Wealth International, Limited

January 2003 Selected News Clips

(Especially noteworthy articles’ headings highlighted in gold.)


The director of the Carr Center at Harvard’s Kennedy School of Government weighs in on the subject, much discussed of late. President Bush claims not, but what other word adequately describes what America is becoming? If Americans have an empire, they have acquired it in a state of deep denial. But 9/11 was an awakening, a moment of reckoning with the extent of American power and the avenging hatreds it arouses. Extensive analysis of the causes and consequences of the situation.

More on this story here.


Lynn Meredith has made $millions marketing the gospel of tax avoidance, the IRS says. Her message, as detailed in her best-selling (100,000 copies) book “Vultures in Eagles’ Clothing”: You don’t have to pay federal income taxes, ever. Authorities say Meredith is particularly troublesome because she has helped move tax evasion from the fringe to the mainstream. In contrast with other tax rebels, her manner is more real estate agent than revolutionary. Federal authorities arrested her and six colleagues on charges of operating a worldwide tax scam last April 15 (the date is just coincidence, they say), and is scheduled to stand trial in June. Prosecutors said Meredith convinced tens of thousands of people to evade federal income taxes, mostly by selling them “pure trusts”. Meredith, who has pleaded not guilty to the charges, says that her trusts are legal and that the government is persecuting her for exposing the basic unfairness of the tax system.

“The IRS has no authority for what they do,” Meredith tells the audience at one of her seminars. “The IRS works by intimidating you. It’s your own fear that makes you comply. If we refuse to be fearful, they will have lost all power over us.” As one client put it: “At first, you think she’s a crackpot. Then you get interested in it because of greed. Then, when you start looking into it more, you get real sick in the stomach. It’s like the carpet of innocence has been pulled out from under you.”

The IRS contends that Meredith has made at least $6 million from her anti-tax activities. Meredith declined to discuss her income but said her business was successful. She owns a fleet of vintage cars, including a 1973 Corvette Stingray with the vanity plate “TAXREBL”. “The IRS gets really upset about all my cars,” she said.

Federal prosecutors have not filed charges against any buyers of Meredith’s trusts - some are scheduled to testify for the prosecution. To outsiders, it might seem as if Meredith has met her match. But die-hard followers advise against counting her out. “Let me tell you, the government’s going to be sorry they messed with her,” said one.

More on this story here.


Paul Craig Roberts, an architect (as assistant secretary of the Treasury) of the Reagan tax-cut revolution and now a syndicated columnist and chairman of the Institute for Political Economy says “The left is right: America is an unjust society.” The problem, he says, is this: “Americans are no longer secure in law - the justice system no longer seeks truth and prosecutors are untroubled by wrongful convictions.” Historic due process rights, many enumerated in the Bill of Rights, have been eroded. “They can seize anyone, and any property, at any time.” We recently coauthored The Tyranny of Good Intentions: How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice with Lawrence M. Stratton, a lawyer.

Asset forfeiture, aimed at drug dealers when radically extended by Congress in 1984 but now covering 140 other offenses, allows seizure on “probable cause” - i.e., at the discretion of police and prosecutors. Proceeds go to the seizing agency, creating a corrupting motive. Civil cases are now often criminalized, through “novel theories” of the law invented by prosecutors to target specific defendants - very much like a bill of attainder (explicitly forbidden in the Constitution). Exxon faced cleanup costs and civil tort damages after the Exxon Valdez oil spill, but it was also indicted for intentionally killing migratory birds without a hunting license and dumping refuse without a permit. This “novel theory” allowed the Bush Administration Justice Department to bring criminal charges, which carry massively higher penalties. “Despite the absurdity of the charges,” notes Roberts, “Exxon lacked the confidence in our crumbling justice system to go to trial.” It settled for a $125 million fine.

Michigan Supreme Court Justice Stephen J. Markman similarly lays the blame at the source: “The ultimate responsibility lies with Congress and its penchant for overly broad criminal statutes.” With sweeping criminal laws the prosecutor can find some technical charge to hang on just about anybody.

More on this story here.


The encryption software’s latest edition, PGP 8, is out and available here. The $39 PGP Personal edition includes PGPdisk, which creates an encrypted, password-protected area on your disk drive. PGP 8 runs on Windows 98 or newer Microsoft operating systems, as well as Mac OS X 10.2. Older versions of the software for other operating systems at can be found here. An open-source, PGP-compatible program called Gnu Privacy Guard is available for Windows, Linux, Mac OS X and several other operating systems and is free for personal and commercial use. (Gnu Privacy Guard needs additional software to become easily usable.)

More on this story here.


Americans traveling abroad would have to give the government detailed personal information before leaving or returning under an antiterrorism rule that the INS proposed today. The rule would force airlines and shipping companies to collect and submit to the government the name, birth date, sex, passport number, home country and address of every passenger and crew member. The proposed rule would make it mandatory for carriers to supply the information for both American citizens and noncitizens.

More on this story here.


Daniel J. Mitchell, Heritage Foundation Senior Fellow, reflects on the events of 2002 and the prospects for 2003. Some significant victories in 2002 will have to be defended. There is heartening evidence that the Bush Administration wants to reform the tax code. Most importantly, time is an ally. Competition is forcing governments to lower tax rates and reform tax codes – continuing a process begun under Margaret Thatcher and Ronald Reagan. Politicians usually do not like having to respond to this competitive pressure, which is why they want the OECD and EU to create tax cartels, but will be forced to make additional pro-growth reforms if the battle to protect tax competition is successful. He goes on the outline the prognonis of the likely 2003 battles, mostly optimistically.

More on this story here.


Web sites have plastered John Poindexter’s personal info on the Web. They put his e-mail address and home phone number on dozens of Web sites, forcing him to block all incoming calls, and posted satellite images of his suburban Washington house and maps showing how to get there. They have created online forms to collect even more personal data on him: “When and if you see Mr. Poindexter purchase something, travel somewhere or do, well, anything -- send us a tip describing your observations. We will display the information received right here on this Web site,” reads a site titled “The John Poindexter Awareness Office”.

“My goal is to simply let them know what they are doing affects other people and they should think about the consequences [of the Total Information Awareness project]”, said the site’s creator. The editor of the mailing list for Politech, which focuses on politics and technology, said the TIA has sparked far more outrage than previous projects with privacy implications, such as the FBI’s “Carnivore” Internet surveillance software.

More on this story here.


A bevy of the most solid Republican conservatives are sounding some of the harshest criticism against the president’s tactics in fighting the war on terrorism. As one critic points out, many of the post-9/11 initiatives would have been fought hard if they had come from Clinton. “Over the last several years,” wrote Phil Gold, an ex-Marine and long a right-wing stalwart, “I’ve become sadly convinced that American conservatism has grown, for lack of a better word, malign.” That movement to which he has given most of his life, he says, “has gained the government, trashed its soul, and now bestrides the planet.” He continues: “We no longer have a commitment to limited government. I no longer recognize the movement. What I started out with isn’t there anymore.”

“Both Ashcroft and President Bush have departed from their earlier emphasis on protecting privacy and have really become statists, who want to impose the power of the state on us to surveil us and also to prevent any dissent,” says Barry Steinhardt, director of the ACLU’s technology and liberty program. “They’re certainly not conservatives when it comes to wielding the powers of the state.” In fact, says Steinhardt, the ACLU are now the real conservatives. “We’re dedicated to preserving the values of an 18th century document.”

More on this story here.


PRAGUE: The accounts, which date to the 19th century, are now being eliminated as required by the EU, which the country hopes to join in 2004. Under communism, it was virtually the only tool for saving money in a bank. The possibility that the accounts could be used for money laundering or terrorist activities put pressure on the Czech government last year to abolish them.

One by one, passbook holders started coming into their local branches. One man brought in 46 books, a woman wanted to register her passbook in the name of her pet and a number of customers came in who had accounts dating to the 1950s. “I had three [passbooks] as well,” said the director of the sales management section at the bank which managed virtually all of the country’s anonymous savings accounts. “It’s not a big financial advantage but it has deep roots. It is something tangible.” Though an average of 11,000 to 13,000 account holders converted their accounts each day, the peak was December 30, when 34,000 visited branches around the country.

More on this story here.


Two women at a Miami export company were each sentenced to nearly six years in prison for accepting large payments of questionable cash and depositing them in amounts under $10,000 to avoid federal reporting. “It seems to me this case was in reality a case about structuring [deposits],” not money laundering, the U.S. District Judge told a hearing where he imposed the minimum prison time based on the jury verdict.

The IRS touted the case as a victory in cracking a sophisticated drug money-laundering scheme that includes legitimate exports from Florida to Colombia. Colombia’s guerrillas, classified as terrorists, are known to deal drugs to finance their activities. The prosecutor rejected claims that the case might chill trade. “Exporters now can better compete in legitimate business, because they don’t have to compete against others laundering funds.”

More on this story here.


A federal appeals court handed the Bush administration a major legal victory in ruling that a wartime president can indefinitely detain a United States citizen captured as an enemy combatant on the battlefield and deny that person access to a lawyer. The ruling may be the most far-reaching yet in a host of court cases brought on by the administration’s efforts in the war on terrorism. The opinion from the three-judge panel said that “The safeguards that all Americans have come to expect in criminal prosecutions do not translate neatly to the arena of armed conflict. In fact if deference is not exercised with respect to military judgments in the field, it is difficult to see where deference would ever obtain.”

Elisa Massimino, a director of the Lawyers Committee for Human Rights, said: “The court seems to be saying that it has no role whatsoever in overseeing the administration’s conduct of the war on terrorism. That is particularly disturbing in the context of a potentially open-ended, as-yet-undeclared war, the beginning and end of which is left solely to the president’s discretion.”

More on this story here and here.


The biggest problem with the criticism of the Total Information Awareness (TIA) system is that it is too shortsighted, focusing on what the Poindexters of the world can do today with current database and information-mining technology. That includes weaving together strands of data from various sources - such as travel, credit card, bank, electronic toll and driver’s license databases - with the stated purpose of identifying terrorists before they strike.

But what could Poindexter and the Bush administration devise in five or 10 years, if they had the money, the power and the will? What could a corrupt FBI, Secret Service or Homeland Security police force do with advanced technology by the end of the decade? That is the real question, and therein lies the true threat. For a hint at what the future might bring, it is worth reviewing some of the projects already under way at the Defense Advanced Research Projects Agency (DARPA), which is the parent agency for Poindexter’s Information Awareness Office. Microcameras at every street corner, ubiquitous spybots flying overhead, location tracking devices in cars, and, of course, implantible chips. Short of fleeing to the wilderness or living our lives entirely online, our only option is to fight the Poindexterization of modern life before it becomes too late.

More on this story here.


The widely promoted claim that Americans are not required to pay income taxes on their wages is false, a federal judge ruled Friday in ordering one of its leading proponents to stop inciting tax evasion. Thurston Bell was ordered to post the court’s order at his Web site (www.nite.org). Mr. Bell was also ordered to remove all language promoting the claim, known as the “861 position”, after a section of the tax code, that only those working for foreign-owned companies owe taxes on their wages. Mr. Bell must turn over to the Justice Department copies of his client’s tax returns, notify them that their returns were false and notify them that in addition to owing taxes they may face penalties for filing frivolous returns. Any refunds they obtained were erroneous, Judge Conner said, and the IRS may take them back.

“Although the First Amendment protects commercial speech generally, it does not protect false commercial speech,” Judge Conner wrote in rejecting Mr. Bell’s First Amendment argument.

More on this story here.


US politics as usual, or is the true economic reality more promising? On January 7, President Bush proposed fully exempting dividends from the federal personal income tax, a bold step that even the great tax-cutter himself, Ronald Reagan, never tried. Also included in the plan were accelerating income tax cuts scheduled for later in the decade, investment incentives for small businesses, and a modest amount of money for job retraining.

Bush justified his proposals by saying that they would put more people back to work in the short run by pumping tens of billions of fiscal stimulus into the economy in 2003 and 2004. He also argued that the elimination of the dividend tax would encourage investment and lay the groundwork for growth and prosperity in the long run. Democrats countered with the undeniable fact that the biggest beneficiaries of the tax cuts would be the well-to-do. However, the old rhetoric of class warfare - rich vs. poor, investor vs. worker - may be increasingly obsolete. Dividends, interest, and other capital income are more evenly distributed than they once were. Moreover, America can prosper only if investors are willing to take a chance on innovative new businesses and technologies - and one way to encourage them to do that is to cut the taxes they pay.

No matter what legislation finally passes, simply by proposing to eliminate taxes on dividends, Bush has transformed the economic debate in a way that goes far beyond the magnitude of the proposals themselves. Economists of all political stripes have long agreed that reducing taxes on capital income - of which dividends are one kind - is a good thing to do. In fact, from the economic perspective, such a reduction in capital taxes makes far more sense than simply cutting the marginal tax rate on high-income households, as Reagan did. But the difficulty in reducing taxes on capital income, such as dividends and interest, always has been political.

More on this story here.


Any visitor to modern Germany is struck by the remarkable contrast between the clean, efficient and unmistakably prosperous surroundings and the utter gloom of the locals. It is a palpably rich country that feels itself to be poor. For the past seven years in a row, Germany has been at the bottom of Europe’s growth league, and the German government’s own forecast, which is widely derided as optimistic, of 1.5% growth this year would continue this wretched record.

So why does the place look so good? Because the Germans have stopped being Germans. They are no longer the law-abiding and dutiful citizens of the economic miracle of the 1950s and 1960s. They are fast becoming just like the Greeks and Italians - hitherto Europe’s leaders in that interesting socio-economic phenomenon, the black economy. Last year, says a well-known writer on the subject, the black economy was worth 16.5% of Germany’s GDP, or $400 billion. In Berlin, the black economy was 22% of the economy. More than three-quarters of all construction work in Berlin was on the black. The Germany economy grew last year by less than one percent. The black economy grew by over 6%. He concludes that it has now become “one of the most stable pillars of our economy.”

More on this story here.


Taxpayers hiding income by using foreign-issued credit cards and bank accounts have until April 15 to avoid criminal charges if they come forward, disclose their methods and pay owed taxes. The foreign cards and accounts are legal, but taxpayers are required to report them and to pay taxes on the income and interest. People who come forward will be required to pay back taxes, interest and penalties but will avoid criminal charges if they qualify.

The IRS began obtaining records in 2000 from Visa, MasterCard and American Express to target people for audits and prosecution for tax evasion. The IRS is looking at about 1,000 accounts, some held by prominent and famous Americans, including athletes, entertainers and authors.

Bank secrecy laws in 30 tax-haven countries have enabled people to hide large incomes and evade U.S. taxes. The arrangements work in various ways. Some use foreign-issued debit cards to access the foreign accounts. Some make charges on foreign-issued credit cards, and pay the bills out of the foreign accounts. The government originally estimated that 1 million U.S. taxpayers have such arrangements, though now they say that number is too large.

Taxpayers who avoided $100,000 in taxes in 1999 would have to pay $149,319 in taxes, interest and a penalty of $20,000. Those who do not fess up would pay $217,758, which includes a higher interest and penalties, the IRS said in a statement.

More on this story here, here, and here.

IRS Web sites: Offshore Voluntary Compliance Initiative link here. How to participate in the IRS initiative here. IRS Voluntary Disclosure Procedure 2003-11 here (PDF file).


It is an Internet-based micronation, one of dozens proclaiming independence from the governments of the world. Altruists, jesters, earnest mini-secessionists and rogues - what they have in common is a sense of independence, some documentary trappings such as passports and citizenship certificates, and their own Web sites. “The more they talk about us, the more they write about us, the more real we become in the eyes of the world.”

More on this story here. Republic of Lomar documents here (PDF file).


SAN JOSE: The US government has filed a civil fraud case against a Costa Rican company which purported to offer “prime bank debentures” to unwary investors. The unusual aspect of this case is that the company, Asset Recovery and Management Trust, targeted investor victims of previous investment scams by claiming to be able to help recover the stolen funds, then luring them into further dubious investments.

More on this story here.

ST. LOUIS: A former insurance broker charged with scamming investors out of $2.67 million in a foreign bank-note scheme pleaded guilty to fraud in the middle of his trial in federal court. The storyline is familiar: He promised investors returns as high as 120% per year from investments in “secret foreign markets”, claimeding to know the several dozen or so gatekeepers who allow trading in bank notes, called debentures, sold by large foreign banks. (There is no secret market for foreign bank notes.)

More on this story here.

The Big Lie: There is a secret banking system where the big banks make astronomical returns, and you can not participate unless you pool with others or place your money with someone who has an place in “the system”. The U.S. government is covering up this secret banking system. Etc., etc.

More on this story here.


Among the problems that have affected modern Iraq, and that will affect any effort to reconstitute a post-Saddam Iraq, are the borders of the country, cobbled together mostly by the British after the defeat of the Turkish-based Ottoman Empire as a side effect of World War I. (The borders did not include a usable port on the Persian Gulf, a factor in Saddam’s decision to invade Kuwait in 1990.) They also yielded a country that is about 76% Arab and 19% Kurdish, with a sprinkling of Turkoman, Assyrians, Armenians and others.

More on this story here.


The world has changed dramatically, but the US still retains its historical ambitions to shape the political destinies of any region or nation it deems important to its interests. Bush’s visions are only the logical culmination of policies that began with president Harry Truman in 1947. The dilemma that the US has confronted since then is that the political and social outcome of its interventions cannot be predicted. There have always been limits to US power, and the question today is when and how the US will acknowledge this reality. Well-know foreign policy author and analyst Gabriel Kolko elaborates.

More on this story here.


According to a new study by two Massachusetts Institute of Technology graduate students, companies and individuals frequently sell or give away old computer disk drives with sensitive information still on them. The study found that 74% of the drives contained old data that could be recovered and read, while 17% contained fully installed, functional operating systems with user data that required no particular effort to recover. Another 36% had been freshly formatted but still contained old data that could be recovered. Among the sensitive information retrieved from the disk drives were detailed personal and corporate financial records, medical records, and love letters, as well as gigabytes worth of personal e-mail and pornography.

Casual PC users often assume that such features permanently delete the data stored in a file from the computer’s disk drive. Instead, most operating systems simply change the data to indicate that the file has been deleted, then mark the areas of the hard disk that contain the “deleted” data as being available for reuse by other programs. Assuming that data is not overwritten by another program, it remains undisturbed and can be retrieved and read using a variety of techniques ranging from simple Unix commands to free and commercial forensic software tools.

More on this story here.


The IRS committed fraud by brokering secret deals with two airline pilots to let them escape taxes in return for testifying against 1,300 other pilots who bought into the same tax shelters, a federal appeals court ruled Friday. The remedy for this “extreme misconduct” by the IRS was to give all of the pilots the same corrupt deal that one of the pilots got. The ruling will require the IRS to pay tens of millions of dollars in tax refunds, interest and legal fees, said a tax lawyer who represented some of the pilots.

More on this story here and here.


Charles Cain cogitates upon the issue of a company’s “residence”. In the United Kingdom, a company is resident for tax purposes where its central management and control is exercised. In the USA and France, the issue of management and control in the context of the tax residence of a company is not an issue. Rather, it is the place of incorporation, and the reality of carrying on business that are the determining matters. Thus, the fact that a Bermuda holding company is managed and controlled in the USA is irrelevant.

The US press and politicians responded to this development of the Bermuda reincorporations in an utterly illogical manner. The press raised the totally spurious argument of the morality of taxation, ignoring entirely that in western civilisation we live by the rule of law, and the rule of law permitted “inversion”. Not only that, but company law imposes a fiduciary duty on directors to manage their companies so as to minimise costs and maximise profitability. Failure to take advantage of the legal possibility of “inversion” could/should have resulted in litigation against such directors by their shareholders for breach of fiduciary duty. The US press, in this case, were not merely wrong. They were as wrong and improper as any terrorist, who regards the law as an inconvenience in the pursuit of their objective. The politicians’ response in Congress was just as absurd.

Bearer shares are a mechanism people use to effect the form, but not the reality - which is seen when the arrangement is examined closely, of the ceding of legal control over their financial affairs. Today, such legerdemain invites trouble. Interestingly, the obsession with secret arrangements can displace the idea that the legitimate use of corporate structures with full disclosure and compliance with tax reporting requirements can be a normal part of tax planning.

More on this story here.


MIAMI: Noted offshore asset protection attorney Denis Kleinfeld lays out the new IRS, its audit policy and what may lie ahead. Many, if not most, of the abuses and intrusive actions of the IRS are the natural consequences of the Byzantine complexity of the tax code itself. Between being burdened with a draconian tax law and a flawed reorganisation, clearly the IRS is an agency in trouble. Which means trouble for the taxpayers as well.

New IRS data makes it difficult for the politicians to claim that the rich are not paying their fair share of taxes. According to the latest released figures, the top 1% of taxpayers ranked by income now pay 37.4% of all federal income taxes. The bottom 50% pay just 3.9% of all federal income taxes. With the pressure to collect tax from such a small percentage of the people, the idea of a kinder and gentler IRS is no longer feasible.

More on this story here.


The year following September 11 has seen probably the most staggering proliferation of “conspiracy theories” in American history. Angry speculation - focused mainly on government dirty dealings, ulterior motives, and potential complicity in the attacks - has risen to a clamor that easily rivals what followed the Kennedy assassination. Some of these suppositions are patent balderdash. But many others are coherent and well argued, and cite disconcerting reports from the U.S. corporate media and respected overseas news desks to support their claims.

“Following are the ten most alarming theories about September 11, the ‘war on terror’, and the future of the world. Feel free to accept them as gospel, study them as symptoms of a traumatized culture, or scoff at them as anti-American propaganda: I’m only the messenger. Personally, though, at this point the only person I hold above suspicion in the matter of September 11 is that poor kid with the goat.”

More on this story here.


He is seeking your assistance in acquiring oil funds that are presently trapped in the Republic of Iraq.

More on this story here.


Rep. Ron Paul comments on the Bush tax cuts plans. Democrats immediately attacked the plan to eliminate double taxation on dividends, clamoring that only the rich will benefit from a dividends tax reduction. This tired argument ignores the millions of middle class American investors who receive dividend checks and presumably don’t consider themselves wealthy. It also ignores the stimulative effect that any form of tax cut has on the economy. When dividends are taxed only once, as corporate income, investment is encouraged and shareholder demand for dividends increases. This in turn encourages companies to increase profits, because it’s hard to pay dividends if you’re not making any money. But these arguments require some analysis, and the left would rather appeal to base emotions and attempt to paint the wealthy as sinister tax dodgers. The truth is exactly opposite.

When people complain about having 30 to 50% of everything they earn devoured by taxes, the collectivists just shrug. They honestly believe it should be more, much more.

More on this story here.


The really wealthy have known for decades how to legally beat the estate tax. A real-life case study demonstrating how is presented. Trusts, LLC’s, Family LP’s, life insurance, gifts - the full gamut of tools and structures is employed.

More on this story here.


The next round of globalization is sending upscale jobs offshore. They include basic research, chip design, engineering - even financial analysis. Can America lose these jobs and still prosper? Who wins? Who loses?

Work that costs $100 an hour in the U.S. costs $20 in India. Even Wall Street jobs paying $80,000 and up are getting easier to transfer. A Forrester Research analyst predicts that at least 3.3 million white-collar jobs and $136 billion in wages will shift from the U.S. to low-cost countries by 2015.

More on this story here.


Long a painful side effect of the innovations of Internet technology, Cybercrime is reaching new dimensions, security experts say. Spurred by a tightening economy, the increasing riches flowing through cyberspace and the relative ease of such crimes, technically skilled thieves and rank-and-file employees are stealing millions if not billions of dollars a year from businesses in the United States and abroad. Thieves are not just diverting cash from company bank accounts - they are pilfering valuable information like business development strategies, new product specifications or contract bidding plans and selling the data to competitors.

“Criminal activity on the Internet is growing — not steadily, but exponentially, both in frequency and complexity,” said Larry Ponemon, chairman of the Ponemon Institute, an information management group and consultancy. “Criminals are getting smarter and figuring out ways to beat the system.”

Part of the problem is that cybercrime is much harder to detect than crime in the actual world. “The vast, vast majority of virtual crimes right now never get caught or prosecuted, where you have some chance in the real world,” said Dan Farmer, chief technology officer of Elemental Security, a computer security firm in Silicon Valley. “It is extraordinarily hard to prove anything using digital evidence.”

More on this story here.


Donald Rumsfeld recently expressed opinion that France and Germany are part of “old Europe” and “a problem” in their opposition to military action in Iraq contributed to the growing polarization between the old and new worlds, and disclosed the lack of depth of America’s global hegemony. Why do Canadians and Americans adopt their myopic view?

Notwithstanding sputtering economies, the reality is that the economic and monetary union is well underway in the European Union. Never before has Europe been united through peaceful means. The result will be a new nation stretching from the Atlantic across Eurasia to the Bering Sea. A union without question more formidable than the United States. What will this mean for the world and the U.S. dollar? The writer is optimistic about the Union’s prospects.

More on this story here.


For online consumers, especially those making international purchases, e-gold offers an ease of use and a degree of anonymity that credit cards cannot match. And for some merchants, of course, the only selling point e-gold needs is that there are people who want to spend it. A transaction fee of 1%, capped at 50¢ per spend, comes in well under the 2-5% fees charged by credit card companies. And as for that bane of online businesses, the credit card chargeback: Unlike almost any other form of online payment, e-gold clears instantly and finally, with no chance for the spender to cancel after the fact.

A large percentage of e-gold’s early adopters come from the ranks of the laissez-faire radicals for whom gold has long been an icon of economic freedom from government. Others are goldbug investors, desperately bullish on the metal despite years of declining prices. Still others come to e-gold via e-dinar, looking to honor Islamic financial commandments and subvert the Western economic system.

A long and interesting introduction to and perspective on the evolving transaction mechanism.

More on this story here.


While tax cuts are always good for the economy, it is dangerous to promote the idea that government can create value in the financial markets. The collapse of stock prices in the last two years provides stark evidence that the Federal Reserve’s monetary policies of the 1990s did not create lasting prosperity, and we should understand that tax policy is no different. Centralized planning via tax policy is every bit as harmful as centralized planning in monetary policy.

Even in hindsight, many do not seem to understand the true nature of the 1990s Fed-created financial bubble. The prosperity enjoyed by so many companies and individuals was artificial, caused by Fed policies that vastly inflated the money supply and made the cost of borrowing money artificially low. Much of the “money” made in the market, and most of the astonishing paper increases in market capitalization, were illusory. The economic problems created by this artificial bubble are real, and we cannot hope to insulate ourselves from the ongoing correction merely by tinkering with the tax code.

More on this story here.


Antigua and Barbuda’s Chief Negotiator on international financial services, Sir Ronald Sanders, wrote this week to the Secretary General of the OECD informing him that his country wants a meeting of the OECD Global Tax Forum so that “all jurisdictions could collectively decide whether there is any basis for further commitment to the OECD’s initiative to eliminate tax competition”. Sir Ronald’s letter follows the decision six days ago by the EU whereby twelve out of fifteen member states will adopt information sharing, but the remaining three, Austria, Belgium and Luxembourg will not be required to exchange information on tax matters even though this is central to the OECD’s “Harmful Tax Competition Initiative”.

The OECD had threatened over 40 jurisdictions with sanctions unless they made a commitment to exchange information with OECD countries on tax matters. Consequently, these jurisdictions committed in February 2002 to work with the OECD in its Global Tax Forum to implement new standards including automatic exchange of information.

More on this story here.


Historically the term “offshore” has gotten a bad wrap from the media, which paints a picture of investors stashing their money with some illegal company located on an obscure Caribbean island where the tax rate is next to nothing. Yes, it’s true that there will always be the instances of shady offshore deals, but a vast majority of offshore investing is perfectly legal. In fact, depending on your situation, offshore investing may offer you many advantages.

More on this story here.


DOHA, Qatar: The Middle East acts as a source of smuggled gold into South Asia and as a return conduit for money flowing back from heroin sales in Europe, a document released at a symposium on anti-money laundering said yesterday. Proceeds from narcotics sales in Europe may arrive in the Middle East as cash, be wired through normal banking channels, be sent via a variety of forms of gold, or it can be transferred by the informal banking system — hundi or hawala.

Gold is also used in South Asia and the Far East as an alternative remittance or underground banking system. The global spread of ethnic groups from South Asia has provided a worldwide network of underground systems known frequently as “hawala”. The system provides a method by which funds can be transferred from individual to individual or country to country without paperwork and sometimes without using the traditional banking infrastructure. The system operates on trust and the anonymity of its customers is assured.

More on this story here.


It is not uncommon for lawyers to communicate to the press in high-profile cases. In several highly publicized terrorism cases (Zacarias Moussaoui, John Walker Lindh, etc.), however, Attorney General John Ashcroft has made an unusually large number of public statements. Indeed, in each case, he has held at least two press conferences. Moreover, Mr. Ashcroft’s statements have often included bold criticisms of the defendants and highly charged language. Going so far in criticizing the accused may violate government ethics rules which require that prosecutors refrain from making public statements that might unfairly harm defendants.

While prosecutors have a duty to try to win cases on behalf of the government, their role is not simply that of a zealous advocate for law enforcement. Rather, prosecutors have an additional, superseding duty: to ensure that justice prevails in each case. A Department of Justice motto makes clear that “The government wins when justice is done” - not when it procures a conviction.

Perhaps most flagrantly, Ashcroft repeatedly stated that John Walker Lindh had voluntarily confessed to all of the acts as charged. Courts have specifically noted that discipline is appropriate for a prosecutor who refers either to an alleged confession, or to evidence that may be held inadmissible at trial. Ashcroft did both: It was clear from the start that Lindh’s lawyers, like any competent defense attorneys, would likely challenge the admissibility of Lindh’s lawyerless alleged confession.

More on this story here.
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