Mountain Vision
March 7, 2012
Mountain Vision

"The real voyage of discovery consists not in seeing new landscapes but in having new eyes."
~ Marcel Proust, French novelist and author

Dear Mountaineers,

This issue of the Mountain Vision is going to be a special one for all of our clients and Mountaineers. I have some bad news, and some good news, for those of you who live in the United States - actually, the majority of our readers - as well as for those living in other countries.

Let me start with the good news...

BFI Opening its Offices in Hong Kong
American author Horace Greeley, referencing America´s expansion to the west and the popular concept, during his time, of Manifest Destiny, was quoted as saying, "Go West, young man, go West!" Those times are long gone. The world is changing. A close friend of mine has been telling me quite the opposite for several years already: "Go East, young man, go East!" While I´m not as young as I was when he first started telling me to ‘go East´, what he had urged me to do is set up shop in Hong Kong or Singapore.

Well, I have finally listened and am proud to announce that BFI Wealth Management Ltd, Hong Kong, will launch its operations in the next few weeks. From our offices located in Hong Kong Central, we will provide a variety of wealth management and cross-border planning services to the Asian markets, with a focus on asset protection, wealth preservation, safety, privacy and compliance - true to the 20-year tradition of our firm.

Our clients, in the coming months and years, should expect to benefit from our presence in the region. On the one hand, we have planned a number of unique and timely services. Furthermore, the Hong Kong office will be able to provide services and solutions that differ from what we offer in Switzerland. I look forward to sharing some of that with those interested very soon.

On June 4th and 5th, in the context of launching our new office, we will hold our first Inner Circle Briefing in Asia, in the heart and center of Hong Kong.
In the next few weeks, I will be giving you some more information on our reasoning for setting up in Hong Kong, our objectives, and of course, more on our first conference in Asia. For now, I cordially invite our Mountaineers to mark the date and, hopefully, plan on joining us for this memorable event.

Committed to Serving American Clients!
Contrary to the appearance being created in the media, and despite all those ‘farewell letters´ that many American clients are currently receiving from all kinds of financial institutions that no longer want to do business with them, it still is possible and perfectly legal for Americans to keep their wealth offshore and to have their wealth preserved, protected, and invested internationally. Americans have plenty of reasons to diversify internationally, and plenty of reasons that have nothing whatsoever to do with tax evasion.

At BFI, we continue to be dedicated to serving the legitimate needs of American clients. It is critically important for Americans to jurisdictionally diversify their wealth -possibly more so now than ever. In order to actively and legally advise clients with residency in the US, BFI Wealth Management (US Clients) Inc. was formed last summer and registered with the US Securities and Exchange Commission. Yes, we can still meet, speak, correspond and, if you wish, Skype with you!

BFI works with a variety of international banks, trust companies and life insurance carriers that continue to accept American clients interested in owning managed accounts, insurance policies, Swiss annuities, precious metals, trusts, foundations, and related services overseas.

The choice of institutions, admittedly, is shrinking. And yes, offshore wealth management for Americans has - quite possibly by design - become a difficult and increasingly complex matter. The mire of US and related regulations may appear mind-boggling. But, rest assured: compliant and safe offshore wealth management is absolutely possible, AND more importantly, absolutely advisable in view of the overall context we currently live in.

Now to the Bad News: The Days of Privacy are Counted!
The bad news is that client confidentiality and privacy is being killed across OECD territories...and beyond. Citizen transparency, with everything you do being passed under the government´s microscope, appears to be the common objective across indebted nations. If you seek privacy, you may soon need to bank in some obscure, unknown, off-the-beaten path countries. And, who wants that? Other, potentially greater risks may await you there.

America, the land of the free, is clearly in the lead on this front, followed closely and eagerly by other nations with similarly dismal balance sheets. A few weeks ago, on February 8th, 2012, the IRS released the latest proposed FATCA (Foreign Account Tax Compliance Act) regulations. On the same day, the US Treasury released a joint statement with the governments of the UK, France, Germany, Italy, and Spain (those politicians and bureaucrats have been working overtime, you have to give them that) announcing an inter-governmental framework for FATCA implementation and tax compliance. In the meantime, other smaller countries are falling in line and applying for the same ‘beneficial´ treatment. Isle of Man was the first to go.

Switzerland, arguably the last bastion of freedom and privacy in Europe, under growing pressure from its European neighbors and America, is being forced to give up, bit-by-bit, the identities of international clients. Meanwhile, Singapore, which has recently been propagated as the new alternative to Switzerland, is passing rules whereby tax evasion is a crime and thus will fall under money laundering legislation. They too are folding. The trend is clear and headed in one direction only.

We can disagree with this development. We can fuss and whine about the fact that our freedoms are being continually cut off, left and right. However, unless ‘We the People´ of all nations stand up and fight the trend in unison, this trend will not be broken any time soon. So, as individual investors, as businessmen, as asset managers, we are forced to accept the facts, analyze them and devise proper strategies to defend our interests and reach our objectives in this new world of bureaucrats and collectivists.

Only a small minority - those few with the most independent, survivalist instinct - will succeed at walking the narrow path of financial freedom.


Your "Swiss Mountain Guide"
Frank R. Suess

We are excited to be taking part in our first Casey Research Summit, the Recovery Reality Check Summit, taking place April 27th - 29th, at the beautiful Hyatt Bonaventure resort in Weston, Florida.

We would like to invite our Mountaineers to register soon, as space is limited for this educational and interactive event!

Doug Casey and his team at Casey Research probably need no introduction. For well over 25 years, the legendary investor and best-selling author has been helping investors through his innovative investment research. The folks at Casey Research believe in identifying a trend before the rest of the pack moves in; getting in early, but also knowing when you need to get out. And as the name suggests, they do it with lots of research, research, research.

The Casey Research Summits cater to the needs of those looking to gain investment intelligence that can be used immediately while being able to network with some of the world´s best financial experts. This Recovery Reality Check Summit will offer the highest quality programming of past Summits, but comes at a critical time with the EU teetering on the edge of potential destruction and the US presidential race coming to a head later this fall.

We were honored to be invited this year to attend the Summit in Weston, Florida (a short drive from Miami and Ft. Lauderdale), and Frank Suess will be joining a list of highly esteemed financial minds discussing the problems facing world economies "in the now", and the strategies you´ll need to use to protect you "for the later".

For more information on the exclusive line-up of speakers and the content that will be discussed, click on the The Program.

As with our own Inner Circle Briefings, the attendance is limited, and from our understanding, the Casey Research Summits normally sell-out in the weeks prior to their events. For more information on the Recovery Reality Check Summit, as well as details for registering, click here on the Summit link, or feel free to write an email to Scott Schamber of the Mountain Vision team.

The Casey Research Summits may be new to our Mountaineers, but it is a valuable educational event you will certainly not want to miss!


Euro zone Disaster - Dirk Steinhoff on the McAlvany Weekly Commentary
In this commentary with David McAlvany and Kevin Orrick, Dirk Steinhoff discusses the "Euro zone Disaster". Amongst other topics, Dirk also touches on the high probability that smaller countries will leave the Euro zone and that rental properties could become a financial liability.
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Why We Should Be Nervous About QE and Inflation
Some interesting thoughts on QE and the prospects of inflation in the article linked below:

"The great likelihood is that success for the QE policy and wider recovery in the economy will nearly inevitably be associated with a large burst of inflation and a good old-fashioned recession, as policy-makers have no option but to raise interest rates precipitously in response."
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Heated Debate Delivers Swiss Tax Assistance Law
Swiss banking secrecy laws have been further eased, with parliament passing a law on tax cooperation and backing, at least in principle, a special deal with the United States.

In a lengthy and at times passionate debate, which included discussion of some two dozen proposed amendments, the House of Representatives voted 113 to 58 on Wednesday to pass the government´s proposed law on administrative assistance in taxation matters.

The new law replaces a previous regulation for assistance on tax matters and is based on standards set out by the Organization for Economic Co-operation and Development (OECD). Previously, Switzerland had differentiated between tax evasion and fraud, allowing only for providing assistance in cases of fraud. In a blow to banking secrecy in 2009, it agreed to lift this legal distinction.
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New FATCA Proposed Regulations
On February 8, 2012, the Internal Revenue Service (IRS) issued Proposed Regulations regarding implementation of the Foreign Account Tax Compliance Act (FATCA). FATCA enacted sections 1471 through 1474 of the US Internal Revenue Code of 1986, as amended (the Code). Those provisions included a new and additional withholding tax compliance regime (statutorily effective in 2013).
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China Lowers GDP Target to 7.5% as Exports Slow
China pared the nation´s economic growth target to 7.5 percent from an 8 percent goal that had been in place since 2005, a signal that leaders are determined to reduce reliance on exports and capital spending in favor of consumption.

Officials will also aim for inflation of about 4 percent this year, unchanged from the 2011 goal, according to a state-of-the-nation speech that Premier Wen Jiabao delivered to about 3,000 lawmakers at the annual meeting of the National People´s Congress in Beijing.

Asian stocks fell as Wen said the nation needs to shift to a more sustainable and efficient economic model and achieve "higher-quality development over a longer period of time." China must boost the incomes of ordinary people, count less on exports and investment, and reduce the state´s role in favor of private enterprise, Zong Qinghou, the country´s second- richest man, said in a March 3rd interview.
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Myanmar Nears Currency Float
Myanmar is nearing a decision to dismantle its fixed exchange rate, which risked holding back trade and investment as the country seeks economic ties with western nations after five decades of military rule.

Authorities will soon announce a shift to a managed float of the kyat, and seek to keep it from rising beyond the informal rate of about 800 per dollar, a person familiar with the discussions said. Officials will then activate an interbank exchange market, in which the central bank will intervene to influence the kyat´s value, according to the person, who spoke on condition of anonymity because the talks are private.
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FBI Warns of Threat from Anti-Government Extremists
Extremists: those are other people, bad people that do bad things, right? Well, think again. In America, according to the linked Reuters article and the latest definition of the Federal Bureau of Investigation (FBI), ‘extremists´ sound a bit like...well, like you and me!?!?

"Anti-government extremists opposed to taxes and regulations pose a growing threat to local law enforcement officers in the United States", the FBI warned. "These extremists, sometimes known as ‘sovereign citizens´, believe they can live outside any type of government authority", FBI agents said at a news conference.

"The extremists may refuse to pay taxes, defy government environmental regulations and believe the United States went bankrupt by going off the gold standard."
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Keeping Peace - an Increasingly Difficult and Potentially Shunned Endeavour...

© Copyright 2010, by BFI Capital Group AG, Bahnhofstrasse 29, 6300 Zug, Switzerland, website: The MOUNTAIN VISION UPDATE is published by BFI Capital Group (‘BFI’). Quotation is allowed if credit is given. Although every care has been taken in the preparation of Mountain Vision, BFI does not guarantee and cannot be held responsible for the accuracy of any statistic, statement or representation made. We recommend that you consult qualified professional advisors to determine the applicability of this information and opinion. The publisher is not a registered investment advisor. Readers should not view MOUNTAIN VISION as offering personalized legal or investment advice.
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