Wealth International, Limited

May 2004 Selected Offshore News Clips

(Especially noteworthy articles’ headings highlighted in gold.)


The U.S. has a tradition of counterbalancing government secrecy by protecting a free press, allowing citizens to converse without risk, and honoring the efforts of brave whistle blowers -- those who defy the culture of secrecy and leak information to the press to inform the public of governmental wrongdoing, mistakes, and deceptions. The Bush administration, however, is aggressively working to prevent such public scrutiny in four distinct ways: it has widened the range of classified and otherwise confidential (but non-classified) materials. It has expanded its ability to criminally prosecute government employees who leak such materials. It has signaled a willingness to move against reporters who publish those leaks. And, most significantly, it is using new “material support” statutes to do an end run around the First Amendment and criminalize many forms of political advocacy.

The Bush administration’s assault on free speech, free press, and free association threatens to constrict our “threshold” liberties. This category of liberty, which also includes the right to be free from arbitrary arrest and indefinite detention (see “Crossing the Threshold”), lies at the heart of what it means to live in a free society and is essential for our other institutions to function as intended. If the press is free, if open elections are held, and if the courts are performing their sworn duty, even a president who tries to assume the powers of an emperor can be dealt with. But the more the press, the public, and the courts allow a president to chip away at the threshold rights that restrain his or her powers, the less democratic, free, and safe the nation becomes.

A long and complex assault on liberty is under way -- an assault aimed not at the fringes of liberty, but at its core: the rights that form the threshold between freedom and tyranny, the rights that allow citizens to push back against government excess. And if we let that assault push us across this threshold, we will find it very difficult to return, for we will have lost the essential tools that free people have historically wielded. Even those who shrug at lost liberties -- who believe that it is worth paying the price of core freedoms to defeat terrorism -- would be wise to worry about these developments.

More on this story here.


Panama is one of the best places in the world for retirees today, combining a low cost of living, near-perfect weather and one of the world’s best discount programs for retirees, with up to 50% off everything from public transport to movies, mortgage rates, doctor’s visits, electricity, restaurants and airfares. When you compare Panama with its neighbors, you will see that it has more amenities than traditional retirement spots such as Mexico and Costa Rica, but costs and crime rates are lower. In Panama, you will encounter less red tape and less interference from local authorities.

More on this story here.


In recent years, considerable information has surfaced regarding the development of powerful spy software by various governments. As a direct result, a growing number of individuals and advocacy groups are claiming that the use of this technology infringes on their right to privacy. Ultimately, the issue is one of competing interests in national security and privacy. Resolution will depend upon the efforts of lawmakers and activists, who must seek to establish a balance between the two ideals.

This article will identify the major spy programs that have fueled this debate in America and other countries around the globe. It will additionally highlight key events that led to the development of these programs. The following sections will set forth the particular characteristics of each program as well as the public reaction that each has garnered.

More on this story here.


The US has a unique distinction: It is the world’s greatest prison state. The US, “the land of the free”, has the biggest prison population in the world and the highest rate of prisoners per capita of all countries -- including countries that President Bush believes need liberating by US armed forces. Even China, with one party rule and a population that is 4.5 times larger than the US population, has 30% fewer total prisoners than the US. China’s per capita rate is a small fraction of the US rate. The US prison population per capita is three times higher than “axis of evil” country Iran, five times higher than Tanzania, and seven times higher than a civilized European country like Germany. One out of every 142 Americans is in prison -- and this does not include military prisons or INS jails.

The conservatives’ war on drugs, launched during President Reagan’s first term, bears much of the blame. Between 1980 and 2000, a period during which the US population grew by 21%, the number of state and federal inmates soared by 312%. Almost one-half million Americans are in prison for drugs-only offenses. Many of them are innocent or were encouraged by federal agents or informers posing as friends to transport small amounts of drugs as a favor. Most government informants are real criminals who escape charges or are given lenient plea bargains in exchange for helping prosecutors boost their conviction rates by entrapping innocent people. It is a disgrace to the US legal system that judges permit such false convictions. Many other innocents are in jail because police dropped small packets of drugs -- or in the Texas cases bags of ground up wallboard -- into their cars when stopped, allegedly for traffic offenses.

With a legal system that mass-produces criminals, prisons are being constructed at a breathtaking rate. A number of states now have prisons in almost one-third of their counties. Another conservative idea -- prison privatization -- has created a contractual monster that must be fed with a constant stream of inmates. A variety of new police Gestapos have been created that help to keep the massive prison complex -- our own Gulag Archipelago -- filled. The most dangerous is Child Protective Services, created by Walter Mondale in response to his constituency of anti-family feminists and “child therapists” in need of employment. The war on crime has turned even parenting into a dangerous occupation. One cannot help but wonder whether the US itself is in need of liberation.

More on this story here.


A financial adivsor explains how an annuity can help elderly parents qualify for Medicaid and preserve assets for their heirs. At its most basic, an annuity is a stream of income guaranteed by an insurance company. In exchange for a sum of money, the insurer promises to pay you a certain amount of income for a specified period of time. If you choose the “life” option, the income must continue as long as the annuitant (your dad, in this case) lives. When the annuitant dies, the income stops. Most annuities also give you the choice to receive income for a specific length of time, such as 10, 15, or 20 years. In this case, if the annuitant dies before the term is up, the payments continue to be paid to his beneficiary.

A “deferred” annuity is one where the investment is made today, but the income payments are postponed until some future date. Since you do not pay income tax on any gains your annuity investment may earn until you withdraw the money, this approach gives your original investment time to increase in value. With an “immediate” annuity -- the option being considered here -- you invest a sum of money and start receiving income from it right away. Now for the “Medicaid” part of the question. ...

More on this story here.


If you are fortunate or astute enough to have amassed wealth, how do you ensure that it stays in the family and is not frittered away in three generations, as an Asian proverb says? Give it away, says Terry Alan Farris, MeesPierson’s head of charity management. That may sound startling at first. But philanthropic efforts -- particularly when systematic -- produce a glue that binds families together much more than even a business can.

Says Mr. Farris: “MeesPierson has been around since 1720, and one of the things we’ve seen is that after three generations, the money disappears.” MeesPierson is a European private bank of the Fortis Bank group. “If you look at wealth succession, one of the missing pieces is value succession. And philanthropy is the greatest tool in helping to develop values.”

More on this story here.


A jaundiced and one-sided view of tax havens and the world of offshore finance, which nevertheless contains much interesting and useful history and information. Some of the attacks are also, doubtless, justified. The proposed solution to the problem of propping up the “dying principles of the welfare state” would appear to be giving more power to the IRS and other instumental agencies of tax collection.

More on this story here.


The fall of the Roman Empire remains one of the great unsolved riddles of history. Rome rose from obscurity to dominate the ancient world until it became practically synonymous with civilization itself. Yet a few centuries later its terrified survivors, decimated by disease, famine, and infertility, eagerly laid their necks beneath the swords of barbarian conquerors. Why? The evils that Rome faced were not worse than those faced by other societies before or since. Political turmoil, civil war, invasion, plague, famine, and all the other scourges of the ancient world can be found abundantly in the histories of all societies, including modern and early modern Europe. Why in the seventeenth century did England not succumb to plague and civil strife, nor Holland to devastating, repeated invasion?

The disunited world of the ancient Mediterranean constituted a de facto free market. States, each one seeking its own interest, competed against each other, with none able to gain a lasting advantage. In this setting, commerce flourished. The population and prosperity of the Mediterranean basin increased dramatically. Little by little Rome swallowed up the states of the ancient Mediterranean, such as Marseille, Syracuse, Carthage, Athens, and Egypt. At first the benefit seemed enormous. The chronic war and piracy which had plagued the Greek world were suppressed. Briefly the world knew peace and order and was able to expand its infrastructure. The ancient world reached yet a new peak of population and prosperity. But the state which made this possible carried within itself the principle of its own destruction.

Long before the deposition of the last western emperor in 476, the de facto free market of the ancient Mediterranean had been replaced by a frozen society. With secret police, branded workers, and coercive family legislation, Rome was the first totalitarian state. The Dark Ages of Western civilization did not begin with the sack of Rome by the Visigoths in 410, but generations before with the self-strangulation of the Roman polity. The barbarians, who had been there all along, stepped into a vacuum created by the Roman state itself, not in spite but because of its might. Sunk in poverty, tyranny, and ignorance, the West was not to rise again for centuries.

Any society subject to the same restrictions as the Roman Empire would speedily fall into economic stagnation and cultural decadence. Ancient civilization was destroyed by unrestrained statism, which flourished in the absence of a principle of individualism. Modern civilization will not fall, because it has discovered the intimately related principles of commercial vitality and individual freedom. Will not fall, that is, unless those who ignore the lesson of the ancient suicide of the West triumph, opening the way to the new barbarians.

More on this story here.


For all those who have dreamed of investing in a private island of their own can now make that dream a reality with “The World”, a new offshore development by Nakheel comprised of 300 islands that resemble the actual shape of the world’s continents. In an announcement by Mr. Sultan Ahmed bin Sulayem, Chairman of Nakheel, all islands have just been made available for purchase.

“The World will be one of the most beautiful and exclusive destinations worldwide that captures the essence of the perfect getaway -- a private island paradise where life slows down, sunsets are theatre and rain rarely falls. It follows in the footsteps of another extraordinary Nakheel project, The Palm, whereby The Palm put Dubai on the map and now The World is putting the map on Dubai,” said Mr. Sulayem. According to Nakheel, there has already been extraordinary demand across the globe for investment in The World.

More on this story here.


Frank Quattrone was convicted of obstruction of justice despite the fact that the stock allocation investigation he allegedly obstructed resulted in no substantive criminal charges being brought against him or his employer, Credit Suisse First Boston. Sound familiar? That is because Martha Stewart was recently convicted of lying to federal agents in an unrecorded, unsworn, and voluntary interview she gave about an insider trade for which she was never criminally charged, either. And retired NBA star Jayson Williams just went down on cover-up charges, too -- evidence and witness tampering -- even though the jury acquitted him of aggravated manslaughter and hung on reckless manslaughter -- the substantive crimes he tried to hide.

Getting nailed for the cover-up is nothing new. It has happened for years, Watergate being a memorable example. But the degree to which almost any behavior the government does not like can be recast as obstructionist is new. Watergate, after all, involved an actual burglary. The government has always hated being thwarted and has often reacted with bullying aggression. But in recent months it has gotten significantly worse. The message from the government is clearer than ever: Submit or we will nail you, innocent or otherwise, for even the most picayune dodging and weaving.

The war on obstruction represents an extremely authoritarian way of thinking (not a terrible surprise given that prosecutors are the ones doing the thinking). And it is a mind-set that might be well-suited for attacking a corporate entity. Arthur Andersen, for example, was convicted of obstruction, but not for any substantive crimes concerning its Enron audits. But it is significantly less palatable, and far more dangerous, when it is deployed against individuals.

The ugly truth of our world is that pretty much everyone obstructs everything all the time. Ever been pulled over for speeding and told the officer you did not see the sign, or that you did not think you were going that fast? Obstruction is a knee-jerk reaction, an almost conditioned response to the fear that comes from an accusation, baseless or justified. Martha, Frank, and Jayson panicked. Most of us would have too. That panic is human -- and though it might be something we punish, it does not merit the kind of witch hunts the government has recently engaged in.

More on this story here.


The further away they are from politics, the more honest and value-giving businesses tend to be. The closer they are to politics and government, the lazier they are, and the more prone they are to the three deadly sins. Concerns about dishonesty or bad value in business, when reduced to their essentials, are really concerns about people in business not behaving in a business way, but in a political way.

Recall what business is based on: peace, value to others and honesty. Business is about treating others with the respect due to human beings. Politics, on the other hand, is about controlling people. It is based on the three deadly sins: violent aggression, theft and mental manipulation. Honest business people are better human beings than the politicals. And the politicals know it. That is why they hate business, and business people, with such intensity. They are like school bullies, that pick on the bright children in the class. They hate us for our virtues.

There has been, in recent years, a new attempt by lovers of freedom to lighten and brighten people’s view of business. To concentrate on positives, not negatives. To celebrate the benefits of business and free trade, and in particular to celebrate the capitalist system which supports them. I think this emphasis on positives is good. But I am not sure that capitalism, with its rather 19th-century feel, is actually the right thing to be celebrating. I am coming to the view that what we should be celebrating is the moral beauty of business. We should be celebrating the peace, purpose, energy, honesty and value of business as virtues in themselves. We should be helping honest business people to realize that they are morally far superior to the political scum that want to rule over them. And we should be promoting and celebrating the common-sense justice, which brings rewards and pleasures to those who earn them, and contempt to those that deserve it.

More on this story here.


Facts: 1.) The top-earning 1% of US taxpayers pay one third (33.9%) of all federal individual income taxes collected while earning only 17.5% of all federally taxable individual income -- a 12.8% higher tax rate than they did ten years ago; 2.) The top-earning 1% of US taxpayers are facing frivolous lawsuits in phenomenal numbers, simply because our lax tort laws make them easy targets of opportunity; 3.) The top-earning 1% of US taxpayers are in more danger of government seizure (“forfeiture”) of their private property than ever before in our history; 4.) The top-earning 1% of US taxpayers are Leaving the USA at the highest rate in history. The IRS numbers cited above are not some bureaucrat’s pie-in-the-sky projections, but rather, they are are totals of actual IRS receipts.

Not only the Income Tax, but other legislative and regulatory attacks on wealth are forcing many of the people who pay the lion’s share of taxes, to leave the U.S. and because of some of that legislation, they are taking their wealth with them, thus, very disproportionately reducing the tax and investment base in the United States. Each new law attempting to stem “capital flight” represents yet another brick in an economic Berlin Wall that the wealthy see being erected by our government and meant to limit their financial options. But instead of forcing the wealthy to stay here, those laws are actually forcing them to move more of their wealth out of the US, while they still can.

Since the original publication of “Tick-Tick-Tick -- The Economy Bomb”, the earlier version of this article, in 2000, more oppressive legislation, aimed squarely at the top-earning 1% has made matters even worse. This is presenting a serious problem for the top-earning 1%. But, before you start shedding crocodile tears for those poor top income earners, remember that these people are almost all problem solvers. To them, this is only a speed bump. But their legitimate and justified response to the problems being created for them by US laws and the US tax structure represents a ticking time bomb that presents an even more serious threat to the remaining 99% of taxpayers. If you make less than $292,913 per year, then that is you.

It is no longer simply a matter of equity in taxation nor of the tracking of terrorists’ funds. As a result of recent and continuing legislation aimed at the wealthy, the economic future of United States of America is now seriously at risk, as those who can save our economy, are precisely the people who are being forced to leave. The wealth expatriation snowball is growing, day by day. I cannot say when it will reach critical mass, but at the rate it is going, it will not be long.

Link here.


In the heart of the heart of the “Homeland” -- the verdant fields and quiet townships of rural Ohio -- the fate of the world is being decided. There, the sway of a few votes could sway a key state whose political bent could sway the entire U.S. presidential election in November. That is why the Bush campaign has adopted the methods of Amway, the quasi-religious cargo cult/pyramid scheme that has suckered millions of rubes into peddling cheap tat and passing the profits up the ladder to the leaders, who sit in stern judgment on any disciple who fails to follow the prescribed rituals or feed enough new converts into the machine’s ever-grinding maw. “Amway [is the model], no question,” campaign officials cheerfully told The New York Times this week.

The cheap tat being peddled by Bushway is, of course, the candidate himself -- or as campaign director Ken Mehlman describes the product, “it’s love and belief in the importance of the president.” The cult’s vast command-and-control machinery has now descended on rural Ohio, where campaign volunteers -- who once merely had to “support” candidates but now must “love” them -- are toiling to meet Mehlman’s whip-cracking corporate targets for contacts, converts and cash.

Beyond its grimly fascinating portrait of a Stalinist-Moonie personality cult at work, the article also reveals a new phenomenon on the American scene, a disturbing development that goes a long way toward explaining the profound, persistent and widespread disassociation from reality that pervades American society and may yet carry the Potemkin president to victory: Fake horses. Bushway operatives are now trolling heavily in the “exurbs” -- middle-class and upscale housing developments sprouting all over the countryside. Developers lure stressed-out city-dwellers to these gilded holding pens by constructing a cozy image of an old-fashioned rural community, complete with fake storefronts -- beguilingly realistic, but only a few feet deep -- and, yes, fake horses, made of metal, gently nosing over white picket fences.

Mehlman’s minions believe exurbia offers rich pickings for the Bush cult -- and they are probably right. People who live in fake towns, with fake stores and fake horses, are likely to be happy with a fake president, who uses fake evidence and fake words about “freedom” and “peace” to launch all-too-real wars of conquest while turning the national treasury into a candy store for his cronies. The exurbanites’ virtual reality is a perfect reflection of the dreamworld where half the nation now dwells, snug in the continuing belief that Saddam Hussein actually had weapons of mass destruction, that he was a staunch ally of al-Qaida, and that every lie their cult leader told them before the war was, quite literally, the Gospel truth, as Knight-Ridder reports.

More on this story here.


May 17 is the 50th anniversary of Brown v. Board of Education, the Supreme Court decision that used federal force to integrate public schools in the US. The anniversary will be widely celebrated in print. Jumping the gun by several weeks, The Nation devoted its May 3 issue to celebrating Brown. The magazine celebrated early, because the editors fear that Brown’s anniversary might pass with insufficient notice by those who should most treasure the decision. Many on the liberal-left and in black civil rights circles have soured on Brown and regard the decision as contributing little to the “black freedom struggle” and even as a disservice to blacks.

David Garrow, author of the Pulitzer Prize-winning biography of Martin Luther King, Bearing the Cross, writes that Brown still matters to the left because the power the Court seized in its Brown ruling can be used to mandate homosexual marriage. The Massachusetts court has taken the lead, and on May 17 homosexuals will be able to obtain state marriage licenses. This, Garrow writes, is a fitting tribute to Brown’s constitutional vision on its 50th anniversary. Whether one looks with favor or disfavor on homosexual marriage, Garrow is correct. Brown gave the judiciary the power to impose its morality on society, regardless of legislation or societal values.

Brown has gained acceptance, because people have come to regard segregation as wrong. Brown got rid of a wrong and, thus, cannot be wrong itself. This is fine as far as it goes. But Brown did something else. It ushered in kritarchy -- government by judges -- as Supreme Court Justice Stanley Reed recognized. Kritarchy is fundamentally at odds with the separation of powers and the character of the American political system. Now that judges rule, the fight over Court appointments has become a life and death matter for the two political parties. Even worse, in place of good will and persuasion Brown substituted coercion as the basis for reform.

May 17, 1954, is a day of infamy, because it is the day Marxism triumphed over liberalism in America. The Brown decision was based on Swedish socialist Gunnar Myrdal’s argument that all Americans (even Northeast Liberals) are so racist that democracy would forever uphold segregation. To get rid of the great evil, an elite would have to seize power and rescue America from immorality. With Brown, the Supreme Court elevated Myrdal’s doubts about American democracy above James Madison’s confidence in it. Ignoring Madison’s warning, the Court made itself a “will independent of the society”. In so doing, the Court upheld Karl Marx’s dictum that good will is not an effective force in human affairs. Brown’s true legacy is rule by judges, the destruction of equality before the law, the replacement of persuasion with coercion, the end of freedom of conscience, and the rise of insatiable racial grievances.

More on this story here.


On the nature of money, capital, scarcity, growth and capital preservation. A wide-ranging discussion on investment issues with Sean Corrigan, the “Austrian-school” strategist of Sage Capital.

Q: [P]eople have been forecasting disasters forever. There are a number of people out there who make tidy profits preaching doom and gloom, but it never happens. Life just goes on. Now Buffett pipes in with such melodrama. It makes one stand up and take notice, no?

A: We should be careful of making the Sage of Omaha -- an investment genius -- into the Oracle of Omaha -- the possessor of an economic crystal ball: he himself would traditionally never have claimed any such a special insight. That said, when eminent investors such as Buffett, Sir John Templeton, Jim Rogers, and Pimco’s Bill Gross, as well as sober and well-regarded market analysts such as Richard Russell, express opinions ranging from caution to outright alarm at the state of play, we, too, should at least consider what it is that they see that the central bankers and their mainstream worshippers fail to recognize.

Link here.


Every second year the British and Caribbean governments meet to consider, at the level of ministers of foreign affairs, matters of common interest. This year, the fourth UK/Caribbean Forum will take place on May 9 and 10 in London. The 2004 meeting will be different to the previous meetings. In the past, the issues covered were relatively evenly balanced between trade, economic relations, security, investment, public health and immigration.

The meeting takes place at an important moment for relations between Britain and the Caribbean. The region is hoping that the UK can do more to support it in Europe and in multilateral meetings. However, Britain is in the throes of reorienting its foreign policy. It is also implementing new approaches towards its international trade relations and its bilateral development assistance. The overriding theme that runs through the new thinking in London places emphasis on thematic approaches at the expense of geography in regions such as the Caribbean that are considered to be relatively marginal to the UK in strategic terms.

It is an approach driven by an over-commitment in Iraq, concerns about terrorism and new global priorities, none of which correlate well with the region’s concerns about a gradual and stable economic transition out of preferential arrangements or the need to have better understood the implications for individual Caribbean nations of smallness and vulnerability. Whether the region as a whole has yet recognized that this has happened, or is willing to change the nature of its dialogue, is far from clear.

The dialogue between the Caribbean and the United States has sunk to a record low. In recent months senior members of Washington’s fundamentalist and increasingly dysfunctional administration have sought to coerce the leaders of democratic and stable governments in the region on issues as diverse as the United Nations and Iraq, Cuba, Haiti, homeland security and trade policy.

More on this story here.


The confrontation between the individual and the collective has long been the topic of literary and philosophic examination. Socrates taking the hemlock, Galileo forced to recant his scientific discoveries, Gulliver being tied down by the Lilliputians, or John Galt forced to retreat to his Colorado gulch, are among the more vivid examples of individuals repressed by collective forces. Artists, writers, and other intellectuals are ever on the alert to warn of threats to the kinds of creative conduct in which they deal. But the virus of collectivism insinuates itself into our lives long before men and women are beheaded or sent to gulags for their politically incorrect opinions.

If our minds are to become fully collectivized, we must learn the catechisms upon which the existence of institutions depends. Having severed the consistency of purpose between individual and social needs that is implicit in all voluntary behavior, the state -- largely through its school systems -- has conditioned us to believe that we are the state, that political systems are but an extension of our will, that politicians and bureaucrats are our “agents”, desirous not only of defending our liberties and advancing our interests, but ever mindful of their status as public servants to our will.

We eagerly embrace this doctrine as a way of silencing those inner voices that whisper to us the falsity of the proposition. We are inwardly troubled by the thought that we might be nothing more in the scheme of things than institutional chattels, to be employed as best suits our owners. We attempt to resolve such a dilemma by reciting the dogma that the institutional order exists to serve us. Many of us still pretend that politicians, judges, bureaucrats, police officers, members of the military, and other government officials, go off to work each morning with no more paramount purpose than the elimination of barriers to our sense of self-fulfillment.

I am suggesting is that the collectivist mindset is the most dangerous social condition mankind faces, whether it finds expression in the form of suicide bombers, a willingness to become a cog in a government’s war machinery, or simply in resigning oneself to a lifetime of control by institutional bureaucrats. State collectivism does not begin at the point of a gun, but culminates there. Its origins are to be found in our attitudes about the independence of individuals who choose, for whatever their reasons, to live outside prescribed herds.

More on this story here.


I have argued that the Bush administration’s attacks on the Bill of Rights, egregious as they are, do indeed have their precedents in history. I never meant to defend Bush on this basis, but merely to give historical perspective. I stand by what I said. Bush, bad as he is, has not violated the Constitution any worse than Lyndon Johnson, Richard Nixon or Harry Truman, and not as badly as Woodrow Wilson, Franklin Roosevelt, or Abraham Lincoln.

Nevertheless, Bush did swear an oath to uphold the Constitution, and he has shirked that duty considerably. We should not hold him to the standard of past American tyrants, but rather to the finest of America’s founding principles. It is useful, though perhaps depressing, to see the many ways in which president Bush has trashed the most noble and inspiring of all attempts to limit government through law, the Bill of Rights. Even as he advocates a new amendment to the Constitution to set national standards on marriage, the most important amendments already in place have each fallen prey to the ravages of his government.

The Bush administration has been utterly hostile to the entire Bill of Rights. I did not focus on it, but one can quickly realize that Bush has violated all the principles of the Bill of Rights in regard to the Iraq War alone. During wartime, the Bill of Rights and its corresponding liberties tend to suffer extraordinary abuse. Bush prides himself as a “war president,” and so it should come as no surprise when he treats his foreign and domestic subjects accordingly. We must have a clear understanding and appreciation for how much George Bush and the present government are undermining the principles that made America so special. The first Ten Amendments of the Constitution provide a blueprint for an incredibly free society. Perhaps Bush, who has a phobia against reading anything aside from what his advisors give him, should break with personal custom for at least half an hour and read the Bill of Rights.

More on this story here.


Tax policy can be a source of economic misery or a cudgel for reform leading to new or renewed prosperity. Forbes Global’s annual comparison of the burden placed on entrepreneurs, executives and their staffs is enhanced this year to include a more comprehensive peek at the actual tax rates in 50 of the world’s major business spots.

The United Arab Emirates (which includes Dubai and Abu Dhabi), has displaced the longtime low-tax leader, Hong Kong -- it probably has the world’s lowest levies on income. Although “Old Europe” continues to impose many of the heaviest loads on top producers, the Forbes Global Tax Misery & Reform Index many of those same nations to be making some of the biggest strides toward tax reduction. This may hold out hope for an economic stirring in a region that lately has lagged the world. And Asian countries such as Taiwan, South Korea, Japan and China look better at lower pay levels, reflecting their steeply graduated (and low) tax rates. France is the “world champion” of tax burdens. But foreign capital and businesses continue to flow into the country. This “French paradox” is explained here.

What about employees at various pay levels? Their pay after income and social taxes is shown in the Employee Happiness Index (PDF file), at incomes of €50,000, €200,000 and €1 million, as well as a fuller breakout for an ambitious, single €100,000 staffer and a married, €200,000 worker.

It is also important to look at the total taxes imposed in a country at all levels, national and local, as a share of GDP. In some countries the progressive income tax rates are applicable only to the top economic half of the population. This breakdown is available only for OECD member countries and uses end-of-2002 estimates, as summarized in the Tax/Spending Burden chart. A column on government spending to reflect the fiscal deficits being run in most nations, covered by debt, hidden taxes, profits from state-owned monopolies and the sale of government assets. Bureaucrats, ye shall not hide!

More on this story here.


A law professor on the Amnesty International Board of Directors argues that the proposed treaty would violate the most basic human rights of foreigners present in the U.S. whose extradition might be sought, and especially those foreigners of Irish Descent. It is obvious from the treaty’s text that it is primarily directed against Irish American citizens engaged in the lawful exercise of free speach to protest the occupation of Northern Ireland by the British Crown and accompanying human rights violations -- such a protest would be cause for extradition. Moreover, because of the treaty’s court-stripping provisions, there would be no judicial review by a U.S. federal court of the exercise of such free speach rights by Irish American citizens. Further, the treaty would retroactively extend to the indefinite past and has no statute of limitations requirement. Preventative detention, incarceration, and property confiscation would all be at the behest of the British Crown. He asks the Senate Foreign Relations Committee reject the proposed treaty outright, and concludes that the perfidy of the proposed treaty cannot be overstated or underestimated.

More on this story here (PDF file).


The US’s Patriot Act is used as a means of denying funding to terrorist groups. But Advocate Mark Ferbrache said that if it used a heavy-handed and interventionist approach to freeze allegedly suspect assets, financial institutions could find themselves caught in the crossfire because local legislation might forbid the client from being told. Collas Day, where Advocate Ferbrache is head of litigation, is hosting a global fraud conference to examine the implications for the finance industry. “This conference is not only about how the Patriot Act is being used, but also about its potential for abuse,” he said.

Advocate Ferbrache, who is a member of Guernsey’s Fraud Network, said that local financial institutions could face a serious and potentially fatal threat. “To the extent that the threat has been considered, or indeed identified, so far it has been only on a legal theoretical basis. The conference will examine real, empirical evidence of the US authorities intervening in transactions to freeze assets.”

More on this story here.


“The enemy we’re fighting is a bit different from the one we had war-gamed against,” said General William Wallace after the first week of fighting in Iraq had not gone as planned. The comment speaks to a truth of which we are reminded in wartime: the military is a government operation that undertakes its activities according to a plan cooked up by nonmarket actors. The bureaucrats are denied access to prices, the signaling devices that serve as the basis for assessing the success or failure of any particular project on the market. As such, even the best military plans, even those that lead to a declared victory, will partake of features similar to that of any form of central planning.

Planners typically refuse to admit error and rather shift the blame. Wallace’s open admission that something was amiss was highly unusual. Planners tend to persist in ignorance. We might describe government planning as one in which ignorance persists no matter what. In war as in socialism, the world would be a much safer place if the planners would stick to their games and leave real life alone.

More on this story here.


Moscow is a city of 10 million people where unemployment is negligible, property prices are ballooning, clubs are booked out and problems of transition to capitalism seem to be receding. Moscow is leading; Russia must soon follow.

Yet scratch the surface and you start to see how deep and perhaps unmendable are the wounds from communism. Moscow may have full employment but living standards are chronically low. For most, it is a daily struggle to survive, one Muscovite said. The newly emerging upper middle-class of executives may be doing well but average salaries are not much higher than £150 a month. Prices may be a third lower than in the west, but that scarcely compensates. Alcoholism is rife. Life expectancy is falling.

The legacy of communism -- and indeed Russia’s pre-communist past -- hangs over the country like a pall. Authoritarian traditions run deep; there is no conception of pluralism. In company law, and more importantly business practice, minority shareholders, for example, are powerless. In a takeover, either the victim owner or the managers simply wish the company’s assets away during the negotiations, leaving minority shareholders -- and the new owners -- with nothing but empty shells when the transaction is complete. The majority owner is tsar or tsarina of all he or she surveys. Revenues are organized through offshore tax havens. Fraud, racketeering and corruption is ubiquitous. Honest-to-God investment and business building is not the prevailing culture.

More on this story here.


The corporate tax bill winding its way through Congress has been widely criticized for its mountain of special-interest loopholes and other provisions. But the bill is just the latest example of why we need to have the same debate about the fairness of corporate taxes that we have been having about individual income taxes. Over the past 50 years, the share of tax revenue coming to the federal government from business has collapsed. In fiscal 2003 corporate taxes represented just 7.4% of federal revenue, down from 32% in 1952. The 2003 figure was especially low because of depressed corporate profits, but other measures paint a similar picture of a declining contribution. Corporate taxes as a percentage of our gross domestic product dropped to 1.2% in 2003, compared with as high as 6% in the early 1950s.

The question of whether American business is paying its fair share is particularly relevant at the moment. Corporate profits are booming -- in part because of lower tax rates -- and a higher share of the benefits of this recovery has gone to business (as opposed to workers) than in any recovery since World War II, according to a recent Northeastern University study.

Some argue that the United States taxes business more heavily than do other nations, creating a different competitive disadvantage: a global one. But apart from the tax havens, with their exceptionally low rates, those statistics are at best ambiguous. What seems clear is that multinational companies that have worked hard to game the system have garnered a special edge. Thus, fixing the U.S. corporate tax system would be particularly helpful for domestic and other corporations that pay closer to the sticker rate of 35%. Those businesses are competing in the U.S. market at a disadvantage against companies paying much lower rates. The playing field needs leveling.

More on this story here.


Federal agents have raided 17 money-transmitting businesses in the Washington, D.C. area that allegedly sent millions of dollars abroad without obtaining licenses, part of a nationwide crackdown aimed at curbing the ability of terrorists to move cash. Authorities have seized $3.6 million in the local raids, which began after the USA Patriot Act took effect in October 2001, tightening regulations on money senders. Although authorities have released few details of the operations, they suspect that three of the firms have sent funds to countries accused by U.S. authorities of supporting terrorism. No terrorism-related charges have been filed.

“When you have an underground banking system, it tends to make us very vulnerable to terrorist activity” as well as other crime, said Kevin Delli-Colli, assistant special agent in charge of the local Bureau of Immigration and Customs Enforcement office, which has headed the effort. But some immigrants and crime specialists say the crackdown has targeted many mom-and-pop businesses that have nothing to do with financing terrorism. These informal money-senders are running afoul of the Patriot Act simply because they lack the resources to meet all of its licensing requirements, critics say.

The most recent raid occurred at the Eritrean Cultural and Civic Center at Sixth and L streets NW. Immigrants who gather at the club to swap gossip and watch Eritrean television programs were shocked at the raid on the office, which many use to send cash to needy families back home. “To include us like a terrorist group is unacceptable. Of course we’re offended,” said Estefanos Mesmea, 55, a cabdriver.

More on this story here.


Unitary statehood among Caricom member states is said to be the best constitutional option for the region, but is one which will be least acceptable. “The island territories of the Caribbean have had too long a colonial history of administrative separateness to make unitary statehood a constitutional possibility. A more acceptable constitutional option will be a federal union,” a paper on the subject, prepared by Trinidadian Dr. Cuthbert Joseph has argued. But it argues, nevertheless, that the model most likely to be accepted by the region’s leaders and its peoples will be a confederal arrangement. Joseph, a former Trinidad and Tobago Cabinet minister, is a historian and international lawyer working now as an adviser at the Ministry of Foreign Affairs.

This is the option which “may have a strong appeal to many governments,” the paper says, adding that “in spite of three decades of the Caricom experience, member states have not yet satisfied the rudimentary requirements of the harmonization of legislation governing public policy and fiscal and other incentives to industry, agriculture, fishing and tourism.”

The disjointed foreign policy picture is notably evident in bilateral and multilateral relations between individual Caribbean states and foreign states such as China and Taiwan, the paper noted. Under a confederation arrangement, each state will continue to claim its distinct sovereignty without even wishing to pass some of its powers to a distinct federal authority. The confederate option normally takes the form of only intergovernmental cooperation in certain matters relating to foreign affairs. But the paper declares that a union based on confederation will not be effective in enhancing the potential of its constituent member states in the globalized polity of today.

More on this story here.


Money. Everybody wants it, and you can always use more. But what is money? Where does it come from? Is it really the “root of all evil” as the Bible and Pink Floyd have said? Do we really need it? How did we all come to value little slips of paper with portraits of dead presidents on them? Why can’t they just give everybody a million dollars and make us all rich? And why is any of this important to those who are concerned about human liberty?

I will anticipate some conclusions here: Money is vital to a prosperous society, without it mankind could do no better than a primitive agricultural society. Money originates and evolves privately, in the market, as a solution to the problems presented by direct barter. Governments (in collusion with large Banks) around the globe have forcibly taken over and monopolized the creation of new money, and abolished the natural gold standard for the sole purpose of expanding their own power and confiscating wealth. All other “justifications” for government money are lies based on completely discredited economic hogwash. The unprecedented and artificial “fiat money” imposed on us now represents a grave threat to civilization itself.

Link here.


Presidential aspirant John Kerry likes to discuss “the wealthiest one percent”. In this he is following in the footsteps of Al Gore who, when running for president, excoriated the one percenters to drive a wedge between them and the rest of us, hoping that enough of the rest of us would vote for him. Fellow demagogue Paul Krugman also often attacks the top 1 percent.

Whom do you picture as the wealthiest one percent? Many of us think of the famous athletes and entertainers earning $10 million a year, trial lawyers wearing expensive suits, and heads of multinational corporations making important decisions in exquisite wood-paneled boardrooms. To be in the top one percent in 2001, the most recent year for which the IRS has released statistics, you had to have an adjusted gross income of $292,913 or more. But if you take a wider and longer view, you reach a striking conclusion: virtually every American who has heard John Kerry or Al Gore speeches is in the top one percent. This includes the middle-class family from Indiana, the barber in Florida, the K-mart clerk in Oregon, and the Virginia junkyard worker.

This is actually good news. Here is why.

More on this story here.


Sample articles from this issue include:

Croatia the Best Country For Tax-Advantaged Residence and Real Estate Investment In Europe: What country combines beautiful scenery, first-class amenities, low prices and a convenient location within a two-hour flight from virtually any point in Europe? Not to mention unique tax advantages for persons who receive certain types of foreign income or a foreign pension? The answer is Croatia -- a well-known European tourist destination 15 years ago, but only now recovering from the widespread perception that it is not a “safe” country to visit. That perception is false. Although most of Croatia remained untouched by the war with Serbia, the nation still suffers from a reputation as a (former) war zone. This has distracted attention from Croatia’s clear seas, the more than thousand islands, romantic fishing villages, beautiful beaches, vineyards, Roman remains and medieval towns -- and its fiscal advantages. More information is also available here.

11 Places Where Your Shrinking Greenbacks Still Go A Long Way: Americans are taking a beating abroad. The dollar is down 18% against the euro in the last year, for example. Down and falling, in fact, against most every major world currency. Tough enough these days to be a traveler with greenbacks... but, oh, the pain for the American residing in euro-land. Every week the cost of living grows greater. Not so everywhere, though. In some places, your dollars still can take you far. Following are our recommendations for 11 countries where even U.S. dollars can buy a grand adventure... or an enviable new life.

Moving To Canada: Ten Tips For Survival: Moving to Canada means leaving behind family, friends, familiar food, routines and your place in the community. In Canada, you have to start all over again, build a new life, make new friends and find your place in a new community. This is a challenge all newcomers face, but if you come here alone -- with no close family or friends to help and support you -- then this challenge may seem even more daunting for you. However, there are a number of steps you can take to help yourself through this “settling-in” period. Here are our ten tips for survival to get you started.

Issue table of contents here.


The IRS issued a consumer alert advising taxpayers to be wary of promoters offering a tax evasion scheme that misuses “Corporation Sole” laws. Promoters of the scheme misrepresent state and federal laws intended only for bona-fide churches, religious institutions and church leaders. Scheme promoters typically exploit legitimate laws to establish sham one-person, nonprofit religious corporations. Participants in the scam apply for incorporation under the pretext of being a “bishop” or “overseer” of the phony religious organization or society. The idea promoted is that the arrangement entitles the individual to exemption from federal income taxes as an organization described in Section 501(c)(3) laws.

The scheme is currently being marketed through seminars with fees of up to $1,000 or more per person. Would-be participants purportedly are told that Corporation Sole laws provide a “legal” way to escape paying federal income taxes, child support and other personal debts by hiding assets in a tax exempt entity. While fraudulent Corporation Sole filings have happened sporadically for many years, the IRS has recently seen signs the scam could be starting to spread with multiple cases seen recently in states such as Utah and Washington. The IRS is concerned about this increase and is taking steps to pursue Corporation Sole promoters and participants.

More on this story here.


Even people who hate math actually love it. They depend on it, and they have faith in it. The only moral truth that everyone agrees on is that “2 + 2 = 4”. Why do I say that this is a “moral” truth? Because it brings order to our lives. That almost every person knows the simple rules of addition and subtraction goes a long way toward explaining how civil society functions. The essential function of a store clerk is to count the money received and give exact change back, and it is normally not a difficult thing to do.

Nature, too, imposes order. Jumping off cliffs or tall buildings can normally be called suicide, and it is understood that humans cannot fly. The belief that people “ought” to fly does not make it so. Instead, one must find ways to move through the air that accord with the laws of nature. Wishing something to happen does not make it happen. Feeling that something ought to be right, does not make it right. Anyone who wants a world in which 2+2 can equal 5 whenever it is convenient, is essentially asking for the world to go to hell. To willfully believe such a thing is to negate one’s own rational faculties.

The study of mathematics is the study of an abstract universe, which only means that reason itself recognizes the abstracts, the patterns -- as opposed to the absolutes -- of our actual universe. Curiously, reason is not held in much regard in the field of ethics or the social sciences. For the most part, social scientists defer to history, statistics, conventional wisdom, and ideology to understand the premises, and then only use “reason” to reach the conclusions. The purpose of social science often seems to be to find data to prove ethical and ideological points. Pick the best arguments of your favorite economist, statistician, sociologist, and historian, and your ideology may appear to be quite rational. That creates random judgments based on generalizations. Hey, we rebuilt Japan and Germany, why can’t we do the same in Iraq? Many believe that democratic institutions provide a check on this randomness; the moral preferences of the majority prevail. But this does not prove that the majority’s preferences are based on reason. Majority rule is still arbitrary rule.

Mathematics is based on our recognition of the real world; our rational faculty is based on recognition of objects and the recognition of structure and patterns. It does not tell us what ought to be or what is “perfect” or “ideal”, but in telling us the patterns and structure of what is it brings order to our lives. For ethics to be ethics, it must do the same thing: bring rational order to our lives. Like mathematics, it must provide rules to be heeded for an ordered universe. And in ethics and social science as a whole, it is the logic of human action itself, as opposed to finding the quirks of this or that individual or the beliefs of this or that population, that ultimately explains social phenomena.

And this is the ultimate, supreme debt we owe to Ludwig von Mises. He established, in Human Action, the premises and logic of human behavior. Not that human behavior is moral, or even reflects “rational self-interest”. But rather, that human beings act by making choices through time, and that these choices are a reflection of costs and benefits according to one’s values at the time of his decision and action. Politics can influence us by imposing additional costs on certain behaviors, and provide rewards for others. But politics can not control behavior or control values. In establishing these axioms, Mises systematically destroyed the conceit of The State, that its laws and coercion can function as values that can persuade people to become “good” in The State’s eyes. Instead, he advanced the idea that The State only imposes additional costs and impediments on human action and thereby distorts it and takes away the freedom and prosperity we otherwise would have had.

More on this story here.


The secret is looking for offbeat places to put your money. Benjamin Graham and David Dodd, in their 1934 classic Security Analysis, offered this partially tongue-in-cheek take: “Investment is successful speculation.” Our spring Investment Guide gives you a mother lode of investing ideas that you will not find elsewhere.

Conventional wisdom tells us that, with rates rising, fixed-income securities are as appealing as a vacation in Fallujah. But we sketch out how to prosper in this important segment, which should remain a part of everyone’s portfolio. We show how you can get good yields in relatively safe places and how to ride rate increases with floating-rate loans. How do you do well in a so-so stock market? Go beyond junk bonds to invest in the junk issuers’ stock. Listen to the guys who beat Warren Buffett at his own game. Take a flier on emerging markets like Turkey’s. Buy new mutual funds, stocks with century-long track records and value names sporting nice dividends. And we describe a stock-picking method based on an oddball blend of value, growth and momentum.

Google may tempt you back into the new-issues market; if you venture there, know which underwriters have done best for investors. Another idea: Purchase a condo in a hotel and get the benefits of ownership and a concierge. Aside from studying and test prep, your kids can get into a good college if you take a few savvy steps. Should you depend on your employer’s disability insurance? Nope. We show smart ways to deduct losses on your taxes. Ever want to invest in the sport of kings? Here is how to buy a racehorse.

Link here.


The federal estate tax exemption is now $1.5 million per person. So a married couple worth $3 million can pass on all their wealth to their kids or other heirs without any federal tax, right? Not necessarily. The biggest hitch lies in an often overlooked detail: whose name is on the property. Say the wife has $2 million of assets in her name and the husband $1 million. If he dies first, $500,000 of the couple’s combined exemption could be lost. As the estate tax exemption rises -- it will go to $2 million in 2006 -- wealthy folks, who never had to worry about this issue, are tripping over it. Less affluent families get caught in titling traps too, leading assets to be distributed in unintended ways and causing squabbles among heirs.

So review the five traps below and then pull out your own papers to see if you are at risk. Just because you have paid a lawyer to draw up an estate plan, do not think you are safe. “The documents may look beautiful and be well drafted, but they don’t do you any good if you don’t have the assets positioned correctly,” warns Len B. Cason, an Oklahoma City estate lawyer.

More on this story here.


Once upon a time, long, long ago, in a faraway place (actually, a contrary-to-fact made-up one), there lived a group of human beings without benefit of government. Any government at all. How did they manage? Well, whenever there was a dispute between two neighbors, or friends, or merchants, or between a retailer and a customer, the plaintiff and defendant together would hire someone to mediate between them. This would be a leader of the community, or a prince, or leader of the clan, or an old wise man, someone renowned for his wisdom and sense of fair play. If there were a robbery, or a rape, or a murder (or a commercial dispute in which one of the parties refused arbitration), the victim would resort to the same kind of person who, for an agreed-upon fee, would mobilize the community to bring about justice by use of force or banishment or both.

All was well in this idyll until a community leader, or prince, or wise man -- the most respected and powerful of them all -- decided that he did not much like the competition from others of his own type. So, instead of allowing disputants a choice, he insisted that they all patronize services from only himself. But securing a monopoly over protection, defense and insurance was not enough for this ambitious man. In addition, he demanded that all members of the society pay him fees (taxes) whether or not they had any need of his assistance in such matters. He hired a bunch of intellectuals, professors and journalists (for a cut of the increased pie) to bruit it about that this new system was only proper and natural, and that the previous one was fatally flawed: morally, intellectually, spiritually and pragmatically.

This, in a very small nutshell, is the beginning of the downward slide of the human condition for Hans-Hermann Hoppe, Professor of Economics at the University of Nevada, Las Vegas, and author of the new book, Democracy: The God that Failed. But this is only the merest beginning of the record of human history, economics, sociology and politics told to us by this amazingly gifted storyteller. At least this Prince (for that is what we plebeians must now call him) ruled in a reasonably wise and humane manner -- it was in his self-interest. But then a second tragedy befell mankind, one far more serious: we moved from monarchy to democracy. Now, all bets were off. “Grab now and make hay while the sun shines” became the mottos of the elected officeholder. This short-sighted behavior pattern transferred from ruler to ruled. It not only ruined the economy, but promoted war, exacerbated crime, increased interest rates (due to societywide impatience) and drove up all sorts of other indices of disarray (unemployment, homelessness, divorce, perversity).

More on this story here.


Certain commentators in the US say there is no longer a use for any trust created and administered under the laws of a foreign country. They believe it is illegal and unpatriotic and that all foreign trust companies are crooks. Wrong on all counts!! Of course, the activities of certain individuals who have created foreign trusts and used them fraudulently or as a result of negligent advice are well publicized. No one would seriously attempt to justify their actions. However, to brand all foreign trusts and their trustees in this way is simply unfair.

Trusts used to be marketed for their tax efficiency. In this day and age, this is probably not true, as the tax benefits have gradually been whittled away by governments worldwide. Trusts now are set up for other cogent reasons, including: 1.) The protection of assets from creditors, etc. 2.) Generation skipping. 3.) Parents in the US with children scattered around the world and unlikely to return. 4.) Protecting children from themselves.

Provided you have the right advice and choose your trustees with care, the use of foreign trusts can be worthwhile as part of your overall financial planning. Properly constructed, foreign trusts can be a very dynamic tool indeed.

More on this story here.


Maybe the surveillance state is like a glacier in an Ice Age. We can see it coming. It moves slowly. But in the end, it covers just about everything. The government is reportedly getting ready to spend up to $15 billion of our money on a computer-based system to track foreign visitors to the United States -- in the name of fighting terrorism. The New York Times reported that three big companies are among the finalists for a Department of Homeland Security (DHS) mega-contract.

Ah, technology to the rescue -- that’s the American credo. Were it only that easy, even if the consequences to liberty were not so dismal. It is not that easy, of course. But we live in a world where people are so fearful that they are willing to forfeit freedom for even the possibility -- most likely the illusion -- of more security. And money is no object.

In theory, the proposed system -- combining database mining, biometric tracking (including radio chips in passports) and other technological measures -- would help U.S. authorities spot some bad guys. In practice, it will undoubtedly crumble under the weight of administrative woes and the vast number of “false positives” (tagging innocent people as suspects) that will make identifying actual bad guys almost impossible. But even it did work, we would be wise to ask ourselves a few questions before spending those billions. Such as: If we build a surveillance system that can track foreigners so efficiently, how long would it take for the same technology to be used to track American citizens? The surveillance state glacier is moving, and picking up speed. Will this one ever melt?

More on this story here.


Dubai has some oil and gas, but they contribute barely 6% of its economic output and are due to run out in about ten years. Contrast that with a fellow member of the seven-state United Arab Emirates (UAE) federation, Abu Dhabi, which sits on the world’s fourth-largest oilfield. Dubai has been wisely using its oil and gas income over the years to invest in a different sort of future, replacing hydrocarbons with people as it has expanded to be the tourism and business hub of a region where 1.5 billion people are within two hours’ flying time.

Thirty years ago there was nothing in Dubai but a creek, a sheikh’s palace and a dodgy reputation as the smuggling capital of the Arabian Gulf. In most other respects, the sheikhdom has been magnificently transformed, and is now a beacon for legitimate, non-oil business in the Arab world -- where shining examples of capitalism are rare indeed. Today Dubai boasts 272 hotels with 30,000 rooms, 30 shopping malls and almost 5 million foreign visitors a year. Dubailand -- a $19-billion theme park twice the size of Disneyworld -- is under construction. The motto of the tiny sheikhdom, for long the poor relation of Abu Dhabi an hour or so’s drive up the Gulf, should be “If we build it they will come.”

More on this story here. CIA The World Factbook section on United Arab Emirates here.


The black township of Khayelitsha, a sun-scorched sprawl of shacks and shops, is only miles from the hip hurly-burly of coastal Cape Town, but it is light-years away in spirit. The city, whose name means “new home” in the Xhosa language, is a makeshift relic of the old South Africa, when racial segregation and minority white rule, or apartheid, were enforced by jackboot and truncheon. But there is a garden growing in the heart of this treeless metropolis. Its flowers are aluminum, and its roots are nourished by a “gardener” who goes by a single name, Golden, and daily he fashions flowers from empty soft-drink cans, performing artistic alchemy on street-side litter.

Tourists troop through his small home, paying the equivalent of a couple of dollars for one of his brightly colored blooms. While his work, also on sale in Cape Town tourist haunts, shows no signs of turning him into the next Donald Trump, Golden says it provides a far better life than he had in apartheid days when he sweated in the gold mines from which he got his nickname. Today, he is more in control of his destiny. “I don’t have a foreman,” the soft-spoken Golden, 47, says proudly. “I don’t have to go into the mines.”

In many ways, Golden’s story echoes his country’s story. Once laboring under the darkness of a system that disenfranchised the bulk of its population, South Africa is clambering into the light. Once a pariah state teetering on the brink of civil war, South Africa is emerging on the world stage as a beacon of hope and racial harmony. Although still juggling a combustible cocktail of domestic issues including AIDS, crime, unemployment, white flight and black empowerment, South Africa - which moved from authoritarianism to democracy without bloodshed - is on the path to becoming a multicultural global player. In some areas, South Africa is enjoying unprecedented success.

More on this story here.


It sounds unlikely but there is a small British property market where homes have spectacular sea views, enjoy year-round sun and share a village atmosphere -- yet where house prices have a mixed and uncertain future. This is Gibraltar, Britain’s troubled crown colony of 30,000 residents on a 6.5 square kilometer patch of land at the southern tip of Spain, overlooking the Mediterranean and the north Atlantic.

Now, its property market is facing two ways -- ultra-expensive developments try to lure wealthy tax-haven buyers just as a glut of land and properties going on sale may lead to price falls at the lower end of the market. A further reduction in the Ministry of Defence’s presence on Gibraltar is set to make prices drop as, later this year, the MoD will sell to the Gibraltar government 148 redundant homes, 14 sites for new developments and more than 20 other sites that may add hundreds of new homes to the Rock’s stock.

A risk for overseas buyers, of course, is that Spain still wants Gibraltar returned to its control, despite the 2002 referendum when 98% of residents voted against such a move. With the Royal Navy’s presence now negligible, would a third-term Labour government in Britain return the Rock to Spanish control as a pro-European gesture? If so, what would become of the tax status and Gibraltar’s burgeoning high-value property sector? No one knows.

More on this story here.


Because of the American stock market boom, 1982–2000, tens of millions of Americans began to believe that they will be able to retire rich. This was always an illusion. They bought shares way too late in the cycle. The masses always do. But Greenspan’s asset bubble, 1995–2000, persuaded millions of Americans that Easy Street is wide and level. It never is. Thrift Lane and Discount Road are where the money is, but they are side streets, unpaved.

The middle class’s illusion of easy retirement is becoming more visible, year by year: the stagnant stock market. But no one who has adopted a pleasant fantasy ever wants to abandon it. Economic reality eventually forces itself on men’s consciousness, but usually only after the magnitude of the on-paper losses have become inescapably visible to their wives. Most Americans will retire into poverty: those who become dependent on Social Security/Medicare. But their poverty will be American-style poverty, meaning a lifestyle beyond most people’s dreams a century ago, or even a decade ago in China and India.

Maybe 20% of them will retire in comfort, if they retire before 2015. Most of these 20%, who live in the post-2015 world, will see their lifestyles decline as their pension fund income shrinks with the fall in the value of money. The best hedge against inflation, as Ludwig von Mises once said, is age. A few people will retire rich and remain well off, maybe 20% of 20%. But there are always big winners in every generation.

The performance of the stock market since 2000 points to the dead end of Easy Street. The stock market has gone nowhere. Stock brokers’ assurances to clients that “now is the time to buy” are common, but they are less and less believed. Stock brokers in Japan had the same message after 1989, but the Japanese stock market today is still only about 25% of what it was in late 1989. Few investors in Japan believe Japanese stock brokers any longer. Anyone who did believe them after 1989 is much, much poorer than if he had simply bought long-term Japanese government bonds and then gone fishing.

The steady, relentless decline of the Japanese stock market after 1989 was not random. Yet American economists, because they believe in random-walk investing theory, in 1990 would not have predicted what has happened. They would not have seen what would have been obvious to an Austrian School free market economist, namely, that the 1985–89 stock market boom had been a bubble created by central bank inflation, and the stock market would not soon recover. That it would decline as much as it has for as long as it has would not have been obvious, even to an Austrian School economist, but that it would not recover soon would have been.

Link here.


The father of legalized prostitution in Nevada and former Mustang Ranch Brothel owner Joe Conforte, now 78 years old, still looks much the same as he did when he left the country 13 years ago to avoid paying millions in back taxes. His hair is inky black. He goes everywhere with his signature Cuban cigar and he still takes charge of all those around him. “I have a good life,” he says in his low gravelly voice veiled in the accent of his native Sicily.

Conforte left Northern Nevada in 1991 anticipating a federal indictment that was handed up in 1995 and included racketeering, bankruptcy fraud and other criminal charges. The government claimed he owed at least $13 million in back taxes made on the “working girls” at the Mustang Ranch, east of Sparks. At the time, he had a history of challenging local authority, pushing legal limits and evading prosecution. Fleeing to Brazil, which does not recognize nonpayment of U.S. taxes as an extraditable crime, was Conforte’s grandest of exit stunts.

Kemp Shiffer was the special agent in charge of the IRS investigation into Conforte and the Mustang Ranch. He was appointed to the case in 1988 and worked it long after Conforte’s flight. Shiffer recently retired from the IRS. “Is Joe Conforte a crook?” he asks. “Absolutely he is. He did everything we said he did. Extortion, conspiracy, bribery, racketeering, money laundering, wire fraud; he is guilty of it all. He’s a crook, but he is a brilliant crook. The man stayed a step ahead of us the entire time. I worked that case for 13 years … He slid right through and out of the country.”

More on this story here.


Federal law enforcement officials routinely seize money they suspect is connected to activities like money laundering, terrorism or drug smuggling. But in early April, United States marshals seized $3.2 million from Discovery Communications, the television and media company, in an aggressive effort to crack down on a new target, Internet gambling.

The money initially belonged to Tropical Paradise, a Costa Rica-based Internet casino operation, which in October paid Discovery for television spots to advertise an online poker room, ParadisePoker.com. According to court documents, the government seized the money and told Discovery, based in Silver Spring, Maryland, that it could be party to an illegal activity by broadcasting such advertisements.

Federal prosecutors contend that online gambling sites are illegal, but the offshore casinos fall outside their jurisdiction. So for nearly a year, the government has been trying to curb the sites’ activities by investigating and pressuring American companies that provide services to offshore gambling sites on the theory that they are “aiding and abetting” the operations. Until now, the effort has largely involved seeking information from American companies, including major broadcasters, Web portals and industry consultants. The seizure of money significantly escalates the government’s attack.

More on this story here.


Imagine a club where members of the volleyball teams enjoy drinking and eating more than exercising and, as a result, are very fat and out of shape. The club decides to expand its membership to include a group of men who only recently gained their independence from abusive parents and now are working hard on bettering themselves. The newcomers wish to join the volleyball teams. The existing players say to the new guys, “This is ‘not fair’ because you are slimmer and more energetic than we, thus you must put on weight belts so you are as slow as we are.” Substitute France and Germany for the fat guys, and the 10 new entrants to the EU as the hard-working thinner guys, and you begin to understand the new European oppression.

Germany’s post-World War II “Economic Miracle” came by abolishing price controls, instituting sound money, avoiding repressive taxes and regulations, and instituting the rule of law. Having achieved prosperity, the French, Germans and some of their neighbors began increasing taxes to redistribute income, and evolved into stultifying regulatory states. The predictable result is economic growth in France and Germany has all but stopped, and Germany now has a slightly lower per capita income than the average income of the pre-enlargement EU.

Because the Eastern and Central European countries suffered under the communists for four decades, their real income levels average only 47% that of the E.U. Eight of these countries (plus Malta and Cyprus) entered the E.U. on May 1. For these new entrants to catch up, they need competitive advantages over their established neighbors so they can attract the necessary foreign investment and spur productive economic activity. These advantages can be lower taxes, fewer economic regulations and more labor mobility. But now the bureaucrats of the old EU are trying to make that impossible.

More on this story here.


When Sterling McBride hunted down escaped prisoners for the U.S. Marshals Service, Mr. McBride learned the value of lying low until fugitives trip up, leaving small clues on their whereabouts. Now, as an investigator for Microsoft, Mr. McBride watches carefully for tidbits of data that link some of the two billion pieces [Ed: !] of junk e-mail that Microsoft’s Hotmail service receives each day with the people who send them.

Once he finds an electronic key to the spammer’s identity -- a real name, address or phone number -- Mr. McBride uses all the tools of a regular detective: trailing suspects, subpoenaing their bank records and looking for disgruntled former associates to become informers. But first he must lift the cloak of anonymity provided by the Internet.

Spammers have been sending more junk e-mail than ever, despite a new federal antispam law that took effect Jan. 1. So far, few have been brought into court because it is hard to find them and link them to electronic offers of pills and pornography. So the vanguard of the fight against spam has turned from software engineers who try to identify and block spam from e-mail in-boxes to investigators in private industry, like Mr. McBride, and an increasing number of prosecutors and law enforcement agents who are learning how to combine traditional detective work with cyber-sleuthing. The F.B.I. is increasing its effort to investigate spammers, largely in response to the new law.

Using information provided by Internet providers along with their own decoy computers and e-mail accounts, these investigators have built a database of more than 100 spammers. Increasingly they are actually purchasing pills and responding to offers of get-rich-quick schemes to track down the spammers.

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I have been a Southern California resident my entire life and let me tell you, the price of real estate here is INSANE right now. We live in Orange County and right across the street from us, in a non-fancy area, with no clear extras, the price of a three-bedroom townhouse is $735,000. I am not making this up, we went open house shopping last weekend. A townhouse/condo with no yard in a new but cramped and crowded development is going for $735K. My wife and I laughed at the idea of putting down nearly $150,000 of our hard-earned saved-up money for a 20% down payment on a piece of property that would have sold for less than $200,000 five or ten years ago. How can this be possible?

My wife and I are savers. We don’t waste money, we pay our credit card bills in full every month. We do not live an extravagant lifestyle. We have excellent jobs with good salaries. Yet we cannot afford to buy a house in California. What is wrong with this picture? After laughing at the price of houses here in Orange County for awhile, I realized that people are actually paying these prices. And I do not understand how. So I sat down and did exhaustive research on the real estate market in California. I read about the history of earlier California real estate crashes.

I finally figured it out. California real estate is overpriced for one of two reasons: 1) first time buyers are getting 1 to 3 year Adjustable Rate Mortgages at 4% or less; and/or 2) people are selling their homes to first time buyers and “trading up” to more expensive houses using BIG down payments from the inflated equity they squeezed out of their house. I can cite references, but you know it is true. So I realized that my wife and I can afford an average, standard, forgettable single family residence in the middle of So. California suburbia. All we have to do is get an ARM.

Are the lenders in this country on crack (or just repackaging their loans and passing them off to blind investors)?! This can only lead to heartbreak and pain. See, anybody who has done their homework knows the rates are going up. Just from a statistical point of view, it is clear the rates are not staying this low, and when they do go up, they will likely stabilize at a significantly higher rate. I firmly believe that when the initial fixed rate on 1 year ARMs is back up to 5.5 to 6% we are going to see a clear shift in the dynamics of the California real estate market. The last time the cheapest mortgages had 6% rates, the price of real estate in California was 40-50% cheaper than it is now. And incomes have not risen appreciably since that time. I do not know anybody whose wages have risen more than a few percentage points in the last several years. Think about that for a minute.

To express it in near mathematical terms: my argument is that the price of real estate in California is inversely proportional (on a parabolic curve) to the interest rate on the cheapest mortgage product available to the least qualified borrower. In other words, as the monthly payment for the least qualified buyer goes up or down, the overall price of real estate goes up or down in some proportionate fashion. Only time will prove if my theory is correct.

The California real estate market is going to go down in flames. With a rock-solid, high earning, excellent credit, two-income, no children, minimal expense, saver household, my wife and I cannot afford to buy a single family residence in our community for the price of the monthly payment on an 80% 30 year fixed rate loan. Something is wrong in the world.

Link here.


Whenever political catastrophe strikes, there usually arises a unique moment in which a battle of ideas ensues. The battle occurs to define the public’s consciousness for the reasons behind the disaster. It is at such times that paradigms for the future are created or destroyed. The outcome of this battle often determines the direction of the polity far into the future. One such moment occurred in the stock market collapse that heralded the Great Depression. As many libertarians have noted (including the ex-libertarian and current Fed bubble-boy, Alan Greenspan), the reasons for that economic catastrophe originated with the Federal Reserve’s policy of “easy money”. The wizards in our central bank thought, throughout the 1920’s, that they had found the magical formula for perpetual prosperity. Namely, they engaged in a decade-long policy of interest rate suppression and currency debasement. This strategy created impressive short-term opulence, but it also gave rise to numerous speculative bubbles that ultimately deflated... causing the collapse of the market and the nation’s downward spiral into depression.

But the battle of ideas that ensued was won by the forces of statism. FDR’s socialists succeeded in convincing the American people that the depression was caused, not by government intervention in the free market, but rather by the excesses of capitalism and a dearth of government regulation. This ideological loss by the forces of liberty carried with it devastating consequences for America which still haunt us today. Most of the socialist policies that are slowly eating away at our Republic had their genesis in this ideological defeat of freedom. What had been a golden opportunity to instruct the American people in the ideals of liberty and limited government became a hideous green light for statists to begin an exponential growth of government power.

As our Iraq adventure begins to rot around the edges, we are again approaching one of these critical moments in the history of our Republic. Neoconservatism is, in my opinion, ultimately untenable. The idea that America can exercise “benevolent world hegemony” is nonsense. It is not adequate that the American people should come to recognize the disastrous ideology that is neoconservatism. It is possible to be right for the wrong reasons. And if the wrong paradigms become embedded in the consciousness of the American people, the outcome could be even more devastating than the neoconservative calamity itself.

First and foremost, it is critical that the public comes to understand why this Iraq war was not a disaster. It was not a disaster because we failed to obtain the UN’s permission to attack Iraq. It was not a disaster because we ran roughshod over the opinions of our allies. It was not a disaster because we failed to create a significant “coalition” to accompany us in the invasion. Rather, the reasons why this war is a disaster revolve around the ideals and beliefs which accompanied the creation of our Republic. President Bush launched a pre-emptive attack without the constitutionally-mandated declaration of war by Congress. His paradigm for launching the war was in diametric opposition to the beliefs of the creators of our Republic. But the leftists who now seek to define this failed war’s aftermath are preaching an entirely different Gospel. In their view, the collapse of neoconservatism should be analyzed in the paradigm of Wilsonian internationalism and big-government socialism. Their differences with Bush are more stylistic and technocratic than moral or constitutional. In the long run, Wilsonianism is a far greater danger to our Republic than the ludicrous rantings of the neocons.

More on this story here.


The passage of the Segregated Accounts and Foundations Bills are important tools to facilitate cross border international business, Minister of State for Finance, Senator James Smith claimed. In the case of the Foundations Bill, it bridges legal systems, thereby enhancing the attractiveness of this country as a truly international arena for business, he said. Senator Smith, who was speaking during the Senate debate on the two measures, said the Foundations Bill has been successfully adapted to the common law legal environment of The Bahamas, providing a “comfort level” to potential clients from those systems that are unfamiliar with alternative corporate structures such as trust, that we are accustomed to.

Senator Smith said that after the transition adjustments, “starting with the blacklisting in 2000”, it is important for The Bahamas to continue innovative product development, consistent with market expectations. This was important for the reassertion of preeminence in a marketplace where competition to attract geographically mobile activities is intense, exists at all levels and involves all countries, including the developed, developing and those economies in transition, he added.

In explaining the Foundations Bill, Senator Smith said it is more readily understood and recognized in civil law jurisdictions than that of “Trust”, which is used in common law countries. The Foundations Bill establishes a regime for foundations to be used as vehicles for the holding of private/and or public assets transferred to the foundation under its charter for the purposes set out in the charter. The charter of a Foundation must state its name, details of the founder, its purposes or objectives, the initial assets being endowed, the designation of its beneficiaries or how they are to be ascertained or that it is a charity, the definite or indefinite period for which it is established and details of its secretary and registered office.

More on this story here.


It is a spectacular tale of incompetence, greed and charges of corruption. It has pushed one of Germany’s biggest banks to the brink of collapse. It allegedly involves ingenious pyramid schemes, runaway debts and uncovered losses concealed in a maze of shadowy companies and Cayman Islands trusts. It features officials at the most senior levels of government and business ignoring -- and, by some accounts, suppressing -- auditing reports that could have stopped the shenanigans years ago. Worse, it represents a more general problem for Germany that shows no sign of going away.

Call it Europe’s Enron. For the financial scandal that has swept up Bankgesellschaft Berlin is every bit as breathtaking as its American counterpart, both in the scale of its losses and the connivance with which they purportedly were covered up. But here the parallels stop. In the United States, Enron touched off a public outcry leading to a criminal investigation, jailed executives, the collapse of a major auditing company and a host of new laws cracking down on intransparent corporate reporting. In Germany the response has been almost the opposite -- public indifference and an official response that, at best, has been tepid and, at worst, amounts to a deliberate effort to enshroud the case in “extreme secrecy”, according to corruption watchdog group Transparency International.

More on this story here, here, and here.
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