Panama Investor Blog

Retirement has a Throne

Every year a country of this Planet is proclaimed the #1 place to enjoy the rest of your life after retirement, and its no big surprise that Panama earned this title amongst our civilization. The Annual Global Retirement Index (now on its 23^rd year) ranks the best international retirement destinations, and together with factors provided by InternationalLiving.com ranging from the price of groceries and average temperature, to utility costs and the friendliness of locals, the editors assess the results. After they do all the math, the result concludes that there is simply no other place where retirees can get more for their buck.  PANAMA is the place to be!

Panama is rapidly becoming a Capital for the world to invest into and this brings lots of incentive programs to make it a place worthy of spending the rest of live in. Having the American dollar as a currency and English as a widely understood language, it’s a magnet for retirees moving from the US and the world. This Central American nation has several significant reasons for obtaining this title, such as its pensioner residence program that offers discounts on real estate loans, medical expenses, pensioners entertainment expenses and much more. But most significantly the immigration process has been simplified for foreigners.

Panama has introduced new visas in the past year, that have made it easier to gain residence; and having a population of around 4,000,000 with a growth of 75,000-80,000 a year, has been a factor that encouraged major advances in infrastructure and boosted the economy in many ways. But besides many factors that make this country a “Happening” place, the low cost of living, the heavenly climate found across the country and the incredible scenery all around are key factors of this judgment.  

Some quotes from an Article on Forbes regarding this announcement are:

 

“If you’re planning to retire abroad—because you want to live better for less, diversify your investments or enjoy a greater degree of adventure—you should consider Panama…”

 

“Panama ranked No. 1 this year because it offers a “great combination of variety and value,” “No matter what it is you’re hoping to find, Panama is a good place to look for it.”

 

The Top 10 places on the list were:

1- Panama

2- Ecuador

3- Malaysia

4- Costa Rica

5- Spain

6- Colombia

7- Mexico

8- Malta

9- Uruguay

10- Thailand

Contact us if you are considering Panama for your next social or economic adventure! – we will gladly help you out, and point you to the right direction based on what you desire.

Investors bailing out of Muni bonds

Things are unfortunatly taking a turn for the worst in most municipalities in the U.S. as the sale of municipal bonds have stopped and those holding them are bailing out. No wonder with the number of municipalities under water with bloated pensions and debt from over spending during the heyday of the housing bubble. With tax receipts dramatically falling municipalities are desperate for cash to pay salaries and many are cutting much needed services such as police and fire department personnel. How long will people within these communities go along with higher crime while the public servants with six figure pensions live high on the hog at their expense? Well, if the muni bond redemption's continue at their ever escalating rate, we won't have too long to find out. Unemployment unfortunately brings increased crime and it all comes together to spell disaster at the community level. This is a most interesting article from Financial-Planning.com

Excerpts:

Investors have withdrawn $25.3 billion — a sum that exceeds the gross domestic product of Panama — from municipal bond mutual funds the past nine weeks, according to Lipper FMI. Funds that report their figures weekly posted a net outflow of $1.51 billion for the week ended Jan. 12.

Municipal funds are now reporting outflows at a rate of $3.25 billion a week, based on the four-week moving average. That’s well above any pace seen before the latest series of redemptions in the $478 billion municipal fund industry.

The spate of outflows has fund managers scrambling to sell municipal bonds at a time when dealers are already worried about the willingness of retail investors to digest long-term tax-exempt paper, breeding considerable volatility and weakness at the long end of the yield curve.

 

Overseas Banks May Shun U.S. Investors

According to Bloomberg, overseas banks may no longer cater to US. clients. Tell us something we don't know. More and more banks here in Panama see the handwriting on the wall and are making it a policy to no longer handle U.S. customers. The cost of complying with U.S. regulations is just getting to expensive. One might think this was a plan by the U.S. treasury and IRS to keep money from leaving the U.S. and force those abroad to repatriate their funds.

January 13, 2011 (Bloomberg News) U.S. citizens may become global “pariahs” when a law forcing foreign banks to report their accounts takes effect, according to Switzerland’s oldest bank.

Americans “risk becoming pariahs of the global banking system through the fault of their own government,” Konrad Hummler, managing partner of Wegelin & Co., said in the copy of a speech presented today in the Swiss capital, Bern.

The U.S. law will require all foreign financial companies to supply information on American clients to the Internal Revenue Service and withhold 30 percent of U.S. interest and dividend payments from account holders who provide inadequate information to determine their U.S. status. The Foreign Accounts Tax Compliance Act will complicate offering services to clients with U.S. links when it takes effect in two years, Hummler said.

“The risks run by financial intermediaries promising to respect these rules are considerable,” said Hummler, who is also chairman of the Swiss Private Bankers Association. Banks “could be held liable for making a commitment” that a client isn’t subject to U.S. tax, he said.

St. Gallen-based Wegelin, founded in 1741, advised clients 16 months ago to sell U.S. assets because extended reporting requirements may saddle investors with tax obligations for themselves or their heirs. Wegelin, which is an unlimited partnership, has said that it can’t afford the risk of increased liabilities at time when American tax authorities are cracking down on international banks.

Implementation Costs

Implementation of the law risks costing the U.S. more than it will generate over ten years, Hummler said. It’s unclear whether Swiss banks will be allowed to sign such agreements with the IRS under Swiss law, he said.

“We still don’t know whether these criticisms will be taken into consideration or on the contrary, ignored by the American administration,” Hummler said.

Banks have been lobbying for an easing of the rules since the law, known as FATCA, was incorporated into jobs legislation enacted in March. Now diplomats are stepping into the campaign, with countries including Switzerland, the U.K. and Canada weighing in with the Treasury.

According to the Joint Committee on Taxation, the law is estimated to bring in $8.7 billion in revenue to the U.S. over 10 years--an amount banks and governments say is relatively low compared with the expense of complying with the law.

UBS Fallout

The Obama administration pushed for the measure in the wake of the political firestorm arising from the case against UBS AG, which in 2009 settled U.S. government claims that the Zurich-based bank helped thousands of rich Americans hide their money offshore.

Wegelin, along with Geneva-based Pictet & Cie. and Lombard Odier Darier Hentsch & Cie., is one of 13 banks in Switzerland in which partners collectively own and have unlimited liabilities for commitments made by the bank.

Switzerland manages an estimated 27% of the world’s privately held offshore wealth.

Saving Social Security with Personal Retirement Accounts

Our Friends from the Cato institute have come out with another great video, this time with a way to save social security. Many countries have privatized SS to the benefit of their citizens and maybe Panama could consider do the same. Unfortunately for the U.S. there is no money in the account so one wonders if their is really any sort of solution to this unfunded liability.

 

 

THE MADNESS OF A LOST SOCIETY- Must see video

This video is extremely powerful and left me numb for a long time after watching. This is what happened on Black Friday just  last week and is a sample of what the U.S., if not the entire world, may experience in the near future. The U.S. leadership is taking us straight down this road by devaluing our currency and when people can no longer buy the basics they will react even more insane and violent than when they are trying to buy cheap crap from China that they don't need. I encourage all of you to watch this and to take individual action to protect yourselves and your families from what you may have to experience some day. May God help us! Hat tip Ty b. For some important advice on what you can do to prepare, pay a visit to this interesting website.

 

WSJ says U.S. officials gleeful over new tax treaty

According to this article from the Wall Street Journal U.S. officials are very pleased with Panama signing of the tax agreement today. "The agreement will permit the nations to seek information from each other on all types of national taxes in criminal and civil matters for tax years beginning Nov. 30, 2007." I would wager that access to U.S. banks will allow the current administration to seek tax information on previous leaders suspected of money laundering. After all, the U.S. is the worlds largest tax haven for politicians from all around the globe. Other than that it is of little direct benefit to Panama.

Here is how the WSJ put it.

The U.S. has won greater access to information about bank accounts in Panama, a step that COULD move the U.S. closer to ratifying a stalled trade deal with the Central American nation. U.S.. Treasury Secretary Tim Geithner and Panamanian Vice President Juan Carlos Varela signed the tax information exchange agreement Tuesday.

Panama has been labeled a tax haven by international organizations including the Organization for Economic Cooperation and Development.

It has previously inked a host of such information exchange deals with countries such as Belgium, the Netherlands, Spain and Mexico, in the hopes of being removed from the OECD's tax haven list.

Some Democrats in the U.S. Congress had said that Panama must make more progress in helping the U.S. catch tax evaders, before they are willing to let the trade agreement advance.

Congressional Republicans, who have been pressing for action on the trade deal, said Tuesday's announcement shows Panama's desire to cooperate with the U.S.

"The fact that we have now signed a Tax Information Exchange Agreement with Panama should remove any remaining hurdles to moving forward with this important trade agreement, something we should do as soon as possible," said Rep. Dave Camp (R., Mich.). Camp will assume the chairmanship of the Ways and Means Committee when Republicans take control of the House in January.

"This is a long-needed and welcome step," said a spokesman for Ways and Means Committee Democrats.

Geithner said the signing of the tax information exchange deal heralds "a new era of openness and transparency" between the nations.

The agreement will permit the nations to seek information from each other on all types of national taxes in criminal and civil matters for tax years beginning Nov. 30, 2007.

"Upon entry into force, the new [agreement] will provide the United States with access to the information it needs to enforce U.S. tax laws, including information related to bank accounts in Panama," the Treasury Department said.

"We know who you are!" attack ads by cash desperate state government

This nastey piece of work was sent to me by a reader today and I must say, it should get your blood boiling. This is an advertisement that the Pennsylvania state government has been airing in order to increase state revenues. As all government tax collection techniques, it is designed to scare you into submission. Take a look at this video and then read the commentary from the Lee Bellinger news letter. Hat tip Robert R.

 

 

F.Y.I.   Lee Bellinger, Publisher
Re: Beware: State Governments Becoming As Abusive and Aggressive As The Federal Establishment!

You've probably noticed your cash-strapped state government is becoming increasingly aggressive as tax revenues continue to tank due to extremely weak business activity.
Now we have the worrisome spectacle of cash-desperate state and federal authorities taking out TV ads threatening the public. Not the sort of TV ads critical of incumbent politicians, that the federal government has tried to ban from reelection campaigns either. This new form of attack ad is based upon raw intimidation of the public by so-called public servants.
I've been warning readers for some time that cash-strapped state and federal bureaucrats are on the prowl for money. A creepy, skin-crawling new government attack ad directed at Pennsylvania taxpayers does exactly that. You have to see it to believe it.
What's telling about Pennsylvania's taxpayer attack ad campaign is that it brags how you have no shield of privacy from government snoops. It is a classic example of a disturbing trend: A situation in which bureaucrats have forgotten their place as public servants and now openly regard taxpayers as subjects to be preyed upon -- not a master to serve.
The tax-collection ad informs residents "We DO know who you are," and it warns them to "find us before we find you."
View the State of Pennsylvania's TV ads on TV and Radio:   And no, this is not a spoof!   Dangerous Financial Pressures on Government Authorities Threaten Our Futures
You see, America's dangerously overextended public-sector is quite literally papering over a solvency crisis of epic proportions. There are gigantic financial pressures on federal and state officials driving them to desperation.
Consider just this one slice of the government's little-understood funding pickle:
On the state-level alone, Uncle Sam is looking at a multi-trillion-dollar bailout of public employee pensions. More specifically, federal bureaucrats know that a major bailout of total state-level pension obligations is coming.
That's because there are an astronomical $5.7 trillion in pension obligations against only $1.94 trillion in actual holdings.
Northwestern University economist Joshua Rauh recently calculated 50 states' pension obligations by removing the rigged statistics governments use to make their pensions appear solvent. Rauh learned that in addition to horrific operating deficits, state government pension obligations are (on a national level) a whopping three times greater than their rapidly collapsing reserves.
Take Steps Now To Protect Yourself – Governments Are Desperate for Your Cash
Desperation moves by states foreshadow what is to come. Cash-strapped Colorado just tried, unsuccessfully, to grab $500 million from a newly-privatized pension fund. Connecticut has tried to issue creative new accounting rules to camouflage its insolvency.
And the State Supreme Court of New Hampshire recently ordered state officials to return $110 million they "borrowed" from a medical malpractice insurance pool.
As the old saying goes, the problem with socialism is that you eventually run out of other people's money. Now that horrific moment appears to have arrived. Governments at all levels are running out of cash.

"is the U.S. sliding into a tyranny of good intentions?

I receive a daily dispatch from Doug Casey that I find enlightening in these difficult times. It is a free subscription that some readers may find of interest. Today the following missive came from the dispatch that I found most interesting considering the polarization of politics currently taking place in the U.S..

Of course what happens to the U.S. will dramatically affect the rest of the world so maybe reading the real downside might give pause to some and help them to consider taking steps to protect their assets and their families. To sign up for the free daily dispatch just click here.

Are we sliding into a tyranny of good intentions?

‘Nationalizing the moral life of the people is the first step toward totalitarianism’

Nearly 50 years ago, Kenneth Minogue, a professor of political science at the London School of Economics, published The Liberal Mind, his classic study of the dominant philosophy of the 20th century: radical niceness. Rooted in extreme liberal optimism and salvationist aspiration, this triumphant ideology (Prof. Minogue said) tenaciously advanced the notion that history requires the perfection of human society, that governments – in pursuit of this perfection – are obliged “to provide every man, woman, child and dog with the conditions of the good life." Prof. Minogue ended with a warning: “A populace which hands its moral order over to governments, no matter how impeccable its reasons, will become dependent and slavish."

Now professor emeritus at LSE, the 80-year-old has published a remarkable sequel – The Servile Mind: How Democracy Erodes the Moral Life. He picks up where he left off, documenting the ways in which democracy (which once expanded freedom) requires strict obedience to the state – and to the bureaucratic moral order that sustains it.

An elegant essayist of the old school, Prof. Minogue advances his argument by small steps that can end abruptly in crisp revelation.

“I am of two minds about democracy," he writes, “and so is everyone else. We all agree that it is the sovereign remedy for corruption, war and poverty in the Third World. We would certainly tolerate no other system in our own country. Yet most people are disenchanted with the way it works. One reason is that our rulers now manage so much of our lives that they cannot help but do it badly. They have overreached. Blunder follows blunder."

Far worse, traditional democratic theory has been flipped upside down: “Our rulers now make us accountable to them."

Count the ways.

“Most Western governments hate me smoking, or eating the wrong kind of food, or hunting foxes or drinking too much. Most of these governments think we borrow too much money for our personal pleasures and many of us are very bad parents. Ministers of state have been known to instruct us in elementary matters, such as the importance of reading bedtime stories to our children.

“Many of us have unsound views about people of other races, cultures or religions, and the distribution of our friends does not always correspond to the cultural diversity of our society. We must face up to the grim fact that the rulers we elect are losing patience with us.

“Debt, intemperance and incompetence in rearing our children are no doubt regrettable – but they are vices, and – left alone – they will soon lead to the pain that corrects. Life is a better teacher of virtue than politicians and most sensible governments in the past have left moral faults to the churches.

“The point is that governments have no business telling us how to live. They are tiresome enough in the exercise of authority. They are intolerable when they mount the pulpit. Nor should we be in any doubt that nationalizing the moral life of the people is the first step toward totalitarianism."

Original article here.

It's Simple to Balance The Budget Without Higher Taxes

This for those who are interested in the economic and political situation in the U.S., this new video from Freedom&Prosperity.org shows that the budget could be balanced without raising taxes. Although I doubt very seriously if the powers that be will follow this advice as they would rather continue to spend on social programs in order to have more control over the people

Steve Wynn says its time to get out of the U.S.

Steve Wynn has come out with another interview where he bemoans the present financial situation in the U.S.. In this interview on CNBC,  he explains why businessmen are so afraid to invest in the U.S. and why he is making his investments in China where the "government is more predictable and stable". Although I believe he is correct in his analysis of the U.S. financial situation, I wish he was not making his investments in a communist country.