You’re Sure You Have Nothing to Hide?

Addison Wiggin – March 23, 2012

  • “If you’re innocent, you have nothing to hide.” So why will the government store information on innocent Americans for up to five years?
  • The Hunger Games: Scenes from a not-too-distant American future? Seeking an escape hatch in a country offering “very attractive returns”
  • Whether it’s Big Macs or iPads, a globe-trotting Abe Cofnas finds reasons not to like this popular “commodity currency”
  • The 5’s special service for nervous readers: The chart that tells Frank Holmes gold will “go the distance”
  • A two-year housing hangover… a blunder even the IRS hasn’t committed yet… reader snipes about “gated communities”… and more!

   As of this morning, the federal government now asserts the authority to store information about American citizens for up to five years.

“Until now,” reports The Associated Press, “the National Counterterrorism Center had to immediately destroy information about Americans that was already stored in other government databases when there were no clear ties to terrorism.”

Presumably, the intel will end up in the Utah Data Center we wrote about Monday once that facility opens up 18 months from now. We don’t know, but these are just the types of news nuggets that have attendees here at The Rancho Santana Sessions squirming uneasily.

   To justify the new “storage” requirements, anonymous sources cite two incidents to The Washington Post:

  • The shoot-up by an Army major at Fort Hood, Texas, in November 2009, killing 13 people
  • The attempted “underbomber” attack aboard a Northwest Airlines jet on Christmas Day 2009.

Does it matter whether either case had anything to do with how long data have been stored?

Well, no.

The Fort Hood shooter slipped through the cracks because one government agency failed to share its information with another agency. And similar bureaucratic snafus kept the underbomber off the no-fly list. Meaning, their data wouldn’t have been kept for any length of time under their new authority.

“But thanks to this measure pushed through in almost complete secrecy,” writes blogger Marcy Wheeler, “when they declare — say — your church a terrorist organization in three years’ time, they’ll have records of your association with it in a database in Utah.”

   Even in the mainstream, there’s a sense of something amiss: How else to explain thousands of teeny-boppers lining up at midnight last night to watch the movie adaptation of The Hunger Games?

The books on which the movie’s based are set in a future North American dictatorship called Panem (Latin for “bread”) in which televised circuses are staged between teenagers who fight to the death — the sole survivor among 12 contestants bringing home food and glory for his or her home district.

Turns out that in 2012, dystopia is back… at least in the estimation of the bookworms who populate the website Goodreads. The webmasters there have analyzed all the site’s reviews of books published in the last century.

The last time dystopian books were this big was when the McCarthy era was winding down…

Indeed, The Hunger Games is giving 1984 a run for its money as the most popular dystopian novel among Goodreads members.

   “This is the most-bullish chart on Nicaragua,” said Chris Mayer to our intimate gathering on the first day of The Rancho Santana Sessions.

The view from the courtyard outside our new conference facilities and the site of this morning’s Rancho Santana Sessions

We’re hosting 30 Reserve members eager to seek out alternatives to the dystopia the United States is rapidly becoming. Some of them are looking to relocate. Others are simply looking for a place to park some of their funds farther away from Uncle Sam’s greedy grasp.

The chart Chris speaks of is this…

It shows where Nicaragua got its electricity last year… and where it will likely get it by 2017. “Thermal” in this case is a term that means… oil.

That’s right. Two-thirds of Nicaragua’s electricity needs are met by burning oil — a practice that ended in most of the developed world after the oil shocks of the ’70s. Result: the poorest economy in Central America, with the highest energy costs to boot.

The government is encouraging massive investment to alter that energy “mix” — so that renewable sources will meet almost all the nation’s electricity needs by 2017. About half of those renewables will come from a massive hydropower project.

Meanwhile, infrastructure spending is up… the population is young… the land is fertile… and foreign direct investment nearly doubled last year.

“Open and free markets work everywhere when you let them,” says the richest man in Nicaragua, Carlos Pellas Chamorro. He’s the controlling shareholder of a conglomerate called Grupo Pellas.

“Of course, there are many obstacles in Nicaragua, as in all emerging nations… Many sophisticated foreign investors like Citibank, GE, Grupo Roble, Cemex, America Movil, Telefonica, PriceSmart, Wal-Mart, Cargill and many others have invested large sums of money in Nicaragua, obtaining very attractive returns.”

[Ed. Note: As mentioned above, not everyone in attendance at the Sessions is looking to relocate — to Nicaragua or anywhere else. They’re seeking new frontiers for their capital.

Today, our expert panelists are turning to the nuts-and-bolts issues of implementing concrete asset-protection strategies. What are the legal hurdles? The tax implications? The estate-planning issues? Can you invest a portion of an IRA — or all of it — overseas?

Even if you’re not here, you can gain access to the answers with a complete set of audio recordings of The Rancho Santana Sessions. We expect to release them about one week from today; you can have them in your inbox as soon as our sound techs perform their professional magic and convert the Sessions to MP3 files.

It’s the same information our intimate group of readers is getting down here today… but it will cost you far less. You’ll want to move on it today… before the price goes up 50% come next Tuesday.]

   The trading in stock markets this week is winding down with mixed results in the U.S. The S&P, for example, is struggling to regain 1,400.

There was some excitment midmorning when Apple experienced a “flash crash” — dropping 9% on a single trade.

The excitement was over in a half hour and shares are close to $600 again… but this is the kind of nonsense that reinforces our conviction in our “sell Apple” call.

The Dow, meanwhile, is up a bit — which is excellent news for our “mock trade.” Abe Cofnas suggested it on Monday — a bet the Dow would end the week above 12,975. So far, so good. Looks as if Abe will go 4 for 4 on these mock trades. This week’s good for a up to a 19% payout.

   “Being in Sydney,” Abe writes from the road, “has allowed me to go beyond the charts to experience the Australian dollar firsthand.”

“A double cheeseburger here is $4.20 AUD; in the United States, it is $1.29. A Whopper is $5.10 AUD; in the United States, it is $3. A McDonald’s Big Mac goes for A$7.35, but only $4.07 in the United States. A McDonald’s cheeseburger is A$4.25 here and 99 cents in the United States.”

“An emerging new comparative indicator that may very well replace the Big Mac indicator of currency overvaluation/undervaluation is the iPad. A new iPad with Wi-Fi and 64 gigabytes in the Sydney Apple store costs $759. In the United States, it is $699. This represents an overvaluation of 8.5%.”

“So my take-away is that investors should stay away from eating burgers in Australia, and we should continue to short the AUD/USD against the dollar.”

If you’d like to play Abe’s fast-paced trades for real, you can learn much more at this link.

   Reinforcing Dan Amoss’ assertion this week that “there simply is no need for housing starts to rise beyond current levels,” new home sales fell 1.6% in February, to an annualized 313,000.

The number’s been stuck in a range ever since the homebuyer tax credit expired in the spring of 2010. Imagine that…

   Gold is regaining some of its lost luster as the weekend approaches. The spot price is up to $1,663. Silver has recovered the $32 level at $32.07.

   “You give us a gold price update,” a reader gripes, “but please tell us why gold and silver prices are falling.”

“The U.S. debt situation hasn’t been on investors’ radar for a while,” says perennial Vancouver favorite Frank Holmes, “but it’s still a significant factor in gold’s eventual recovery.”

“The chart below shows the condition of all Federal Reserve Banks’ total assets over the last 10 years. During 2008, total assets jumped vertically, and since then, the Fed’s balance sheet has maintained a much-higher level”:

“In addition,” says Frank, “real interest rates are still negative for many areas around the world. Historically, negative real interest rates (the inflationary rate is greater than the current interest rate) combined with global stimulative money supply efforts have been an especially powerful combination for gold prices.”

“I believe the yellow metal will go the distance, and with bullion below its long-term average, it makes for a rare and attractive entry point for investors today.”

In other words, Frank suggests the recent pullback is a good buying opportunity for gold investors.

   Here’s a disconcerting example of the downside of state-directed data storage:

Norway’s tax agency displayed Kenneth Belcovski’s records to everyone who visited its website. Mr. Belcovski is a 36-year-old business consultant. His Social Security number, income, mortgage payments and a vast array of other personal information is now in the hands of… well, everyone who recently visited the tax agency’s website.

“Although Norwegians are able to check online some of the income details of public figures — including the king and the prime minister — the recent breach goes far beyond what is considered acceptable,” says a rather understated Reuters report.

“I don’t have anything else to add to what has been reported,” says an equally understated Belcovski when asked to comment.

   “Another amendment will do little to nothing if not obeyed,” writes a reader carrying on the discussion about the National Debt Relief Amendment. “The present Constitution gets little more than lip service from elected officials.”

   “If indeed the federal government threatened the states,” a reader adds in reply to a suggestion yesterday, “maybe the states could turn around and withhold all their donations for taxes, etc.”

“Boy, the states that pay little but get much would stand up and take notice! Let’s DO IT!”

The 5: You might be surprised which states “pay little but get much.” In fact, we updated that very information in the latest issue of Apogee Advisory.

   “Looks beautiful,” says a reader who caught our dispatches this week from the Ranch. But what’s with the gated community?

“Gated communities are the epitome of everything that’s wrong with the U.S. — the wealthy 1% living isolated from and in fear of the 99%. So now you want to export that concept to Latin American countries?” ”Way to set yourself up for resentment and hatred (and all that follows from hatred) from the locals. You take their best land, develop it and then lock them out. Sooner or later, all you folks living in gated communities will reap what you have sown.”

The 5: You’re sure to be right.

But unless you’ve been here, you probably should get off your high horse. We don’t have time here in The 5 to describe our efforts to integrate with the community: the clinic, the technical school, support of the local baseball team, efforts to get a local airport built, maintenance of the roads out toward Tola and Rivas, the 200 or so community members who work here full time and/or the school where the children here get to interact with the local schoolchildren.

For the record, we’ve been warned. Just today, a gentleman with a decade of experience doing business locally said, “If you decide to give the locals a gift, like a clinic, you’d better be prepared to do it forever. You automatically create a dependency issue. And before long they will hate you for it.”

But we would invite you to come down and check it all out for yourself.


Addison Wiggin
The 5 Min. Forecast

P.S. You don’t have to be part of the “1%” to benefit from the information conveyed by our expert panel here at The Rancho Santana Sessions.

Fact is, almost anyone who’s accumulated a modest amount of savings would do well to consider the offshore-investing guidance coming from today’s speaker lineup. Don’t miss out on a chance to listen in on these Sessions yourself. Order the MP3s today and lock in the best-available price.


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