The View from Switzerland

By Robert Vrihof

So much has been written about Switzerland that is misleading, or actually wrong, it is time you got the facts from someone who actually lives and works here.

Yes, it is true that there has been (and probably will continue to be) a lot of pressure on our small country. It is also true that our leaders have made some mistakes over the past few years. I for one wish that our politicians had showed more backbone. Perhaps now they will.

But never forget it is also true that we have been an independent nation for well over 700 years. And despite immense pressure against us for many of those years, we have remained proudly and fiercely independent.

Although we were warned we could not survive without doing so, we did not join the EEC or EU. Instead, we have signed numerous agreements over the past 20 years with our neighbors. We now have free trade with most European countries.

It is also true that we have been able to cope with the recent financial crises better than most other countries. Consider: Our unemployment is below 4%. In fact, we are currently considering proposals that we invite construction workers from Spain to come to Switzerland to work. During the past few years, some 200,000 Germans have come to our country to live and to work.

It is also true that our small nation is the home of many very large businesses. Many are known and respected worldwide, such as Nestle, Roche, and Novartis. If you do not have any Swiss firms in your portfolio, you should.

It is also true that investors worldwide consider the Swiss franc one of the safest, strongest, most trustworthy currencies they can own -- despite the fact that it pays almost no interest.

Speaking of currencies, rumors of the death of the euro are nonsense, in my opinion. The Euro is here to stay. Europe and especially Germany are profiting enormously from the weak euro. Many companies, especially car manufacturers, are running three shifts a day to keep up with demand.

The opportunity to profit from a stronger U.S. dollar is evaporating before our eyes, we believe. As asset managers, we currently hold the Australian dollar, the New Zealand dollar, the Norwegian kroner and the Swiss franc.

We keep a small percentage of funds in high-yielding stocks in Switzerland and Europe, as well as select Canadian precious-metals ventures. And we still strongly believe that a part of your total wealth should be invested in physical metals.

Having said this, your next question will be where we are headed economically. Will there be a double-dip recession, decades of Japanese-style stagflation, a return of inflation and even hyperinflation, or what? I’m modest enough to say I don’t know. Eventually time will tell.

And finally, I must say that I feel blessed to live in one of the best and most beautiful countries in the world. We are proud, peaceful, and orderly. Granted, our taxes could be lower. But where is that not true?

We at WHVP have been serving an international clientele for nearly 20 years. Should you have any questions about offshore banking, and especially Swiss money managers, please feel free to contact us.

Robert Vrijhof is managing partner of Weber, Hartmann, Vrijhof and Partners, Schaffhauserstrasse 418, CH-8050 Zurich, Switzerland. Email: info@whvp.ch,
Website: www.whvp.ch or telephone from the U.S. 011-41-44-315-77-77.r

Stand By Me
By Michael Checkan

I just returned from a two-week business trip to China. The purpose of the trip was to look for investment opportunities in the Chinese currency, called the reminbi or yuan. At present the opportunities for Americans to invest in the yuan are very limited.

The Chinese currency is not a convertible currency, like the U.S. dollar or the euro. This will change as their financial markets develop and as the country continues to prosper. And prosper it has. Every time I return to Hong Kong, Shanghai or Beijing, the cities have grown enormously.

Today, Hong Kong is the financial center of China. But the Chinese intend to have Shanghai become the new financial center, comparable to other world financial capitals, such as London or New York. I have no doubt they will succeed. Beijing and Shanghai are already the two most modern cities in the world.

China has become the banker to the West. While I was in Hong Kong, the headlines concerned the financial meltdown in Greece and the support China was giving to the euro. Premier Wen Jiabao said that Europe would always be one of the main investment markets for China's foreign exchange reserves. At $2.4 trillion, China's stockpile of foreign-exchange reserves is the largest in the world.

China is the banker to the U.S. as well. This country would be in deep trouble if the Chinese were to withdraw their holdings of U.S. treasuries and bonds and both countries know it. In fact, the Chinese have been reducing their holdings of dollars. The Chinese used to hold 90% of their reserves in U.S. dollars. Today that number is only 70%. The rest is invested in euros, gold, and the currencies of some of their Asian trading partners.

While I was in Hong Kong, the Chinese moved to de-peg their currency from the dollar. This should mean the resumption of the yuan's gradual appreciation of 4-5% per year. That appreciation started in July 2005 but was halted in mid-2008 because of the subprime crisis in the U.S. Currency experts told me that the yuan is probably undervalued by 25-30%, so it has a long way to rise.

As I’ve already mentioned, currently there are only limited ways to invest in the yuan. Some banks will allow you to purchase yuan, but only in non-interest bearing accounts and with no delivery of the actual currency. You’re only hope for gain comes from appreciation against the dollar.

Later this year, the first Chinese Yuan Fund will be offered in Hong Kong. This event will move the city closer to its goal of becoming an international offshore yuan trading center. There are also some equities and funds available whose main holdings are in China. These offer a possible "double play," with increases in both the stock or fund values and currency gains. Check with your financial advisor for more information on appropriate candidates.

Lastly, it is possible to hold physical banknotes. However, the largest denomination bill in China is 100 yuan, which is worth about $14.70. You’d have to own a suitcase full to have a significant investment. Still, it might be a good idea.

If you would like more information about investing in foreign currencies, please contact us at Asset Strategies International. Call 1-800-831-007, or click here to send me an email.r

Perth Mint Certificates … Designed for Peace of Mind

By Kevin Drost

International diversification of your precious metals portfolio has never been more important. Recent legislation requires informing the federal government whenever total assets held by Americans outside our borders exceeds $50,000. In spite of these new laws, or perhaps because of them, the appeal of Perth Mint certificates is stronger than ever.

When the recently passed Capital Controls Bill takes effect, Americans with more than $50,000 worth of precious metals stored at the Perth Mint will be required to disclose those assets to the U.S. government. It has always been our position that investing in a Perth Mint certificate as a means to avoid government reporting requirements was misguided. Therefore, we believe the new reporting requirements will not change the fact that the Perth Mint Certificate Program remains the safest, most cost-effective storage program for precious metals in the world.

A Perth Mint certificate is the only government-guaranteed precious metals storage program in existence. In addition, all metals stored there are insured by Lloyds of London at the Mint’s expense. The Perth Mint Certificate Program is a physical metals storage program, not a fractional reserve “paper gold” storage program. Metals are not leveraged in any way, nor are they used to back derivatives. When you buy an ounce of gold, silver or platinum, there is an ounce stored on your behalf in the Mint’s vaults. The certificate is a warehouse receipt giving you legal title to the metals stored there on your behalf. Being able to purchase precious metals using your IRA funds is a testament to the integrity and security of the PMCP program.

Both unallocated and allocated metals storage is available. The commission for the purchase of precious metals is 2.25% over spot. There is a one-time 25-cent-per-ounce surcharge for unallocated silver purchases. There are no storage fees for unallocated metals. Allocated metal storage costs vary from 1.5-2.5% annually, depending on the precious metal.

In our opinion, the benefits of storing your precious metals with the Perth Mint do not diminish one iota, even if the U.S. government knows about it. There is no safer, more cost-effective way of owning precious metals anywhere on the planet. Sure, when you sell your metals you are required to report and pay any capital gains tax due.

When Michael Checkan, Glen O. Kirsch and Rich Checkan developed the PMCP 14 years ago, they did so with just these times in mind. We encourage our readers to diversify your portfolio while you can. r

Change in 2010

By Chip Wood

Those all-important mid-term elections are now less than two months away. At least we’re assured by every political pundit in America, no matter what part of the political spectrum he or she occupies, that they’re incredibly important. To hear some folks tell it, the fate of the free world rests on the outcome. And maybe it does.

We are neither as optimistic as our most conservative friends, nor as fearful as many on the left. Yes, we expect to see big changes in both houses of Congress. It would delight us, I don’t mind saying, if Nancy Pelosi were no longer Speaker of the House of Representatives and Harry Reid had to find new employment, instead of serving as Majority Leader of the Senate.

But no matter what happens politically, we’re afraid some things will not change. The U.S. government will still consume trillions of our tax dollars every year; deficits will still stretch as far as the eye can see (and burden our children, and our children’s children, for decades); the purchasing power of the U.S. dollar will continue to decline.

That’s the bad news. The good news is that no matter what happens on November 2^nd, gold and silver will continue to offer the best way mankind has ever found to protect the purchasing power of your savings. It will still be legal for you to own precious metals, to hoard them, and even to store them offshore.

Oh, and there’s one other bit of good news we’re happy to share with you. Asset Strategies International will still be here to serve you, as we have every year for nearly three decades, with some of the lowest metal and currency premiums, the best service, and the most helpful customer-service representatives in the business.

And we’ll still be publishing our informative emails, Always Something Interesting, twice each week. If you haven’t already signed up to receive them, we urge you to do so now. Just click here to send an email and we’ll take it from there.

The French have an expression, plus ça change, moins ça change, which translates as “the more it changes, the more it remains the same.” While we hope your favorite candidates win this November, we’d be remiss if we didn’t point out that some things won’t change, no matter what happens in the elections.

One of the most important will be the need for you to continue to take steps to protect your wealth. That’s why we’ll keep repeating our mantra: Don’t keep all of your wealth in one country, one currency, or one asset class.

I trust a word to wise will be sufficient.r

Where Are Michael & Rich?
By Rich Checkan 

In just over one month, we will have the opportunity to meet here in Rockville, MD with those of you registered for our October 2^nd seminar, When Your Assets Are On the Line … Proven Strategies to Preserve, Protect and Grow What’s Yours. We had limited space for this seminar and it filled up quickly.

Based on the high demand and the waiting list that continues to grow, we have decided to do more of these domestic seminars throughout the country in the coming year. Our initial discussions are centered on Atlanta in the spring and Dallas in the fall of 2011.

We will also host an offshore investment seminar, a Gathering, exclusively for ASI’s clients at the fabulous Del Pacifico resort on the Pacific coast of Costa Rica next January. Please see the enclosed flyer for all the exciting details.

And please note two important things: Once you land at the San Jose airport, all costs (including all meals, lodging, and entertainment) will be provided by your hosts. And two, attendance is limited to only 40 people. This is a fantastic opportunity and it will fill up fast. If you wish to be included, please let us know right away.

Of course, we will also have the opportunity to meet with you at conferences sponsored by our friends. We look forward to meeting you somewhere in the world.

Michael Checkan

• The Oxford Club’s 2010 Wealth Preservation Tour, November 26 through December 4, 2010 to Munich, Salzburg & Vienna – THIS EVENT IS FILLED. 

Rich Checkan and Kevin Drost

• The Sovereign Society’s Offshore Advantage Academy, Los Cabos, Mexico, November 3-6, 2010q