Invest Offshore Newsletter

Published: Sun, 01/31/21

Newsletter Issue #158 Invest Offshore
 

January 31, 2021
Offshore Investment Guide
Gold backed dollar

Dear ,

The day has arrived when the Silver Market manipulation is brought into the light. If Jesse Livermore were alive, he would easily turn ten thousand dollars into ten million in one year, by speculating on the price of silver.

Big Short Squeeze, as Wallstreetbets targets $SLV price of $1000.

The perfect storm has arrived and for riders who know how to ride $SLV, this is the greatest single transfer of wealth in human history.


Gold Silver Ratio and the U.S. Dollar
Invest Offshore in Gold

Gold-Silver Ratio History The gold-silver ratio has fluctuated in modern times and never remains the same. That's mainly due to the fact that the prices of these precious metals experience wild swings on a regular, daily basis. But before the 20th century, governments set the ratio as part of their monetary stability policies. For hundreds of years prior to that time, the ratio, often set by governments for purposes of monetary stability, was fairly steady, ranging between 12:1 and 15:1.

The Roman Empire officially set the ratio at 12:1, and the U.S. government fixed the ratio at 15:1 with the Coinage Act of 1792. During the 19th Century, the United States was one of many countries that adopted a bi-metallic standard monetary systems, where the value of a country's monetary unit was established by the mint ratio. But the era of the fixed ratio ended in the 20th century as nations moved away from the bi-metallic currency standard and, eventually, off the gold standard entirely. Since then, the prices of gold and silver trade independently of one another in the free market.

Gold standard is a must to rebalance and bring back order. Currently there is chaos, the blind leading the blind. The Fed is warping policy because no one understands it and because they are so entrenched in the psyche that very few people can comprehend it - it is purposefully confusing but they can use their own research and "expertise" because they own the hens, the fox and the house. And they own the person's farm it's on too.

In 1913 the U.S. Federal Government made it legal for a private corporation to have the ability to print the money that we use. We The People lost that power over 100 years ago, and very few truly understand the powers that are at play, and how they will stop at nothing to continue to keep this game at hand going.

Here is an example of Gold value:

1913 average income $633 Gold price per ounce $20.67/oz One years income buys you 30.6 oz of gold

1990 average income $20,468 Gold $387/oz One years income buys you 52.9 oz of gold

2016 average income $57,317 Gold $1,250/oz One years income buys you 45.8 oz of gold

The best way is to measure wages relative to gold price per oz. There was a 73% increase in real wages over a 75 year period. However since 1990 you could argue that quality of life based on what one years income can buy you in gold has decreased in gold terms by 13.5% from 1990 to 2016.

There was a slow and steady increase in purchasing power each year because of improvements in technology, which is how more of your annual income could buy gold in 1990 versus 1913.

Gold provides the ultimate price stability - not the Federal Reserve. The Fed provides the illusion of a steady increase in pay but in all reality the increase in the money supply acts as inflation, which is really the decrease in buying power over time. The Fed is the gate and acts as "Mafia Protection" whereas gold is the Protectorate. It does not discriminate. The fact is vast majority of Americans have not seen a real wage increase in over 30 years except for the top 10% who have seen the vast majority of this growth, and especially the top 0.1%. Therefore the bottom 90% literally get robbed every single year by the powers at hand. Gold standard resets the playing field for the masses, around the globe in one fell swoop.

It’s time to be vigilant and BUY GOLD & SILVER.


Great Bear of Wall Street – Jesse Livermore loved a Big Short Squeeze
Jesse Livermore

Jesse Lauriston Livermore (1877 – 1940) was known as the “Great Bear of Wall Street”. He made and lost several fortunes in the stock market using a system he began to develop at age fourteen when he held an entry-level position at a brokerage in Boston. He analysed price and volume data and became expert at predicting whether a stock or commodity would rise or fall. Livermore played both long and short positions because both offer opportunity for profit. He made his biggest fortunes during the crashes of 1907 and 1929. In each instance, he understood that the existing overextension of credit in the market would inevitably result in falling prices. He accordingly short sold and made 3 million and 100 million dollars in each crash respectively.

All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis. ~ Jesse Lauriston Livermore

Livermore used only his own funds. Trading was his business and he devoted effort and time to improving his skills. Evolving his strategy, learning from experience and remaining flexible were key to his success and it is possible that failing to do so created problems for him later in life. His approach was tactical and thorough. He conducted due diligence, reading companies’ trade reports, financial statements and earnings statements, and he kept track of price patterns and trade volume. He observed that the majority of traders allow fear and hope to interfere with their trading decisions. Fear makes them exit a winning position before making big profits and hope makes them hold onto a losing position when they should sell. Livermore’s strategy was the opposite. He advised traders to fear a loss developing into a much bigger loss, and hope their profit would grow into a much bigger profit.

According to Livermore – The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.

Jesse Livermore’s trading rules and lessons include:

  • Ignore tips; rely instead on your own judgement, strategy and analysis.
  • Learn how to lose. Losing trades offer an invaluable education as long as you learn from them.
  • Study underlying market conditions and trends. Trade with the trend, meaning buy in a bull market and short in a bear market.
  • Only trade when there are clear opportunities. Otherwise stay out of the game.
  • Never risk capital losses of more than 10 percent. If you lose your stake, you’re out of the game.
  • Wait for the market to confirm your opinion before entering a trade. Patience is the key to big profits.
  • Continue with trades that show a profit and close trades that show a loss. Good trades usually show a profit from the beginning.
  • Exit trades where the prospect for further profits is minimal.
  • In any sector, trade the leading stock, the one showing the strongest trend. Trade the strongest stocks in a bull market or the weakest stocks in a bear market.
  • Limit the number of stocks you follow. Don’t scatter your attention; instead, focus on what matters.

These rules refer specifically to trading in the stock market but Livermore’s general recommendations can easily be applied to all kinds of earning opportunities. In the next chapter, we’ll explore how government obstruction in the free market creates opportunity for speculative profits. Livermore himself made his biggest money in 1929 when he profited from government manipulation of the credit markets through control of the banking system.


Silver Futures Soar 8%, Rise Above $29 As Reddit Hordes Pile In
Silver chart

Update (1800ET): It was the one print everyone was waiting for, and here it is: silver futures opened up 7%, surging from $27/oz to a high of $29.095 following a weekend of speculation that the next big squeeze on WSB's radar is silver. And whether that's true or not, may no longer matter in a world where - as described below - there is virtually no physical silver to be purchased.

So as silver approaches $30, keep an eye on major price slams, emerging either out of central banks who desperately need to keep precious metals lower, or the BIS itself, whose Benoit Gilson will have a busy day tomorrow.

Update (1100ET): For some background on just how unprecedented this weekend's action in silver markets is, Tyler Wall, the CEO of SD Bullion writes the following (emphasis ours):

In the 24 hours proceeding Friday market close, SD Bullion sold nearly 10x the number of silver ounces that we normally would sell in an entire weekend leading to Sunday market open.

In a normal market, we normally can find at least one supplier/source willing to sell some ounces over the weekend if we exceed our long position (the number of ounces we predict we will sell over the weekend).

However, everyone we talk to is afraid of a gap up at Sunday night market open.

This is about ready to get really interesting as there was very little inventory left from suppliers/mints going into Friday close.

Our direct AP supplier informed us after close on Friday that the "US Mint will be on allocation for the remainder of Type 1" (Current Silver Eagle Design).

Our sales for the month of January exceeded any one month last year during the heart of the pandemic. It was an all-time record month in our company history.

And, perhaps most importantly, as QTR tweets so succinctly, "this is a red pill moment for many, and it's beautiful."

Additionally, there are also signs of a notable regime shift, as Bloomberg points out, investors are holding onto silver they own, rather than trying to take profits.

“Now we’re seeing nothing, no single offer, which is scary,” Peter Thomas, senior vice president at Zaner Group, said by phone from Chicago.

“Whatever we sell, people are holding it. There’s no inflow of metal at all.”

Update (1030ET): It would appear the run on silver has begun. With the market closed, traders have rushed to secure some exposure to silver ahead of what WSB suggests could be "the world's biggest short squeeze" and that has left bullion dealers

As we noted below, the premium for physical silver had soared late Friday and into Saturday (after the massive flows into SLV), but as Sunday rolled around, bullion dealers are now facing massive shortages of physical coins.

While all eyes have been focused on GameStop and a handful of other heavily-shorted stocks as they exploded higher under continuous fire from WallStreetBets traders igniting a short-squeeze coinciding with a gamma-squeeze, the last few days saw another asset suddenly get in the crosshairs of the 'Reddit-Raiders' - Silver.

On Thursday, we asked "Is The Reddit Rebellion About To Descend On The Precious Metals Market?" ... One WallStreetBets user (jjalj30) posted the following last night:

Silver Bullion Market is one of the most manipulated on earth. Any short squeeze in silver paper shorts would be EPIC. We know billion banks are manipulating gold and silver to cover real inflation.

Both the industrial case and monetary case, debt printing has never been more favorable for the No. 1 inflation hedge Silver.

'TheHappyHawaiian' cites two reasons to buy - The Short Squeeze and Fundamentals.

The short squeeze:

Buy SLV shares (or PSLV shares) and SLV call options to force physical delivery of silver to the SLV vaults.

The silver futures market has oscillated between having roughly 100-1 and 500-1 ratio of paper traded silver to physical silver, but lets call it 250-1 for now. This means that for every 250 ounces in open interest in the futures market, only 1 actually gets delivered. Most traders would rather settle with cash rather than take delivery of thousands of ounces of silver and have to figure out to store and transport it in the future.

The people naked shorting silver via the futures markets are a couple of large banks and making them pay dearly for their over leveraged naked shorts would be incredible. It's not Melvin capital on the other side of this trade, its JP Morgan. Time to get some payback for the bailouts and manipulation they've done for decades (look up silver manipulation fines that JPM has paid over the years).

The way the squeeze could occur is by forcing a much higher percentage of the futures contracts to actually deliver physical silver. There is very little silver in the COMEX vaults or available to actually be use to deliver, and if they have to start buying en masse on the open market they will drive the price massively higher. There is no way to magically create more physical silver in the world that is ready to be delivered. With a stock you can eventually just issue more shares if the price rises too much, but this simply isn't the case here. The futures market is kind of the wild west of the financial world. Real commodities are being traded, and if you are short, you literally have to deliver thousands of ounces of silver per contract if the holder on the other side demands it. If you remember oil going negative back in May, that was possible because futures are allowed to trade to their true value. They aren't halted and that's what will make this so fun when the true squeeze happens.

Edit for more detail: let’s say there’s one futures seller who gets unlucky and gets the buyer who actually wants to take delivery. He doesn’t have the silver and realizes it’s all of a sudden damn difficult to find some physical silver. He throws up his hands and just goes long a matching number of futures contracts and will demand actual delivery on those. Problem solved because he has now matched the demanding buyer with a new seller. The issue is that the new seller has the same issue and does the exact same thing. This is how the cascade effect of a meltup occurs. All the naked shorts trying to offload their position to someone who actually has some silver. My goal is to ensure that I have the silver and won’t sell to them until silver is at a far higher price due to the desperation.

The silver market is much larger than GME in terms of notional value, but there is very little physical silver actually readily available (think about the difference between total shares and the shares in the active float for a stock), and the paper silver trading hands in the futures market is hundreds of times larger than what is available. Thus when they are forced to actually deliver physical silver it will create a massive short squeeze where an absurd amount of silver will be sought after (to fulfill their contractually obligated delivery) with very little available to actually buy. They are naked shorting silver and will have to cover all at once and the float as a percentage of the total silver stock globally is truly miniscule.

The fundamentals:

The current gold to silver ratio is 73-1. Meaning the price of gold per ounce is 73 times the price of silver. Naturally occurring silver is only 18.75 times as common as gold, so this ratio of 73-1 is quite high. Until the early 20th century, silver prices were pegged at a 15-1 ratio to gold in the US because this ratio was relatively known even then. In terms of current production, the ratio is even lower at 8-1. Meaning the world is only producing 8 ounces of silver for each newly produced ounce of gold.

Global industry has been able to get away with producing so little new silver for so long because governments have dumped silver on the market for 80 years, but now their silver vaults are empty. At the end of WW2 government vaults globally contained 10 billion ounces of silver, but as we moved to fiat currency and away from precious metal backed currencies, the amount held by governments has decreased to only 0.24 billion ounces as they dumped their supply into the market. But this dumping is done now as their remaining supply is basically nil.

This 0.24 billion ounces represents only 8% of the total supply of only 3 billion ounces stored as investment globally. This means that 92% of that gold is held privately by institutions and by millions of boomer gold and silver bugs who have been sitting on meager gains for decades. These boomers aren't going to sell no matter what because they see their silver cache as part of their doomsday prepper supplies. It's locked away in bunkers they built 500 miles from their house. Also, with silver at $23 an ounce currently, this means all of the worlds investment grade silver only has a total market cap of $70 billion. For comparison the investment grade gold in the world is worth roughly $6 trillion. This is because most of the silver produced each year actually gets used, as I have mentioned. $70 billion sounds like a lot, but we don’t have to buy all that much for the price to go up a lot.

**If the squeeze happens, it would be like 40 years worth of their gains in 4 months **

The reason that only 8 ounces of silver are produced for every 1 ounce of gold in today's world is because there aren't really any good naturally occurring silver deposits left in the world. Silver is more common than gold in the earth's crust, but it is spread very thin. Thus nearly every ounce of silver produces is actually a byproduct of mining for other metals such as gold or copper. This means that even as the silver price skyrockets, it wont be easy to increase the supply of silver being produced. Even if new mines were to be constructed, it could take years to come online.

Finally, most of this newly created silver supply each year is used for productive purposes rather than kept for investment. It is used in electronics, solar panels, and jewelry for the most part. This demand wont go away if the silver price rises, so the short sellers will be trying to get their hands on a very small slice of newly minted silver. The solar market is also growing quickly and political pressure to increase solar and electric vehicles could provide more industrial demand.

The other part of the story is the faster moving piece and that is the inflation and currency debasement fear portion. The government and the fed are printing money like crazy debasing the value of the dollar, so investors look for real assets like precious metals to hide out in, driving demand for silver. The $1.9 trillion stimulus passing in a month or two could be a good catalyst. All this money combined with the reopening of the economy could cause some solid inflation to occur, and once inflation starts it often feeds on itself.

Source: Zero Hedge and WHAT to Buy

USA Offshore Asset Protection Structures
Invest Offshore

South Dakota Trust Company now available

Structure a Qualified Overseas Pension Plan to be legally compliant in the United States, for tax deferred accumulation of offshore assets. Some of the most important benefits of utilizing Pension Plans are as follows:

The assets held in the Qualified Employee Retirement Income Security Act (ERISA) Plan are exempt from creditor claims (except for IRS tax liens and certain forms of spousal support).

If a creditor obtains a judgment against you and seeks to collect any assets held in your plan’s trust, they cannot do so. This includes if you were placed in bankruptcy under any Chapter of the Code, the bankruptcy judge and or trustee cannot seize assets owned by your pension plan trust.

All earnings such as rents, royalties, interest, dividends earned by the pension plan trust assets are not subject to current taxes until you draw them out of the Plan. You can withdraw funds with a 10% penalty if you are 58 years of age or younger or after the age of 59 1/2, there is no penalty but the amounts drawn down are subject to being taxed similar to the tax you would be liable for if this was paid to you as a salary. You are required to start to withdraw these funds out over the life expectancy as the IRS table determines. Draws are required at age 72.

You can borrow up to $50,000.00 personally from the Plan but the repayment term must be amortized over 60 months at a minimum interest rate equal to the 5-year treasury bill rate (currently .22 of 1%).

One of the best uses of the Pension Plan is when you make an investment (which can be leveraged subject to certain rules) and all the capital gains are also tax deferred.

Needless to say, compounding your investment returns works really well when you don’t have taxes to pay.

It takes approximately 45 days to get both the sponsoring C Corp or LLC formed and the Pension Plan set up for use.

We also structure investments that are Plan Qualified being Capital Asset Purchases (real estate, mortgage notes vs gold coins and certain stocks and publicly traded debt instruments). Some of these investments are done in conjunction with other firms. Some clients want their Plan Assets in very safe income rental properties, first mortgage notes on rental properties and some in capital appreciation assets wherein we buy distressed bank assets, renovate them and either hold and rent them or resell in the market.

For more information about the Structure of a Qualified Overseas Pension Plan contact within

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Disclaimer: This document was produced by and the opinions expressed are those of Invest Offshore as of the date of writing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Invest Offshore to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Invest Offshore does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.

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