Alternative Investment Guide to Freedom

What Have We Learnt From the Financial Calamity Which Almost Bankrupted the World?

2009-12-26T17:49:00.000+10:30

By Milton Johanides

If it were not for the swift response of courageous political leaders such as Brown and Obama, we would be living in a very different world now. Many more individuals would have lost their savings and their homes, many more businesses would have gone to the wall and the supply chains which keep each and every one of us fed and clothed on a daily basis would have broken down irreparably. In other words our generation narrowly avoided a swift return to a dark age of homelessness, starvation and disease. So, thanking God for our earthly salvation, how do we now show that we have learnt the lessons of the past? By returning to the very same system of financial operation that led to the near disaster in the first place!

It's business as usual in the financial world; big salaries, big bonuses, mega deals between giant corporations, and big plans for future economic growth. All eyes are back on the stock market indices, currency fluctuations, and big company manoeuvres. If anything we have become even more resilient to bad news. We have learnt to take in our stride the collapse of major enterprises (flyglobespan, 17.12.09), the threat of industrial action (Royal Mail, British Airways) and the anger of protesters (Copenhagen Climate Conference).

These are all just minor irritations on the road to the billion dollar dreamland, where everyone can enjoy the fruits of a utopian capitalist economy. In the meantime we have put away billions of dollars of debt for repayment at some time in the future. So what happens if we need another bailout the next time the news is so bad it cannot be ignored? What happens when we need billions more to fight the next big ideological war? How much more financial pressure can the world endure?

I am disappointed that nothing seems to have changed. No provision has been made to avoid the next big bubble, which in the manner of markets is sure to be bigger and more unstable than any that have gone before. We continue to build our towers of Babel, following prophets such as Murdoch and Cowell who are motivated only by the continued expansion of their own enterprises. Most of us seek a peaceful world, where brothers and sisters can live alongside each other without bombs and without killings.

We seek the understanding of enlightened minds to restore the mental balance of communities who have become accustomed to finding solace in conflict. The stratagems of self-obsessed businessmen have a direct negative impact on the well being of ordinary people. A society geared mercilessly towards profit wears away the spiritual connections of its citizens. While providing entertainment through new technology and mass media we empty people's pockets and fill their heads with idle hopes and foolish dreams which can never become real. Post financial crash we had an opportunity to change priorities and begin to restore ordinary human contacts. Instead, I fear greed is even more voracious than ever.

What have we learnt from the crisis of the past two years? I have learnt there is not a single individual in the world powerful enough to stop the machine which continues to grow, overheat and devour the environment which keeps it sustained. But I have also learnt that our Lord God has given us everything we need to lead a happy life, even while our vain endeavours and ugly ambitions continue to threaten the earthly paradise He created for us.

Milton Johanides is a retired businessman, church elder, writer and artist. He has been featured on BBC TVs Songs of Praise, owned numerous art galleries and once ran an award winning picture framing business in Scotland. The views expressed in these articles are his own. email: miltonjohanides@yahoo.co.uk
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Sovereign Debt Default Scare - Is Dubai Too Big to Fail?

2009-12-26T17:44:00.000+10:30

By Archana Debnath

Just a year back, big banks and financial institutions had defaulted big time in many developed nations, especially in the US. Declaring themselves bankrupt overnight, these big financial institutions reported losses in billions of dollars on what we now know as sub prime crisis. So huge were the losses that US Government alone injected more than $700 billion to resuscitate these dying financial institutions.

Honest tax payers' money has been squandered to revive failed private US banks in one of the most aggressively capitalist nations of the world. Reason - these banks were too big to be allowed to fail. On the other hand, in 2009 alone 106 US banks had to close down, but they were not bailed out by US Fed. Reason - they were not big enough to be saved.

So what is the lesson to be learnt from here? The lesson is that as a business institution you have to bungle big time, show billions of dollars as debt in your books, borrow or leverage indiscriminately and then sit back and relax after blowing the whistle. You will face no problem because your government will bail you out since your bungling is too big. And once bailed out, you can then go about using the bailout money to enrich yourself with astronomically high bonuses. You can justify large bonuses by showing existence of big money in your books. So what if now the money in your books is honest taxpayers' money loaned to you by your government?You can be squatting smug on your haunches with the knowledge that, do what you may - you just cannot fail. You are too big to be allowed to fail!!

That is how investment bankers are using the bailout money in many countries. In fact in UK the public outrage has been such that Government has now slapped 50% tax on bonuses that banks pay to their employees. As a result, Barclays recently announced a pay hike of 150% for 22000 of its investment bankers with retrospective effect from June 2009!! Take that - if you tax our bonuses then we have other means of looting tax payers' money.

Well so far so good. Big business institutions have been bailed out of thick financial soups by their respective governments. But in doing so these governments have become susceptible to credit crisis themselves. Governments, I agree, are again too big to be allowed to fail. And that is how we found Dubai getting bailed out by its neighbour, Abu Dhabi.

Abu Dhabi has given temporary reprieve to Dubai so as to maintain investor confidence in the region. But such actions of saving nations from becoming bankrupt will be possible only when there are only few and far between instances of sovereign default. But what happens when most nations fall into a debt trap from which they cannot extricate themselves. Many developed European nations are on the brink of sovereign default. Greece, Spain, Ireland are some such names. Then there are a host of East European nations which are tottering under the burden of massive debt. Who will ultimately bail out whom?

The way even rich European nations are falling into the debt trap, I wouldn't be surprised if lenders, as a species, totally vanish from the face of this earth. Germany is the richest nation in European Union and it also has spiraling debt in excess of 70% of its GDP. But wait a second! The biggest debt defaulter can be US in times to come. It is estimated that for the next 30 years US national debt will keep on increasing every year. Presently US Treasury has calculated the National Debt at $ 12.135 trillion. White House estimates a record $ 1.5 trillion deficit this year alone, and next 5-year deficit total of $ 4.97 trillion.

Now imagine a scenario in future when US defaults on its public debt. What will happen to this global economy which shook like an aspen leaf with the prospect of tiny Dubai defaulting? The total debt of Dubai, including all its state sponsored entities, is not more than $ 100 billion. Compare it with the present US debt of $ 12135 billion. It is also agreed that US is really too big to be allowed to fail. But tell me, who on this planet will be capable of bailing out US, in case it defaults??

An economist with specialization in capital market analysis. The author advises Indian stock market participants through a blog site http://archana-archdeb.blogspot.com.

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Are We Headed For a Double Dip Recession in 2010?

2009-12-26T17:40:00.002+10:30

By Marquis Van De Mark

The current economic conditions have created an obvious stir in the thoughts and opinions of individuals, experts, and classrooms across the nation. Not since the early 1980s has there been so much talk from experts about the reality of a double dip recession appearing on the horizon. Even college and high school students have become concerned about the long-term effects of what they hear in the daily news.

Quality of life is in the balance for many people and a decent portion of them have placed future plans on hold until they see how this economic drama plays out. However, there are always some who have better positioned themselves to be prepared for difficult economic times. Even within this demographic there is an ample amount of concern.

Some financial forecasts have a double dip recession not taking place until the latter part of 2010 or beyond, while others see it taking place much sooner. The gloomy unemployment picture plays a crucial part in these analyses, since hiring growth is predicted to decline by the majority of experts. A lack of confidence in the economy may also prove to be a contributing factor, incited by the daily flow of headline news which gives details related to the increasing deficit.

Political efforts are being made to hold back this flood wall of economic digression. Hope still remains, that the predictions of a double dip recession never become a sobering fact. Thoughts and opinions related to the economy will continue to intensify, and this is a certainty that can be taken to the bank.

Marquis Van De Mark is a financial adviser that writes on topics of interest. You can visit Marquis' website by linking here http://www.countertopmicrowaveovens.net/ you can find more information about Countertop Microwave ovens by visiting here Countertop Microwave Ovens

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Economic Forecast - Will 2010 Be Up, Down, Or Something in Between?

2009-12-26T17:38:00.000+10:30

By Dan Elder

2009 is ready for the history books and most of us are glad that year is finally in the rearview mirror. In many ways 2009 has been the most significant year in many decades, with the worst economic conditions since the Great Depression, financial scandals and Ponzi schemes of historic proportions, and the most uncertainty about what might be on the horizon since the terrorist attacks of 9/11. In light of what we've just endured, we're all anxiously wondering what the future holds, particularly ahead in 2010.

Will 2010 Be Up, Down, or Something in Between?

My nature is to want to share an upbeat outlook for 2010. However, a real world forecast is to be cautiously optimistic that the fragile recovery will continue, absent any further shocks to our financial system. Why? Well...

Energy Prices Should be Stable

Recent articles in authoritative publications have reported that on-shore crude oil storage is full to capacity and that mothballed tankers are anchored off the Atlantic coasts functioning simply as floating storage tanks. A recent inventory showed that 50+ tankers were anchored off of the coast of England alone.

Most oil producing countries derive the majority of their national income from crude oil sales, so their incentive is to keep pumping, regardless of market price, in order to maintain their revenue stream, which will keep supplies abundant. So, the world is awash in crude oil, with inventory stores in excess of demand, putting downward pressure on gasoline prices. Overall, gas prices should remain relatively stable during the first half of the year, absent an unplanned disruption like a major refinery fire or a hurricane that destroys oil platforms. That's good news for every household and corporate budget in our petroleum-based economies.

Consumer Spending Drives Everything

The modest economic improvement widely reported during the last half of 2009 is the probably the result of businesses simply restocking depleted inventories to low levels, which is good news but not great news. The consumers' current shopping behavior is a far better gauge of what they are thinking and what may lie ahead. Media reports (and my own informal observations and interviews with various store managers) at this writing show that shoppers are typically only buying the advertised loss leaders and then promptly leaving the stores. That scenario means that retailers would start 2010 in a further weakened condition as a result of having to liquidate seasonal inventory (and profits) at 50%-70% off to generate cash flow.

I think consumer spending will continue to be restrained in 2010 because of the increased personal savings rate (an eventual benefit, but lowers consumer spending in the short term), unplanned new car payments in the household budget resulting from the federal Cash for Clunkers program, high unemployment (the unemployed spend little and have little to spend), and credit that's either not available at any price or only at unfavorable interest rates and terms when it is.

The Credit-Starved Economy

Credit is available for large corporations now (as shown by the financing required for the corporate acquisitions now in the news) but will most likely continue to be tight for small and mid-sized businesses (SMB's) in 2010. Banks say they have money to lend in this area, but the reality is the qualifying bar is set so high that very few will be able to meet it. It's noteworthy that this economic barrier persists despite the availability of government Small Business Administration loan guarantees and the president repeatedly summoning banking CEO's to the White House to urge them to begin lending again.

If longer term loans remain unavailable, SMB's will turn to the only recourse they have left, which is financing their need for operating cash with credit card debt. Unfortunately, this option is fraught with danger because lending institutions issuing credit cards are rapidly changing card terms, raising interest rates to usurious levels, requiring most new cards to have variable interest rates (a practice which helped get us into this mess in the first place), and lowering credit limits in advance of new federal laws coming into effect in February 2010, effectively sidestepping legislation intended to curb these abuses.

The Impending Real Estate Tsunami

The huge numbers of residential loans in default in 2009 may very well turn into huge numbers of foreclosures in 2010. There is a federal program designed to help beleaguered homeowners reduce their interest rates (and the associated mortgage payments), which theoretically should help correct the problem but has been ineffective for two reasons.

First, according to current program eligibility rules, homeowners must be current under their present mortgage terms to apply, which eliminates the huge number of homeowners already in default. Secondly, the Federal Reserve reports that only tiny percentages of those eligible and who have already applied to renegotiate their mortgages have actually been serviced, and the slow processing rate almost certainly guarantees more homeowners who are tapping their 401(k)'s to make payments and remain eligible will default when their financial resources are exhausted.

Commercial real estate values and investment income will probably take a drubbing as vacant store fronts drive down rents renegotiated in 2010. Failing businesses have created a glut of vacant commercial space in many areas and vacant commercial space doesn't generate income. Surviving business owners will have several alternative locations to choose from and will use the oversupply as leverage to negotiate lower lease rates for the space they do occupy for as far into the future as possible.

And devalued properties of all types will have an adverse effect on local tax digests, forcing local governments to either raise property tax rates or trim operating and school budgets. Which of these choices do you think your local government will make?

The Threat of Hyperinflation

Finally, a rapid recovery would create hyperinflation for several reasons. Inventories are so low that any increase in demand would quickly eliminate shelf stock and drive up prices as buyers competed for remaining store inventory. Manufacturers have laid off so much of their workforce that they no longer have the staff to meet increased orders in the near term, which would drive up prices for available distributor inventory.

Meanwhile, some sectors of the economy are awash in stimulus money and could support paying higher prices, which would remove market restraints and drive up prices. So, a rapid increase in demand must be avoided and the Federal Reserve will adjust its monetary policy (by raising interest rates) to try and prevent this from happening.

The Bottom Line

What does all this mean? Well, if the scenarios above make sense to you then my suggestion is for small and medium sized businesses, like professional practices that depend on elective procedures and service industry businesses, to be prepared for clients and patients to defer discretionary spending until the second half of 2010. If you're a retailer, you should keep inventories lean for the first half of the year.

Will this all come to pass? It's hard to tell because we haven't been here before, but I've shared my best guess. Do you think I nailed it or do you have a different opinion? I look forward to your comments.

Dan Elder is an experienced business coach and management consultant with Business Growth Accelerators, specializing in growing professional practices and retail and service industry businesses. He offers a free initial phone consultation to those interested in significantly improving their business situation.

Learn more about how he can help you at bgaccelerators.com/servicesbusinesscoaching.html.
Dan is also a regular columnist for Business in Savannah (The Savannah Morning News), speaks on a wide variety of business topics, and is the author of the Business Growth Accelerators series on Amazon.com. He welcomes your comments. Contact him at bgaccelerators.com.

(c) 2009 - Daniel J. Elder. Permission is granted to reproduce and distribute this article in its entirety without fee or royalty. Portions may be excerpted for publication provided attribution is made, including the author's contact information.

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Why the Economy is Faltering - A Theory Based on History

2009-12-26T17:34:00.000+10:30

By Ranger Kidwell-Ross and Jack Lessinger

Unlike recession, depression is always the result of a struggle to totally remake a society-and-economy (socio-economy). In the Great Depression of the 1930s, the socio-economy that minimized consumer spending (1845-1960) was transformed screaming and kicking into a socio-economy that maximized consumer spending (1900-2020).

In the 2lst century, we are in the midst of a very different problem, a struggle to end our fascination with consumer spending and create a responsible socio-economy. We are resolutely confronting long-neglected problems of the environment, infrastructure, debts, deficits, climate change, water and air pollution, housing boom and bust, defective infrastructure, medical and educational deficiencies, etc. The new socio-economy overcomes excesses of consumer spending and rewards responsible behavior.

The socio-economy that minimized consumption spending, 1845-1960

Look at an 1840's map of the United States. In the vast interior there were no railroads, no industrial cities, no industry. It was when young Americans began to believe it their manifest destiny to tame that vast land supply into the world's most powerful industrial power. But how could a desperately poor and largely uneducated people make that happen? To realize their manifest destiny, men would work long and hard for little money. They'd accept low wages, scrimp, save and invest (how many Americans were obese in those years of conquest?).

In only 60 years, dirt-poor America filled that great empty interior with railroads, mines, farms and industrial cities. A tiny river village called Chicago would become the central hub of a Colossal Industrial socio-economy. From 1840 to 1900 Chicago grew from 4,470 to 1.7 million! And other large cities soon ringed that hub.

The socio-economy that maximized consumer spending, 1900-2020

After decades of building and connecting new cities, the industrial colossus was starved for customers able and willing to buy ever more expensive supplies of goods and services. While Europeans colonized, Americans became spenders and consumers.

Rising on silent cat feet, the consumer socio-economy made its first inauspicious appearance around 1900. Capitalistic progress would no longer be measured by industrial expansion. The new benchmark would be an ever-increasing level of consumption spending along with the unprecedented height of landfills.

Eventually, we welcomed the acceleration of consumer spending by easy credit, credit cards, radio, TV, other consumer-oriented innovations, annual style changes, 'no money down, no payments until...,' and endless advertisements via every channel of communication. We created the new consumer city-suburbia-with its endless "palaces" for little kings. Not so fast. The transition from minimum to maximum consumption spending would not come easy to those strong-willed Americans. That difficult transition would bring a Great Depression.

What Caused Great Depression I - the New Theory

Unyielding Yankee savers had to be rewired, mentally reprogrammed into fully developed consumer addicts. Everything had to change - family life, ambitions, child-rearing, education, political attitudes. To increase incomes, unions had to become much more powerful. But revising the "common-sense" of the late 19th century would prove to be a most difficult mountain to climb. The whole economic landscape had to change.

Suburban homes and automobiles were pivotal mainstays of the rising socio-economy. But they had to be developed together. Cars and suburbs were twins joined at the hip. For people living in city tenements, cars were superfluous. Street-cars were just fine. But living in suburbia was impossible without cars.

Suburbia exploded after 1945. In the 1930s, however, suburbia was more an idea than a reality. William J. Levitt, father of Levittowns, did not yet have that gleam in his eye.
Nor was auto insurance sufficiently demanded or provided.
Nor did we have many auto-ready highways.
Nor were Americans ready to end entrenched habits of saving.
Nor were they ready to accept the life of consumer conformity in suburbia.
Nor were masses of people rich enough to buy suburban homes.
Nor were lenders ready to make loans with very low down payments.
Nor were sufficient jobs or shopping facilities available in suburbia.
Nor were county planning departments ready to issue new suburban standards.
Nor did merchants have the advantage of TV advertising and credit cards.
Is it surprising that the Great Depression lasted over a decade?

The socio-economy that is ending excessive consumption spending, 1960-2020:

Since 1960, repairing the damages of excessive consumption spending has given rise to a flood of environmentalists, health-food enthusiasts, climate change warriors and people dedicated to simple living.
Welcome the Responsible Capitalist, the socio-economy that opposes maximum consumption spending and the excesses of the 20th century. Progress of the universal health-care bill signals one approaching victory of "What's in it for US."

Great Depression II?

Half a century after launching of the consumer era's suburbia, pummeled by an unwarranted housing boom and bust (largely radiating from the consumer era's suburbia), and seriously torn by deficits, debts, climate change, infrastructure obsolescence, environmental damages and more, we are abandoning the 20th century's consumption-spending socio-economy. But chucking the old and embracing the new will take years.

Almost imperceptibly, a new society is creating a brand new economy. We are now convincing each other that another kind of life is more rewarding and worthy. Industries and advertising devoted to the old way of life will be jettisoned. Rising since the 1960s, new attitudes, industries, skills, education and satisfactions will repair damages inflicted by excessive consumption spending.

Finally, the favorite policy tool of 20th century economics is now defunct-reducing taxes to increase consumption spending. If we are to emerge from the next 10 years without a serious time of depression occurring, policy-makers will need to embrace an entirely new set of tools, as well as recognize the changing values the U.S. population will choose in place of its current fascination with rampant-and unsustainable-consumerism.

Jack Lessinger and Ranger Kidwell-Ross are principals in Socio-Economics, Inc., which specializes in using long-term data to predict current and future trends. Lessinger is an Emeritus Professor from the University of Washington and the author of numerous books on socio-economics. His latest, with Ranger Kidwell-Ross, is "The Great Prosperity of 2020; Fall of What's in it for Me?; Rise of What's in it for Us?" The book is available on Amazon.com, as well as on the company's website, http://www.socio-economics.com.

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Early Retirement Planning - Consider Retiring to Mexico

2009-12-26T17:29:00.000+10:30

By Gary Pierce

Do you have income of $1500 to $2000 per month? You can retire to Mexico and live quite well if you do.
If you want to retire but have been told you do not have enough money, consider Mexico. One million Americans have already done so ... so can you. You can live very well on $1500 to $2000 a month ... less than that if you speak Spanish.

These are figures for a comfortable retirement, including maid service - listening ladies? - in the areas of Mexico most popular with Americans and Canadians. If you speak Spanish, you can live anywhere you choose. The average Mexican family exists on $500 a month. I am not suggesting you do the same but this is given as a point of reference.

How about health care in Mexico? Glad you asked - the national health insurance plan, which you are eligible for as a Mexican retiree, is $270 a year ... not a month, a year ... this includes doctor visits, drugs and hospitalization. We pay more than that a month in the US for a $10,000 deductible policy.

How about crime in Mexico? Glad you asked, with the exception of border towns where drug related violence is real ... you are three times more likely to be a victim of violent crime in the US than in Mexico.
How about the Mexican culture? Folks retiring to Mexico report they feel like they are in the US 40 years ago. Mexican society is built around the family and family values. What is wrong with that?

Therefore, if you think you cannot afford to retire take a look at Mexico ... one million Americans have done so already. Enjoy.

Early retirement planning. Gary Pierce is the webmaster of http://www.frugal-retirement-living.com; he retired early at 49, he is still retired at 64. He has experience in lifestyles that are both fulfilling and frugal. It is 2009 and many are wondering if they can ever retire. Don't give up until you check out this website. Enjoy.

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Why Banks Aren't Loaning Money

2009-12-26T17:26:00.000+10:30

By Praveen Puri

Why is it hard for people (especially individuals and small businesses) to borrow money? This lack of loan activity on the part of banks has helped to cause the recession and contributed to our current unemployment woes.

The main issue is that banks have a growing amount of non-performing loans, and they have to allocate capital as a reserve. The rule of thumb, especially for smaller banks, is to have 100% in reserve. Last year, however, banks only averaged 89 cents in reserve for each dollar in troubled loans. The FDIC defines a non-performing loan to be one that is either more than 90 days past due or no longer accruing interest (perhaps because the lender has given up on it).

Some banks are critical of this definition. For example, some feel that a loan that is more than 90 days over due should not be considered non-performing as long as the lender is still charging interest - because this signifies that the lender feels the loan will be repaid. As an illustration of the above scenario, a shopping mall developer may be late making a payment because of a temporary condition, such as a delay in lease signing due to logistics, or late paperwork. The bank will still charge interest because they know that the loan is not in danger of default.

With the recession and housing crisis bottoming out, banks should be making progress on working through their non-performing loans and, as a result, more money should be available in 2010 for loans.

Over the years, Praveen Puri, a trading and financial veteran, developed a passion for simplicity, minimalism, and Eastern philosophy. He developed a pure Zen trading system. It uses no news reports, indicators, charts, or parameters to distract you from Now. They are nothing but crutches that keep you hobbling around, instead of surfing in flow with the market.

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3 Reasons Banks Are Failing

2009-12-26T17:24:00.000+10:30

By Kevin Dare

As of December 21, 2009 there are over 140 US banking institutions that have failed in 2009. Banks across the country are faltering from large institutions like Wachovia to smaller institutions like Pacific National Bank. Why are these banks failing? There are three main reasons these institutions are failing.

The first issue is over leverage. During the Clinton Administration, Congress asked why more Americans didn't own homes. Companies like Countrywide and Washington Mutual took Congress' questions to heart and started to aggressively lend. People would borrow up to 95% to 97% of the cost of their home with short term fixed loans that would convert to floating rate mortgages. The general sentiment was that once the loan turned to a floating rate mortgage, usually 3 to 5 years after the original loan was made then the buyer would refinance and get a new loan. The upside was the buyer would benefit from capital appreciation of their real estate. These borrowers made two erroneous assumptions. First that their home would be worth more in 3 to 5 years and second the interest rates they would borrow at would be the same or less then their original note.

The second reason for bank failures is devaluation of real estate. In the past 24 months, national values of real estate have fallen over 50%. The FDIC is requiring that banks "mark to market" their assets. This means that if a loan on the bank's books is $100, they need to verify it is still worth $100. If the asset is really $50 then the bank needs to write off that $50 and take a hit to its balance sheet. If there are enough hits, the bank will have unhealthy ratios and will require additional cash to rebalance the books or it will fail. It is likely that more banks will fail because over the next 36 months there are over $800 billion in commercial real estate loans that are maturing and will need renewal.

The third reason for bank failures is greed. On one hand there is Congress which made the push for greater home ownership. Nancy Pelosi was the one who made the push for home ownership now she blames the Republicans for allowing this financial crisis to happen. The reality is that it wasn't the Republicans nor was it the Democrats that caused this failure, it was the underlying greed of the American people which was the real engine behind these failures. The problem is that these failures are going to happen again as is evidenced with the "saving" of these failing banks.

Do you know who are saving these failing banks? Private equity groups. The problem is that there are so many loop holes and ways that people can take advantage of the US government and the policies that have been created. The biggest problems are still ahead of us as the American government via the FDIC is in the middle of the largest giveaway in American history.

The government is allowing banks that are failing to be taken over by private equity groups with no experience running banks while they limit their liability and provide tremendous upside for the investor; this comes all at the taxpayer's expense. Greed is striking again.

Kevin Dare is a real estate developer who specializes in commercial real estate in California. Kevin is also interested in soccer, Vexillology including interesting facts about American Flags and Mexican Flag.

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GCC to Perk Up on Low Realty Cost

2009-12-26T17:19:00.000+10:30

By Jose Roy

In a recent report by AT Kearney, a leading global management consulting firm stated Dubai's capacity to "rebound fast should not be underestimated, with low real estate prices at offer now". It further adds that apart from the UAE, the other Gulf Co-operation Council (GCC) members would also be back on track by attracting foreign investors on similar grounds.

Dubai's strength comes from the over supply of realty units which in turn reduced prices considerably to make them attractive for investors overseas. Many projects regardless of size those which are either put on hold or shelved will likely factor in on supply and demand quotient to give an edge to the failing real estate firms with higher price and profitability in the near future. "As development projects are temporarily or permanently halted, the oversupply will begin to diminish," the report said.

However, the challenge for local developers is to confront the coming consolidation wave, review diversification strategies and manage existing assets wisely. The commercial segment may be the most affected as the available office space will jump from 4mn to 6mn square metres by the end of 2011. AT Kearney report titled "2010 Real Estate Global Opportunity Index" says Dubai's experience is a cautionary tale for other GCC countries to manage supply in accordance with demand. It also noted that the UAE real estate was cheaper in comparison to its global peers.

In contrast, Abu Dhabi, the UAE's capital emirate has witnessed increase in tourism and airport traffic, bank lending criteria for residential sales had been relaxed and construction costs were down 30 percent since the end of 2008. Besides, the emirate boasts of $200bn real estate and many high-visibility projects, such as the successful Formula 1 racing event on Yas Island.

A host of luxuries offered by the GCC member states such as, an environment for high style living standards at a lower cost now is likely to attract foreign investors to bet on the future of the region. Nevertheless it is observed that the oil reserves amounting to more than $5 trillion would continue to be central to these economies for many years to come. Likewise, Saudi Arabia is the largest real estate market in the region with numerous mega projects. Unlike the UAE, Qatar or Bahrain which depends on foreign investors, the Saudi kingdom has its own domestic demands to be fulfilled in its realty domain.

It has been forecast in another study that Saudi Arabia will face a shortage of up to 1mn housing units over the next three years, as residential prices increase nearly seven percent annually. The GCC real estate is likely to perk up as there are indications of a global recovery ushered in by emerging economies including China and India where reality has started looking up. Millions of new housing units at affordable prices, falling interest rates and job market stability are expected serve as a springboard to a quick rebound for the region.
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The Economic Crisis

2009-12-26T17:15:00.000+10:30

By Jocelyn O Iyog

The global economic crisis began in September 2008 with the failure of certain large US-based financial firms and the insolvency of many companies. The root cause of the crisis was the subprime mortgage crisis. The lack of regulation and risk control in the US financial sector spawned the sub-prime crisis.

Banks, in their ongoing greed for profit, began lending huge amounts to people who could ill-afford such loans. In addition, the loans were poorly secured and the mortgage did not cover the value of the loans. These "toxic assets" soon made banks insolvent. Banks closed down or went into liquidation and the economy began spiraling into disaster.

The source of the problem is therefore the lack of regulation. If the market was appropriately regulated and the regulations enforced, banks would never have been allowed to lend against assets that did not cover the value of the loan.

Being certainly the seat of capitalism, the United States has always preached de-regulation. The market was supposed to correct all abnormalities by itself. This current crisis has shed light on how false this capitalist theory has proved to be. An appropriate level of regulation is always necessary to ensure that everybody behaves as they are supposed to and no one acts against the public good. In any case, the economic crisis has already crossed the doorstep and is well into the house. While we need to stimulate the economy back on track, we also need to bring the right dose of regulation to the market so that such a thing does not repeat in the future.

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OPINION: Here is an Easy Way to Really Stimulate Economic Growth and Create Jobs

2009-12-19T17:56:00.000+10:30

By Jim D Zitek

Our economy, as defined by most politicians and economists, is a statistical model called Gross Domestic Product or GDP. This model is based on consumption (spending by consumers, businesses and the government.) rather than wealth building or production. So every dollar spent is a dollar of GDP and every new dollar spent is GDP growth.

Most politicians catch on to this real fast. The more you spend, the more GDP goes up and the better your chances for re-election. This already sounds like a win-win situation. But wait, it gets even better. We have to get over one speed bump first. To spend a dollar you have to produce a dollar. But the government does not produce anything so it has no money to spend. No problem, it just has to get its dollars from somewhere else.
The government has to take a dollar from producers in order to spend a dollar; or it has to borrow the money and pay interest from someone else. It doesn't matter where the dollar comes from in the GDP model because every additional dollar the government spends is counted as an increase in economic growth (GDP.)

Now, if the government takes a dollar in taxes from a producer to spend; you could argue that the overall net is one dollar. You subtract a dollar from the economy in taxes and then spend that dollar. That sounds simple enough. But this could be a problem later because you have to keep increasing taxes to pay for the spending. Do they care? They will probably be out of office by then.

You would think tax payers would catch on to this, but remember you elected them because they were clever and great communicators. So they just change the meaning of the word spending to investment and everyone is happy. Long-term they try to convince tax payers that they are only doing this because the government can spend dollars more wisely than the producer they took it from or because the government can buy something the producer cannot.

Wait. Here is the BINGO. You borrow the money because if you pay-as-you-go, tax payers could catch on. And you get to pay huge interest payments on the borrowed money - you got it. Every new dollar paid is an increase in GDP. Now, think of the GDP growth we are going to get when our deficits go up by 10 trillion or more over the next few years. PLUS, if interest rates rise significantly, and they will, because of all the debt; BINGO - even more GDP growth. If you think this is a sane approach to our economy, do nothing. If not, support politicians who are sane.

Jim Zitek is an Investment Advisor with Feltl and Company, a securities brokerage and investment banking firm. He uses a top down approach to portfolio management. He is also a well regarded speaker on the topics of critical thinking skills and decision making. He shows people how to separate good information from bad information at the same time they develop the breadth and depth of information they need. Then how to reduce uncertainity by focusing on the information that is critical to the decision. All of the views presented here are my own and may not reflect the views of anyone I am associated with or affiliated with.

You can get more information at the web site http://www.zitek.net and at the blog http://www.paradigmadjustment.blogspot.com

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OPINION: The Greatest Depression is Happening Now!

2009-12-18T21:40:00.000+10:30

By Luke Hawthorne

During the Great Depression of the 1930's, the world's economy was the worst people had ever known. Until now that is!

I hardly ever get depressed, even in these horrific economic times. For some reason (probably genetic) I can just about always see either the funny side of things, or the positive aspects of everything. However (don't you just hate when people say that?! It kind of negates everything they've just said!), I want you to be prepared for the coming years so that you can survive and prosper.

Okay, the world leaders are STILL calling this a recession but that's obviously not true. They KNOW it's a depression, but they think they can talk their way out of it, like they do most things. That simply isn't going to happen! Here are the reasons that this Depression is going to be worse than The Great Depression.

1. Most people didn't own their own homes: this means that they didn't OWE thousands of dollars.
2. Most people didn't live off of credit cards: there WERE NO CREDIT CARDS, so they didn't have to pay high interest charges.
3. The U.S. budget was balanced (even during the Great Depression). Now the U.S. owes more than $14 TRILLION. As a comparison, at one mile per second, 14 trillion miles would take TWO YEARS for light to travel that distance! So, the U.S. owes a LOT of money.
4. There were far fewer people in the U.S. in 1930 - only 123 million, compared to 310 million now (most of whom are in debt).
5. In the early 1900's, the U.S. had a trade surplus every year. Now they are getting owe BILLIONS EXTRA each and every year.
6. In the 1930's, the U.S. was a MANUFACTURING country. Now it's a consumer country.
7. In the early 1900's, the U.S. monetary system was backed by gold. Now it isn't.
8. Finally, in the 1930's, the U.S. was a developing country. Now it's descending (look at healthcare, education, etc).

None of us knows for certain where all of this poor financial management of the world will lead, however, here's what I think we can expect.

1. Repair shops will do well (automobiles, appliances etc.) as people will keep what they already own, working.
2. Home defense and the personal defense industry will boom, as will the sale of weapons and ammunition.
3. Education will boom, but in the hard sciences only, not Art History or Psychology etc.
4. Bicycles sales will sky-rocket.
5. Alternative medicine will increase and be more accepted by regular MD's.
6. Public Road Transport will increase.
7. Airline travel will decrease as more people tele-commute on their computers.
8. Used product stores will do well (Goodwill etc).
9. The underground economy will boom (scary stuff!).
10. Recession Gardens will become increasingly popular (I'm glad I have a large backyard!).
11. Riots
12. Massive increase in crime
13. Food will become scarce and therefore very expensive (because demand will be greater than supply)

While there can be no absolute answer, the things to do would be to LEARN how to be self-supporting as much as possible. This means both with money and food. Learn how to protect yourself, your home, your possessions. There are many free resources online which will explain in detail how to make your home difficult to enter, and you can always ask your local law-enforcement officers to advise you.

Concentrate on buying quality products that will last longer and ONLY PRODUCE QUALITY products for your customers. This is critical. While many people will continue to buy poor quality because it's cheaper, doing this is almost always a false economy. Poor quality ANYTHING, usually doesn't last, and you end-up buying the same thing again the following year (or in the case of a pair of tennis shoes I once bought, six MONTHS later!!).

Attack the future, before it attacks you! I don't know who originally said this, but its meaning couldn't possibly be appropriate than in this current economic meltdown.

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Retiring Overseas Could Be the Best Decision You Make

2009-12-18T21:36:00.002+10:30

By Daniel Findermind

If you live in the US, retiring overseas could be the best decision to make. Why?

First, there are countries where the average salary is up to 10 TIMES smaller than the ones in US. This means you could live there as a king, literally. In the Philippines, the average salary is around $300. In Macedonia, the same case. Actually, on the entire Balkan Peninsula, the average salary varies between $300-$1000. Not bad, eh?

Another beautiful thing is that you have a lot of choice. Different countries have different climate, so you can choose in which one to move. Also, you could have additional advantage if you learn the language there. So many new communities to get involved with. Plus, some countries also offer additional benefits for retired people.

Is $1500 enough to live like a king? In India, yes. In the Philippines, same case. On the Balkans, you guessed so.

South America is also a cheap place to live. You can go and hire a maid and some other assistants for a monthly salary of less than $200. Actually, in the Philippines (not in South America but I wanted to illustrate because it is in that category of countries) hiring a maid can be as cheap as $50 per month!
You can try to search for some people who actually live in one of these countries and ask them more. They'll probably confirm you my statements above.

I know that doing an additional research is always helpful when making these kinds of decisions.

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What is the Reality of the Spanish Property Market? Are Banks the Best Source For Cheap Deals?

2009-12-18T21:34:00.000+10:30

By Louise Reynolds

Spanish house price falls seem to range between: 50% since the 2007 peak, to the official statistics of -7%. Both extremes cannot be correct. So which is the correct figure? Latest figures from the Ministry for Housing show National average prices have fallen 8% over 12 months, from €1,780 m2 to €1,634.7 m2 today (September '09 vs '08).

This seems a modest property price decrease, given latest quarterly house price data from Knight Frank, which shows the USA officially declined -15.4% and the UK -11.7%, Bulgaria -21.9%. Many expected to see double digit falls and the International Monetary Fund (IMF) forecasts bigger falls than is being reported. Agents on the ground believe prices in some instances have declined up to 50%. That isn't to say that is the case with all property, it may be in pockets and where properties have been priced unrealistically, to begin with.

So why is there this discrepancy in figures? Well official figures are not always that comprehensive and because of the way the Spanish conveyancing system has worked in the past, not all transactions may have been captured at the most accurate price. So what is the truth about the price dynamics? It lies somewhere in between officialdom and anecdote, as ever. Coastal properties have suffered more, based on anecdotal evidence, as this is where a lot of housing stock is, whereas inland properties appear to have suffered less as a generalisation.

So what is the best source of cheap deals? Are Banks the best source of cheap property?

Spanish lenders acquired at least €20 billion ($29 billion) of property in the past 18 months, according to data compiled by analysts at Zurich-based Credit Suisse Group AG.

Some buyers assume that the surest way to secure a cheap Spanish property is to access repossessed properties direct from the bank. However, there are downsides to this approach. Repossession in Spain is slow - sometimes more than 12 months. So properties promoted today as 'repossessed', may have been around and available for 18 months or so. So it may have been the case that the "bargain" property had already failed to find a buyer for at least a year, maybe longer.

The second drawback is intrinsically related to this point. Due to the length of time it takes to repossess a property, banks will want to pass this cost of effort on. So prices could be inflated to take account of the repossession process. What about developers, sellers and agents as a competitive source for discounted property?

Many bargain properties are still available direct from sellers, developers and agents. It does not cost more to buy through an agent, than it does to go directly to a developer. Pricing will already be based on selling through multiple channels. Agents are a valuable source of advice and guidance through some of these nuances. Many developers and sellers are aware of the market dynamics and have already adjusted prices accordingly. Just because you hear the word repossessions, does not automatically mean there are cheaper properties available.

So what is the outlook for Spain?

Buying into Spain now, while prices are keen, is surely attractive for many who may have found Spanish prices unaffordable in the past. This assumes finance is available to those wishing to do so. Whilst the economic outlook is still uncertain, it remains a favourite among buyers because of its climate, lifestyle and beauty. It is a great time to be getting into the market, if a medium to long term outlook, is taken.

And whilst property price declines have been more accentuated on the coast, inland prices have held up. So if you are feeling uncertain about the prospects and not sure whether more price falls are likely, an option would be to look inland, where prices and values have held up more and are likely to be less volatile in the future.

Sources: Bloomberg, OPP, Economist, RR de Acuna, IMF, Investors Chronicle, Credit Suisse, SPI, Knight Frank.

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International Pensions Are the Key to a Relaxing Retirement

2009-12-18T21:32:00.000+10:30

By Gino Hitshopi

There are a whole host of different pensions around the UK at the minute, there is the standard UK state pension, Self Invested Personal Pensions or SIPPS, Personal Invested Pensions PIPS and many more, but what some people need is international pensions.

It actually sounds quite important and like it could be something that international spies would have with their Swiss bank account, but international pensions are actually just the transferring of funds from someone's current pension to one that is accessible around the world.

With more and more individuals looking to retire in warmer climates like Spain, Italy and France, they need some way of transferring their funds from their existing account into an account that will be available the world over, these international pensions allow people to enjoy the rest of their lives in the warmer Mediterranean climate which becomes very appealing when you become older.

Obviously not having to be around the cold and sometimes harsh British winters is a major positive point to move across, but another reason could be the relaxed and chilled atmosphere of the countries, there is something about the south European way of life that instils calm and relaxation. When lunch time comes around, the country stops and everyone takes the time out to enjoy their lunch in the beautiful restaurants.

Of course another reason why people might want to transfer their pension funds into international pensions could be because of the fantastic Mediterranean scenery, the wonderful mountains and hills, the rolling fields, the vineyards, the sights and sounds. After you have lived so much of your life in a built up busy town or city in the United Kingdom, it is a refreshing change to move to such a laid back and relaxed location.

After visiting several of these retirement locations I can honestly say that it has made me contemplate my own retirement plans, upon visiting some of these you quickly come to realise how you can fall in love with the picturesque scenery and surroundings. Imagine waking up in the morning, walking out onto your lawn to be confronted by warm sunshine, your next door neighbour offering you a couple of freshly laid eggs from the hens. It all sounds too good to be true, but after visiting a couple who had retired abroad this fantasy can become a reality.

So why don't you consider moving your pension funds into international pensions and enjoy your retirement in peace, quiet and tranquillity.

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Dubai - Is This a Game Changer For the Global Economy?

2009-12-18T21:23:00.000+10:30

By Victor Igden

Just when the stock market was trading at new highs and people thought we might be in for a soft landing, Dubai threw a huge and very shiny spanner into the works. The immediate cause for concern was the request for a standstill on interest payments on debt issued by Dubai World - a private, though state-backed, corporation. This, you might have thought, was a standard corporate bust.

Not so. Three things made it particularly critical. First, property prices in Dubai had already fallen by as much as 60% - while the economy clearly was still suffering, many people thought the pain had already been taken and the emirate could now spend its efforts on moving forwards. Apparently not.

Secondly, there was an implied state guarantee for the debts of Dubai World and its subsidiary Nakheel. If Dubai wasn't backing its bonds, that could be construed as a sovereign default (though Moody's pointed out that there was no explicit guarantee, and in fact it had downgraded DW bonds because of that).

Thirdly, the timing of the news - which came out just ahead of the Eid al-Adha holiday, when stock markets around the Gulf would be closed. No information, no traders, no liquidity, and a potential default- not the best recipe for happy investors. Some bears have suggested this is the beginning of the real financial collapse.
However, there have been a number of 'voices of reason' insisting that the damage can be limited to a few bonds, and that Abu Dhabi will step in as fairy godfather.

I suspect the truth lies somewhere between the two opposites. But to see what's going on you have to know how Dubai got into the situation it's in.

Dubai isn't a petrodollar state. It doesn't have an awful lot of oil - enough to have got started on modernising its economy, but oil and gas revenues contributed less than 6% of GDP in 2006 and probably a good deal less than that now. Its strategy has been to become a Gulf 'hub'; and that's not worked out badly, with Jebel Ali port one of the top ten container ports worldwide, and trade, entrepot and financial services accounting for over 40% of the economy.

Real estate growth was originally driven by the services economy. However, over recent years, real estate has managed to get into the driving seat; by 2005, construction and property contributed 25% of total GDP. After Dubai relaxed a bar on foreigners buying property in 2006, a huge, debt-driven asset boom began; millions of dollars went into promoting Dubai developments to UK and Irish buyers, and promoting the city as a tourist hot spot.

In some ways, Dubai is very similar to Iceland - debt driven asset price inflation, a tiny population (fewer than 200,000 Emiratis, though the total population is about 2m).

But there's one big difference. Dubai, though acting in many ways as a sovereign state, is part of the United Arab Emirates - a somewhat ambiguously constructed federation in which the largest single economy is Abu Dhabi's. That's led to hopes that Abu Dhabi will bail out Dubai - but the evidence suggests that if it does, it will drive a hard bargain.

Abu Dhabi has always considered itself the big brother in this relationship. It's more conservative both socially and financially, and hasn't been completely happy with Dubai upstaging it economically - nor with Dubai's relatively relaxed lifestyle choices. Abu Dhabi has said it will back banks - both Emirati and foreign owned - operating in the Gulf. But it has said nothing about Dubai World. And it certainly hasn't said anything that could be construed as writing a blank cheque.

There are rumours that it will drive a hard bargain by seeking to control assets such as Emirates airlines and the Dubai World ports business. But equally, it might strike a hard political bargain. Besides, I suspect Abu Dhabi's not exactly happy with the way the announcement was made - you could interpret it as Dubai trying to 'bounce' Abu Dhabi into writing them that blank cheque.

According to reports, Dubai has USD 19bn of debt coming due this year and next. That stands against GDP of USD 90 bn or so (based on this year's first quarter GDP); that's over a fifth of GDP taken up by repayment, before debt servicing, and total debt stands at close to 100% of GDP.

The big problem here is that GDP is going to shrink. There's been a massive emigration of expats, both professional Brits and blue collar Indian workers, and that's not just from the construction sector; it's also from bank head offices, magazines and newspapers, just about every sector of the economy. So Dubai will be trying to service that debt on a lower GDP. That's going to be tricky, and I don't think the Nakheel/Dubai World bonds are the last we'll hear of it.

However, the crisis theoretically could be contained within UAE, with a few knock-on impacts outside. For instance HSBC, which got hammered last week, actually has a 2% total exposure to Dubai - way less than its exposure to US subprime.

The impact on the markets, though, I think will prove to be longer lasting, because Dubai has put an end to an Indian summer of stock trading. Many analysts and fund managers were already worrying that the bull run of 2009 might be getting over-extended; Dubai is likely to tip the balance for many of them on the side of greed rather than fear. Dubai has also reminded us very powerfully of the lack of transparency of some of the markets investors have moved into, seeking to improve returns in an era of low base rates.

But Dubai has also got rid of the easy consensus that we were going to ride out this recession without any sovereign defaults. Remember, 1998 saw Russia default, 2002 saw Argentina do it. So far, further defaults have been prevented - but many economies are looking rocky. Ireland, Hungary, the Baltic States, are all highly exposed. Governments' resource to huge economic stimulus programmes and quantitative easing has in fact exacerbated their financial vulnerability, so that most governments will enter 2010 much weaker than they started 2007.

The market in credit default swaps reacted fast to the Dubai crisis - put simply, the cost of insuring against sovereign default has risen dramatically. The cost of insuring Dubai bonds doubled, Saudi debt is up 20%, Qatar up 10%. The effect isn't restricted to the Middle East, either; emerging markets have suffered, and Greece has been in the spotlight too. The price of debt has also been impacted. The sukuk (sharia style bond equivalent) in question fell from USD 1.10 to 57 cents on the dollar on Wednesday. That's scary for investors who have moved into bonds as a 'safe haven' from equities markets.

It's likely that even if markets recover, borrowing costs for highly indebted governments will rise. That could include the US and UK - which will limit the amount of stimulus they can feed through to the economy, and lead to a much slower recovery than would otherwise have been the case. If the bounce that analysts have expected doesn't occur, stock markets look stretched - so even if Dubai doesn't bring about the collapse of the world economy, my feeling is it will probably lead to softer equity markets.

Even if Abu Dhabi pays all Dubai's debts, the problem is that you can't put the spectre of default back in the box - investors' mentality and their risk aversion will have been affected by the events of last week. In particular, the 'bargain mentality' that saw many investors buying up 'junk' stocks and re-entering the UK housing market earlier this year could recede.

After all, if you thought that a 50% fall in real estate prices meant that Dubai was a bargain, you've had your fingers very badly burned.

I suspect this could be the end of the 'back to business as normal' phase of the recession. The fact is, economies like Dubai and, dare I say it, the UK need some dramatic restructuring before they can resume growth.

You can't be an ostrich and stick your head in the sand. Though, that said, Dubai does have an awful lot of sand to stick it in!

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How to Ship Household Goods to Thailand For Retirement

2009-12-18T21:21:00.000+10:30

By Dennis Ramm

Whenever importing household goods for your retirement in Thailand, always remember that only second-hand or used merchandise may be shipped in without paying the required taxes and duties. Thus, under Thai law, brand new household goods shipped inside the country will definitely be subject to the necessary taxes and tariff provided by Thai law.

In order to be exempt from said taxes, Thai law requires that said used household items being transported from another country into Thailand was used by the importers themselves at their former country of residence. The law also provides that the origin of the shipment be the same as the origin of the importer.

Goods must arrive within six months to Thailand

The importers must also take into consideration the fact that the said goods or personal items are not allowed to be shipped before the arrival of the Thai retirement visa holders, nor six months after arrival of said importers.

In the case of used electrical machines or appliances like air conditioners, television sets or microwave ovens, the import of these electrical devices shall be limited to one unit only. Thus, if the importer brings in more than one unit, then the excess shall be subjected to Thai taxes and duties.

There is however, an exception. If the importer is a whole family planning on changing residence and living in the Kingdom of Thailand permanently, they will be given the privilege of bringing into the country two (2) units of each item.

Certain items may not be important into Thailand such as narcotics or drugs, firearms, plants, and pornographic material. It is strongly recommended not to import vehicles due to the complex process needed to clear Thai Customs as well as environmental clearances. It is simply best to purchase a right hand drive vehicle in Thailand after you arrive.

Documents Needed for Thai Customs

You will need your passport, retirement visa for Thailand, inventory list showing the brand name, model and serial numbers, and your shipping documents. It will be helpful to have the original sales receipt of all the electronics items. When the shipment arrives the Thai Custom official will ask to see your original passport. Typically the shipping company that you use will coordinate with the Thai Customs officials in clearing your household goods through the customs process.

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China's Response to the Global Financial Crisis

2009-12-18T21:14:00.000+10:30

By Luthor Laine

In September 2008, the world entered into a massive financial crisis, triggered by the loss of confidence by investors in the value of securitised mortgages in the US during 2007, of which caused a worldwide recession by April 2009. Although the worldwide financial crisis originated from the United States, its effects were felt on a huge scale by economies around the world, including China.

China has a huge trading surplus with foreign countries, especially the United States. The balance of trade between China and the United States was, by February 2009, US$34.8 billion in favour of China. The President of the United States in 2009, Barack Obama, had accused China of fixing their exchange rates to take advantage of foreign trade and investment. It is true, of course, that the purchasing power parity in China is equal to about ten times as much as many Western countries. In fact, in 2008 China was ranked the second large economy in the world using the PPP as a measurement, second only to the US.

China's phenomenal growth rate during the early 21st century was supported mainly by manufacturing exports. Following the financial troubles experienced in the West and the bankruptcy of several banks, letters of credit became unavailable to importers, especially in America. The Baltic Dry Index which is used to calculate the price of shipping goods fell drastically during the second half of 2008, losing 90 percent of its value within six months.

This was mainly due to the collapse of world trade, an event made official by the International Monetary Fund on January 29, 2009. As a result, by January 2009, China's exports had dropped to their lowest level since April 1999. JP Morgan's chairwoman of China equities Jing Ulrich, stated in a report by the BBC: Export growth is likely to be flat in 2009, with negative year-over-year growth in the near-term. Nevertheless, during December of 2008, China had still managed to boast a US$39 billion trade surplus, despite the recent drop in exports. Economist Stephen Green, on the other hand, argued that China's trade surplus might be an illusion, since capital inflows amounting up to US$67 billion, disguised as trade, account for the net balance of trade in China.

The vice chairman of the State Development Planning Commission of China, Zhang Guobao, stated in the People's Daily newspaper: "The international financial crisis... is equally a challenge and an opportunity. The slowdown... has reduced the price of international energy resources and assets and favors our search for overseas resources." The government of China began buying up bargain assets overseas by concentrating on energy and resources companies in need of bail-outs.

The China Development Bank financed China's biggest-ever foreign investment a US$19.5 billion dollar bid for 18 percent of Rio Tinto, an Australian mining company in desperate need for investment to finance its US$19 billion worth of debts. Paul Cavey of Macquarie Bank, stated: The amount of money coming out of Beijing suggests they are confident that we are at the bottom of the market adding that they still have a lot of money to play with.

Rio Tinto announced on Feburary 12, 2009 that they are unanimously recommending to shareholders a transaction with Aluminium Corporation of China ("Chinalco"), a leading Chinese diversified resources company. The transaction delivers cash proceeds to Rio Tinto of US$19.5 billion, raises significant funds at a time when financial markets are distressed, creates a partnership between an Australian company and Chinese company, subject to regulatory approval.

The Chinalco Rio Tinto partnership is just one example of many Chinese government bailouts of foreign companies. The Chinese government had also sank $39 billion in three separate deals to secure future oil supplies from Russia, Brazil, and Venezuela. China seemed to be more interested in natural resources than investing in banks, as noted by top economist in Asia, Andy Xie.

On May 10, 2008, the State Administration of Foreign Exchange announced that it will invest in a bond denominated in Special Drawing Rights with the IMF an international organisation that supervises and provides advice to countries about economic policy and lends to countries experiencing balance of trade problems. Hu Xiaolan, a vice president of the Bank of the People's Republic of China, seemed OK with the prospect of using the renminbi to play a greater role with international markets, and stated in a press conference: It's not simply a case of a country wanting to internationalise a currency. It needs the recognition of the market and the confidence of investors in the country's policies.

The managing director of the IMF, Dominique Strauss-Kahn, said in a press conference on April 23, 2009, that the slowdown in China's growth, as in other countries, has in effect a very deep slowdown in the imports, and the effect on the world economy is important. He also noted that he won't draw any kind of consequences [about the] role of China in Asia and the way China will help, or not, the Asian part of the world to get out of the crisis. It is a global crisis. There is no way for Asia to get out of the crisis without the rest of the world getting out of the crisis. That is why we need a global view, and in this global view, certainly, the Chinese economy today plays a big role.

China seems to be taking its role in the ongoing world-wide economic crisis seriously. The People's Bank of China submitted a report on their website on the 1st of April, 2009 about China's commitments made during the recent G20 summit:

President Hu Jintao ... made a solemn commitment at the Summit, saying that, "as a responsible member of the international community, China will continue to take an active part in the international cooperation to keep international financial stability and promote world economic growth, support international financial organizations in increasing financing capacity in response to the changes in the international financial market and extend greater support for the developing countries influenced by the crisis. We are willing to actively participate in the trade financing plan of the World Bank International Finance Corporation (IFC)".

The article by The People's Bank of China also stated that China has actively participated in the World Bank's trade finance program, provided liquidity assistance to trade finance programs of regional multilateral development institutions provided over US$650 million to ... multilateral development institutions in cumulative terms [and] launched bilateral trade finance programs.

China remains in a strong economical position in the aftermath of the credit crisis, and it is said to have been an oasis of relative economic stability. Despite having its domestic economy weakened as a result of the crisis, by May 2009, data suggests that China may be on the rebound. The comments made by Chinese President Hu Jintao and Zhou Xiaochuan suggested that China has a clearly made plan to recover:

More money will be lent to the International Monetary Fund
US$95 billion in currency swap deals with six countries (trading in CNY instead of USD)
US$52 billion in foreign acquisitions, two thirds of which are focused on natural resources
Multi-billion dollar lines of credit to countries rich in oil resources.

How will China play out in economic terms in the months and years to come? As Zhang Guobao suggested, the international economic trouble might be an historic opportunity for net surplus countries such as China to have their voices heard on the international stage, much like the recent G20 summit. As a result, China will most probably be playing a more prominent role in international affairs from now on.

Article Source: http://EzineArticles.com/?expert=Luthor_Laine
http://EzineArticles.com/?Chinas-Response-to-the-Global-Financial-Crisis&id=3363643

Is This a Recession Or a Depression?

2009-12-18T21:10:00.000+10:30

By Luke Hawthorne

There is a great deal of confusion over the economic terms 'recession' and 'depression'. Prior to the Great Depression in the early 1930's, ALL downturns in a given country's economy were called a "depression".

In the U.S.A. during the Great Depression, the term "recession" was first used. It was used so that people could more easily understand the difference between a smaller downturn in economic activity and more a more severe one. For example, in both 1910 and 1913, the U.S. economy declined from the previous year, but, in HINDSIGHT, they were referred to as merely recessions, because of the much deeper problem of the 1930s.

A recession, as defined by the Business Cycle Dating Committee at the National Bureau of Economic Research, is the decline of business activity in the economy including employment, industrial production, real income, retail and wholesale sales. Some economists won't use the term "recession" until the decline has lasted for six months (two quarters).

The U.S.A. for example, saw its worst recession between 1974 and 1975, when the "business activity" declined by about 4.9%.

So what do economists currently label as a depression? Technically, it is when a country's Gross Domestic Product (GDP) is 10% lower than the previous year's GDP, OR if the GDP drops (even if it's less than 10%) each year for three consecutive years.

Unfortunately this raises more questions than it answers. What exactly IS Gross Domestic Product?

The GDP is defined as "measure of a country's economic performance and is the market value of all final goods and services made within the borders of a country in a year". That would include ALL transactions within the country AND between that country and others. This would include every exchange involving money. The GDP is often confused with the GNP, or Gross National Product, and while they are often very similar figures, they are not the same.

The GNP is the Gross National Product, which refers to the PEOPLE, who not all may be in the same physical location. E.g. GNP of all United States citizens will be somewhat different to the GDP of the Nation called the U.S.A. Put more simply, GNP refers to people, and GDP refers to a country.

The theory goes like this; if a country has lots of trade within its own borders AND with other nations, then it must be doing well financially. It is often used as an indicator of a country's standard of living, though this isn't always the case.

Why? Because of several factors; for example, the value of the country's currency compared to others can help determine the standard of living enjoyed in a given country. The type of government in power (dictatorship etc.) will have a strong influence, and most importantly, products produced IN EXCESS of what it needs to survive must be considered.

REAL wealth, whether it is individual wealth or national wealth, should only ever be measured in terms of what is available IN EXCESS of what is required to survive. When and individual can afford buy a new car every year whether he needs it or not is a sign of having something in excess of what he needs. Please note that I said "can AFFORD". If a person has to take a loan out to pay for the new car, or a mortgage for the new house, then he cannot really afford it.

One very important thing to remember is that severe economic downturns in a country (or indeed, worldwide) are ONLY called Depressions YEARS AFTER they happened. Because a country's GDP has to drop by at least 10% over the previous year, or the decline lasts for three years or more, by definition it can ONLY be called a depression a minimum of one year after the fact, OR three years after (if the decline was less than 10%).

As I write this, the world is in a steep economic decline. In other words, there are far fewer trades going on both within any given country and between countries. While this cannot be technically referred to as a depression, there is no doubt at all that it WILL be called a depression in the years ahead.

In conclusion, the words used to describe a situation (economic or otherwise) are just words. What really matters is how people DEAL with that situation. They need to learn from historical events so that they can both deal with the current situation, and make sure that they teach the next generation how to prevent it from happening again.

History does NOT have to "repeat itself".

Article Source: http://EzineArticles.com/?expert=Luke_Hawthorne
http://EzineArticles.com/?Is-This-a-Recession-Or-a-Depression?&id=3123670

Early Retirement Planning - Retiring Overseas Should Be an Option

2009-12-18T21:01:00.000+10:30

By Gary Pierce

If early retirement planning in on your radar, do not forget that retiring overseas costs a lot less than it does in the United States. $2000 a month, and less, goes a long way toward living well in places like Mexico, Ecuador, Uruguay, Panama and other countries.

In Mexico specifically 1 million Americans have retired there with more being driven south by the poor economy in the US. Folks that have seen their 401K's tank ... still want to retire ... they are looking for lower cost options and Mexico fits the bill.

You are 3 times more likely to be a victim of a violent crime in the US vs. Mexico. The health care is cheap, $270 per year will buy you Mexican health insurance that covers everything, including prescriptions.

If retiring overseas appeals to you I would suggest taking a long trip to your country of choice and rent an apartment for a month, rather than a hotel room. Do the everyday things like going to the bank, doing the laundry, cooking some meals at the apartment. This conservative approach will keep you from making an expensive mistake. Never buy real estate until you have lived there a year ... always rent first.

Retiring overseas will likely not be an option you hear from your planner ... unless he or she has experience in this area. I would suggest going on line and getting some information there as a start.

Again, I caution you do not view living overseas through the eye of a tourist. Lying on the beach in Cancun is fun but it does not give you the day-to-day experiences that you will face living there vs. being on vacation.
Early retirement planning ... make sure you examine all the options before you say you I cannot afford to retire. It is much cheaper to live in a foreign country. Enjoy.

Article Source: http://EzineArticles.com/?expert=Gary_Pierce
http://EzineArticles.com/?Early-Retirement-Planning---Retiring-Overseas-Should-Be-an-Option&id=3430144

A Leap Into the Unknown - Next Year's Economy

2009-12-18T20:58:00.000+10:30

By Jacek Popiel

As 2009 ends, the official word is out: thanks to a massive financial bail-out and zero interest rates, we have escaped a second Great Depression. The economy is on the mend, growth is back, and all that remains is fixing some lesser problems, such as bankers' excessive bonuses.

"Greedy bankers" make convenient whipping boys, but if banks are making profits again, why should their executives not get paid accordingly? Every other industry rewards its winners. On the other hand, if bankers are guilty and need to be punished, it behooves us to first determine what they did wrong.

As was found out once the current crisis hit, banks had invested large amounts of money in questionable assets. When these assets turned out to be less valuable than originally assumed, the financial system faced worldwide bankruptcy, from which it was saved by huge, and still continuing, provisions of government money.

The key question to be asked is why so many dubious assets were created and purchased in the first place.
The iron rule of economics is the law of supply and demand. Greed plays a part as well, but the supply and demand rule underlies everything else.

The assets in question were created and sold because there was demand, meaning money looking for assets to invest in. If there was more money than available assets, new ones had to be created to satisfy the demand, and created they were, sometimes out of thin air. This asset creation fed a speculative bubble. When the bubble popped, the system crashed.

So the initial problem was not the dubious assets, but the excessive abundance and availability of money. Funds were abundant because interest rates were low, but also because the U.S. government had pumped the global financial system full of dollars through large and continuous budget and trade deficits. This mass of money then was freely available because the financial system was globalized, and funds could move around in huge amounts, seeking the best returns.

Finding solid investment opportunities is hard work, and returns are often slow to materialize. Creating phony assets is easy and brings an immediate financial reward. A financial system loaded with piles of freely moving money is an open invitation to speculate. In the short run, speculation generates more profit than sound investment. As it stands now, the financial system is structured to maximize both speculation and greed, while short-changing valid investment.

Bankers and traders may be greedy, but the system set-up encourages them to be.

The last fifteen years have seen financial crises of increasing gravity: the Asian crisis, the Russian default, the dotcom bust and the 2007-2008 crash. All flow from the dynamic outlined above: too much money moving too freely and too fast.

This situation has now been aggravated by the "remedial" measures taken by governments and central banks to mitigate the current crisis. These measures translate into increased deficits and the wholesale printing of money, and have vastly increased the monetary mass in the global system.

The logical consequence of this would be the formation of more speculative bubbles, followed by new crashes. It is questionable, however, whether any asset category can by now absorb even a fraction of the money in circulation, old and/or newly created. This is all the more true as the "real" economy is weak and has little inherent dynamism aside from government stimuli. If the floating monetary mass then remains unabsorbed, the probable outcome will be a monetary collapse, led by an imploding dollar.

The consequences of this are hard to imagine. There is no precedent for a global monetary crash. Yet this is where we are, in all probability, heading if current policies are maintained.

The above "if" suggests an alternative approach. Such a shift is not ruled out because the U.S., the country at the core of the issue, is heading for a crucial election, the stakes of which are extremely high.

Alternative policies could therefore be embraced by a political challenger to the status quo. These policies would include:

- Budgetary tightening aimed at the elimination of fiscal deficit
- Measures to promote investment in the real economy
- Tariffs applied to major trade imbalances
- Taxation of speculative activities within the financial system

There is no guarantee that these measures will produce a smooth transition to a more viable system. Any induced shocks will nevertheless be much easier to handle than a wholesale monetary collapse. We have a choice between a deteriorating status quo and a new start. This choice must be clearly articulated as we move towards the 2010 elections.

Article Source: http://EzineArticles.com/?expert=Jacek_Popiel
http://EzineArticles.com/?A-Leap-Into-the-Unknown---Next-Years-Economy&id=3430494

Ras Al Khaimah Investment‏

2009-12-18T20:50:00.000+10:30

by Ramapati Singhania

The Authority is an investment arm of the government of Ras Al Khaimah, UAE with a mandate to promote and oversee the economic development of the emirate. In the process, it transformed the place into an investment destination with over a thousand foreign investors setting up operations within the emirate in just a short period of time.

The semi-governmental agency whose mandate is to work towards reinforcing the investment climate in the emirate and promotes its various economic sectors proposes investment policies and supervises implementation. It has literally transformed the emirate into an investment magnet with over a thousand foreign investors setting up operations within the emirate in just a short period of time.

Main advantages are the following:

* 100% income and corporate tax exemptions
* No import or export taxes
* No income, sales or wealth tax
* 100% repatriation of capital & profits
* No restrictions on hiring expatriates
* Land at very concessional rates
* 25 years renewable lease agreements
* Proximity to entire gulf and global markets

Ras Al Khaimah investment authority acts as one stop shop for all investor needs. Its services include offering business licenses (Free and Non free zones), visas, industrial plots, warehouses, labour accommodation, commercial space and building permits. It provides all necessary infrastructure and approvals under one umbrella for all investors including partnering them for their projects in UAE.

It has formed RAK Offshore which is a true offshore facility and regularity body that allows complete offshore non resident business and financial services. The international offshore centre is a free zone regulated by the RAK Investment Authority.

IBC incorporation in RAK can be done much speedier than in the other UAE free zones and lacks the requirements that are typical in these free zones.

It is the cheapest offshore in the Middle East. If properly structured, offshore company formation is an excellent, tax efficient strategy for entrepreneurs to conduct their international business. It also allows any non resident individual or moral entity to open a company registered within the free zone.

They require a symbolic capital and only one director and shareholder. They can hold board meetings anywhere in the planet and identity of their shareholders are kept confidential by law unless there is any suspicion of any criminal activity by RAK and UAE regulatory bodies.

RAK Investment Authority allows business investments services in manufacturing, education, health, information technology, media, real estate, tourism, and financial services sectors. The company also involves in developing projects, such as hotel complexes, multiple residential dwelling and touristic attractions, and a residential complex.

It also engages in ceramic tile manufacturing. The company serves the Middle East, Africa, the Indian Subcontinent, and the CIS countries.

RAK is successful in establishing reforms, instituting new laws and regulations and enforcing policies that are hospitable to local, regional or international investors. Ultimately, the government proactive support and involvement in the ongoing economic revolution is aimed at raising standard of living of both citizens and residents of the emirates, while ensuring long term socio-economic sustainability.

The government vision is that Ras Al Khaimah investment authority becomes leading authority in making sound investments and partner with others who share their vision, enabling them to achieve their objectives, at the same time creating a sustainable and growing economy.

Ramapati Singhania specializes in creating and managing web businesses. His latest website http://www.rakcompany.net/rak-investment focuses on helping you to incorporate offshore companies in Ras Al Khaimah in the UAE.

Real Estate Opportunities Around the World

2009-12-18T20:47:00.000+10:30

by Adriana Noton

Although recent house market reports have shown that there is still market instability, there are real estate markets around the world that are showing great improvement. The weakened US dollars indicate that it may be a great time to invest in foreign property. Many people are discovering that there are a number of real estate investment opportunities all over the world.

The following are a number of emerging international real estate opportunities:

Panama City: This is one Central American city that is currently seeing remarkable growth in construction. Many experts believe there is going to be a huge demand for second homes, retired homes, and semi-retired homes in Panama City.

Berlin: The city of Berlin in Germany is another city that is seeing growth in estate investment. Berlin is now seeing a surge in artists flocking to the city which is bringing new life to the city and its cultural ambience. Germany offers simple long term investment opportunities and even properties in West Berlin where prices have not increased in years.

Portugal: Portugal offers great investment opportunities. It features a healthy and productive lifestyle, significant rental returns, and also has the benefit of having one of Europe's highest life expectancy rates making it a great place to retire. The population of Portugal is about 10 million people.

Haifa: The city of Haifa is another city that has recently seen an increase in its housing market. This is due to the recent surge in technology companies to the area bringing in huge number of employees which is raising the value of property.

Estonia: Ever since Estonia became a member of the EU, its property market values has steadily risen. As well, some areas Estonia have seen property values double since 2000. Because Estonia will be changing its currency to the Euro, many experts believe the property markets will remain strong.

Tokyo: The city of Tokyo is seeing an increase in investors due to the fact that its local banks are weathering the financial storm, it has inflation at 1%, and the local banks stayed away from the toxic mortgage-backed securities. As well, in Japan, investors look at the costs of the property, capitalization rate, and how much they can rent for the property. In Japan, it is not just Tokyo that has good investment property opportunities. Shanghai also has excellent residential markets. For instance, Shanghai property is selling for about US$366 per square foot.

Ajman: Situated on the coast of the Arabian Gulf, Ajman is now attracting international investors. Ajman is beginning to see large amounts of building construction at a faster rate than its neighboring countries.

Egypt: Located on north-east Africa, Egypt boasts astounding real estate investments for both rental returns and capital growth. Its attractions such as the famous Egyptian pyramids attract millions of people.

Mexico: There are a number of features that makes Mexico a great place to invest in real estate. It features beautiful resorts, lively Mexico City, great beaches, low cost living, and great fishing. Every year, millions of people travel to Mexico to experience the wonderful culture and people.

Real estate opportunities will vary from country to country. However, in this time of time economic uncertainty, investors are now flocking to international properties to secure investments for their future. Many people are investing in vacation homes and homes for retirement because when permitted, they can take advantage of the tax incentives and deferment of capital gains.

When go skiing and mountain climbing, do you want to get great residential locations and BC real estate so you can relax and enjoy? We provide Kimberley real estate services and save your money for you. http://www.mountainspiritresortandspa.com/.

Which QROPS Jurisdiction is Best?

2009-12-11T23:27:00.000+10:30

By Jonathan Cassidy

The important thing to remember about QROPS schemes is that they are not blanket avoidance structures. So if you intend to continue to be a UK resident for tax purposes and are simply looking for a method of avoiding paying tax, a QROPS will not be of much use. You as you will only be able to receive benefits similar to those you would if your pension were held by a UK scheme. The system is meant for those residing in foreign jurisdictions. So which one should you choose?

There is no single jurisdiction that suits everyone. You have to consider which country you would like to retire to, as well as the country you intend to host your QROPS. This is important because the country into which the monies will be paid which is also important from the tax point of view.

The QROPS scheme can be anywhere. So for example, Mr Green can be English, living in France, with a QROPS in Guernsey.

Guernsey

Guernsey is a popular choice for QROPS because it does not usually tax non-Guernsey residents. Accordingly, it may be possible to live outside of Guernsey and receive the income from your pension tax free or at a very beneficial rate.

Guernsey also has the advantage of a mature offshore investment community of institutions, whose staff have many years of experience. Further, the jurisdiction is well regulated, which means that investors can have the comfort of knowing that their money is in safe hands.

In addition to minimal or low taxation rates, perhaps the most attractive aspect of Guernsey as an offshore QROPS host is the freedom it affords to members of pension schemes, both in terms of the ability to hold a variety of asset classes and withdraw funds in a way that is much less restrictive than the UK system.

Isle of Man

The Isle of Man is a UK Crown dependency, but also an independent democracy in its own right. Accordingly it has the benefit of political stability but also financial independence to pursue its own low tax regime.

It has a double taxation treaty with a number of countries, which means that while a taxpayer may have to pay tax on the income from their Isle of Man QROPS, that tax will be taken into account by the country in which they are resident. So for example if Mr Green is English and has retired to Norway, but has an Isle of Man QROPS, he will have to pay 18% tax to the Isle of Man tax authority on any withdrawal of this pension. However, when he comes to pay his tax to the Norwegian authorities, this will be taken into account. So his tax liability to them on his pension income is the Norwegian amount less 18%.

The Isle of Man has signed double tax treaties with various countries from the Nordic region. For specific advice, contact your QROPS specialist.

Ireland

The Republic of Ireland is a prominent destination for QROPS, as their pensions regime has no requirement to purchase an annuity. Accordingly, members can benefit from drawing down lump sums without having to purchase an income bearing product that they do not want. On the other hand, members should consider whether their fund is likely to be used up in their lifetime, because there is a charge to Irish inheritance tax on the transfer of fund following an Irish QROPS scheme member's death.

Notwithstanding that Ireland is a member of the EU, UK investors must always remember that any Irish pension scheme they choose to join must be on the HMRC approved list, otherwise it could be subject to hefty penalties.

New Zealand

The New Zealand system is almost the reverse of the UK one - there is minimal tax relief on contributions, but members' pension investments are taxed as they grow. Accordingly, when members of New Zealand schemes come to withdraw their funds, the monies are considered to have been taxed already. Add this to the fact that members have access to their funds much earlier than members of UK schemes: the UK pension member who has saved with the benefits of tax free contributions and transfers to a New Zealand Qualifying Recognised Overseas Pension Scheme when they retire abroad is having their cake and eating it too.

Australia

The Australian system locks in pensions benefits until the age of 60. But after that there is a generally favourable tax treatment of benefits, and a general flexibility towards how members access their money.

Malta

The Maltese Qualifying Recognised Overseas Pension Scheme market is just beginning to open up, and investors do not yet know what opportunities are available. It could provide a bit of healthy competition to the more mature markets. QROPS advisers are waiting to see what the Maltese have to offer.

Article Source: http://EzineArticles.com/?expert=Jonathan_Cassidy
http://EzineArticles.com/?Which-QROPS-Jurisdiction-is-Best?&id=3385858

How Do You Choose a QROPS?

2009-12-11T23:25:00.000+10:30

By Jonathan Cassidy

Choosing a QROPS is an important decision. After all, the scheme will hopefully safeguard and grow the funds to provide you with a comfortable retirement.

As with all financial decisions, you should seek assistance from a professional adviser before making such an important decision. But what criteria will he or she take into account when selecting a fund?

The list

The government introduced the QROPS scheme in April 2006. The scheme allows non resident members of UK pension schemes to transfer their pension funds out of UK pension schemes into approved foreign ones without payment of UK income tax.

The scheme consisted of a list of authorised and approved pension schemes in foreign countries. The list is available on the HMRC website and is updated constantly (with both additions and removals of funds). Transferring your fund to an overseas fund that is not on the list risks incurring a large UK tax charge. If the Revenue thinks that the transfer was to evade UK tax, there are some enormous penalty charges that they can impose as a sanction. Basically, if it's not on the list, it's not a QROPS!

Treatment of residents/non residents

For the first five years after the QROPS pension scheme member ceases to be a resident of the UK, the country hosting their QROPS will report back to HMRC about any withdrawals made from the scheme. After those five years are up, HMRC falls out of the picture.

However, throughout this time, the withdrawals the investor makes from their pension attract the attention of the country which hosts the QROPS. If the person is resident in yet another country from their QROPS' host, their actual country of residence will be interested in the pension monies too. This applies both to the monies generated by the growth of the fund and to the income accruing to the private individual following a withdrawal.

Accordingly, the tax treatment of the scenario is something that will heavily influence which QROPS you choose, and which jurisdiction it will be in. This is why it is essential to consult a QROPS adviser who is well versed about a number of jurisdictions, so that you can have the benefit of the information about a number of options.

Availability of your money

Compared with other nations, the UK's pension scheme is quite restrictive in the way that it prevents investors from withdrawing lump sums unless they meet very strict criteria. This can be frustrating if the investors wish to use the monies for more pressing concerns, such as paying off a mortgage early. Also, members of UK pension schemes are forced to purchase an annuity at the age of 75 to provide an income for themselves. This requirement could bite at a time when the market is unfavourable, or when the investor wanted to make other financial decisions.

In some foreign jurisdictions like Guernsey or New Zealand, investors are allowed access to their money in whatever manner they choose, whenever they need it.

Asset classes

In the same way that the UK pension scheme restricts what you can do with your fund, it also restricts what you can hold in it. For example, although SIPPs (self invested personal pensions) are becoming more popular, there are still a number of restrictions on assets that you can hold. Some foreign jurisdictions are much more relaxed about what they will treat as pension assets, and will even allow you to hold residential property. Speak to your QROPS adviser about whether you have to liquidate your assets and transfer cash, or whether you can transfer the assets themselves.

Fees

The fees that QROPS trustees charge vary according to the level of service they provide. Historically QROPS fees were very high, sometimes even up to 5% per annum of the value of the pension fund because there were not many approved Qualifying Recognised Overseas Pension Scheme. However, the fees have dropped considerably as there is now more competition. A good QROPS adviser should be able to negotiate a good rate on your behalf, particularly if they are from a large organisation that places many funds each year.

The whole market?

When you an approach an adviser to help you choose a Qualifying Recognised Overseas Pension Scheme, ask them whether they are tied to any particular provider able to advise on the whole of the QROPS market. Tied advisers may not be able to offer the cheapest QROPS arrangements.

Article Source: http://EzineArticles.com/?expert=Jonathan_Cassidy
http://EzineArticles.com/?How-Do-You-Choose-a-QROPS?&id=3385846