Introduction – We rarely ever send out a special alert. This is a time when it is necessary. The reason is the US Dollar is in the process of no longer being accepted as a reserve currency. The value of the dollar will then decline and this will result in hyper inflation. Even Donald Trump recently warned bread would be $25 a loaf soon. The idea is to not have savings in US Dollars. Please read this recent letter the US Treasury Secretary sent to Congress to see just how serious and grave of a matter this is:

Download: Treasury Secretary Letter

If you astutely hold stronger currencies and the dollar goes down you can increase your worth substantially maybe even double or triple it and of course not wind up in bad shape financially like those holding US dollars only. This is going to impact people in North America and Europe greatly. We will back everything up with links from accepted mainstream media sources. Of course we have answers to the problem. Time is still available but the amount of time available is short. Feel free to inquire.

The Warning Signs

China and Russia Have Agreed to Use Each Others Respective Currencies – They both agreed to this well as other currencies in their trade deals. They will no longer use the US dollar when trading amongst themselves. This reduces demand for the USD. When demand for something drops the law of supply and demand sets in and the price decreases. The USD is headed downward. Hyper inflation is the term and it could wipe out your wealth very quickly. If you are holding the right currencies and precious metals this can work in your favor and you can multiply your wealth very quickly. Your choice.

China, Russia Quit Dollar (Fox News)

China, Russia quit dollar (China Daily)

Other Countries Cutting back on Dollars – Mexico banks will now only let a person convert $300 into their local currency (Peso) at a time. Walmart Mexico has completely stopped accepting dollars as did other stores. At least one other Latin American country has stopped accepting more than $300 USD for conversion into the local currency at a time. These countries do not want the USD anymore and are trying to discourage it being brought into their country. They know what is coming shortly. Here is an article apparently written by people from inside Mexico:

Mexican Government successfully sheds the US Dollar from its economy

Vietnam is trying to stop accepting USD into their economy encouraging the use of other currencies.

Vietnam tries to ease dollar influences

All this means demand for the USD will keep dropping and thus the value of the dollar will drop accordingly. This is inescapable.

A Word on Exchange Rates – You need to follow this carefully. The currency exchange markets are where the "official" exchange rates are set. You go in and see the USD buys so many Swiss Francs, Hong Kong dollars etc. These exchange rates are manipulated and fixed by the large banks and governments. You should not be looking here for the symptoms of the problem. This is the deception. Based on this many people think the US dollar is holding up just fine. This is far from the truth. When a country stops taking the US dollar it is irrelevant as to what the exchange rate says. The US dollar is no good. Then one needs to convert into another currency that is accepted to do business out of the USA. After time more US dollars will be needed to buy these other currencies. We are there now, but it is just starting. You still have a brief window to convert out of US dollar without taking a beating.

China Beginning to Float its Reminbi Currency – China has loosened controls on floating the value of their Reminbi. It has gone up 4% recently. As these controls become less and less, the value of their currency may increase more. What they do not say is the USD and Euro are really dropping in value against their currency. China is holding over 2.8 trillion dollars of foreign currency reserves. China can challenge the USA globally anytime it wants by say lending a country $10 billion or $100 billion from its foreign currency. China is trying to set its currency as the reserve currency in the world. This will set the USD in much less demand. When the USD is in decreased demand it's value will drop. Supply and demand rules always apply no matter how much they rig the forex markets.

Treasury gives China a pass on currency manipulation

China’s good reasons to revalue the renminbi

China Buying Gold – First lets take note that China has increased their gold mining efforts tremendously mining 340 tonnes in 2010. That is a lot of gold. In an effort to dump USD for real assets China has gone on a controlled gold buying spree. Physical gold in Shanghai is selling for $20 over London Spot. See what I mean, supply and demand trumps published exchange prices. Call a silver dealer and see what he is charging for silver rounds compared to market prices. China imported over 200 tonnes of gold last year (2010). During the first month of 2011 China was buying gold heavily. So in 2010 china mined 340 tonnes of gold and imported another 200 tonnes for a total of 540 tonnes of gold. One metric tonne is 35,273 ounces of gold which today is worth $47,000,000 (approx using $1350 per ounce). You can do the math if you like to see that it is a substantial amount. Bear in mind they have previous gold reserves as well. China is slowly dumping their USD reserves and buying gold which is a hard asset. China is estimated to have 1,050 tonnes of gold reserves. The problem with these figures is that China buys gold and does not report it for years. We really do not know how much gold they have and possibly the figure is much higher. We do know they intend to buy a lot more and are doing so. China says they intend to up their gold reserves to 10,000 tonnes over five years. If they bought this much gold too soon it would spike up prices too much. They need to engage in a careful and steady acquisition. For sure this level of buying along with India and consumers afraid of their governments fiscal policies will keep gold demand and prices high for years to come. There are only six nations plus the IMF to have over 1000 tonnes of gold. The USA claims to have 8,133 tonnes of gold but I have long since given up on believing anything they say. I know of no gold audit in the USA for many decades and this is suspicious.

China may increase gold reserves beyond 'Fort Knox' level

The worth of the currency of a country is dependent on the amount of gold reserves they have as well as foreign currency reserves. If you wish to see that China is number one and the USA is number twenty two go here:

Reserves of foreign exchange and gold - World

Current Account Balances – Now this will scare you. The current account is the sum of the balance of trade (exports minus imports of goods and services).

Current Account Balance - World

See that China is number one and the USA is number 163 with a serious minus number. The UK is number 161 also minus. The EU countries are for the most part in the minus numbers. For crying out loud Papua New Guinea has a positive number and the USA does not. If this does not scare you, well it should! The fact that countries are pulling away from the dollar means the day of reckoning is coming. Instead of waiting for the other shoe to drop and suffering you can make a handsome gain on the inevitable.

External Debt – Again this is scary.

Debt - external - World

You can see the USA is number one and the EU countries trail right underneath the USA. They all have way too much debt to be fiscally healthy. They are circling the drain in reality. The negative number means it is importing more than it is exporting. The Euro is circling the drain right alongside the dollar. Don't hold the dollar, the Euro or the UK pound down, instead diversify to other better currencies and precious metals and profit from the collapse. Sounds harsh but I am not causing the collapse, just telling you how to protect yourself and gain from it.

Domestic Economic Indicators

Municipal Bond Failures – What we are talking about here is the inability of municipal bond issuers (cities, counties and states) to pay their interest payments. This is called a default. People are getting scared big time about this. Cities, counties and states are suffering from the poor economy. Property values are low and thus property taxes get reevaluated lower. This means less income for the municipalities. Sales taxes are low due to low retail sales due to a poor economy and again less income for the municipalities. Employment taxes are low due to low employment. Inventory taxes are low due to low sales and poor capitalization of companies in general due to the economy. People that owe taxes are having trouble paying them and are delinquent thus the revenue stream going to the munis is retarded in this way as well. People have less to invest, interest rates are low and corporate profits are off thus capital gains taxes are down. This is all common sense, a no brainer if you will. All this adds up to trouble for the cities, counties and states who have the same overhead but less income. The bad temporary fix is to borrow more but they are not as credit worthy these days, so the cost of borrowing is higher if they can even borrow. The other fix is to cut spending. This means layoffs and cut government projects. The layoffs result in more unemployment. The cut programs means the economy suffers from less government spending thus more unemployment. It is anticipated that there will be 100 muni failures this year. Ouch. While the mainstream media is well into a propaganda campaign to tell the people things will be okay, basic logic says otherwise. Just read the above few lines again. From the end of Nov to early Feb. 2011 $22.5 billion has been pulled out of the muni bond market by investors. The outlook is far from bright and this is just the start. All this turmoil is only going to hurt the economy and in turn the US dollar. 2011 is going to be far worse than 2010. One more time far worse.

Municipal bond market stabilizes

States Defaulting – The states are very messed up financially now. They have massive deficits due to decreased revenue streams just like the cities and counties. Their bond interest payments are fixed expenses. Their state pension payments are also fixed. They are asking the fed for permission to file bankruptcy. The fed has said they are done with more bailouts to the states. You know if they ask for permission they will get it. If they get the permission, then they will file bankruptcy. Millions of elderly retired folks will lose their pensions and medical benefits. Read what happened in Vallejo, Ca.

Vallejo Bankruptcy Plan Would Pay Creditors as Little as 5%

These people are too old to work. Many need the health benefits. The bond holders will get burned. Please bear in mind the damage done to the creditors will vary according to the debt load the state has. The states will just about lose their ability to borrow money without posting hard assets as collateral like Arizona did with its state buildings getting cash on a sale lease back.

State gets $735 million in sale-leaseback deal

The people that lose their pensions and benefits will cause more to lose their jobs and unemployment will soar. Unemployment means more declining revenue for the cities, counties and states and thus more cut backs and layoff. Obama quantitative easing was a serious failure. He is keeping it going but it has done not a thing to help, just like him. They have nothing else left to do. They need to be spurring on private industry? Have you seen any signs of this? Of course not. The future of the US dollar is dismal. When it declines in value then comes hyper inflation. Imagine gas at $7.50 a gallon now like it is in Europe. Many people will not be able to go to work. How about $12.00 a gallon or more. The outlook is dismal.

US state bankruptcy won't get big cheer at hearing

Gas Prices – Due to tensions in the middle east gas prices have risen to $100 a barrel. This isa two year high. The tension seems to be staying so the gas prices will keep climbing amidst fears of the suez canal closing or shipments being curtailed in some way. This will drive up prices at the pump. One needs to consider that people in the service industry making under $10.00 an hour may not be able to afford to drive to work. Sure if gas goes to $4.00 a gallon life will go on but if it hits the Europe prices which is $7.50 now then what? Now the Europe price for gas may go to $12.00 a gallon and prevent them from using their cars too. This will mean more riots and instability in Europe. It is believed by many that the European Union will break up before long. Before this happens things will need to get a lot worse and this is in progress. Rising fuel costs mean rising prices, especially food. This increases inflation. Inflation is the thief that robs those working for wages. Wage raises never keep up with inflation. Business raise their prices to keep up but wages never seem top keep up. This is just adding more fuel to the fire.

Fed Debt Ceiling Not Going Up – Eighty Seven House Republicans vowed they are not going to let the fed raise the debt ceiling. What is going on is the other side is negotiating a debt ceiling raise if accompanied with spending cuts! Idiotic I say. It remains to be seen how this will play out. I do expect the debt ceiling will not go up. Either way it seems there will be program cuts and probably layoffs. The fed can also borrow from what they have not yet borrowed from like the federal workers pension and benefits fund. The military, federal law enforcement workers, federal judges etc will just love that one. When have you ever seen the fed pay anything like this back? Have they ever paid back the social security fund they borrowed against? No. Whatever way this goes is going to cause spending cuts and layoffs. The fed will go deeper into debt and this is a debt that can never be paid back. If they took 90% of everyones wages for decades they could never pay this debt back. The dollar will get cheaper in value which means hyper inflation. You should look at the riots in Europe and the Middle East and ask yourself where things are headed in the USA. How do you think that will affect the US dollar as a reserve currency? Don't wait for things to get worse and hurt you. Get proactive and profit from the imminent drop in the value of the dollar. Just hold foreign currencies in your offshore bank account. What is the worst that can happen? Things stay the same with the currency values. It is a stretch to think that the currencies with asset based economies like Canada and Australia will have their currency drop against the US dollar. It is also a stretch to think that Hong Kong dollars and Swiss Francs will drop against the US dollar. There are no expiring options or margin calls with this. Your bank account is multi-currency and you just hold many different currencies. If things go against the dollar you can multiply your wealth. Please don't shoot the messenger for being so cold about it, that is our job. These are not investments, just a multi-currency bank account.

FDIC – It is Feb. 9, 2011 and we have had 14 bank failures this year already. At the end of last year the FDIC reserves were down to $21 billion. This is the sum they have to cover bank failures with. The FDIC being concerned with future losses from bank failures is changing their way of assessing fees banks pay them for this mandatory bank failure insurance. They are going to charge based on assets not deposits. They want the reserves to go up from 1.15% of deposits up to 1.35% of deposits. Ultimately they want to get to 2%, but that can take a long time, time which may not be available. So if there are bank failures amounting to over 1.35% of deposits they are out of money. Well will that make you sleep well at night? Sure they can go back to Congress and ask for more money but the republicans plainly said are not increasing any debt these days. The FDIC is a private corporation that can file bankruptcy. We can tell you and tell you and tell you over and over. We know that we can not help everyone. Most people will not believe this until it is over and they lose a major portion of their purchasing power. Sure misery loves company and they can sit on the park bench and comment all they want about who would have ever figured this would happen. On the other hand you can preserve or even increase your wealth and get on the right side of the inevitable by holding the right currencies and precious metals. When the decline ramps up the government will probably restrict the amount of money leaving the country or that can be converted into foreign currency. I expect there to be bank holidays as well. Do not take this lightly. Things are well advanced. If you do not believe us go back and read the Treasury Secretary letter again. Never in the history of the nation has such a letter been written. Things are not going to be alright but you can maintain or even increase your purchasing power.

What to Do

Why Offshore - The idea is to get your money offshore. This protects your money from bank closures. Protects your money from confiscations. Removes you from being a target for lawsuits or actions from government agencies. You want to go to a bank that has government bank insurance like Hong Kong. Hong Kong banks have bank insurance from the Hong Kong government during the financial crisis for any amount of cash deposits in any of ten currencies. This crisis is expected to go for some years. This includes – Hong Kong Dollars, Singapore Dollars, New Zealand Dollars, Aussie Dollars, Swiss Francs, Canadian Dollars, Thai Baht, UK pound Sterling, Euros and USD. You can spread your dollars into Aussie Dollars (considered asset backed currency), Canadian Dollars (considered asset backed currency), Hong Kong Dollars (extremely stable currency), Swiss Francs for instance and thus be able to weather a storm if the US dollar and Euro crash. Of course in this event the UK pound will drop as well. The European Union and USA are the countries in the most trouble right now. What happens plays out like this. The Hong Kong dollar is worth about $0.12 now. Roughly speaking it takes 8 Hong kong dollars to buy one US Dollar. If this goes to $0.18 your money will now buy 50% more than before. What if it goes to $0.24 then you doubled. You could convert your foreign currencies back into the US dollar after the drop levels off and buy real estate, businesses etc at fire sale prices, do the math. The higher the hyper inflation the better off you are. Why be on the wrong side of this.

Why Hong Kong – Well first and foremost is the government bank insurance to any limit deposit. You do not want to be banking without the government bank insurance in these turbulent times. As currencies drop banks may get into trouble. Hong Kong (i.e. China) get not get to the top of the charts because they are stupid. Hong Kong is essentially China and China is the strongest country in the world economically right now. What about China getting stuck with all this bad US debt? Well what about China having such large gold holdings and foreign currency reserves which is an incredible offset? When the Dollar, UK Pound and Euro go down, gold is likely to spike a lot. What is a lot? Well $2000 an ounce is conservative and it can get there simply out of fear alone when the show which has already started gets more advanced. It could get to $5000 an ounce as well. What about China having no debt to speak of? What about the Chinese currency well on its way to being the next reserve currency in the world? Consider the FDIC as a poorly funded private corporation that can fail any time now. It can readily go bankrupt. The FDIC is not a government agency. Congress may simply say they are not going to bail it out which is what they are telling the states. You have to look at the whole picture. There is no perfect solution but banking in Hong Kong is pretty darn good and it stacks the deck in your favor in many different ways.

Stay Away From Dollarized Economies – The countries with dollarized economies are: Ecuador, Panama and El Salvador. If the dollar drops the banks in these counties can rapidly get into serious trouble. Suggest stay out of banks in these countries.

Gold Ownership In Honk Kong Bank Account – The Hong Kong bank lets you hold gold in your bank account. It is not allocated gold, it is a hybrid. You cannot go pick up the gold physically at the bank. On the other hand the gold is owned by a bank owned trust which buys it on the London Spot Exchange for you and sells it for you when you sell it. The bank we use is a trillion dollar bank. They are not buying non-existent fantasy gold or counterfeit gold. They did not get to be a trillion dollar bank by being stupid. I do not know if there are exchanges selling non-existent gold or counterfeit gold but I do hear rumors. Are these rumors true or not I do not know. I do know that a trillion dollar bank is far from stupid enough to fall for such a scam. In the event of a bank liquidation the trust assets (the gold) do not go into the general liquidation for general distribution. Assets held in trust do not get included into a bank liquidation like regular bank deposits do. You would keep your gold in the event of a liquidation. You can buy gold online in a few minutes as long as the market is open. You can sell gold online in a few minutes as long as the market is open. There is no capital gains tax in Hong Kong on profits from selling gold, stock market gains etc. It is a nice solution for precious metals holding.

Physical Possession of Gold - When you deal with physical possession of gold you get into a number of issues. Security, theft and fire pop right up. Lawyers can send law enforcement to your home through the courts to take your gold away under court order. Burglars can point a gun at your head and make you give it to them. In the event of a fire the gold can melt and get lost in the cracks and foundation.

Transporting Gold - How do you transport gold across borders in the event of a need for this? Well if you have 10 1 oz coins fine. If you have 75 then it is a commercial quantity and you will have to pay VAT, figure 15% or higher. How about government seizures when crossing borders for source of funds investigation or outright corrupt theft. What gold you know like "We don't need no stinking badges". How about leaving the airport with the gold and getting robbed because the customs official was kind enough to tell his buddies about you and your gold with a description? What about needing to get the gold assayed to sell it? See the link below to see what happened to one fellow who tried to move his gold to Panama through Mexico. Quite sad really. You may want to have the page translated:

Detienen en AICM a estadounidense con 150 monedas de oro

Gold Storage Services & Government Confiscation or Forced Purchase - We can talk of services like Viamat that hold the gold for you in Europe or USA. Their due diligence is punitive. Europe has judgment reciprocity with the USA. USA judgments can be executed against gold held in Europe. If you are the signatory on the account your gold can be had with judgment reciprocity. If the USA calls for a gold confiscation or forced sale to the government (like in 1933) these services will be forced to sell your gold to the USA for low prices to comply with the executive order that Obama may one day issue and you could do nothing about it. If Obama says ok Gold is going to be bought for $400 an ounce that is what you will get. What they did in the 1930's was buy the gold for $20 an ounce and then a few short months later the gold went to $35 an ounce and they almost doubled their money. Who gained? The Federal reserve Bank which is a private bank. If we use this model they might give you $1300 an ounce for your gold and then six months later gold would be be say $2500 an ounce. Many say the USA will go to a gold standard. I think it is not going to happen as long as the Federal Reserve Bank still exists. They fought hard to get away from any asset backing to the currency. They even saw to it that all countries did the same. Switzerland was the last to go off of gold, if you were wondering. If they ever did go to a gold backed currency they would first need to do an audit of the gold reserves. You will never see such an honest audit and it would require an honest audit to work. Next, if they did it they would confiscate or do a forced sale of all privately owned gold. Think about it. Would the fed ever not play a hand like this where they can rip off the wealth of "we the people". They are not going to go to a gold standard. Europe cooperates with USA, look at Switzerland. Do not expect any safe harbor there regarding court decision from US or confiscation forced sale efforts. These companies will only redeem your gold when you sell and send it to the same bank that opened the account and funded it originally. This can be an issue if dollar drops and the bank is closed or you have to take your gold proceeds back in dollars since the bank account used was a USD bank account. What if that bank was closed? If you sell the gold and make a gain this can be reported to your government. So these services that store physical gold for you have their disadvantages when you look at them closely. If you put gold in a vault box at a bank then you have to get to the bank to get the gold. What if the bank fails and the vault boxes get looted. What if you can't travel. What if traveling with the gold is dangerous?

We talk to many people about gold. There is no 100% perfect solution. We have a secure workable solution. It is easy to buy and sell gold this way. The bank is a trillion dollar bank in Honk Kong. It is one of the top twenty banks in the world. This is the best solution we have.

How to Proceed – We suggest you read this page for more details on Hong Kong Banking. Hong Kong Bank Accounts and Hong Kong Corporations

We cannot open a personal bank account unless you are a resident or citizen of Hong Kong. This means you have to use an anonymous bearer share Hong Kong corporation. The time frame for all is 30 days. The cost is $3995 complete, second year and after is $1000 a year.

Feel free to ask more questions.

http://www.panamalaw.org