Property Rights and Property Taxes—and Countries That Don’t Have Them

Anthony Freda Art

Nick Giambruno, Senior Editor InternationalMan.com
Casey Research

Do you really own something that you are forced to perpetually make payments on and which can be seized from you if you don’t pay?

I would say that you don’t.

You would possess such an item, but you wouldn’t ownit—an important distinction.

A ridiculous perversion of the concept of ownership and property rights has infected most of the world like a virus: something that most people unquestioningly accept as a normal part of life—like it’s a part of the eternal fabric of the cosmos.

I am talking about property taxes, of course.

Corporations Join Droves Renouncing US Citizenship

And now those "droves" are going to be paying an extra 422% to break free by renouncing citizenship, according to Forbes. - Ed.)

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Nick Giambruno, International Man
Casey Research

Don’t be surprised to lose if you don’t make an effort at being competitive.

And if you go out of your way to make yourself less competitive, expect to lose.

If that sounds like simple common sense, that’s because it is.

But it’s also exactly what the US has been doing for years—enacting tax policies that sabotage its global economic competitiveness.

It’s like trying to get in shape for a marathon by going on an all-McDonald’s diet. (Speaking of McDonalds, check out this funny video spoof of what their commercials should really look like.)

Here are two major reasons why the US is lagging in the global economic marathon:

Amazon.com Creates 5,000 Jobs, Destroys 25,000 in the Process?

image: Wikimedia Commons

Alex Daley, Chief Technology Investment Strategist 
Casey Research

The Technology Jobs Conundrum

The past few weeks have seen the tech and business media abuzz about a not-so-little warehouse in Tennessee. That's because this distribution center, opening its doors with a burst of fanfare and even a few visits from nearby politicians, isn't a jumping-off point for Macy's or Target. Instead, the warehouse is the latest in a series of new locations being opened by retail technology giant Amazon.com.

The jobs this new mega-warehouse is purported to create: 5,000.

The politicians who made the quick trip to Tennessee to get in front of the cameras included one President Barack Obama, who gave a rousing speech not just about the importance of the 5,000 jobs promised at this one facility (and another 2,000 corollary positions at customer service centers elsewhere in the country), but also about the "need" to raise taxes on the businesses that are creating them and use those taxes to fund "infrastructure" jobs in green energy and natural gas, among other areas.

10 Reasons Why Obamacare Is Going to Ruin Your Medical Care… and Your Life

Dees Illustration

Elizabeth Lee Vliet, M.D

Of course you've heard of "liar loans"—in the heyday of subprime mortgages, unscrupulous lenders handed out mortgages to practically everyone with a pulse. "So you're saying you make $100,000 a year? Great, check this box titled 'McMansion.'" 

We all know how this charade ended. Now Dr. Elizabeth Lee Vliet, M.D., an acclaimed expert on the subject of Obamacare, warns that the delay of the employer mandate by one year will force Americans into a single-payer system, raising insurance premiums and encouraging "liar subsidies" that might prove fiscally devastating. Not to mention that under the new health care system, you may well end up dead… -- Dan Steinhart Editor, Casey Research

Obamacare is a hodgepodge of new regulations, requirements, and penalties. I'd like to start by defining three terms, which, while obscure today, should begin to enter our everyday vocabulary as Obamacare continues to take effect:

Despite Declining Deficit, Foreigners Aren’t Bailing Us Out, So the Fed Will Keep QE Going

Bud Conrad, Chief Economist
Casey Research

The basic imbalance driving our economy is the government deficit, which spun out of control as a result of the Credit Crisis of 2008/9. But the sequester, improving tax base, lower interest rate, and elimination of stimulus spending have caused the big government deficit, while still extreme, to drop to half its previously nosebleed levels.

Even so, the deficits remain well out of proportion for a sustainable future. Projections for future government expenditures, including those related to the masses of retiring baby boomers, are on track to increase exponentially. Especially given that the deficits are actually much worse than generally discussed. Honest accounting would include the growing liabilities for retirees in the current accruals, resulting in deficits running closer to $5 trillion per year.

A Tight Tax Leash Constrains Americans

Nick Giambruno, International Man
Casey Research

Many readers are already well aware that the US government is essentially unique—and not in a good way—in how it treats its citizens living and working in foreign countries. No other country in the developed world imposes and effectively enforces as many burdens on its citizens abroad (and those who would do business with them) as does the US government.

Whether it is filing and paying taxes to both a foreign government and the US government, the reporting of foreign financial assets (FBAR and Form 8938), or saddling foreign financial institutions with extra compliance costs for dealing with US citizens (FATCA), among others, the root cause of these burdens is a system of citizenship-based taxation (CBT).

The US is the only developed country in the world that enforces CBT.The rest of the developed world uses residence-based taxation (RBT), which means filing and paying taxes only in the country in which you reside, as opposed to the country of which you are a citizen.

It is critical for Americans considering internationalization to understand the difference between CBT and RBT. This two-and-a-half-minute video does a good job of spelling it out.

Dealing with the burdens associated with CBT is an unfortunate fact of life for Americans.

It is not likely to change in the foreseeable future. In fact, I would bet that the burdens will actuallyincrease as the US government becomes more financially desperate. That is a significant incentive to act sooner than later… or before it is too late altogether.

However unpleasant this reality is, it does not negate the need to internationalize.

Quite the contrary.

FREE Copy of the American Expat Guide

As spending on welfare/warfare related programs continues to rise, it is clear that US government will sink deeper into fiscal and moral bankruptcy, with political risk increasing in tandem.

It is far better to deal with the burdens associated with internationalization than to leave your savings, your income, and yourself in range of a desperate government's wrecking ball.

Taken together, being compliant with all the requirements can feel like navigating a confusing hedge maze with draconian consequences.

We live in a time of great uncertainty. Any number of black-swan events (economic or otherwise) are not just plausible but likely; the feeling that we are on the precipice of a new, large, and global war; and the likelihood that the US will become a full-blown police state after the next large attack are all good reasons to have an insurance policy.

Being internationalized gives you the peace of mind of knowing that you have options at your disposal if you should ever need them.

While Americans may need to internationalize more than citizens of other countries, everyone with assets to protect may benefit from moving some of them outside one's home country. Questions of "how" and "to where" are natural, as scams abound.

The comprehensive special report titled Going Global 2013 can help investors steer clear of them, as well as other mistakes a well-meaning person might fall into. The report addresses: what countries are best for you and your money (they are often not one and the same); the best ways for Americans to keep their hard-earned money from the IRS; stock markets and currencies around the world that are good investment bets; setting up an international trust; and much more.

With specific, actionable advice, Going Global 2013 can provide your money with "diplomatic immunity"... and your life with a fresh start. Get all the details and get started now.

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A Rare Anomaly in the Gold Market

image source

Jeff Clark
Casey Research

Gold stock investors have been pummeled, including myself. Worse, we've had to hear "I told you so" from all the gold haters in the media.

There are a few commentators expressing mild interest in gold at these levels, but one thing I haven't heard any of them talk about is a metric that gold analysts are rarely able to use, because gold stocks just don't get this undervalued.

Mainstream analysts sometimes talk about book value, especially when a stock appears cheap. Book value (BV) is a metric that, in essence, sets the floor for a stock price in a worst-case scenario. BV is equal to stockholders' equity on the balance sheet, and is the theoretical value of a company's assets minus liabilities – sometimes you'll hear this called "net asset value" (NAV). So when a stock price yields a market capitalization (share price x number of shares outstanding) equal to BV, the investor has a degree of safety, because if it dropped lower, a buyer could theoretically come in, buy up all shares, liquidate the company's assets, and pocket the difference.

Price to book value (P/BV) shows the stock price in relation to the company's book value. A stock can be considered "cheap" when it is trading at a historically low P/BV. Or, even better, it can be considered objectively " undervalued" when it is trading below book value.

The Real Reason Governments Are Killing Financial Privacy

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Nick Giambruno
Casey Research

At the latest G-20 meeting, central bankers, finance ministers, and an assortment of other central planners touted what they hoped would be a new "global standard" of the automatic sharing of financial information.

The US has taken the lead with the odious FATCA law, and the EU has followed suit with its own version. Through FATCA and other measures, both governments are aggressively seeking new ways to undermine financial privacy.

Financial privacy should not be viewed in a negative light, as it is often portrayed. The Swiss view it as a fundamental human right to preserve dignity, akin to medical privacy. How would you feel if the government snooped into your medical records and automatically shared those records with foreign governments?

While it would appear that the primary objective of this new "global standard" is to rake in more money for bankrupt governments, it seems another motive is at play here.

What Will the Price of Gold Be in January 2014?

Jeff Clark
Casey Research

While many of us at Casey Research don't like making price predictions, and certainly ones accompanied by a specific date, it's hard to ignore the correlation between the US monetary base and the gold price.

That correlation says we'll see $2,300 gold by January 2014.

There are plenty of long-term charts that show a connection between gold and various other forms of money (and credit). Most show that one outperforms until the other catches up. But let's zero in on our current circumstances, namely the expansion of the US monetary base since the financial crisis hit in 2008.

Here's the performance of the gold price compared to the expansion of the monetary base since January 2008.

You can see the trends are very similar. In fact, the correlation coefficient is an incredible +0.94.

Are Businesses Quietly Preparing for a Financial Apocalypse?

Dan Steinhart
Casey Research

US corporations are sitting on more cash than at any point since World War II.

That's without including banks. I'm only talking about nonfinancial corporations – the ones that sell goods and services and make the economy go.

Those businesses hold $1.4 trillion. In absolute terms, that's the most ever. In relative terms, it's themost since World War II.

As investors, we can infer quite a bit from corporations' inability (or unwillingness) to deploy their cash.

The Solar Silver Thrust

Jeff Clark
Casey Research

In early July, Japan set a premium price for solar energy that was three times the rate of conventional power. This meant utility companies would be paid three times more for electricity sourced from solar. It's widely expected that the premium will ignite the use of solar power – and solar uses a lot of silver.

Silver Demand from PV Panels

As you may know, silver is used in photovoltaic (PV) technology to generate solar power. A typical solar panel uses a fair amount of the metal – roughly two-thirds of an ounce (20 grams). To put that in perspective, a cellphone contains around 200 to 300 milligrams (a milligram weighs about as much as a grain of sand). A laptop contains 750 milligrams to 1.25 grams.

Photovoltaic technology is relatively young, but each year its use is growing rapidly. Just since 2000, the amount of silver consumed by solar-panel makers has risen an average of 50% per year. Demand grew from one million ounces in 2002 to 60 million ounces in 2011. Last year demand from the PV industry represented almost 11% of total industrial demand for the metal (excluding jewelry). 

How Investors Can Protect Themselves in a Politicized Economy

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Casey Research

Right on the heels of the Republican and Democratic National Conventions, the recent Casey Research Summit in Carlsbad, California—cosponsored by SprottGlobal—focused on a timely theme: "Navigating the Politicized Economy." The somber revelations of the summit contrasted with the buzz of the party conventions. The Gold Report sat down with Louis James, Casey Research's chief metals and mining investment strategist, Rick Rule, founder and chairman of Sprott Global Resource Investments and chairman of Sprott US Holdings, and Marin Katusa, Casey Research's chief energy investment strategist, to discuss how investors can position themselves in a politically driven economy.

The Gold Report: Before we get into some of the nitty-gritty from the summit, could you give us a big picture of the troubled economic waters we'll have to navigate if we want to stay afloat?

How to Navigate an Economy Weighed Down by Government Meddling and Cronyism

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Doug Hornig
Casey Research

If you wanted to sum up the just-concluded Casey Research/Sprott Inc. Summit titled "Navigating the Politicized Economy," you could say "The situation is hopeless but not serious."

More than 20 speakers – many of them world-renowned financial experts and best-selling authors – gathered in Carlsbad, CA, from September 7 to 9 to ascertain exactly how hopeless, and what investors can do to protect themselves.

Casey Chief Economist Bud Conrad reconfirmed – with a blizzard of charts and graphs – that the ship of state is still heading for a fiscal iceberg … and that iceberg looms closer by the day.

The US national debt has far outpaced the government's ability to pay it off. It's unsustainable – and made continuously worse by the Federal Reserve, which pushes more and more debt onto its balance sheet, blowing up an ever-bigger bubble. And with the recent announcement of QE3 – read "money-printing without any limits" – Conrad thinks the resulting pop! will be one that will make the entire globe's ears ring.

The Bottom Line on Gold, the Dollar, and the Euro

Louis James
Casey Research

One of the points we've made several times over the last year is that traders stuck in an old paradigm are frequently selling gold for the wrong reasons.

The most egregious (or just plain silly) example is that gold often drops when the euro drops.

This happens, not because there's anything wrong with gold at such times, but because gold is priced in dollars. Instead of being thought of as a store of value in many investors' minds, gold is viewed as a hedge against weakness in the dollar.

But what are dollars priced in?

Nothing, actually.

Prediction: The Day of Economic Reckoning is Near

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Doug Casey
Casey Research

It is a deal with the devil: governments churn out more and more cash for the promise of continued prosperity. But the day of reckoning is near, according to Doug Casey, chairman of Casey Research and an expert on crisis investing. As the epic battle between inflation and deflation continues, Casey discusses his predictions for the new world market in this exclusive interview with The Gold Report.

The Gold Report: There will be a Casey Research Summit on"Navigating the Politicized Economy" in Carlsbad, California in September. Investors from around the world look to these summits as future road maps for investing pitfalls and opportunities.

The thesis behind the Summit is that governments have made a Faustian bargain – a pact with the devil – that saves the empire with overspending, but drives it to the brink of collapse by creating fiat currencies.

Doug, where in that story is the economy currently?

What Does Liberty Really Mean to You?

David Galland
Casey Research

For some time now – years actually – I have pondered the nature of liberty. Or more specifically, what liberty actually means to me. And to be extra clear, I am not talking about the meaning in abstract or philosophical terms, but tangibly – in much the same way I might answer if asked what my wife means to me.

The trigger for this entirely personal discourse comes from reading various articles and viewing various YouTube videos and speeches from self-styled champions of liberty (COL). There is even an entire conference, Mark Skousen's FreedomFest, dedicated to the topic.

Invariably, these well-meaning COL rail against "The Man" (something I do myself), accentuating their public angst by sharing stories of being molested by the TSA or otherwise inconvenienced by minions of the state. It is my contention that most of these individuals, and certainly the majority of "freedom-loving" Americans, don't actually understand the meaning of liberty, but rather give the matter little more than lip service.

And again, I don't mean liberty in an abstract way – like, say, "world peace" – but tangibly.