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If he stops printing money, markets will collapse and chaos will ensue.
But if he keeps printing money, the consequent asset bubbles will
eventually burst and chaos will ensue.
It is only a matter of time. Which brings me back to the big picture.
1) Europes infamous bailout/austerity experiment has failed and is
leading to a breakup of the eurozone
2) The Japanese government is hitting the accelerator as they drive
over the cliff
3) The US Fed has completely lost control of Quantitative Easing
and has backed itself into a corner
Its clear that the signs are all there. When you look at the big picture, its obvious that a collapse of this system is
inevitable.
But its impossible to say with any certainty WHEN the final collapse will begin. If the past five years have taught
us anything, its that politicians and central bankers are exceptionally creative in their delay tactics. They will
keep the party going AT ALL COSTS, even if that means stealing money directly from peoples bank accounts.
We can say with certainty that the succession of bubbles has matriculated up the monetary food chain with steady
progression over the last decade or so from stocks to property to banks to government debt to central banks.
Each time, the next rung up on the ladder has taken over the bubble and made it even larger. Even countries can
go bankrupt. They just get bailed out by central banks and supranational unions.
But now the bubble is with central banks. There is no higher rung. So while we cannot say when the central banking
fiat system will collapse, we can certainly see that all the evidence is there, and the stars are very close to being aligned.
Whats impossible to say is whether this current financial system lasts another month, another year, or another
decade. Or whether it collapses tomorrow.
But consider the other side of the coin: Freedom.
Freedom has already collapsed. They can play economic and monetary
charades all day long, and they may be successful in fooling some of the
people, some of the time. But the complete and total collapse of freedom
in the developed West is now front and center for the entire world to see.
Case in point, Edward Snowden had to apply for asylum in Russia just to
avoid persecution in the United States. Most of us probably still remember
Ronald Reagan pleading, tear down this wall. How times have changed.
Western governments have reacted to all of this very poorly. Rather than
apologize profusely for their criminal acts, dissolve their governments, and
begin anew, theyve dug their heels in for more of the same. More bombs,
more guns, more drones, more spying.
We find now, for instance, that even the absurdly loss-making US Postal
Service is in on the action, monitoring peoples mail. The French too, it
turns out, have been running a giant NSA-style monitoring apparatus. And
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now both the US and UK have been caught spying on each other as well
as their other allies and other countries citizens and their own citizens.
Its like one giant, out-of-control orgy of incompetent espionage. And its
only the tip of the iceberg.
So while it may take weeks, months, or even years longer for the giant fiat
monetary experiment to ultimately grind its way down to a spectacular
collapse, the death knell of freedom has long since sounded.
Putting the two of these together, it certainly makes sense to spend some
extra attention these days looking after ones affairs with the goals of (a)
taking back some of your freedom, and (b) take precautionary measures
against calamity in the financial system.
Simon Black
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Temporary residency is generally held for one or two years, depending on the visa category. And then one applies
for permanent residency.
Once youre a permanent resident, you have nearly all the rights and privileges of a Chilean citizen.
Benefits of becoming a Chilean resident are significant. As stated, you can open a bank account. You can own
firearms. You are granted a tax-free period of three years during which you can earn as much foreign (nonChilean sourced) income as you like without being taxed on it. You can bring in household items tax-free.
Furthermore, dependent spouses and children are able to get visas automatically, though they are not authorized
to work until they reach the permanent residency stage themselves, or if they apply for a separate residency visa
on their own.
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seen people provide bank statements with mid six figure lump sums and get approved.
I have seen some people demonstrate $1,200 in monthly income and get denied, and others who demonstrated
only $1,000 in monthly income approved.
THE PROCESS (IN THE UNITED STATES OR CANADA)
STEP 1: Gather your documents
Again, there is no fixed requirement on what needs to be demonstrated. However, in our experience, I
recommend the following:
1) Real estate lease contract. The contract should very clearly indicate that you are the owner of the
property.
The longer the lease term, the better. So if you can have a lease agreement for five or ten years, this is
better than a 12-month contract.
Further, an amount of at least $1,500 should be appropriate. But like the term, higher is better. If you
have dependents, I would add $500 for each of them.
And you definitely will want to have this contract notarized.
2) Letter from a CPA or attorney. Have your CPA or attorney type up a short statement. And this
should be notarized as well. Something like this
-------------Department of Immigration and Migration
Ministry of Internal Affairs and Public Security
Government of Chile
[DATE]
Dear Visa Officer,
My name is [CPA Name]. I am a Certified Public Account in the [Insert Jurisdiction]. My license number is
[Insert CPA license number].
[Insert your name] is my client. S/he is a citizen of [country of your citizenship] with passport number [insert
passport number] and date of birth [date of birth]. S/he has been my client for [length of your relationship with
CPA].
I can attest that my client is the owner of a property located at [INSERT full address of the property you own].
Further, I can attest that my client derives rental income totaling [RENT] per month. My client has been
drawing this income for [amount of time.]
Based on this income, I can attest that my client is economically self-sufficient. S/he is able to support himself/
herself from this income without a job.
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I can further attest that my client has no criminal record and is of upstanding character, and that his/her net
worth is currently [insert net worth estimate].
I can be reached if you have any questions at [CPA phone number].
-------------3) In addition, I recommend enclosing a bank statement if you have a bank balance above $50,000. Ideally
this would be notarized as well (which, if you have a relationship with a local bank, they should be able to
do for you.)
4) If you have other income (particularly government pension, disability, or Social Security income),
include the most recent statement(s). Try to have those notarized as well, and include those amounts on
the CPA letter.
5) If you have private pension or dividend income, it gets a bit tricky, as there is no clear standard.
Particularly if its a company you own.
The rule of thumb here is the more documentation, the better. You should include this pension in the
letter from your CPAsomething like:
My client receives [Insert amount + specify either US dollars or euro] per month from a private pension.
This pension is connected with [INSERT NAME OF COMPANY] which is registered in [COMPANY
JURISDICTION] with registration number [COMPANY TAX ID number]. My client will receive this
pension for the rest of his life.
It would also be beneficial to have the company draft a statement indicating your pension distribution. If
you can show a series of annual statements, it helps demonstrate a long chain of income.
STEP 2: Notarize the documents
Technically, all of the above should then be legalized. Legalization means that the consulate has to authenticate
the validity of a document.
If you bring a pension statement from North America or Europe down to Chile, the only way that the
bureaucrats will know the document is valid is if it is first legalized by the consulate in that country.
The process is an interesting one, and it varies from consulate to consulate.
At the Chilean embassy in London, for example, all they require is that a document be notarized. And then you
can mail it to the consulate, along with 12 per document, to:
Legalisation Department
37-41 Old Queen Street
London
SW1H 9JA
In the US, the official process is more complicated, as Ill illustrate below. But the starting point for all of them is
to have the documents notarized first.
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(3) Fee: $8 per document in a check made out to the US Department of State
(4) Stamped, self-addressed return envelope for them to mail it back to you.
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Heres a list:
Consulate
Address
Phone
number
Jurisdiction
Houston
Chicago
(312)654 8946
DC
1732 MASSACHUSETTS
AVENUE, NW, Washington DC
20036
202-530 4104
LA
Miami
305-373-8623
San
Francisco
New York
Philadelphia
(215) 829-9520
Montreal
Toronto
Vancouver
Ottawa
Pennsylvania
Quebec, Newfoundland and Labrador, PEI,
Nova Scotia, New Brunswick
Ontario, Manitoba
BC, Yukon, Alberta, Saskatchewan, NWT,
Yukon, Nunavut
Ottawa
If your region isnt listed, you can find the right consulate at http://www.chileabroad.gov.cl/en
No matter which consulate youre using, you need to send a money order (no checks) for $12 per document and a
self-addressed, stamped return envelope.
I would also recommend including a short cover letter requesting to please legalize the enclosed documents and
return to you via the enclosed self-addressed, stamped return envelope.
It would also make sense to call the consulate before you send them the documents just to make sure that nothing
has changed since the date of this publication.
STEP 6: Document translation
Now that your documents have been returned with all sorts of stamps and seals, they need to be officially translated.
I recommend that this happen on the ground in Chile with one of the attorneys that I recommend below. In this
case, you only need to send the documents down to them, and theyll take care of it.
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people have gotten approved with minimal documentation. And other instances of people NOT getting
approved with a lot of documentation.
So you may want to take the gamble and submit without dotting all the is and crossing your ts. The worst case is
that your application gets rejected, and you can simply resubmit at a later date.
The same goes for actually being on the ground in Chile. You can take the gamble and have the attorneys mail it
in for you without you being in the country. The worst case is that it gets rejected, and you resubmit again later.
Taking a bit of a gamble may save you some time and hassle.
Permanent residency
After one year of residency with this rentista program, youre eligible to apply for permanent residency, what they
call permanencia definitiva.
In order to qualify for permanent residency, you must have spent at least 185-days out of the first 365-days in the
country. So from the time you receive the final, formal approval and receive the stamp in your passport, you need
to spend 185/365 days in the country.
Once you do so, you can begin the application procedure for permanent residency; its another series of forms,
but quite a bit easier in terms of documentation requirements. We can discuss this another time.
If youve ticked the box on the 185-day requirement, you can start the application process for permanent
residency after roughly 9-months on the ground in Chile, or basically 90-days before your temporary rentista visa
expires.
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This is convenient because, in all likelihood, this way you will already be approved as a permanent resident before
the temporary visa expires.
After obtaining permanent residency, you only need to spend one day each year in Chile in order to maintain
your status. But even this requirement can be waived by lodging an application at any Chilean consulate in the
world.
Another important feature of a Chilean residency, which is a major difference from the US, is that there is no
legal distinction between Chilean nationals and Chilean residents regarding Constitutional guarantees. Every
inhabitant of the Republic of Chile has the same Constitutional rights.
Naturalization
After five years of total residency, youre eligible to apply for naturalization in Chile. This clock starts ticking
from the time you get your final temporary residency approval and the visa stamp in your passport.
There is no official Spanish language requirement for naturalization, but when applying for citizenship youll be
invited to a personal interview, which is in Spanish. There is no test or official legal requirement, however.
I should also mention that a Chilean passport is quickly becoming one of the worlds best travel documents. Its
already visa-free to Europe and, starting in 2014, it will be visa-free to the US.
Even More
Even though weve provided a lot of detail and step-by-step instructions here, this article barely scratches the
surface. There are other ways to obtain residency in Chile (namely the work contract visa). Not to mention,
tax matters that you need to be aware of. Plus well also need to cover the actual conduct of moving to Chile,
including the transport of household goods.
Well have to discuss these in a future edition. One thing to note, though: in general, Chile is a fairly tax efficient
place to be.
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New residents are able to bring in as much money as they want from worldwide sources, tax-free, for a period of
several years. And even after this tax-free window expires, there are a number of legitimate ways to shelter nonChilean income.
Furthermore, Chile has entered into a number of tax treaties with other sovereign nations that specifically
benefit things like dividend, interest, and pension income.
Your US Social Security income, for example, is tax-free in Chile, and can be paid directly to a Chilean bank account.
More on these topicssoon.
Contacts
Applying for residency can be a frustrating experience if you go about doing it yourself, unless you speak fluent
Spanish and have some experience under your belt in foreign countries and dealing with foreign bureaucracies
and rules.
Chile runs a fairly flat government operation, and they do covet talented foreigners but the process is still
cumbersome. Most immigration officials dont speak English, so if your Spanish is poor or non-existent, its going
to be a challenge navigating through the process yourself.
Therefore I highly recommend that you seek help from those in the know.
Paola Casorzo works at the firm of Philippi & Associates; shes incredibly knowledgeable and specializes in
immigration. She can be reached at pcasorzo@philippi.cl.
Marcos Rios works at the firm of Carey & Associates. In addition to being an all-around great guy and
tremendously knowledgeable, Marcos speaks English with native fluency. He can be reached at mrios@carey.cl
The fees for either firm will be anywhere from $1,500 to $3,000. But, as Ive hinted before, Sovereign Man will
soon be offering a low-cost, turnkey service to help people acquire residency in Chile, along with a number of
other services that leverage our unparalleled experience and contacts in the country.
This will also help people who need additional support with the address requirement and much more.
I expect to be able to launch this in a few months time, so stay tuned for more.
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Asia, where rice is the staple food, totally dominates the worlds irrigated area. In China, 80% of the grain
harvest comes from irrigated land. For India its 60%. But at least those regions have plenty of water resources.
In other cases the situation is more severe.
After more than 20 years of wheat self-sufficiency, Saudi Arabia announced in 2008 that their aquifers were
largely depleted and they would be phasing out domestic wheat production.
Between 2007 and 2011, the wheat harvest of usually just under 3 million tons dropped by nearly half. At this rate
the Saudis will likely harvest their last wheat crop by 2016, as planned, and will then be totally dependent on
imported grain to feed nearly 30 million people.
The cities in Saudi Arabia already use desalinated seawater for domestic consumption, but thats far too costly
for large-scale irrigation use.
The situation is even more serious in tumultuous Egypt. Two and a half years of political turmoil have caused a
deep economic crisis in the country, scaring away investors and tourists which are a huge source of income
draining foreign currency reserves and making it difficult to maintain imports.
Egypt is the worlds largest importer of wheat, normally importing
about 10 million tons a yearhalf of which it distributes to its 84 million
people in the form of heavily subsidized loaves of bread, which sell for
less than one US cent.
Just now, amid the most recent crisis in Egypt, its Minister of Supplies
had revealed that the country has only 500,000 tons of imported wheat
left. This is enough for about 45-days.
Given the turmoil that the country is currently in, you can just imagine how
explosive the situation will become when the country runs out of bread.
And it goes to show in what kind of shambles a country is when they
have a centralized department of government to import and distribute
food. But nonetheless, the case is important because it shows that
water shortages imminently mean food shortages.
Now, why would a place like Egypt suffer from a water shortage, when a
river like the Nile, which gave birth to one of the early ancient civilizations
whose achievements we can still marvel at today, runs through it?
Because in places (especially in the Middle East) where all the other water resources are already being used,
governments are forced to take water from irrigation in order to ensure the continuance of public utilities.
As a result, they have to begin importing food to make up for the lost production.
Economically, this makes sense. Since it can take 10,000 gallons of water to produce a single bushel of wheat (which
sells for around $8.50), importing grain from other countries is a cost effective way to import water.
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The traditional large breadbaskets of the world, the United States, China, and India, are depleting their water
reserves as well. In 2012, those three countries were drawing down their water aquifers more quickly that they
could be replenished.
In other words, food is being produced in these three large agriculturally important countries by
drawing down water reserves.
This is creating a sort of food bubble, an environment in which food production is being maintained at the
expense of rapidly drawing down water resources.
For the US specifically, irrigated area appears to have peaked and begun a long-term decline.
The US Geological Survey estimates that 400,000 acres of farmland dried up over the last 13 years in the United
States. Moreover, in a report published in May, the USGS indicated that the depletion rate for US aquifers is
actually accelerating.
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south is rainy/snowy, damp and wet all year round. Meanwhile up north, the Atacama Desert is one of the driest
places on Earth.
Central Chile has the best balance with abundant water coming down the Andes and temperate, Mediterranean
climate with some of the most fertile volcanic soil on the planet.
As Chile is becoming more and more of an agricultural powerhouse and a prime source of agricultural products on the
global market, the demand for water in Chile, especially in the agriculturally significant central regions, is bound to
soar.
There are a number of different ways how you can invest in water. The most straightforward one is through one of the
Chilean canal associations.
A long time ago the government put together a number of public works projects to build large networks of these
canals to be used for irrigation, which it then later sold off to the private sector.
So what you have now are private companiescanal associationswhich own and maintain the canals. And
individuals buy and sell shares of these private companies.
Typically, each share entitles the bearer to a certain amount of water. For example, one share may mean that
theyre allowed to use one liter per second. But it varies from association to association.
You can buy shares in these canal associations in the secondary market from individual owners of a particular canal
association. It amazes me that theres any market at all, i.e. that someone is actually willing to part with his/her water
rights in exchange for pieces of paper. But these sellers are not exactly the most long-term, forward-thinking people
on the planet.
Heres the thing, though. Not all water rights are created equal. Just because you own shares in a canal
association doesnt mean that youll have access to water. If the water source of the canal dries up, your shares
will essentially entitle you to zero.
Take a look at the mapthis is an image from Chiles
national water authority (DGA), showing areas of the
country with severe water shortages and restrictions.
Many of the canals in these areas are in danger of
running out, entirely. So owning hundreds of shares of
water rights in these areas is somewhat irrelevant if the
source is no longer flowing.
In other words, if you own every single share of a canal
association, and the canal source no longer generates
flow, then you own 100% of nothing. This is hardly a
valuable investment.
(I raise this point, perhaps too loudly, because I want to
encourage people to be very cautious here. A number of
these new expat-oriented developments are localized in
these ultra-arid regions, especially Region V (Valparaiso)
and Santiago Metropolitan region. Ill have more on this
later.)
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Price
Perhaps one of the best parts about water in Chile is that its so cheap. In regions VII and VIII, private canal
association shares often trade for less than a few thousand dollars each.
If you consider that 1 liter per second entitles you to millions of gallons over the course of a year in perpetuity,
this drives the cost down to essentially zero. Amortized over a fifteen-year period, the cost is about $1 per
20,000 gallons.
In California, where it can cost $30,000 just to apply for a water permit (thats capped at 10 acre-feet, or 3.25
million gallons per year), the cost is roughly 20x more expensive.
My assessment is that farmland in Chile is roughly 30% to 70% cheaper than in other Western, developed countries.
Water in Chile may be up to 90% or 95% cheaper.
Given the agricultural boom that seems all too obvious driven by clear supply and demand fundamentals, I expect
these anomalies to self-correct in the coming years.
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Three years ago, a number of universities cooperated with the Chilean water
authority to conduct a study about water rights pricing. They focused on
region V and the Santiago Metropolitan areafurther north than the area
that Im recommending.
According to the study, farmers were paying, on average, about 88.9 UF
(roughly $4,450) per Liter per second of water. But this varied from as little
as 20 UF per L/s ($1,000) in parts of the region where water is abundant,
to as high as 200 UF per L/s ($10,000) in parts of the region (like Curacavi)
where water is exceptionally scarce.
To me, this provides an interesting indication of the potential growth, even
within the Chilean market.
Bottom line, the evidence on the ground in Chile suggests that buying
water rights in the right areas may be a 10-bagger opportunity.
Theres another opportunity here that presents itself as well.
While agricultural water rights in region VII may cost about 20,000 gallons per dollar, residential service in
Santiago runs about 1,000 gallons per dollar. a 20x difference.
As Santiago continues to grow, there may be a rather interesting arbitrage between the price of water on an
agricultural / industrial scale vs. the price of water on a retail level.
Meanwhile, while we wait for these opportunities to materialize, its possible to generate a yield because you can
also lease your water rights.
All of this makes water rights in Chile, along with the countrys rich agricultural property, a very interesting
investment possibility.
But, as with everything, due diligence is critical. I already mentioned that not all water rights are created
equally even in the right regions.
There are thousands of different canals, some obviously better than
others. Some canals carry liabilities that a lot of unsuspecting buyers are
not aware of when they buy shares in a canal association and therefore
take on those liabilities.
A substantial amount of canals have a lot of deferred maintenance
due, the bill for which is going to fall on the shareholders.
Not to mention there are a lot of intricate nuances in the Chilean
water codedifferences between things like acciones (shares) vs.
derechos (rights).
If youre a subscriber of any length of time, you know that Ive been
operating in Chile for a few years now, building up a portfolio of
agricultural operations and exploring these opportunities with a great
team and a lot of influential contacts.
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tennis, and shooting, is incredible. The education system is top-notch. Even healthcare for most normal ailments
is very high quality.
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Until recently, this arrangement worked well enough. The island retained a great degree of autonomy, and
remained basically self-funding. Then a series of events upset the apple cart.
Immigration
Recent changes to the Norfolk Island Immigration
Act mean that if you are an Australian or New Zealand
citizen, you can now move to Norfolk Island unrestricted,
and obtain fast track permanent residency.
For other nationalities, the standard procedure is as
follows:
STEP 1: Obtain a multiple-entry Australian visitor visa.
This must be valid for a period of at least 30 days beyond
your intended stay on Norfolk Island.
For your first Australian multiple-entry visitor visa, you
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have been living in Australia on a valid Australian visa for four years immediately before applying which
must include the last 12 months as a permanent resident, and
not have been absent from Australia for more than one year in total, in the 4 year period, including no
more than 90 days in the year before applying.
So, bottom line, Norfolk Island is not a place for people looking for fast, easy citizenship. But the lifestyle is
undeniably fantastic. More on this below.
Costs for applying for the various visas above on Norfolk Island are very reasonable. And, all immigration
matters are handled by the Immigration Department of Norfolk Island.
http://www.immigration.gov.nf/
Norfolk Island Immigration Service
Customs House
Bi-Centennial Complex
Taylors Road
NORFOLK ISLAND 2899
Phone us + 6723 22140 ext 2
Fax us + 6723 23260
Email us immigrationstaff@admin.gov.nf
Full information on all aspects of immigration to Norfolk Island is available in this guide:
www.immigration.gov.nf/Immigration%20Policy%20&%20Guidelines%2002072013.pdf
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One large-scale commercial farming operation that I visited on the island is the Norfolk Blue cattle farm. It
is about 98 acres in size. There is a herd of about 80 cattle. The Norfolk Blue breed is unique, and the owners
have gradually been resurrecting it from the brink of extinction, after going around and buying up all remaining
specimens on the island.
The tasty, grass-fed all natural beef they produce is slaughtered and processed on site, and is currently all used for
the farms attached restaurant, Norfolk Blue. In time, the owners hope to have enough left to begin exporting.
Real Estate
The whole island has a relaxed, rural feel about it. But, nowhere are you too far away from the facilities in the
town of Burnt Pine.
Most properties, including some of those in town, have plenty of roomoften 2 to 3 acres. Many are ideal for
growing your own fruit and vegetables.
Some larger properties, including one of 10 acres, and one of 14 acres which may be suitable for small-scale
farming are also on the market at the moment.
But frankly, with so many places for sale, I found asking prices on the island to still be relatively high, at least for
homes.
A basic two-bedroom cottage opposite the school, near town, with little to distinguish it, and only a modest
amount of land, was on the market for A$180,000. It might rent for $150 a week.
A well-kept, 3-bedroom house with separate granny flat or studio and garage, on top of a hill, with a large deck
and great views out to the sea, which the owners are selling fully furnished, was listed at A$450,000.
I also saw a modern, luxurious home with stunning views, and enough land attached to subdivide and add more
structures, for which the vendor is asking A$1.3 million.
For the most part, owners of properties on Norfolk Island have held them for a long time. Often theyve
been in the family for generations, and they are not being forced to suddenly sell because they cant make the
mortgage payments.
But there are some distress sales going on and no one in Norfolk Island really has the money to scoop them up.
One particularly interesting property was the residence of Mr. Eldon Foote, a rather famous Australian
entrepreneur, now deceased. There were problems with the estate, and now the compound is up for sale.
This is a 2-storey cliff-top residency with stunning views. The house itself is over 10,000 square feet. The land
is almost 10 acres (3.874 hectares.)
There is an ocean viewing deck, indoor squash court, billiard room with full size table, swimming pool, fullsized championship tennis court with its own clubhouse, stables, cattle yards, four fully fenced paddocks with
reticulated water supply and irrigations systems, plus a bore with reticulated water throughout the property.
The property has solar hot water and photovoltaic panels on the roof to generate its own power. It has
a modern kitchen, formal dining room, and servants quarters. There is also a guest cabin, and a separate
managers residence.
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The property is being listed between $2.5 and $3 million. It would easily take double that to recreate it. And
for the right person, this could be the ultimate island hideaway. The zoning is rural. (see real estate contact
information below)
Titles are all freehold (Torrens system used in Australia). A paper title is still issued.
A standard property sales contract is usually 30 days, but contracts can be signed on one day and settled the
next, if neither the buyer nor seller has a mortgage, and there are no added complications.
The Stamp Duty on a sale is 4% of the contract price, and is called a transaction levy. Legal fees on the
purchase of a property are usually around A$500, including all searches.
Real estate agents commission on houses and land is typically3.5% of the contract price, including GST of 12%.
The seller pays this. Commission on commercial properties and businesses is negotiable and generally between
2% and 5% + GST.
Australian and New Zealand citizens face no restrictions on owning property on Norfolk Island.
For a non-Australian or New Zealand citizen the requirements are different. Generally, an existing house requires
FIRB (Foreign Investment Review Board) approval for purchase.
The purchase of vacant land, a new house or unit, or a business, does not require FIRB approval.
Some of the best vacant land on the island currently for sale is two adjacent blocks, each 3/4 of an acre. The
views from these blocks were featured on Norfolk Islands first stamp series, issued in 1947. The owners are
asking $570,000 per block, or $1.05 million for the two in one line.
There is also another property, encompassing 10 acres of cliff-top oceanfront land, 2/3 of which is flat. The soil is
good, and the views are to die for. The seller is asking $480,000.
Property can be purchased without the purchaser having to live on Norfolk Island. On freehold property a person not
living on Norfolk Island pays an absentee landowners levy of 1% of the unimproved value of the land only.
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Moving your savings to a more stable, more financially secure jurisdiction makes a lot of sense. Unfortunately
there are very few of them remaining in the world. And there are even fewer that make it easy for foreigners to
open an account.
Weve talked about some of theseSingapore, Chile, Australia, etc. This month I want to review Norway.
As one of the few places in the world with ZERO net debt, Norway is in an enviable position. Plus the
government tends to run at a breakeven, or a small surplus. And they have a massive sovereign wealth fund
thanks to the nations oil wealth.
While taxes in Norway are incredibly high for Norwegian residents, capital flows freely across borders, and bank
deposits are treated very well.
This is exactly the sort of jurisdiction that one ought to consider for bankingits stable, its financially healthy,
and its transparent.
DNB is the largest bank in Norway, and the government is a substantial shareholder. The bank is profitable
another good sign. After all, who wants to park their money at a bank thats hemorrhaging cash?
They have roughly $166 billion worth of customer deposits, with about $80 billion in cash on the books. This
means that DNB has a cash backing of nearly 50% of its customer deposits. This is an extraordinary
figure in banking literally an entire order of magnitude higher than most banks in the West.
Moreover, bank deposits are guaranteed by the Norwegian government up to 2 million Norwegian kronor (about
$330,000 USD, or 250,000 euros). And as the Norwegian government is in such an excellent financial position,
this is a guarantee that actually has teeth.
So to reviewthis is a profitable, conservative bank that holds a substantial portion of customer deposits in
cash, backed by a solvent, debt-free government which guarantees deposits up to USD $330,000.
This should definitely be on the radar.
Best of all, you dont have to go to Norway to open an account. As weve discussed before, the process is fairly
straightforward for non-resident foreigners.
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You get started simply by contacting the bank at foreign.customers.savings@dnb.no. They will write you back
with all the requirements, which are actually quite simple.
Right now DNB requires a minimum deposit of 100,000 euros (roughly USD $130,000), which they will then
convert to Norwegian krone.
They also have nationality restrictionsthey require that you be a citizen of the EU, Canada, United States,
Australia, New Zealand, Singapore, Switzerland, Japan, or Iceland. No other nationalities qualify at this time.
Also, they require that you submit a simple application form (which they will send to you via email), a bank
reference letter from your current bank (they will also send you a form for this), and a notarized copy of your
passport.
To have an account in Norway, its also necessary to have a national tax ID number. However the bank will
actually apply on your behalf for the tax ID number. In other words, you do NOT need to fly to Norway to
apply for a tax ID number, or to open a bank account at DNB.
If you meet the minimum deposit and nationality requirements, I think this is an excellent option to consider.
IMPORTANT UPDATES
As indicated in this months welcome letter, I plan on dedicating the
entirety of next months issue of SMC to providing in-depth answers to
your questions. (If you want to submit a question for next month, please
go to https://secure.sovereignman.com/smc/survey/082013/)
But for this month, as we are about to close out this issue, I want to spend some time updating you on a number
of important items.
In previous editions of SMC, Ive made a number of references to various projects or features that my team is
working on. Many of these weve been working on simultaneously and most of them are near completion at
this point.
1) New members website
These are trying times. And having solid relationships with like-minded people is becoming more important
than ever.
For the past several months, my team has been working on a new and improved online forum, exclusively and
complimentary for SMC members, so that members can interact with each other and exchange information.
We thought about this for a long time and made specific design improvements to ensure that the community
is self-regulating and controlled by members. The new site is currently in Beta testing, and were very close to
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wrapping up our testing; I expect we will start taking live customers next week, and conduct a formal launch
within the next 30-60 days.
3) Agriculture and Water fund
This is another major project that Ive been working on for quite some time. The opportunities to invest in
agriculture, specifically in Chile, are tremendous. That is, if you have the time, resources, investment capital,
knowledge, contacts, and experience on the ground.
Few people really have all of these. And Ive really tried to caution people against going down to South America
and thinking that they can buy some small farm as an investment. For most people, this is going to end up being
a total disaster.
Owning real estate anywhere is hard. When you own productive agricultural real estate that requires constant
attention in a foreign country where you dont speak the language or have any real contacts, the prospect
becomes downright impossible.
So the question becamehow to bridge the gap between the obvious opportunity and the operational
difficulties for most people? There really is no passive, turnkey investment solution out there.
Having invested heavily in agriculture in Chile over the last few years with my team of seasoned professionals,
Ive managed to build the perfect platform to make large-scale agricultural investments.
And Ive realized that the best way to bridge this gap is to open up this structure to allow people to coinvest alongside my team in Chilean agricultural property and water.
I mentioned this in this months water article. And while this edition of SMC is not necessarily the appropriate
venue to go into details, I will send all the relevant information to those who indicate interest, which you can do
by filling out this form below:
https://secure.sovereignman.com/agstructure/
4) Chile services
With so many people interested in Chile, yet so few professionals on the ground who actually have a handle on
the country, its also become obvious to me that my team needs to step in and fill this void.
Case in point, for the roughly 500 people who came to our event in Santiago, I had to personally send my team
to the local offices in Santiago to apply for RUT numbers for the hundreds of attendees who requested them.
There are a number of services for which we have the staff, and expertise, to provide namely, immigration, as
well as basic assistance with relocation (like finding an apartment, mobile phone setup, banking, etc.)
This is something that well begin rolling out in the next few months, all with the goal of helping support the
transition of SMC members who have chosen to plant a flag in Chile.
5) Resilient Community
Almost every day, we receive inquiries from subscribers about the status of our resilient community in Chile.
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I have deliberately avoided discussion of our resilient community project in the pages of SMC and Sovereign
Man, and have rather moved any news & updates to www.SovereignValley.com. The next one will be forthcoming
by the end of this month.
That being said, I do need to set the record straight about something.
There are a couple of expat real estate developments launching in Chile right now. Each purports to be a
resilient community, sustainable community, and the like.
I have intimate knowledge of these developments, as well as the developers. And I want to be absolutely clear
that I am not connected to any of these projects. Nor do I endorse, support, or recommend any of developers...
no matter what you may read on their websites.
I need to be candid about this because one of the developers has appeared within the pages of Sovereign Man in
the past, well over a year ago. Another showed up to our event in Chile. And as a result, weve had a number of
people asking the same question-- Is Simon involved with these projects?
No. Precisely the opposite. But I have a genuine concern that a lot of folks may be making this connection
and presuming far too much credibility of these developers and their projects... and basing important financial
decisions on erroneous assumptions.
This isnt an appropriate forum for me to write about my own experiences or due diligence with these projects,
the properties, or the developers.
But, I would strongly encourage prospective buyers to exercise caution and conduct extensive due diligence on
the land, the long-term water resources, the soil quality, the legal framework, the finances of the developers,
etc. Do not accept token answers at face value without verifying. And weigh your own evidence against the bold
promises that are being made..
6) Trip to Singapore
Also, as mentioned in the welcome letter, this November Ill be hosting a very small, intimate group in
Singapore.
This is going to be a unique experience as I will be personally guiding people, and individually consulting on a
number of important steps, right on the ground in Singapore.
This includes residency, banking, gold storage, and a number of things weve never even discussed before, like
unique insurance products and private banking solutions.
Im deliberately keeping attendance very, very small, to ensure that people receive the individual attention they
need at the seminar.
This gathering will be free for Total Access members (I will send you an email about lodging, meal, and airfare
options). The fee for non-Total Access members is $4,995, but that number will include all accommodations and
transfers.
Later this week I will send an email out with specific dates, and how you can sign up.
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BREAKING NEWS
As this issue goes to press, I wanted to let you know about two key pieces
of news:
1) Hong Kongs Legislative Council has just passed legislation that will enable the exchange of banking
information, as well as enter into intergovernmental FATCA agreements that countries like the UK and
France have already signed with Uncle Sam.
Weve been talking about this for a long time-- banking privacy is dead. And the prospect of trying to hide
your money overseas by not reporting it is simply not a good idea. So if youve had unreported money in Hong
Kong as a US taxpayer, Id strongly encourage you to seek professional counsel about getting up to date.
2) Im getting word from some private banker friends that some European governments are giving banks a firm
timetable to meet the Basel III capital ratio requirements. If the deadline passes and the banks still dont
meet the requirements, then someone is going to have to take a Cyprus-style haircut... either the banks
bondholders, or the depositors.
Were still trying to confirm the details and will provide more information as we have it.
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S U RV I V E A N D T H R I V E I N T H E AG E O F T U R M O I L
CHANGE FROM
CHANGE FROM
CHANGE FROM
Price in Gold 1 Month ago
6 Mos ago
USD
24.3 mg
8.0%
29.5%
CAD
23.4 mg
6.1%
22.6%
EUR
31.8 mg
6.9%
27.4%
JPY
0.245 mg
7.4%
16.4%
BTC
2,343.7 mg
-4.6%
781.4%
BOND WATCH 2013-07-13
1 Year ago
5 Years ago
21.6%
-24.8%
19.4%
-27.0%
29.7%
-38.3%
-2.5%
-19.3%
1,506.4%
1-3 Year (SHY)
20+ Year (TLT)
1 Year ago
21.7%
3.2%
Price in Gold
2.05 g
2.62 g
1 Month ago
8.0%
3.9%
Price in Gold
S&P 500
40.84 g
TSX Composite
291.43 g
Nikkei 225
3.56 g
Gold Bugs Index (HUI)
5.47 g
CHANGE FROM
1 Month ago
12.6%
9.2%
17.2%
-7.6%
Crude Oil
Silver
Copper
Coffee
Cotton
Price in Gold
2.58 g/bbl
0.478 g/oz
76.7 mg/lb
29.0 mg/lb
20.7 mg/lb
6 Mos ago
29.4%
17.9%
6 Mos ago
47.8%
21.5%
54.7%
-32.7%
CHANGE FROM
1 Month ago
19.4%
-2.5%
6.0%
4.9%
2.1%
6 Mos ago
46.7%
-17.0%
11.6%
0.6%
45.8%
CHANGE FROM
5 Years ago
-18.7%
2.1%
CHANGE FROM
1 Year ago
53.1%
30.2%
62.1%
-31.3%
5 Years ago
2.0%
-33.5%
-9.8%
-62.7%
CHANGE FROM
1 Year ago
49.7%
-10.4%
12.1%
-20.0%
49.3%
5 Years ago
-45.1%
-19.5%
-40.6%
-36.0%
-9.3%
"Sovereign Man: Confidential is published by Blacksmith Pte. Ltd. publisher of Sovereign Man No.4 Kiarong Complex Gadong 2nd Floor Block D BSB, Brunei-Muara BE1318 Brunei Darussalam Neither this communication nor content posted to
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