's hands and puts it in the hands of the
producers (on both left and right).
Inflationism spawned the Occupy Wall Street movement... and Mises predicted much of what is currently ongoing nearly
100 years ago. Sadly, Mises and Rothbard have been all but banned in the socialist schooling institutions where most
of the OWS protesters received their indoctrination.
It's no wonder they are all so confused.
The Markets
CURRENT MACRO OUTLOOK
SECTOR
SHORT
MEDIUM
LONG
LAST
SECTOR
TERM
TERM
TERM
CHANGED
0-3 months
3-12 months
1 year+
US Stock Market
Bullish
Neutral
Neutral
9/18/2011 (ST)
USD Index
Bearish
Bearish
Bearish
9/18/2011 (ST)
US Treasury
Bonds
Bearish
Bearish
Bearish
7/10/2011 (ST)
Gold
Neutral
Bullish
Bullish
6/12/2011 (ST)
Gold/Silver
Stocks
Bullish
Bullish
Bullish
7/11/2011 (ST)
Commodities
Bullish
Bullish
Bullish
9/18/2011 (ST)
**Highlighted areas show change from last month. Color shows in which direction it has moved from last month.
Red=Downgrade Green=Upgrade
TDV's market views are sent out every weekend in the Interim Update.
The Dollar Vigilante Portfolio
by Ed Bugos
Stock/Investment
Symbol
Chart
Last Price Reco Price Change Reco Date Original Writeup
JUNIOR MINERS
Sabina Gold & Silver
TSX:SBB Chart/Quote $4.32
Golden Star Resources
NYSE:GSS Chart/Quote $1.99
Jaguar Mining
NYSE: JAG Chart/Quote $5.20
Nautilus Minerals
TSX: NUS Chart/Quote $2.65
Market Vectors Junior Gold Miners NYSE:GDXJ Chart/Quote $31.13
Gold Explorers ETF
NYSE:GLDXChart/Quote $13.40
Merrex Gold
TSXV:MXI Chart/Quote $0.39
B2Gold
TSX:BTO Chart/Quote $3.67
Midway Gold
AMEX:MDW Chart/Quote $2.10
Amarillo Gold
TSXV:AGC Chart/Quote $1.35
Premium Exploration
TSXV:PEM Chart/Quote $0.28
Colibri Resource
TSXV:CBI Chart/Quote $0.16
Eurasian Minerals
TSXV:EMX Chart/Quote $2.17
Golden Predator
TSX:GDP Chart/Quote $0.77
$3.49
$5.04
$7.56
$2.05
$36.18
$17.80
$0.405
$2.32
$1.82
$1.44
$0.53
$0.22
$2.80
$0.78
23.78% 8/15/2010 Click Here
-60.52%9/15/2010 Click Here
-31.22%10/18/2010 Click Here
29.72% 11/29/2010 Click Here
-13.96%11/1/2010 Click Here
-24.72%12/1/2010 Click Here
-3.70% 12/1/2010 Click Here
58.19% 2/1/2011 Click Here
15.38% 4/1/2011 Click Here
-6.25% 5/1/2011 Click Here
-47.17%6/1/2011 Click Here
-27.27%7/1/2011 Click Here
-22.50%9/1/2011 Click Here
-1.28% 10/1/2011 Click Here
AGRICULTURE & ENERGY
Powershares DB Agriculture
Global Uranium Fund
NYSE:DBA Chart/Quote $33.35
TSX:GUR Chart/Quote $2.03
$25.98
$2.14
28.37% 9/1/2010
-5.14% 9/1/2010
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GOLD & GOLD MAJORS
Central Fund of Canada
Agnico Eagle
African Barrick
Market Vectors Gold Miners
NYSE: CEF
NYSE:AEM
LSE:ABG
NYSE:GDX
Chart/Quote $22.58
Chart/Quote $43.39
Chart/Quote 549.03
Chart/Quote $58.83
$14.51
$55.75
570.50
$57.29
55.62% 8/1/2010
-22.17%8/1/2010
-3.76% 3/1/2011
2.69% 11/1/2010
Click Here
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OTHER
Powershares Ultrashort Treasuries NYSE:TBT Chart/Quote $20.63
$30.78
-32.98%8/1/2011
Click Here
NEW STOCK ADDITION
Tirex Resources (TSXV:TXX)
Company Description
Tirex Resources Ltd (TXX:TSXV) is a Canadian listed exploration and
development company formed in 2006 to explore for base metals in
Albania, where it holds a 100% working interest in over 553 km2 in the
VMS rich Mirdita district, north central Albania. In 2011 it had entered
into an agreement to form a 50/50 joint venture company with Albania’s
largest miner for the production of copper and gold from known
deposits at a rate of 500 tonnes per day (increasing to 2000 tonnes
per day by 2014), with startup planned for Q1, 2012.
The company is funded by the European Bank for Reconstruction &
Development, which has lent Tirex 7.5 million Euros through an
unsecured convertible debenture issued in various tranches since
2009 (at a rate of EURIBOR + 1.5pct) with 6 million Euros maturing on
October 25, 2013, and the remainder maturing 5yrs from now.
The debentures are convertible into common shares at C$0.62 per
share (mostly). At the current exchange rate (1 Euro buys 1.4 CAD)
that implies the issuance of about 17 million shares (or a 20-25 pct
dilution).
Important Note: the company has adopted IFRS accounting rules
where it has to make assumptions about the variability of exchange
rates and calculate an additional (derivative) liability in connection with
this debenture, which does not burden cash flow. In the event of
conversion both liabilities (the convertible and derivative) are reversed. The company also writes off exploration
expenditures as incurred rather than capitalizing them.
This means its assets are lighter than most Canadian exploration juniors, and puts shareholders equity in a deficit; but
these are accounting formalities that do not impair the operating ability or viability of the company.
Why Toll Milling?
The number of ways to build a company is finite. I don’t know them all. But I’ve run across a few formulas.
If the market is hot enough or is really keen on the story, the company may be able to issue equity cheaply –meaning
with minimal dilution of existing shareholders and other interests.
But this has not proven to be a reliable way to build a company in most cases as it relies on a hot iron or strong
promotion. Usually all that happens is you end up over-issuing stock in weak markets.
There is the Frank Giustria way in which he built Wheaton River and reverse merged with Goldcorp back in 2004-05.
But he pulled that off early in the cycle. While we argue that it is still early, we simply cannot argue that the miners are
as cheap as they were when Frank started up with Wheaton back in 2001-02.
And no one has been able to repeat that performance since – not even Frank.
You couldn’t make accretive acquisitions as easily today. And if you did, you’d have to have a sizeable warchest of
cash or the ability to issue debt, as share transactions would be dilutive here for most issuers (weak market).
Some companies prefer the prospect generating model, whereby they farm interests out to majors – or cash rich
juniors – for development…or they have a royalty stream. It is a tried and true model, but it can take time.
Then there is the Bema Gold way (or B2Gold today). Here the company acquires a project that can be put into
production relatively quickly and with very little capital and share dilution, and then uses the free cash flow for
exploration and development in order to grow organically. Thus the company does not need to dilute existing
shareholders to get growth. It is generating cash flow internally. It doesn’t have to be a long life operation; it only
needs to live long enough for the exploration team to find and develop the company making asset. Most importantly, it
does not depend on a major or a bunch of bean counters to conjure up an acquisition strategy.
But this model requires exploration talent…a group that can find mines…or a region where they’re easy to find.
Toll milling offers a twist on this plan in that the expertise to build and operate the mine is external. It means that the
company pays someone who owns a mill with capacity to process its ore. In this case, it is paying by giving up a 50%
interest. The mill already exists. Its owner, Ekin Maden Tic. Ve San. A.S., a well established, respected and privately
held Turkish miner and metals trader, has contributed 500 tonnes of daily processing capacity (growing to 2000 tonnes
per day over 24 months) to a 50/50 joint venture, and will also fund all capex through to production with repayment
coming out of the profits of the operation (25% of profits will go toward capex loan repayments during phase 1 with the
remainder to be split 50/50). The mines being targeted are old underground operations and already have workings in
place so the additional capital required to upgrade them is apparently minimal. The company has filed all applications
and environmental impact documentation with the relevant ministries and the local communities appear to be behind
the project. It is awaiting final permits.
The joint venture is targeting production for the end of January. Tirex is working on an NI 43-101 update with a
resource estimate but plans to start mining first – it will calculate a resource by drilling from underground pads.
The CEO points out that both its financier – European Bank for Reconstruction and Development – and its JV partner,
which is also the largest miner in Albania at the moment, have committed significant capital to mining the project without
an NI 43-101 estimate, suggesting they have confidence in the historical resource.
So, for no money down, figuratively, and no facilities, the company’s projects will start earning cash flow next year, and
fund an exploration and development program in an under explored district in a region that has been isolated and
difficult to invest in for over 40 years, but now is a rapidly emerging parliamentary democracy that has been a full
fledged NATO member since 2009, and is currently an EU candidate country (targeted for 2014).
How Much Cash Flow?
Based on the non compliant historical resource there may be up to 10 years of mine life in the known targets alone -at
grades averaging 2% copper and 1.2 grams per tonne gold. The mill is currently getting 84% copper recoveries and
30% gold recoveries (future upgrades include improvement in gold recoveries to around 70%).
Using a US$3 copper price, a US$1700 gold price, and a milling rate of 500 tonnes per day (150,000 tonnes per year),
this all translates into a potential annual revenue stream of approximately US$130 per tonne, or almost US$20 million
per year…growing to US$80 million over 24 months as mill capacity is quadrupled to 2000 tpd.
Unfortunately, we don’t have good information on the costs so we can’t nail down a solid cash flow estimate, and we
can’t attribute a hard value the project either –at least not until we get the NI 43-101 resource update.
But the potential for the project to return from $5 million up to $20 million in cash flow if the expansion occurs, and to
grow further, exists. Nevertheless, this is really only the immediate positive inherent in this company.
Management
The Chairman of the Board is Tookie Angus who I think has met just about everybody in the business. He is on many
boards. He has worked with Giustria’s Endeavor Financial in the past, is the former Chairman of BC Sugar Refinery
Ltd, as well as a former director of First Quantum, Bema, and Ventena Gold; and presently of Nevsun.
Fred Sveinson is a director with 40yrs of experience running small mines in many parts of the world, including as the
general manager of Echo Bay’s Lupin mine before Kinross took it over.
Other important insiders include George Gorzynski, a 25yr veteran in consulting junior miners, and the CEO Bryan
Slusarchuk, a financier and the founder of Skanderbeg Capital (named after Albania’s national hero – credited with
stopping the expansion of the Ottoman Empire in the 15th century).
Albania: Background
Albania is a tiny little mediterranian country nestled under the heel of Italy's boot on the other side of the Adriatic
bordered to the south by Greece, the north by Montenegro and Serbia, and to the east by Macedonia.
Today it is a parliamentary democracy established under a constitution
renewed in 1998. Elections are held every four years to a unicameral 140seat chamber, the People's Assembly. The country is divided into 12
counties, in turn divided into 36 districts and 373 municipalities (72 with city
status). The president is elected to a 5yr term as head of state by the
Assembly of the Republic of Albania by secret ballot, requiring a 50%+1
majority of the votes of all deputies. The next election will be held in 2012.
The current President of the Republic is Bamir Topi. The president heads up
the executive and the assembly heads up the legislative branches of
government. The prime minister is a former communist party leader and the
country has been basically a social democracy, perhaps a lot like Canada's,
since 1997.
That’s par for the course in Europe for anyone that is trying to integrate into
the EU. It has become a NATO member and a member candidate.
It is a relatively poor country. The government has a budget of less than $5
billion /yr. Agriculture is the most significant sector, employing some 58% of the labor force and generating about 21%
of GDP. Albania produces significant amounts of wheat, corn, tobacco, figs (13th largest) and olives. Climate is
hospitable, allowing for exploration all year round.
The company notes that a stable new mining law was passed in 1994 designed to attract foreign investment, and
corporate tax rates were recently cut to 10% (among the lowest in the world).
The Heritage Foundation ranks the country (Albania) 70th out of a total of 179 countries in terms of economic freedom,
with a score of 64, which is moderately free and falls above the world average (59.7) though below the regional
average (66.8).The average for free economies is higher (84.1) –see graph
on right - based on a small sample where only Hong Kong and Singapore
scored > 84.1.
According to this survey Albania basically compares with countries like Turkey
(ranked 67) and Romania (ranked 63) on the basis of economic freedom.
It ranks above countries like Greece (ranked 88th), Burkina Faso (ranked
85), Italy (ranked 87), Kazakhstan (ranked 78), South Africa (ranked 74), and
so on. Despite the social democratic bias economic freedoms have increased
significantly over the past decade. Overall protection of intellectual property
rights is weak due to political pressure, intimidation, corruption, limited
resources, and crime, however, the foundation says.
Recent (20th century) Mining History
Albania was a significant copper producer under King Zog's monarchy before WWII.
The Soviets carried out large exploration programs in the Mirdita area (1950-61) and discovered many of the known
deposits.
The Albanian Geological Survey (GJEOALBA) expanded on some of the known deposits but made no new discoveries
until the Chinese came in during the early seventies.
According to Tirex’s website, the Albanian Geological Survey interpreted all of the deposits in the Merdita district as
“Cyprus-type” VMS deposits, rather than Noranda-type VMS deposits (see graph).
Nine deposits on what is now Tirex’ property were in production at various times during this period while other known
deposits with high zinc content on the property were not mined due to lack of processing facilities.
Moreover, data on precious metals content is sparse as the government kept gold data secretive, and never assayed
for any silver.
Nebex Resources did some work in the nineties but generally that was a slow time due to the turbulence - kosovo wars,
etc.
Renewed exploration interest started up in 2006 with a private Canadian company acquiring a property that
encompasses most of the traditional Albanian Mining District (Mirdita) which was then in turn acquired by Tirex
Resources Ltd. In 2007 Tirex began extensive data compilation of all past work done in Mirdita and flew Albania's firstever Airborne Geophysical Survey. Results from the data compilation and from the airborne survey outlined numerous
high-priority exploration targets throughout the large property. This work by Tirex Resources represents the first
extensive use of modern exploration methods in this prolific mineral district.
Why Albania
Blessed with many natural resources, Albania has (for the most part) remained somewhat isolated from the world
because of its mountainous topography and the policies of its former hard line governments.The region has not been
systematically explored by modern exploration and
mining methods for a long time
Tirex was one of the few to see the resource rich
potential of the region in 2006 while the percieved
risks were still higher. Thus it had gained first mover
advantage, allowing it to acquire the best ground in
the country.
"Historic isolation of Albanian precluded the use of
most modern exploration techniques. Techniques
such as electromagnetic surveys have been used
routinely with positive results in Canada and most
VMS districts of the world since the 1960's. The 2007
airborne electromagnetic survey carried out by Tirex
is the first large, modern geophysical survey carried
out in Albania and has outlined several strong
electromagnetic responses that are considered
excellent VMS targets." (NI43-101 Technical Summary
Report, Mirdita Project, Albania, 2007)
The Mirdita Project
Tirex holds interests in a large 553 km2 land position
encompassing the heart of the traditional Albanian
copper Mining District, an area that Tirex believes
may be one of the world's great VMS districts. It is
located 70km NE of the Albanian capital (Tirana) and
consists of numerous old mines (9), mineral prospects
(17) and exploration targets (102 geophysical
anomalies) identified on the property through data
compilation work as well as by the recently completed
airborne geophysical survey. Access to property is
excellent and infrastructure on or near the property includes electric power and good water supplies. The company is
focused on its joint venture deal with Ekin Maden and has engaged SRK to update its NI 43-101 resource calculation.
In addition to drilling verification holes in known deposit areas, Tirex will also be drilling numerous High Priority but
previously un-drilled geophysical targets. These are targets that the company identified during the Tirex 2007 airborne
EM geophysical survey. As this was the first ever airborne geophysical survey in the history of the country, many of
these targets have never been drill tested and provide investors with potential exposure to pure discovery.
Production Plan and Strategic Partnership with Ekin Maden
Announced definitive agreement to form JV on Sep 6, 2011 (JV completed subject to permit approvals)
Production scheduled for end of Q1, 2012
to mine copper and gold from six targets/pits (will also study zinc extraction and silver credits)
carried through to production (NO upfront capex requirement from TXX)
Ekin Maden operates the Munelle and Lak Roshi (currently biggest mines in Albania) since 2001 (via affiliates)
Ekin Maden's existing mill and flotation plant complex located in Fushe Arres, owned by Beralb Sh A (affiliate)
interests are 50/50 of "net ore value after mining, processing and sales" costs
the 6 deposits include the Tuc, Paluca, Qaf Bari, Letitna, Gurthi-Koshaj, and Fushe Arres
Initial production to consist of copper concentrate and gold
CONCLUSION
We like this story for the following reasons:
Offers emerging production and near term cash flows with no money down and minimal dilution
District scale exploration program with over 100 never-before-drilled geophysical targets
First mover advantage after country opened up to investment and resource development
District has never been systematically explored by modern methods and knowledge
Zinc, gold and silver historically ignored
High grade feature of the deposits reminds me of Nevsun’s story
Partners Ekin Maden (JV) and EBRD (banker) know area well and display confidence in plan
Strong management team
Cheap
We recommend adding Tirex to your portfolio with a $2 target price over the next 6-18 months. Over that period the
company is expected to transform into a positive cash flow generator with an updated NI 43-101 resource estimate,
growing production (and cash flows), and maybe a new discovery or two under its belt.
The chart suggests near term downside to 40 cents is possible, but we’ve seen strong support come in at between 50
and 60 cents, and the sector’s correction may be approaching an end, so it is not likely in our view.
Expatriation of Ass & Assets
by Jeff Berwick
"Because you can't fight city hall, but you can leave town!"
We recently met Mark Nestmann for the first time in Phoenix in October. We have been
reading his work for years but were impressed by his speech at the Casey Research
"When Money Dies" summit and we spent some time talking with Mark at that time. His
depth of knowledge, especially for how to get Americans completely removed from the US
tax net is as deep as anyone we know and we asked him to do an interview with us for this
edition of TDV.
Mark has helped hundreds of clients over the last two decades clients who are seeking
wealth preservation and international tax planning solutions. Mark is the President of The
Nestmann Group, Ltd., an international consultancy assisting individuals to achieve their
wealth preservation goals. Mark divides his time between offices in Vienna, Austria and
Phoenix, Arizona.
Mark Nestmann
In 2005, Mark was awarded a “Master of Law” (LL.M.) degree in international tax law at the Vienna University School of
Economics and Business Administration in Vienna, Austria. Nestmann’s research and thesis dealt with the subject of
“exit taxes” imposed on individuals who change their tax residence from one jurisdiction to another. Among many other
publications, Mark is the author of The Lifeboat Strategy and Austrian Money Secrets.
At the end of this interview we will link to Mark's book "The Lifeboat Strategy" and a special offer by Mark of a free 15
minute consultation to TDV subscribers.
The Dollar Vigilante (TDV): Thanks for taking the time, Mark.
Mark Nestmann (MN): My pleasure.
TDV: Based on your experience, at what level of priority should people be looking to internationalize
themselves? Do we have a decade? A few more years? Or much less, in your opinion, to get their assets
and personal documents internationalized?
MN: I think there will be exchange controls in place by 2014, maybe earlier. The 30% witholding tax part of the HIRE act
imposes de facto exchange controls. It was supposed to come into effect in 2013 but is now delayed to 2014.
TDV: Is your book and consulting services mostly aimed at Americans? Would a non-American get value
from your book or services?
MN: Yes, our focus is mostly aimed at Americans. But anyone who does business in US dollars, has US citizenship or
resident clients, owns US property or even has a US dollar bank account is affected by laws I describe in the book.
TDV: To start things off from the beginning, please give us an overview on expatriation.
MN: Expatriation means different things in different countries.
If you're a citizen of Great Britain, Mexico, Japan, or most other countries, expatriation means that you leave these
countries and become non-resident. After a prolonged period of time—one year or longer—you're no longer required
to pay income tax in those countries. Stay away a few years longer and you may no longer be subject to capital gains
tax. And if you permanently disconnect from your home country—that is you give up something called "domicile" your
heirs are no longer required to pay estate tax on your property outside that country.
If you're a US citizen, however, the process is much more difficult. The United States is one of only two countries, and
the only major industrialized country, that imposes significant income, capital gains, gift, and estate taxes on its nonresident citizens.
No matter how long you live outside the USA, or even if you never live there, if you're a US citizen, you are subject to
US income tax on your worldwide income and your heirs must pay US estate tax on your worldwide estate.
For this reason, it's not possible for a US citizen to expatriate—that is, to permanently end US tax liability—without
giving US citizenship.
Isn't this unfair? Yes, from several perspectives. It may impose a double tax burden on US citizens living and working
abroad. It imposes tax obligations of "accidental" US citizens that were born of US parents but never set foot in the
USA. It makes US citizens pay taxes for services they never receive. And under numerous tax treaties with other
countries, it may deny the other country the right to impose tax on the income of US citizens living there.
Isn't this unconstitutional? No. More than 80 years ago, the Supreme Court upheld the government's right to impose
taxes on non-resident US citizens.
TDV: Please tell our readers more on why someone would want to expatriate.
MN: There are numerous reasons. To permanently disconnect from U.S. tax obligations, a U.S. citizen must not only
become non-resident, but also give up U.S. citizenship and passport. If you're wealthy, giving up U.S. citizenship and
residence can save millions or even billions of dollars in future taxes. Expatriation also eliminates the increasing
difficulties U.S. citizens face investing or doing business outside the USA. As a consequence of the U.S. government's
intensifying crackdown against anything "offshore," most offshore banks now prohibit anyone with any connection to
the United States from opening an account. Giving up U.S. citizenship and passport eliminates this problem. Finally,
expatriation frees you from the possibility of your non-U.S. assets becoming subject to any future exchange or currency
controls the U.S. government might impose to protect the value of the dollar or to shore up its shaky finances.
TDV: How can people get started with the expatriation process?
MN: Fortunately, you can make nearly all of the preparations for a possible future expatriation without leaving the
United States. This is a four-step process. Once you've accomplished the first three steps, the final step—expatriation
—is much easier than if you're starting from scratch.
Step 1: Move Your Assets to Safer Havens Offshore
My personal favorites: Austria, Switzerland, Nevis, Singapore, and possibly Panama. Of course, with the recent actions
taken against UBS, the qualified intermediary rule, the PATRIOT Act, the new HIRE Act, banks are willing to deal with US
depositors only with great caution. That is one of the reasons why a foreign passport is so important for Americans
(more on that below).
Step 2: Find Another Country to Live in that Offers Greater Personal Freedom
The countries that people seem to be most interested in living in are in central and South America—Panama, Costa
Rica, Belize, and Uruguay. Another popular group of countries are the Dutch Caribbean territories, several of which
once comprised the now-defunct Netherlands Antilles. In Europe, it's mainly the UK and Switzerland, and in Asia Hong
Kong, Singapore, Thailand, Australia and (especially) New Zealand.
Which one is the freest? Who knows? I have found that the less developed a country is, the less feeling of "Big
Government" you have there. I recently returned from a week in Dominica (Editor's Note: Dominica is a different
country than the Dominican Republic) in the Caribbean. No EZ Pass gates, no CCTV networks, no DWI checkpoints
and no tax on offshore income. But it's not a wealthy country, and you won't find the same amenities as in the USA.
There is a whole host of things to consider when considering a place to reside. One obvious one is the availability of
residence rights. In other words, what you have to do to gain residence? You may only have to demonstrate some
minimal level of income in some countries to obtain a residence visa. Others require a guaranteed pension. In others
you may have to make a substantial investment in the country. In others you may need to qualify on a points system.
Some countries have multiple programs you can consider.
Another assessment you need to make is security and the enforcement of rights. Is it likely you'll be robbed? Are
property rights enforced? Can you depend on the police? In some respects, of course, you have the greatest freedom
if the police force isn't that efficient. But if you can simply bribe your way out of a problem, so can anyone else.
Another thing to consider about choosing a place to reside is infrastructure: anything from the availability of ATMs (use
of which naturally gives big brother a clue to your whereabouts) to hospital care.
Also, language. If you're middle-aged or older and have never spoken a foreign language, learning your first one will
probably be the most challenging thing you've ever done. But if you don't speak the language, you'll have to rely on
other expats and anyone who can speak English.
This makes English-speaking residence havens—places like Belize, St. Kitts & Nevis and Dominica—interesting.
Another thing to consider is prejudice. Your skin color, accent, religion, or any number of other factors can prejudice
locals against you. Does prejudice exist, and if it does, can you arrange your affairs so it doesn't materially affect you?
Then there's tax. Is the country's tax system less oppressive than the USA? If you're lucky enough to land in a country
that only taxes domestic income, your offshore income may be tax exempt. Sometimes you're only taxed on what you
bring into the country.
You must also consider interaction of that country's tax system with the US tax system (or your home countries tax
system), as long as you retain US citizenship and passport.
Finally, the last consideration is the availability of attaining a passport. Will that country award you a passport after
you've lived there a certain number of years? (Editor's Note: We recommend never living in a country where you are a
citizen so the government has the least control over your life - however, in many cases, it is easiest to interact and
transact in a country when you are a full citizen)
Step 3: Get Another Passport
For U.S. citizens, the most important reason to get a second passport is that it's a necessary prerequisite for step 4,
which is to relinquish all legal obligations to the USA by giving up US citizenship.
A second passport also provides:
• Ability to travel privately without a telltale passport stamp in your US passport
• Expanded travel possibilities to “forbidden countries” like Cuba, North Korea, etc.
• Protects your identity, should you ever need to keep your nationality a secret
• Gives you the right to reside in other countries
• Gives you a way to cross international borders if your primary passport is lost or stolen.
One way to get second passport is to live in another country for a certain number of years, ranging from two to 10,
sometimes even more. In some countries, it's not possible to obtain a passport if you enter under certain visa
categories, and sometimes not at all.
It's almost never possible to obtain a passport unless you have obtained a residence visa to live there. Other permits
may also be required.
If you don't want to leave the USA, you might be able to get a passport based on your ancestry or who you're married
to. If you're married to a citizen of another country you probably qualify for residence there and eventual citizenship
and passport. Example: Austria: 6 years instead of 10 years.
Some countries extend citizenship to children of citizens. Canada is an example. Others extend it to grandchildren. If
you had a grandparent born in Ireland, you probably qualify for Irish citizenship.
If you're Jewish you may be able to move to Israel and claim Israeli passports for you and your family. The biggest
drawback of that strategy is if anyone in your family is under 40, in which case they might be liable for Israeli military
service.
You can also buy a passport. There are two countries where this is possible: the Commonwealth of Dominica and the
Federation of St. Kitts & Nevis. The costs start about $100,000 for a single applicant, $125,000 for a family.
In almost every country if you do something of great benefit to the government, you can be awarded a passport.
Bulgaria and Slovakia are two countries where it is possible to do this. Both countries are members of the EU. With a
passport from an EU country, you can live or work anywhere in the EU. Total costs for this option start at around
$600,000.
There are also numerous places where you can purchase fraudulent or stolen passports. These are popular with
intelligence agencies and terrorists, because you can get the passport in a fake name.
But if you get caught you face very heavy criminal penalties. Obviously, I can't recommend them.
TDV: We've had many subscribers who don't want to wait 3 years to get a Dominican Republic passport
which we offer through our service. For this reason, they may be interested in a place like Dominica
where you can get a passport very quickly. Can you provide a summary of the second passport program in
Dominica or St. Kitts and Nevis?
MN: Certainly, here are some pertinent points about Dominica:
• Independent Caribbean Jurisdiction
• Travel to Approximately 90 Countries Visa Free or with Minimal Visa Formalities
• Required Contribution: $75,000 (Single) or $100,000 (Family of Four)
• Additional Costs: US$30,000 +
• Interview in Dominica necessary
• No further obligations unless you live there
And here are some points about Citizenship by Investment in the Federation of St. Kitts & Nevis:
• Independent Caribbean Jurisdiction
• Improved Travel Options in Comparison to Dominica Including Access to Most EU Countries
• Option 1: Qualifying Real Estate $350,000 +
• Option 2: Contribution of US$200,000 +
• Additional Costs: US$20,000 +
• No Interview Necessary
• Can Live in Most “Caricom” Jurisdictions Visa-Free
• No Further Obligations Unless You Live in
TDV: Can you provide a summary of the second passport program in St. Kitts or Nevis?
MN: Yes, here are some points on that:
• Independent Caribbean Jurisdiction
• Improved Travel Options in Comparison to Dominica Including Access to Most EU Countries
• Option 1: Qualifying Real Estate $350,000 +
• Option 2: Contribution of US$200,000
• Additional Costs: US$20,000 +
• No Interview Necessary
• Can Live in Most “Caricom” Jurisdictions Visa-Free
• No Further Obligations Unless You Live in St. Kitts or Nevis
TDV: What are the steps to take to completely revoke your US citizenship?
MN: These are the basic order of things to do that:
• Move Assets Outside USA
• Sell Assets to Minimize or Eliminate Exit Tax
• Obtain Another Passport
• Choose Another Residence Country
• Appear Before U.S. Consular Representative
• Receive Certificate of Loss of Nationality
• Apply for U.S. Visa or Obtain Visa Waiver
• File Form 8854
• Don’t spend an average of more than 121 days/year in the USA unless you can prove a closer connection to another
country. In that case you can spend up to 182 days/year in the USA.
TDV: Other than tax, what are some of the other benefits to expatriation?
MN: (Editor's Note: Mark's answers here could easily apply to all western countries) Once you're no longer a US citizen,
it's far easier to invest and do business offshore far easier than if you remain a U.S. taxpayer.
And once you've expatriated, you're no longer subject to the dictates of U.S. government should it declare an
"economic emergency" to deal with the worst economic crisis in history. That means you'll avoid possible foreign
exchange controls, forced repatriation of offshore assets, etc.
In 2008, former President Bush signed into law the first-ever "exit tax" on individuals who expatriate. I predicted years
ago that Congress would pass an exit tax bill ago, and now it has. There are two exemptions to this horrific bill.
Unfortunately, neither of these exceptions applies to most “covered expatriates".
Exemptions are:
* An individual born with citizenship both in the United States and in another country. They are exempt provided that
(a) as of the expatriation date, the individual continues to be a citizen of, and is taxed as a resident of another country,
and (b) the individual was not a resident of the United States for the five taxable years ending with the year of
expatriation.
* A U.S. citizen who relinquishes U.S. citizenship before reaching age 18 1/2, provided that the individual was a
resident of the United States for no more than five taxable years before he or she expatriated.
TDV: Are only wealthy people affected by the exit tax?
MN: No, You Don't Need to be "Rich" to Pay the Exit Tax
It would be one thing if the exit tax only affected billionaires. But, with only a few exceptions for dual nationals and
others with strong ties to another country, the law applies to any expatriate that:
1. Has an average annual net income tax liability that exceeds US$147,000, adjusted annually for inflation for the five
preceding years ending before the date you lose your U.S. citizenship or terminate your residency
2. Has a net worth of US$2 million or more on such date
3. Fails to certify under penalty of perjury that he or she has complied with all U.S. federal tax obligations for the
preceding five years or fails to submit any proof of compliance the IRS demands
If you qualify under any of these criteria, you are what the law calls a "covered expatriate" and are subject to the exit
tax.
The good news - if there is any - is that the first US$636,000 of gains is excluded. This exclusion doubles for a married
couple filing jointly, when both expatriate. This exclusion increases by a cost of living adjustment each year.
Gains are calculated "mark-to-market," or the difference between the market value on the expatriation date and the
market value at acquisition. The law requires "covered" expatriates to pay a tax on all unrealized gains of their
worldwide estate, including most offshore trusts.
Expatriates who were not born in the United States may elect to value their property at its fair market value on the date
they first became a U.S. resident, rather than when they first acquired it.
This phantom gain will presumably be taxed as ordinary income (at rates as high as 35%) or capital gains (at either a
15%, 25%, or 28% rate), as provided under current law. Naturally these rates will increase once all the Obama tax
increases come into effect. And the tax applies not only to former U.S. citizens, but also to long-term green card
holders who have resided in the United States for at least eight of the 15 years before they expatriate.
Some might ask, how are you supposed to pay the tax without selling your assets? That's your problem - not the IRS's although the bill permits deferral in certain circumstances, but you have to post "adequate security" with the Treasury.
When you actually sell the assets, you won't have to pay any additional taxes. However, your adopted country might tax
the gain a second time, leading to double taxation on the same income.
And I've heard speculation that some states—notably California—may impose their own "exit tax" when a person
expatriates.
TDV: What about Retirement Plans?
MN: The exit tax legislation also creates an onerous tax regime for most pensions and deferred compensation plans of
"covered expatriates."
There are two sets of rules for covered expatriates; the first for "eligible deferred compensation items" and the second
for "specified tax deferred accounts"
Unrealized gains in certain "deferred compensation items" are not subject to the exit tax. Instead, there is a 30%
withholding tax imposed with respect to any taxable payment to a covered expatriate.
Plans covered by this provision are:
• Qualified pension, profit sharing, and stock bonus plans
• Qualified annuity plans
• Most Federal and state pension plans
• Simplified employee pension plans
• Simplified retirement accounts
If you're not a "covered expatriate," you're only subject to a 30% withholding tax when the pension payments are sent
to another country. You may be able to use a tax treaty to reduce this tax.
If you're a covered expatriate, and you have a traditional IRA or other retirement plans that Congress refers to as
"specified tax deferred accounts," the plan will terminate upon expatriation. That means you will pay income tax on the
entire untaxed amount in the account. Fortunately, no "early distribution" tax applies for covered expatriates under the
age of 59½. Still this can equate to 35% of your account—more when the Obama tax increases kick in.
The most important specified tax deferred accounts are:
• Individual retirement accounts
• Individual retirement annuities
• Simplified retirement accounts
If you're not a "covered expatriate," you're subject only to a 30% withholding tax on payments from your IRA as you
receive them. Again, you may be able to use a tax treaty to reduce this tax.
TDV: Based on all that, is now a good time to consider expatriaton?
A. Timing has never been more favorable for any U.S. person considering expatriation. A lot more prospective
expatriates have a net worth under $2 million than say, early 2008. in addition, even if you are a covered expatriate,
you may not have unrealized gains that exceed $636,000. What's more this exemption increases annually with
inflation.
In addition, the long-term capital gains rate—15%—is the lowest it's been in decades. Combined with today's
depressed asset values, the tax cost of liquidating assets to get below the US$636,000 threshold may never be lower.
Here's how I figure it. Let's say that you manage to get your unrealized gains down to under $636,000, and then
expatriate.
Guess what? You escape tax on the full $636,000. That's worth at least 15% of $636,000, or $95,400. If your gains are
in precious metals, it's worth 28% of $626,000, or $178,000. If it's taxed at ordinary income, at 35%, it's worth
$222,600.
As taxes rise, of course, the exemption is even more valuable. For 2013, at 39.6%, it avoids a maximum of $251,850 of
income tax.
Double these numbers if both you and your spouse expatriate. This tax subsidy goes a long way to pay for the
expenses you'll incur expatriating, particularly if you need to purchase a second passport as part of your planning.
This appears to be accidental—Congress may change the law or the IRS may write regulations that attempt to do so.
Notwithstanding that possibility, this tax subsidy goes a long way to pay for the expenses you'll incur expatriating,
particularly if you need to purchase a second passport as part of your planning.
TDV: There are so many grey areas and just plain wrong information about expatriation. What are some of
the myths you've heard about expatriation?
MN: One is, the numbers of people expatriating are much higher than the government reports. The "official" number of
people who take this admittedly radical step is tiny—only a couple thousand annually, although this number has risen
rapidly in recent years. The Treasury Department is supposed to publish their names in the Federal Register each
quarter. But the real numbers are much higher.
One especially busy U.S. consulate in Switzerland expatriates three people daily with appointments booked a year in
advance. That comes to close to 1,000 expatriations annually—just from a single consulate.
Another reason the official numbers are so low may be that the law mandating Federal Register reporting by the
Treasury Department applies only to "covered expatriates." However, only a few of the covered expatriates my firm has
helped expatriate have had their names published in the Federal Register.
I think the government doesn't want you to know that the number of people expatriating is exploding.
Another myth has to do with the exit tax. I was at a dinner meeting a few months ago and introduced to an elderly
gentleman who insisted that anyone who expatriated would forfeit 15% of his net worth automatically.
I told him this was incorrect but he interrupted me and basically told me that since he was a major contributor to the
organization sponsoring the event we were attending, I could go to hell.
Well, that may come eventually, but I'm here now, and telling you this is incorrect.
As well, there's another misconception that you can only spend 30 days/year in the USA after you expatriate. This used
to be true to covered expatriates under the old law that was abolished in 2008. However, it's still true if you expatriated
between 2004 and 2008. But it's not true if you expatiate after 6/17/08.
And, there's another rumor that once you expatriate you can never return to the USA. That's hogwash, although
there's a very small basis in fact to the rumor.
In 1996, Congress enacted the so-called Reed amendment to the Immigration and Nationality Act. The amendment
gives the US Attorney General the discretion to deny entry into the United States to a former US citizen who renounced
US citizenship in order to avoid US taxation.
Other categories of "excluded persons" are those with communicable diseases or other health conditions; those
convicted of crimes involving moral turpitude or illegal drugs or with multiple criminal convictions; prostitutes; spies;
terrorists; and draft evaders.
After Congress enacted the Reed Amendment, commentators criticized it for violating US treaties and possibly the US
Constitution as well. And more than a decade after its original enactment, regulations under this provision have not
been promulgated, and its power has never officially been invoked.
The 2004 amendments to the anti-expatriation rules eliminate the requirement that "tax motivation" be a factor in
determining the status of a covered expatriate. For this reason, the Reed Amendment may no longer be relevant,
particularly since it has been so long since its enactment, with no regulations in place to enforce it.
Given this history, it may be safe to assume that one can safely give up US citizenship with no fear of future exclusion,
particularly if you choose an expatriation option other than formal renunciation.
Also, there are no automatic forfeiture of social security benefits, contrary to popular belief.
There are restrictions on Social Security payments sent to a non-citizen in some cases. The most significant restrictions
are if you live in a country upon which the U.S. government has imposed trade or financial restrictions; e.g., Cuba,
North Korea, or Iran. There are other exceptions if you didn’t' work in the USA long enough to qualify for SS benefits, or
if you relocate to a country that the USA believes doesn't have a social security system roughly equivalent to that in the
USA.
If you're not a U.S. citizen, depending on where you live, there may be a withholding tax of as much as 30% on the first
85% of your monthly payment. This percentage may be reduced or eliminated if there's a tax treaty between the United
States and your residence country.
And one of the biggest concerns I hear is that expatriates will be automatically targeted by the IRS.
Expatriates aren't automatically targeted by the IRS. The IRS has much easier pickings going after people still living in
the USA. It has better things to do trying to asset jurisdiction over non-US citizens not living in the USA and with minimal
or no U.S. assets or activities.
Indeed, the act of expatriation stops the clock on all future tax obligations with respect to non-US income. You still have
obligations to pay past taxes, but even if those are due the statute of limitations for collection eventually will run out,
assuming you've filed all relevant returns for tax years prior to expatriation.
TDV: What are some Traps for Expatriates to Avoid?
MN: One trap is that the U.S. real estate and securities held by a non-resident alien—that's you once you expatriate—is
subject to U.S. estate tax at a much lower threshold than a U.S. citizen. That threshold is only $60,000.
To avoid this tax, hold U.S. securities or property through some other way other than your name. A typical structure for
this would be a U.S. corporation owned by a foreign corporation. The U.S. corporation doesn't die and neither do its
shareholders, so there is no estate tax due.
Also, I have heard numerous horror stories of people who make an appointment to expatriate only to find that the
consular official they meet with is hostile to the concept of expatriation.
One person I spoke to told me she was told by an official that she would never be allowed back in the USA if she
expatriated. Another was told the IRS would conduct a "super-audit" of all her property. In another case, the consulate
refused to forward paperwork signed by a client to the Department of State, putting her expatriation in limbo.
The solution to all these problems is to expatriate at a "friendly" consulate. We've had good results at numerous
consulates and the numbers are increasing all the time. However, there are a couple countries you should probably
avoid, which we share with our clients.
TDV: If someone gives up their citizenship and expatriates from the US, how many days a year can they
spend in the US after expatriation?
MN: Once you expatriate you can obtain a visa to visit the USA, or if you have a passport from a country on the USA
visa-waiver list, qualify for entry based on that passport.
However, you won't want to spend more than an average of 121 days annually in the USA once you expatriate.
If you can demonstrate a closer connection to a country other than the USA this period can be extended to 182 days,
but over 182 days you're almost always considered resident. There are exceptions under some tax treaties for even
more than 182 days, but you need to be very careful if you spend more than an average of 121 days annually in the
USA after expatriation.
TDV: Any final thoughts?
A. The decision to give up U.S. citizenship is a serious one. It also requires substantial advance planning, including the
acquisition of a second passport, if you don't already have one. It's a step you should take only after consulting with
your family and professional advisors. But it's the only way that U.S. citizens and long-term residents can eliminate U.S.
tax liability on their non-U.S. income, wherever they live. And it's a tax avoidance option that Congress may eventually
eliminate altogether.
TDV: Thank you very much for your time, Mark.
MN: My pleasure.
For those interested in further information, Mark has a book which is updated yearly, called The Lifeboat Strategy that
covers almost any aspect of expatriation, particularly from the US, in great detail. You can see more about the book
and purchase it for $149 through Mark's website by clicking here.
We asked if Mark could give our subscribers a discount on the book and he said that he prefers not to offer the book
on a discounted basis but offered any TDV subscriber purchasing the book a free 15 minute Skype/Telephone
consultation. If you purchase the book and wish to receive a free consultation with Mark, just email him directly at
[email protected] with the subject line, "Free TDV Consultation" and he'll be happy to help as many of our
subscribers as possible with any of their specific expatriation questions.
Dispatch From Within The Belly of the Beast
by Private Parts
Editor’s Note: We include these casual comments from a former US NCO (Non-Commissioned Officer) currently working as a contractor of the US
Government on the ground in Afghanistan as an eye-opening look into what American taxpayer dollars are being used for in the “War on Terror”
"I commend the work of the Ministry of Counter Narcotics and the Counter Narcotics Police of Afghanistan.
Bothinstitutions have worked hard to improve their overall performances." - United Nations Office on Drugs andCrime
(UNODC) Executive Director, Yury Fedotov, after releasing the 2011 Afghan Opium Survey earlier this month
Greetings from Kabul!
I had to laugh when I heard the UNODC Director’s statement. Only within the government can you fail so miserably at
your assigned task yet still be commended for “improving overall performances.” Luckily, government “achievements”
rarely have to be measured by things like, you know, statistics. You just have to hold enough press conferences
and interviews and repeat the same lies until they are widely reported and accepted by the public as facts.
Ok, so let me quickly summarize the past year in the wonderful world of Afghan opium:
• Opium production soared by 61% this year, increasing from 3,600mt in 2010 to 5,800mt in 2011
• Afghanistan still produces 90% of the world’s opium
• 2011 farm gate value was over $1.4 billion, the highest farm gate value since 2003 (Fyi, the Taliban taxes poppy
farmers 10% so they pocketed $140 million of that, not including whatever additional profits they made as it was
processed/trafficked out of the country)
Now the 61% production increase was a bit misleading since last year’s crop was unusually low due to a crop disease
that destroyed some very large fields in the south. But when looking at the whopping farm gate value (anywhere from
5-10% of the country’s GDP, based on whichever fraudulent government GDP figures you want to believe), it’s obvious
that Afghanistan’s opium trade is as strong as ever since the US invasion 10+ years ago. And considering the US, UK,
Russia, Iran, etc. have spent billions throughout the years through their various counter-narcotics organizations and
eradication/interdiction programs, if this front of the drug war isn’t an epic failure than I don’t know what is.
Karzai didn’t have any comments on this year’s opium production numbers though. He was too busy warning the US
that Afghanistan would back Pakistan if the US attacks it. Not that our partner-in-crime is a legitimate representative of
the Afghan people, or that anything he has to say really means anything on the global stage, but even so I was
surprised at how many US officials seemed shocked and angered by his warning. Were they not aware that former
Afghan President Rabbani just got blown up at his own home in Kabul last month? An assassination almost certainly
directed by the Quetta Shura (the Taliban’sHQ in Pakistan).
Sure, Karzai’s a crook, but he’s also shrewd. He knows when it’s time to ratchet down the rhetoric. And he definitely
seems to be softening his stance towards Pakistan, even as the US continues to criticize Islamabad and the ISI’s
support of militant groups on an almost daily basis.
Regardless of how much money we’ve poured into this place, the fact that the Afghan President would back his Muslim
brothers in Pakistan, a place he lived for years, during any potential war with the US should have been expected. Nor
should it surprise anyone that millions of other Afghan Pashtuns also have an affinity with Pakistan.
Well, “shouldn’t surprise anyone” when talking about normal,
reasonable people, found anywhere on Earth. But obviously the
typical brain-dead US military officer and State Dept. official wouldn’t
understandany of this. I think one of the prerequisites for being
commissioned as an officer must be to have some sort of phobia
when it comes to opening a history book. I had to listen to a 10minute debate last week between several clueless Army J2 and J3
(intel and operations) officers trying to figure out why the “traitorous”
and “ungrateful” Karzai would make such statements, and “How could
anyone in Afghanistan have any support for Pakistan?”
It’s amazing how many US officials still don’t realize that the entire Af/Pak “border” was/is nothing but an arbitrary line
drawn up by colonial British India and an Afghan king. And that it means absolutely nothing to the Afghan or Pakistani
Pashtuns that live on either side of it.
Anyway, here are a few other stories around Kabul the past few weeks that I thought were interesting:
• In the past year since the government seized control of the collapsing Kabul Bank (after it was looted by several of its
politically-connected shareholders, all Karzai cronies, of course), the Afghan central bank admits they’ve only
recovered less than 10% of the $1 billion that was stolen. By the way, much of the looted deposits were used to buy
villas on Palm Jumeirah in Dubai. In fact, several of the crooked shareholders even used their own names to
buy/register the properties. They didn’t even bother using front men or shell companies or any of that. Now THAT
is ballsy!
• While taking the oath in 2009, Karzai pledged on live TV that fighting corruption was the top priority for his 2nd term.
He even established a special “Anti-Corruption Task Force”. Well, after two years, the results speak for themselves.
While the task force has investigated 2,000 cases (at least initially), nearly every case was ultimately blocked from
proceeding any further because the accused were high-profile government officials or even aids to Karzai himself. In
fact, there have been only 28 convictions total in the past two years, all involving very low-level officials and no one of
any importance nationally. So much for “fighting corruption” being a priority.
• The Afghan Mining Minister announced China Metallurgical Group (MCC) was selected to carry out technical studies
for two proposed rail lines in the country. MCC had already been awarded a $3 billion copper mining project a few
years back (the largest contract awarded in Afghanistan’s history) and are believed to be the front-runners for several
more upcoming mining contracts.
And just in case you’re keeping score at home:
Number of dead US troops in Afghanistan since the start of the war: 1700+ (and now averaging about 40 US
casualties/month)
Number of dead Chinese troops in Afghanistan since the start of the war: 0
Now I’m not a financial expert, so I could be wrong on this, but China’s ROI in Afghanistan appears to be better than
ours.
Well, as you can see, the $2 billion/week the US is still pouring into this place hasn’t made a damn bit of difference.
Afghanistan is still as corrupt and as dangerous as at any point in the decade-long occupation. But hey, as long as
the direct deposits keep hitting our bank accounts with no problems, we’ll continue the charade of pretending to work
and caring about “spreading democracy” or “fighting terrorism” or whatever other nonsense the US government still
thinks it’s accomplishing over here.
Regards,
Private Parts
Survival & Health News & Notes
by Jeff Berwick
Health is not only the most important thing. It is the only thing. For without health, you have nothing. This is something
I have believed since a young age and still believe to this day.
Many in the western world believe they live in a "first world country" and believe the propaganda that the rest of the
world is far worse off. However, in many ways, with diets that are highly processed, most people in the western world
today are being poisoned daily.
This has led to a near pandemic in cancer. Yet, what do the sheeple do when confronted with this reality? They wear
pink on certain days and sometimes do a walkathon to "fight" cancer. Cancer was not meant to be fought. Cancer, in
nearly all cases, is a case of toxicity to the point of near death. The mindset shouldn't be to "fight" cancer anymore
than it would make sense to "fight" poison. Any intelligent person knows that you just don't drink the poison in the first
place.
In this regard, it is always amusing to talk to the brainwashed slaves who think that by living in a place like Mexico or
Thailand that I am worse off than living in places like the US. In almost every way, I am better off. Especially when it
comes to food.
Gonzalo Lira wrote an excellent piece on this reality called, "What Distinguishes Rich From Poor Today". It has a
number of excellent points. For one, it makes the point that I have often made, that food in places like Mexico and
Thailand is often organic and bought from local farms... returning to the US to Walmart food results in a shock as to the
low quality of the food. It also makes an excellent point that due to to the injection of hormones and other
pharmaceuticals into the meat that men today are becoming more feminine and women are becoming more masculine.
It states that this is why so many women are opting for breast implants today, because the breasts they would have
normally had have been stunted by the hormones in their food.
Of course, if you really were concerned about cancer, it has been shown that 77% of cancers are preventable just by
doing something so simple it should be obvious. Getting daily exposure to sunlight. Remember that big bright thing in
the sky that the government and media has been telling you is dangerous for decades? It turns out it is pretty healthy.
Both the cancer industry, as it explains in the above linked article, and the govt/media don't want you to know this.
What they want is for you to take toxic chemicals and slather it all over your skin and your childrens' skin... Given the
fact that just about everything you put on your skin gets absorbed into your bloodstream, it is interesting that there is a
complete lack of regulation of cancer-causing ingredients in skin care products. There are over 150 toxic cancercausing ingredients currently used in cosmetic products alone. According to US federal law, products containing
cancer-causing substances should carry a written warning. But the FDA does not enforce this law with cosmetics or
personal care products.
In the western world, we spray on, lotion in or ingest a large amount of toxic chemicals everyday. Check out this article
by Natural News denoting ten dangerous chemicals that most people expose themselves to every day.
IRON
In one Finnish study of more than 2,000 individuals, researchers found that stored iron was more strongly linked to
heart attack risk than either high blood pressure or high cholesterol. It is believed that women who menstruate regularly
are less likely to experience heart attacks because iron levels are reduced by the loss of blood each month. The same
line of logic explains why men who donate blood regularly also experience fewer heart attacks.
Typical staples in the American diet - such as breads, pastas and cereals - are required by federal law to be enriched
with added iron. Is this a good idea? Watch this video which shows that at least one cereal just adds metal filings into
its cereal to "enrich" it with iron: http://www.youtube.com/watch?v=5ahlawrQHeA
Your government is likely enriching your water with a poison called fluoride to stop "tooth decay" and stipulating that
toxic levels of iron be put into your food. In China they went to the one-child policy to try to limit population growth. In
the western world they weren't so obvious. Instead, they allow you to be born but then work on poisoning you
thoroughly during your lifetime.
Use organic products as much as possible and stay away from ANY and ALL processed foods. Even things that seem
as innocuous as breakfast cereal are often packed with toxins.
End Quote
"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the
Government ever since the days of Andrew Jackson."
-- President Franklin Delano Roosevelt, November 23, 1933, in a letter to Colonel Edward Mandell House
Stock Charts courtesy of stockcharts.com
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