Page 1 | Autumn 2019

Productivity | Strategy | Profitability


On centimillionaire investing for UHNWIs


Gold remains the strongest hedge


Negative interest rates and MMT



Productivity in Philadelphia real estate

THE NEXT CRISIS Michael Pento’s leading insight on asset bubbles, central bank policy and inflation


UK £4.50 Europe €5 USA $7




Cuchara, CO / $1,400,000 / 160± Acres

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Waller County, TX / $1,705,170 / 100± Acres





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L I S T P R I C E - $ 9,9 9 0 , 0 0 0 U S D 1415 6th Street, Santa Monica, CA 90401 3 beds | 4 Baths | 2 1/2 Baths | 8,228 Sq. Ft. EXTRAORDINARY live/work architectural by architect William Dale Brantley, 1986. First time on market: high-end modern, mixed-use compound w/multiple work spaces + chic residential penthouse. Ground floor + mezzanine features 2 separate workspaces (5,500 +/- SF total) incorporating warehouse-sized work spaces w/18-foot ceilings, art gallery, private office suites, workrooms, mechanical rooms & bathrooms. Could be divided. Ultra-private (2,700 +/- SF) 3rd floor penthouse. Huge open living room & dining room, chef's kitchen, master suite w/library, walk-in closets + dual bathrooms. Full-length skylit gallery, office, powder, laundry & additional en-suite bedroom complete floor. Three-sided, private 3rd balcony envelopes entire residence, ideal for major entertaining or intimate gatherings. Optimum for owner/ user, production company, tech start-ups, artists, design professionals. Elevator to all 3 floors. Secured garage via alley (5 covered + 2 uncovered spaces). Impeccably maintained. MLS# 18414020


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32 EDITOR-IN-CHIEF John Marshall

HEAD OF PRODUCTION Peter Green EDITORIAL Thomas Hughes, Rachel Smith, Oliver Taylor, Shannon Berkley ART DIRECTION & DESIGN Stormcues Limited BUSINESS DEVELOPMENT Steve Williams, David Warmann, Jack Moore, David Goldwin, Mike Walsh COMMERCIAL DIRECTOR Luke Francis PHOTOGRAPHY James Drake, Sarah Dean, Rory Gardiner Executive Global Magazine is published by: Stormcues Limited 405 Kings Road Chelsea London SW10 0BB Tel: +44(0)207 993 4782 ADVERTISING EDITORIAL The information in this publication has been obtained from sources the proprietors believe to be correct, however no legal liability can be accepted for any errors. No part of this magazine may be reproduced without the consent of the publisher. Executive Global is registered trademark ® of Stormcues Limited. Copyright © 2019 Stormcues Limited. All Rights Reserved.


• Productivity, Strategy, Profitability


What could possibly go wrong? 24

Our cover feature and CEO Profile examines possibilities for The Next Crisis, analysing the impact of asset bubbles, Central bank policy and inflation in our special interview with Michael Pento, President and Founder of Pento Portfolio Strategies.

PRODUCTIVITY Philadelphia real estate

Eradication of money’s time value 28 Shannon Berkley reports on why we may be entering the twilight zone of interest rates.

Out of Bullets



We interview Hanno Schoklitsch, CEO of Kaiserwetter Energy on sustainable investing.

Centimillionaire investing


Richard Wilson, CEO of the Family Office Club, on investment strategies for centimillionaires.

Extreme monetary interventions 36 Claudio Grass explains the ramifications of negative yielding bonds and interest rates.

Gold remains the strongest hedge 16 Earning interest on gold John Williams of ShadowStats delivers his expert analysis on the repo market, current activity on Wall Street and projections for 2020. Harry Dent examines how the changes in demographics will affect the population


Oliver Taylor on how monetary techniques of Central Banks are now becoming ineffective.

Asset Management through IoT  32

Executive Global’s bespoke series of interviews on Productivity, Strategy, and Profitability. We explore Philadelphia’s high end real estate market with luxury home specialist Margot Mohr Teetor.

Say hello to the new renters


Bill Holter of JSMineset looks at negative rates, MMT, the credit market and asset bubbles.


Keith Weiner, CEO of Monetary Metals, describes ways to earn a return on gold.









Ever closer union? 

How to protect your investment 40 Abel Gomez of Gomez Tomiczek Group looks at the best ways to preserve wealth in Panama.

Alternative investment funds


SOG Law on the impact of Republic of Serbia’s adoption of a new law governing AIFs.

FDI & INWARD INVESTMENT Foreign investment in Curacao


Investing in the Marshall Islands 46 Rachel Smith reports on what makes the Marshall Islands a favourable jurisdiction.


Oliver Taylor explores the Swiss Canton of Zug for business and foreign direct investment.

GEOPOLITICAL AFFAIRS Mortgages in hyperinflation 

Business travel with Cathay Pacific 56 Rachel Smith looks at luxury travel experiences with Cathay Pacific First and Business class. Thomas Hughes looks at why the Bombardier Challenger offers facilities like no other.


• Productivity, Strategy, Profitability

LUXURY LIFESTYLE The Queen of Luxury Hospitality 66 We catch up with one of New York’s renowned professionals delivering elegance and sophistication to the world of decoration and furnishing

The Ring Group Compass luxury 68 We sit down with Shelby Ring to find out about the exciting real estate market in Los Angeles.

Architecture shaped by character 70 We take a look at one of the pioneering firms delivering luxury architecture in Mexico.


Florida horse country

Executive coaching for leaders

Erik Nygaard describes why Ocala, Florida, is the exclusive ‘horse capital of the world.’


We interview Caroline Sheridan, CEO of Sheridan Resolutions on executive coaching.

Supporting business educators


Andrew Main Wilson, CEO of the AMBA, reports a record year of growth supporting educators.

Lingnan’s leading MBA program 64

Shannon Berkley investigates the dramatic impact hyperinflation can have on real estate.



The Bombardier Challenger 605 58

Thomas Hughes takes a look at the numerous advantages Curacao has to offer investors.

Business in Zug


In light of recent events, Oliver Taylor explores implications of ‘Ever Closer Union’ with the EU.

Kevin Li of Sun Yat Sen University, explains the success of the Lingnan MBA programme.

Luxury ranch real estate

72 74

We take a brief look at a thoughtfully compiled offering of the finest investment grade agricultural and sporting properties on earth.

Hotel Martinez Cannes


Thomas Hughes explores the famous art deco style grand hotel on the Croisette at Cannes.

Why Over 100 People Every day Are Moving To Tennessee Although Tennessee does not exempt all income from taxation, the state doesn’t tax your earned income. The average worker does not pay a dime in income tax on his wages. The state also exempts retirement benefits from taxation, including military, Social Security and pension income. Quality of life is exceptional. Music, arts and culture, restaurants are thriving. Property taxes are generally lower than in “blue states” which is probably why I find a lot of Northeastern boomers moving in. Central Geographical Location to access both coasts. Business Friendly Environment. Great Air service - including private airport services. Tennessee is a true four season state with short, mild winters.

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Nothin’ Modern About Modern Monetary Theory Modern Monetary Theory — or the notion that a government can print the money it needs to finance itself and never worry about paying its bills — has gained significant traction in recent months. Is it really a novel approach to fiscal management or is it simply a relaxation? Could it represent the abandonment of an honest economic model? s a concept that old-school thinkers never considered viable, unsterilised debt monetisation has been anathema to previous generations for a host of good reasons. Although the world might have changed, the realities of money and debt are constant, and no government can run the presses to tweak its economic climate. Remarkably, with governments and central banks engaging in such programmes worldwide, MMT has gained acceptance as a potential solution. With the global economy between a rock and a hard place, we have come to realise that an ordinary raise in interest rates beyond nominal terms would inevitably lead to a crash. Further quantitative easing (QE) would also lead to a loss of value and confidence in currency. When QE first appeared, from the top down, most citizens were too far removed from the current economic woes to understand what needed to be protested. An analysis of history, however, shows that allowing the free market to operate unencumbered by government and banking institutions would be a better solution today. The MMT response worldwide seems more of resignation than a real, intricate and possibly painful sorting out of diving markets. Former VP of Development Economics and Chief Economist of the World Bank, Lawrence Summers, has warned of the need to differentiate between fiscal stimuli and the notion that “all government debt can be addressed by printing money.” He points to the many South American countries that have tried it, with disastrous consequences. Indeed, a strong contingent of top tier economists who have been at the global coalface deride printing money as a dangerous route to failure. Interestingly, BlackRock CEO Lawrence Fink has cautioned against MMT, calling the philosophy “garbage.” Possibly just gloating as the largest investment concern in the world — the NY-based BlackRock has some $6.28 trillion USD under management — detractors of MMT would assume Fink would benefit from money management designed to prop up those who have traded us into a hole. Fink however, caricatured the current situation by likening it to parents who sit by and watch while their children’s behaviour deteriorates. Although historians are the first to point out that history is not always the best predictor of the future, a historical analysis of the phenomenon of money printing shows extremely poor results.



executive global • Productivity, Strategy, Profitability

Seen against the backdrop of modern yet experienced economists sounding the alarm, there really is nothing modern about Modern Monetary Theory. Far more a softening towards what was previously considered economic suicide, MMT has very few case studies to bolster its application. Indeed, the money printing of former failed regimes only ever led to hyperinflation. From Weimar Germany to Zimbabwe to Hungary, modernday Venezuela, the list is a long one and makes for sad reading. Advocates of MMT have failed to point to fundamental differences between then and now, no matter that global commerce has made for a more fluid market overall. MMT requires central banks to maintain artificially low interest rates, causing a misallocation of capital and huge bubbles to develop. Major players like Fed Chairman Jerome Powell have also derided the concept of MMT, pointing to the folly of ignoring deficits by anticipating printing money to ease an economy. Appearing before the Senate Banking Commission, he said that the concept of MMT was “just wrong,” noting that the US was “not even close to primary balance.” Powell is clearly alarmed by the broad consensus that MMT is a new, logical salve for all economic ills. Lawrence Summers is also on record describing MMT as “voodoo.” Smoke and mirrors with a touch of magic, it “promises a free lunch” but cannot possibly hope to skirt economic fundamentals as imagined. Thinking retail investors know that a diversified portfolio requires diversification in all asset classes, including precious metals. Far more than a watchword to consider nowadays, diversification should be the only consideration for anyone looking to hedge their bets, as even powerhouse economies toy with MMT. Savvy investors and executives will diversify at all costs, while particularly minimising variable rate debt to avoid the damage wreaked upon their wealth by potentially rampant inflation ahead. EG

John Marshall

John Marshall Editor-in-Chief, Executive Global

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Executive Global Awards 2019

Celebrating Excellence Worldwide The Executive Global Awards celebrate the most exemplary standards of professional achievement, innovation, and excellence internationally, championing the world’s premier organisations and were conceived to deliver a fundamental insight into the finest institutions and truly enterprising individuals that are critically shaping their industry for the better

Best Boutique Institutional Broker-Dealer - United States AmeriVet Securities

Best Luxury Watch Brand - Switzerland Patek Philippe SA

Best Luxury Automobile Brand - Switzerland Aston Martin

Family Office Consultant of the Year - United States Richard Wilson

Best Commercial Bank - Spain Banco Santander

Best High Net Worth Bank - Switzerland Pictet & Cie

Best Corporate Social Responsibility Firm - Norway Better Globe Forestry

Best Digital Bank- Chile Banco de Chile

Most Resilient Hedge Fund - United States Bridgewater Associates

Executive Coach of the Year - United Kingdom Sheridan Resolutions Ltd

Best High End Luxury Architecture Firm - Mexico CDM - Casas de Mexico

Best Commercial Law Firm - Global Latham & Watkins

Dr. K Olsen Global Tax

Best Tax Firm - Norway

Best MBA Programme - China Sun Yat Sen University

Best First Class Airline Lounge - United States Etihad

Best Wealth Management Bank - Switzerland UBS

Best Private Bank - Antigua & Barbuda Global Bank of Commerce 

Economist of the Year - United States Walter ‘’John’’ Williams

Recommended Author - United States Nomi Prins

Most Innovative Automobile Manufacturer - USA Tesla, Inc

Best Sustainable Asset Management Firm - Germany Kaiserwetter Asset Management GmbH

Best Private Bank - Switzerland Julius Baer

Best Tourism Promotion Agency - Morocco

Moroccan Agency for Tourism Development

Hospitality Executive of the Year - United States

Lauren Berger Collection - Lauren Berger

Portfolio Management CEO of the Year - North America

O’ Connor Portfolio Management - Catherine O’ Connor

Productivity | Strategy | Profitability

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Gold Remains the Strongest Hedge Against Increasingly Dangerous Markets As this article goes to bed in the last week of November 2019, U.S. Stock Indices are just off recent, historic high levels, despite unusual stock-market volatility of the last year, and despite major economic, financial-system, FOMC and political instabilities and uncertainties at hand. Article by

John Williams


ncreasingly unstable times lie ahead, and physical holdings of precious metals, both Gold and Silver, are likely to provide investors with the continued long-term ability to maintain the purchasing power of their assets. Separately, Democrats controlling the U.S. House of Representatives are promising to impeach Republican U.S. President Donald J. Trump. If he is impeached, and if the markets see a significant risk of his being convicted and removed from office, such would have meaningfully negative impact on the U.S. dollar, the U.S. financial markets and positive impact on precious metals.



NEAR-TERM POLITICAL ISSUES AND UNUSUAL RISKS My current reading of the circumstance, and of the evidence presented in the hearings to date, is that impeachment by the House is problematic, given the mixed political pressures of the election year ahead. While the process heavily is split along party lines, a freshman Democrat Congressman could be reluctant to vote for impeachment, if the process were not supported widely by the general public. If President Trump is impeached, chances of his conviction in the Republican-Controlled Senate and removal from office appear to be nil. On a separate political front, U.S. Treasury Debt and the Federal Deficit are ballooning out of control; properly described as “unsustainable” by both U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell. Long-term inflation risks and threats of increasingly rapid dollar debasement promise eventual, massive financial-market, financial-system and political disruptions. Current election year considerations

• Productivity, Strategy, Profitability

likely will push these issues into the background, once again. Nonetheless, panicked dollar selling, hyperinflation concerns and financial-market instabilities could explode in the context of unfolding domestic political discord; a Federal Reserve that is losing control of its monetary system, including the ability to maintain adequate liquidity in the overnight money markets; and a collapsing economy that has become increasingly immune to monetary stimulus. PRECIOUS METALS HAVE OUTPERFORMED ‘’BOOMING’’ EQUITIES OF THE LAST YEAR The popular U.S. Stock Indices hit historic high levels on varying dates around third-quarter 2018. The Dow Jones Industrial Average hit its then historic peak on October 3rd, the S&P 500 doing the same on September 20th and the NASDAQ Composite on August 29th. Those indices then crashed from their record highs by 18.8% (DJIA), by 19.8% (S&P 500) and by 23.6% (NASDAQ)


ShadowStats Photo: MediaPunch Inc / Alamy Stock Photo

into December 24, 2018, in response to the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) continuing to raise interest rates into December 2018, along with its expressed intentions at the time to hike rates still further in 2019. Over that same timeframe, from stock-market peak to trough, the spot price for Gold rose by 6.5%, with Silver up by 5.2%. In response to the stock-market crash, Treasury Secretary Mnuchin called in the “Plunge Protection Team” (created in response to the 1987 stock crash), to rally the markets into 2019 with direct intervention, and heavy stock buying from major banks. The FOMC also put its planned rate hikes on hold, and later eased three times through its October 2019 meeting. It then signalled on October 30th that rate cuts were on hold, in the context of Fed policies having generated “sustainable moderate economic growth” in the U.S. economy. The FOMC had accomplished no such thing, where the data at the time, and reporting subsequent to that meeting, showed rapidly slowing growth in a number of series, particularly including the Fed’s own Industrial Production survey. Nonetheless, the stock indices rallied to new highs, hitting all-time peak levels on November 15, 2019, now having backed off minimally. Against the historic high levels of third-quarter 2018, the November 15th historic high stock indices had gained by 4.4% (DJIA), by 6.5% (S&P 500) and by 5.3% (NASDAQ). In contrast, over the same timeframe, spot prices gained by 22.4% for physical Gold and by 18.3% for physical Silver.

FOURTH-QUARTER 2019 REAL GDP LIKELY WILL SHOW A CONTRACTION Key U.S. economic indicators have just confirmed a deepening monthly downturn in headline October 2019 (initial fourth-quarter 2019) economic reporting, specifically Industrial Production (Manufacturing and Mining), Real Retail Sales and the CASS Freight Index. Along with softening economic projections from the Atlanta Fed’s GDP Now forecast model (currently at 0.4% for fourth-quarter GDP) and my forecast for a second consecutive negative Holiday Shopping Season, oncoming headline monthly data broadly remain consistent with what otherwise has been an ongoing U.S. recession from a fourth-quarter 2018 economic peak, albeit not yet confirmed. I have been writing about this “new recession” and ongoing U.S. economic downturn over the last year, although much of the underlying headline weakness has been masked by data distortions from the December 2018 to January 2019 shutdown of the U.S. government. That included the shutdown of much of the Commerce Department, which surveys and reports major U.S. economic series, including the GDP, Retail Sales, New Orders for Durable Goods, the Trade Deficit, Construction Spending and Housing Starts. The related July 26, 2019 GDP benchmark revisions were woefully shy of reality, lacking benchmarking or reliable benchmarking data from key underlying series. Nonetheless, the formal 2019 GDP benchmarking institutionalised many guesstimated and over-stated missing numbers that will not be corrected until the July 30, 2020 GDP benchmarking. Timing of the current recession should be pushed back to fourthquarter 2018 at that time.

Separately, subsequent “missing” benchmarkings of underlying series, such as Construction Spending, have confirmed the ultimate sharp downside benchmark revisions pending for the 2020 GDP overhaul, as did the preliminary downside 2019-benchmark revision to Payroll Employment, which deleted 20% of the previously estimated annual jobs growth. Once all data are in hand, headline U.S. economic activity should be deemed to have peaked in November 2018, the monthly onset of the new and current recession. A FLUMMOXED FOMC WILL HAVE LITTLE CHOICE BUT TO RESUME EASING, SOON As the revised economic data surface, and where the current headline monthly numbers also continue to show consistent patterns of ongoing downturn, the FOMC will be forced to back off its “perfect economy” claim, and to resume a moreaccommodative stance, including cutting interest rates and further re-expansion of Quantitative Easing. Market reactions to this should reflect some flight from the U.S. Dollar into the relative safety of the precious metals. PROTECTION FOR INVESTORS Discussed regularly in these articles, the practical protection for investors in these extraordinarily volatile and dangerous times, and unstable financial markets, remains the investment in, and holding of physical Gold and Silver. EG

For further information, please visit: Autumn 2019 •



Economy and Markets

Say Hello to The New Renters: Under-Saved Retiring Boomers! I have had three speaking engagements in the last few months in the apartment and home rental arena: one to apartment investors, another to an affordable apartment housing company, and a third with investors who convert larger suburban homes into assisted living centers at high rents. Article by


hen it comes to rentals, the households that have dominated in the past are clear: young people as they get married and form households. Most can’t afford to buy right away, so they rent until they can. Then the kids are born and that boosts the motivation to buy a home in a good neighbourhood. But many can’t do that for a few years. This chart shows that the Millennials should have already peaked in apartment rentals in 2018 at their higher marriage age of 28….But they are not. High home prices have caused them to shift in buying starter homes from age 31 to age 34 by the best most recent estimates from Zillow. And I am seeing a deep downturn from 2020 into 2023 that will cause more people to rent and fewer to qualify for mortgages – or just be too scared to buy in a second and even deeper collapse in prices.


CHART: THE RENTAL/MULTIFAMILY WAVE – PEAKING BUT EXTENDS So, that should extend this younger rental market into around 2024 by my best estimates, before the


next boom with lower home prices and mortgage rates gives Millennials the reason to finally buy if they are going to. But I also always stress that Baby Boomers are massive in size and a change generation. They have changed every life stage they have gone through. Guess what the first thing I found when digging down into my demographic research? Not only have over 60 households dominated home and apartment rentals in the last decade, they will dominate even more in the decades ahead… as they retire, and as the Millennials finally get into full home buying mode and wean off renting. Did your parents rent when they retired? I don’t know many older folks who did. Most either stay in the house they own, or downsize to own a smaller one. Yes, there are people who always rented as they couldn’t afford to buy, and that wouldn’t change. The new trend is that a growing minority of retiring Baby Boomer owners are selling their home or McMansion and converting to renting for a sorely needed savings boost, flexibility and enhanced lifestyle. The sad truth is that Boomers came of age and grew up in the best of times, that they helped create with their own massive demographic force. Hence, unlike their Bob Hope Generation parents, who faced The Great Depression and World War II, they didn’t save for a rainy day. They are woefully under-saved as the next chart shows.

• Productivity, Strategy, Profitability

CHART: BOOMERS BEHIND ON RETIREMENT SAVINGS, MORE RENT The Boomers now range from age 58 to 85 by our definition of the rising birth wave from 1934 to 1961. This chart shows that people age 60 with a post-peak median income of $60,580 should have $260,494 saved, but only 26% have that or more. 74% are under-saved coming into retirement. By the way, you can multiply your income by that median and use that as a ratio to the Retirement Savings Benchmark and calculate where you stand at your age. Hence, more are seeing that the easiest solution is to sell their McMansion or primary home, and instead of downsizing, simply rent your retirement home: their profits in a booming market from their home become their catch-up retirement savings plan… Bingo! My demographic research and economic projections say selling to rent for retirement is exactly the right thing to do now with a peak to


Economy and Markets Photo: Solis Images /

• Watch Home, Plants and Pets While Gone • Concierge, Package and Grocery Delivery • Walk-Able Neighbourhoods and Near City Centers • Close to Shopping and Restaurants • Easy Access to Public Transportation Even though many older households want to be in larger downtown areas with great entertainment and health care access, they still favour the suburbs. 60+ renters in suburbs grew 39% between 2009 and 2015 vs. 21% in cities. When I was in Tampa I always noticed the new hip, upscale community, including a major rental complex at Westchase. It was modern, 10-15 minutes from the airport or downtown, had a Starbucks, a bar, a number of good restaurants, a dry cleaner, bus lines…all right there. I could see renting there as an upscale younger Millennial or an older Boomer in retirement. In fact, my wife and some of our friends like being in closer to downtown neighbourhoods that have more younger people as they attract cool places and restaurants!

the second and final real estate bubble near. Now, this is not a mad rush to every one retiree becoming a renter. Just a rising percentage of people who choose to rent who formerly owned. But given the size of the Boomer population and the smaller size of the rental vs. owned market, this turns out to be a very significant trend for the apartment and home-rental developers, operators and investors. CHART: RETIREMENT DOWNSIZE WAVE: MAJOR NEW RENTERS This trend peaks more around 2024-26, but this crash and downturn of a lifetime will cause more Boomers to retire later if anything. Already in the last decade, renters over the age of 60 have grown cumulatively by 43% vs. only 7% for the Millennials under 34. But the ”WOW factor” comes when you look at the projections by The over-60 category will roughly double in numbers by 2035 from 9.4 million in 2017 to 18.6 million, while the

under 34 barely grow from 14.9 to 16.1 million, and the 35 – 59 grows modestly from 19.1 to 25.7 million. CHART: RENTAL HOUSEHOLD PROJECTIONS BY AGE GROUP (60+ RENTERS WILL NEARLY DOUBLE BY 2035) So, who’s your daddy if you’re in the rental business? Ageing old farts… And they just happen to be the best customers: • Higher Income, Less Rent-Burdened, No Children • Lean More Towards Luxury Segment • More Stable, Longer Tenure • Seeking Liquidity, Flexibility and Lifestyle • Still Prefer Suburbs, Lower Cost and Closer to Grandkids • Want One Story or Elevator, No Stairs • Want Low Maintenance and No or Less Yard

SUMMARY Make no mistake about it. The rental market for apartments and single-family homes has shifted from the Millennials to the ageing Baby Boomers. They just can’t help but dominate at each life season they move into. Who would have thought that retirees would dominate the rental markets…it’s not just for young people anymore! And above all, recall that the Winter Season – that we are about to see the worst of – only favours a narrow group of investment sector as deflation brings a great reset to the risk asset sectors: high quality bonds (Treasury and AAA corporate), the U.S. dollar… and in real estate: cash-flow positive residential rentals (commercial gets hit the worst). The more upscale apartment buildings and suburban McMansions will likely become the best bargains for buying cheap and renting out in the downturn and recovery. And those larger McMansions are the best suited to converting to smaller assisted living facilities that have the highest rental value and specialisation of features for holding value. EG

For further information, please visit:

Autumn 2019 •



RE/MAX Preferred Realty


Productivity in Philadelphia Real Estate Interview with


Our special interview on Productivity with MARGOT MOHR TEETOR, Luxury Realtor at RE/MAX Preferred Realty presents a taste of the sublime on the East Coast. We look at luxury real estate in the suburban location of Pennsylvania, as Executive Global highlight the success behind one of Chester County’s most distinguished, single family home specialists.

What does the Kennett Square market have to offer for high net worth investors who may be fond of European architecture and real estate? Kennett Square is a quaint town, continuing MMT to grow and open its doors to new businesses. It was revitalised years ago and has come a long way. Kennett Square is the mushroom capital of the world! I would say it is more of a small American town, than one influenced by European architecture. The residents of the Borough love it, for they are walkable to all their wants, as far as good food, boutique shops and fun festivals (Mushroom Festival, Kennett Brewfest, etc.) and music (The Flash). EG

What would you say are the archetypal EG qualities that are commonly found in the most productive and successful real estate agents in the luxury market? I would say a good work ethic, a great MMT marketing plan and knowing and understanding the accolades of the area well. Can you pinpoint three key moments in the EG past where you began to notice your career really started to take off, along with the factors that could be attributed to your success? I started my career as a RE/MAX agent, MMT which actually was quite hard, for a RE/ MAX agent is an independent contractor. I have been in the business now for 15 years and have learned a great deal on my own accord and by experience. A few years ago, I was given a shot at a listing that had been on the market with different


agents (no offense to those agents) for over 10 years. I was given the chance to list it. It was a 230 acre property in a fantastic location. I worked very hard to find a buyer who would not split up the acreage, but keep its beauty. I sold in a two year period, it sold last December. I have always had a reputation of working hard and going over and above for my clients. When I sold Wyndemere (the property I am speaking about) was when I believe my career took a new turn. I have sold million dollar properties before, but because this one was so difficult, I think people realised that I work hard and get to the closing table. What would you say is the secret to successfully selling real estate at the maximum asking price? Marketing and making the listing inviting, MMT warmth to a listing makes all of the difference. And it is important that the listing is in tip top shape, if a seller wants to get the best price. The buyers have to be wowed from the get go. EG

To the environmentally conscious, tell us the most productive things a home buyer can do to make the best of sustainable living? I am actually a GREEN certified realtor. I MMT have had many clients install geothermal systems, on demand hot water systems, solar panels, there are many things one can do. I have noticed over time though, that the technology has become better in these areas too, which is great.

• Productivity, Strategy, Profitability



Tell us about some of the innovative technologies that can be used to productively

market niche real estate in the state of Pennsylvania? I have a great crew. Prior to listing a home, I MMT hire a stager for a consolation and have her go through the house with the owner. I suppose that is into so much considered a ‘’technology” but it is very important to have a clutter free and properly staged home prior to putting it on the market. I have great photographers, both do amazing still shots. One of my photographers, August Haeuser, does all my drone video and does my interior videos. I will send you the two links for Fox Hill Farm (exterior and interior). He is fantastic. I also have a social media gal who works for me. It is extremely important to have a social media presence in today’s market. You have been notably successful in this market. What can VIP clients expect when being represented by you? They can expect me to be by their side every MMT step of the way and to represent them to the very best of my ability. I take my job very seriously. On a side note, I was telling you earlier about the area in which Fox Hill Farm is located. It is under the Brandywine Conservancy easement and is surrounded by eased land. It really is a very special place, here in Southern Chester County. In the early 1980’s, Buck and Doe Valley Farm (a subsidiary of the King Ranch in Texas) was going to sell their 5,300 plus acres. This was a large track of a land and very important to this region. Now there is well over 26,000 acres eased, it is a beautiful area. My listing on the 80 acres is a part of the acreage. EG EG

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It is extremely important to have a social media presence in today’s market.



Negative Rates and MMT (QE), Equal Junk Credit - What Could Possibly Go Wrong? We are living in the greatest credit bubble of all time…in real time! If you don’t believe this, read any economics book published 30 years ago or more and look up the definition of ”banana republic”. Once a country crossed in to 100% debt to GDP levels, it was the end of stability and beginning of currency crisis. Some might say that times have changed and those old fuddy dud economic rules no longer apply? Article by

Bill Holter


assure you this is not the case as 2+2 will always equal 4 and no matter how, or how hard any nation or collective nations try…they will never be able to print and borrow their way to prosperity! Let’s first take a look at the mechanism used to allow the tremendous buildup in debt in the first placeinterest rates. Current debt levels could never have occurred without low/negative rates because the attached interest (debt service) could never have been paid or sustained. As of this writing, there are roughly $17 trillion worth of debt trading in negative rate territory. Negative rates are an anomaly never even dreamed of prior to current day. In fact, the great economists like Hayek and Von Mises never even broached the subject. Even John Maynard Keynes would have laughed the idea off. I have compared negative rates to a snake eating its own tail because in a system where lenders pay borrowers, capital is destroyed rather than being created. Broadly, negative interest rates are the equivalent of “capital destruction”. Capital destruction is not what or how the capitalist system was created. You see, before central banks were created…someone had to actually create and save capital so it could be lent out for interest to other ventures. It was “savings” that allowed capital to be lent out, which would create further systemic growth. Think of savings as the fertiliser and water for the crop field of capitalism to flourish. Without savings there was nothing to lend…



Central banks alleviated this need for savings by their ability to “lend” (create money out of thin air) without having saved capital as collateral. But, by doing this, they have set the stage to destroy their own ware, their currency! You see, if you own something, anything…and someone wants to borrow it, they must “pay” for the privilege. By pushing rates negative, central banks are proving their currency has no value because you as a saver must “pay” for the privilege of someone else borrowing your savings. No system can survive if available capital continually shrinks year after year. Yes, central banks will continually print and shove the liquidity into the markets with a caveat. The caveat being; if something is “free” to create then what real value does it have? Central banks in essence are declaring their currencies valueless from two separate standpoints. It is of no value to save because lenders must “pay” to lend it, AND from the other side of the ledger- it can and is, created freely with zero cost.


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Now, let’s look at modern monetary theory or ”MMT”. This is simply another name for quantitative easing (QE). By any other name it was and is outright monetisation. The central banks told us they would normalise their balance sheets in the future. Well, the future came and went for the Federal Reserve for about a year and a half when they raised interest rates a little over one percentage point and shrunk their balance sheet roughly 10%. That resulted in a global financial temper tantrum last December that threatened to take the entire system down. THE STATE OF THE CREDIT MARKET Explaining the above, let’s look at the typical Ponzi scheme and then see if it now pertains to credit. Investors are promised an outsized return for their investment. Unsuspecting (new) investors pony up capital which is then used to pay previous investors dividends, interest or return of capital. This works only so long as new investors can be found to fund the payments to previous investors. Once new money ceases to flow in, the entire scheme is exposed for what it was, a non economic plan of fraud… Is it any different in the credit markets today? Looking at the US Treasury, they have built a $22 trillion mountain of debt (actually closer to $200 trillion when all off books debt, loan guarantees, and future promises are taken to account). Each and every year since 1960 (with the exception of



touted as the lender of last resort to the banking system, now is the lender (buyer) of last resort for US Treasury securities. The definition for what the Fed and Treasury are doing is “monetisation”. If you don’t believe me, then I urge you to look up the definition of the word in the dictionary. Where does that leave us? Bluntly, the credit markets worldwide are a bloated Ponzi scheme that cannot survive on the the cash flow from the real economy. Central banks are now constantly required to create new liquidity to keep the system afloat. Broadly, credit markets worldwide have morphed into a giant junk bond casino, where no one purchases bonds to hold to maturity. Rather, investors now purchase bonds with an eye to flipping them to the next sucker on the next central bank rate cut. The ultimate error in this strategy is not whether they can find a new buyer. Even the most nimble trader will be stuck after their last flip, if they stay in the system and are caught in ”cash” while that cash is on fire.

Photo: tlegend /

1998), the Treasury has been run with deficits. In the last 12 months alone, Treasury has amassed another roughly $1 trillion deficit. The deficit is simply spending more than is taken in from the tax base. Living beyond one’s means with a twist of Charles Ponzi… It has gotten to the point where the US Treasury must borrow massive funds to pay past investors (lenders) both interest and principal. Would you ever personally lend someone capital if you knew

they had to borrow further funds to pay you back? The answer is no! No you would not knowingly do this, but it is exactly what you do every day when you purchase a Treasury bond, deposit to a money market account invested in treasuries, or even when you accept cash or wired dollars. Never forget, dollars are debt based fiat currency that has survived to this point because foreigners funded our deficits. They are no longer doing this which means the Federal Reserve who has always been

ASSETS WITH NO COUNTERPARTY RISK What comes is broken confidence. Nearly everything financial in today’s world is someone else’s liability. In other words, whether you own bonds or believe you are hiding in a cash position, your debt instrument is only as good as the financial health of the issuer. This includes central banks. The corner the central banks have painted themselves into, has left them with only one tool left in their box. They must inflate or they die...along with their currency. You see, central banks are now required to print enough liquidity to prevent defaults. But by doing this they dilute existing currency. To the point, central banks are now being forced to print so past debt can be serviced but the action itself undermines the currency. So central banks MUST reflate, the question is ”can” they? The chart provided shows credit growth in China since the great financial crisis; Either central banks can reflate credit or they cannot. If they do pull it off, the credit bubble only gets larger and more dangerous. If they cannot, the $250 trillion global credit market begins to default and confidence is broken. The best way to ”play” the situation is to not play the game! Historically the best approach is to become very liquid in the highest quality cash. You want liquidity in order to have the ability to purchase broken and undervalued assets amidst the carnage. You want extreme quality because what comes will be all about default and how to avoid it. The simple answer is gold and silver. Gold cannot be printed or debased as global fiat currencies will be. Nor can gold ever default. Gold will be seen as the island of capital preservation in a vast sea of defaults. It will mightily attract fear capital in a world where banks and even central banks lack trust in trading partners. Gold promises nothing, it is simply proof of labor, capital and equipment already used to produce it. During good times there is very little difference between a promise and proof. During a credit meltdown, proof trumps any and all promises as it will be the gross over issuance of promises which is at the root of the coming historical debacle! EG

For further information, please visit: Autumn 2019 •



Michael Pento

President and Founder, Pento Portfolio Strategies, LLC

Never before in history has there been real estate, equities and bonds in a bubble... 24

• Productivity, Strategy, Profitability


Michael Pento

President and Founder, Pento Portfolio Strategies, LLC

THE NEXT CRISIS Our exclusive interview on The Next Crisis with Michael Pento, President and Founder of Pento Portfolio Strategies, LLC, explores the impact of asset bubbles, Central bank policy and inflation upon the U.S. economy, as Executive Global take an exclusive peek behind the operation of a pioneering firm using proprietary macroeconomic models to determine investment strategies across an inflation/deflation and economic cycle spectrum. We examine the critical preparatory measures that should be taken for high net worth individuals and institutional investors to mitigate against risk. What three fundamental elements would you say characterise a successful money manager in 2019? I have a math-driven process that determines MP where the economy sits on a spectrum between deflation/recession and inflation/growth. This way you can eliminate much of the emotional impulses that cause you to panic when you should be buying and feeling complacent when you should be selling. It also gives you an opportunity to participate on the upside with the major averages but also profit from the inevitable economic downturn. This is especially crucial today because there is a record amount of debt, record low interest rates along with record high asset values. Yet, at the same time there is an earnings recession and economic growth is anaemic. Understand the unique investment environment of today. Never before in history has there been real estate, equities and bonds in a bubble---this is the case globally. This is why an active management style of investing has become imperative for your financial health. Have a transparent and non-opaque investment approach and make sure you communicate with your clients regularly regarding your strategies. PPS EG

produces the podcast called the Mid-week Reality Check, which gives investors our proprietary insights on the economy and markets. Tell us about the advantages of the Inflation/ Deflation and Economic Cycle Portfolio proprietary investment model? The major advantage of this active strategy is MP that it allows you to participate in the upside of the market while also offering investors the opportunity to protect and profit from bear markets caused by recessions. It also can provide alpha during times of stagflation. EG

Prudent investors made significant fortunes during the Great Depression. If history inevitably repeats, what strategies could investors deploy to capitalise on the pending downturn? The IDEC Model not only identifies when a MP recession/depression is imminent but can also help determine when the debt-default process ends and when to get long the recovery. Once the market cap of equities corrects to a more normal historical relationship, it will become much safer to own a diversified basket of stocks. EG

Autumn 2019 •



Michael Pento

President and Founder, Pento Portfolio Strategies, LLC

Central banks are focing asset prices far above what the underlying economy can support. Eventually, investors will lose faith in fiat currencies and inflation should run intractable. CV MICHAEL PENTO Country of Birth USA ALMA MATER Rowan University EXPERIENCE 1991 Became a licensed Securities Professional 1994 hired by Specialist Firm on the NYSE 1997 Obtained NASDAQ Trading License 1998-2003 Obtained a total of 5 Securities Licenses 2007 Served as Chief Economist for Delta Global 2010 Served as Chief Economist Euro Pacific Capital 2012 President and Founder Pento Portfolio Strategies



Treat every client like they were a direct family member—the ones that you love, that is.


Be prepared, be confident and pray.


Use debt sparingly and only in a productive capacity. Make sure your employees know that you care for them and give them a stake in the company success.


How do you think negative interest rates might affect pension funds, mortgages and cash flowing real estate investments within the next 5-10 years? Negative rates have caused asset bubbles to MP exist in real estate, equities and bonds. Pension funds have been forced out along the risk curve because they cannot meet their return obligations in a world where sovereign debt is at the zero-bound range. Now, both investment banks and pension funds hold a tremendous amount of junk corporate debt. This will force them to become vastly more underfunded once the recession begins and cause many to become insolvent. EG

John Powell recently announced that balance sheet growth at the Federal Reserve was ‘not quantitative easing’. What impact may this have on U.S. Treasuries and Central Banks worldwide? The Fed is printing $60 billion each month MP to purchase short-term debt and steepen the yield curve. Jerome Powell claims that his new QE program isn’t QE but what else would you call monetising debt? Central banks are forcing asset prices far above what the underlying economy can support. Eventually, investors will lose faith in fiat currencies and inflation should run intractable. EG

With recent events at the Fed, how critical are new developments in the repo market for forecasting pertinent economic trends? Keeping the money markets free of friction is MP essential to keep the economy and capital markets from freezing up. Remember, the market for overnight money seized-up a year ago and the major stock averages lost between 20-30% in a matter of weeks. The fragile state of asset bubbles requires that monetary fuel is continuously pumped into the banking system. The Fed is caught in its own net. It created these bubbles and now it must supply the liquidity necessary to provide all of that related debt—much of which is distressed--with a permanent bid. My model views credit spreads as a crucial component in determining when the chaos will begin. EG

How far off do you think we are from the asset bubble bursting as highlighted in your book The Coming Bond Market Collapse? Making guesses for when the long overdue MP reality check begins is not prudent. However, I believe these bubbles will burst once inflation runs

• Productivity, Strategy, Profitability


well above central banks’ 2% targets and/or when the junk bond market begins to crash. I’ll keep an eye on those two functions rather than pick a date. Aside from gold and precious metals, what are some industries that we can expect to offer productivity for investors after the crash? After the crash I would expect investors to do MP well in an internationally-based strategy that focuses on dividends. Companies that focus on producing green energy and have high levels of free cash flow should do very well. Countries and currencies that return to the gold standard should fare much better after the dust clears. EG

And what impact will there be on an ageing population of retirees when the bond market does finally burst? Retirees may finally be able to earn a positive MP real rate of interest in a bank after the crash, but I’m afraid most will suffer the third 50%+ haircut in stocks since 2000. Making matter worse is that they will also witness a huge drop in the principal of their fixed income holdings. In other words, because interest rates are already at record lows their bond holdings will not offset losses from equities. They will need to know when to head out of the market but not too early. Otherwise, they risk losing out of potential gains in stocks and also suffer a decrease in purchasing power while hiding in cash. EG

Given all of this data, if you could serve in an advisory capacity to the President of the United States on markets and the economy, what would your advice be and why? My advice won’t be taken well because the MP global economy has been living in a fantasy world for a very long time. What is needed is to allow interest rates to become a function of the supply of saving vs. the demand for credit. In other words, stop QE and all rate targeting. This would allow rates to rise and prick the bubbles in bonds, real estate and stocks. It will be painful no doubt, but it is the only way to provide for a viable economy. Also, it is the best way to rectify the wealth gap and restore America’s middle class. EG

What do you predict for the U.S. dollar as world reserve currency, given all of these geopolitical and financial headwinds? The US dollar is already losing its status as the MP world’s reserve currency because China, EG


Michael Pento

President and Founder, Pento Portfolio Strategies, LLC

ABOUT MICHAEL PENTO Michael Pento is the President and Founder of Pento Portfolio Strategies (PPS). PPS is a Registered Investment Advisory Firm providing money management services and research for individual and institutional clients. Michael is a well-established specialist in the Austrian School of economics and a regular guest on CNBC, Bloomberg, FOX Business News and other national media outlets.


» Opened PPS RIA in 2012 offering proprietary

Inflation/Deflation and Economic Cycle Model SM (IDECM) investment strategy

» Wrote “The Coming Bond Market Collapse”

published by Wiley in 2013. First book identifying the global fixed income bubble

» Regular guest on most leading TV and

Print financial media including FOX, CBNC, Bloomberg, Wall Street Journal and Forbes

» IDECM tracked by major financial institution in 2014

» Creator and Producer of the Mid-week Reality Check podcast

Europe and Russia don’t want to be subject to dollar hegemony. These countries are already taking steps to not only conduct trade without using the dollar but also to back their currencies with gold. Therefore, I do not think the dollar will be replaced by another fiat currency. I believe only a currency backed by gold will be able to supplant the dollar as the reserve currency. This is most likely to occur after the crash. With over 27 years of investment experience, EG what can global institutional clients expect when investing with Pento Portfolio Strategies? Trust and transparency are of course crucial. MP Investors need to know what you are doing with their money and why you are doing it. They will also get a proven strategy that actively monitors the dynamics of the business cycle. I also record a podcast each week called the Mid-week Reality Check and publish a commentary several times a month as well. Investors can expect the best service that is offered for a fee that is much lower than most

active managers and hedge funds charge. We also are fiduciaries and put our clients interests before those of our own. EG

For further information, please visit:

EXECUTIVE SNAPSHOT Michel Pento also serves as Senior Market Analyst for Baltimore-based research firm Agora Financial. Prior to starting Pento Portfolio Strategies and joining Agora Financial, Mr. Pento served as a senior economist and vice president of the managed products division of another financial firm. There, he also led an external sales division that marketed their managed products to outside broker-dealers and registered investment advisors.

Autumn 2019 •



Monetary Policy

Negative Interest Rates and the Eradication of Money’s Time Value The notion of negative interest rates — that being an interest rate below zero — is hard to align with any traditional financial model. We can speak about the concept, but experiencing its actual existence feels like entering a twilight zone of interest rates, thinks Shannon Berkley. oney handlers actually have no right (no one has the right) to extend “negative interest rates” to anyone. While pundits more easily follow the descent of interest rates to near-negative territory and beyond, it is territory that no citizen can afford to be in. Such a trajectory of rates might well be a legitimate part of the typical financial model, but it is as surely the death knell for private wealth, too. It may not seem so dramatic, and the notion that it is “just this moment in time, just a moment” is also far too easily assumed by most citizens. Businesses might understand it better and, for that matter, play a more sophisticated game with the current situation, but a simple example demonstrates the problem with that kind of thinking. By means of example, let’s imagine that a business has a wad of money at the start of a year. With negative interest rates, that wad slowly reduces in value, and the time value of money (utility) also comes into play. It is assumed that the business is productive and growing in volume or reach, and by definition, which business isn’t? Yet the same business six months into the year, having had the value of that wad of cash shaved away, has done less, produced less, and earned less than it could have with positive interest rates in play.



It might have missed the opportunity to add a staff member or two, or to terraform a planet in space — a project worth zillions of dollars. Investors understand that opportunity costs are real and sometimes even dramatic, hence the average investor’s preference for the money today in order to put it to work to earn some more. The loss inherent in opportunity costs is often speculative, but on a rinse-and-repeat cycle of negative interest rates, that business will eventually cease to exist, at least without working a lot faster and harder with less capital available. The “time value” of money dictates that non-eroding cash-in-hand today is worth more than the same amount even just a little down the line. And the opposite holds true as well — value-eroding cash today is worth less down the line than it was yesterday. Getting devalued money later on also costs unfathomable human activity, commercial dynamism, and overall wealth and wellbeing for all involved. So what if a business suffers? For one, that business is one of thousands facing the same fate, employing millions of people who live with millions of families in millions of homes. As a result, almost imperceptibly, everything and everyone slowly goes downhill. It is a huge loss, but one ephemeral

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and thus never earning more than gripes and belttightening. What it really is, is the slow erosion of individual wealth, the death of individual surety, along the equally outrageous lines that central banking elites control the value of what one can earn in a human life — and thus define the quality of a person’s very journey in life. NEGATIVE INTEREST RATES ARE DARKER THAN MOST UNDERSTAND Extending negative interest rates is taking away people’s money. It’s theft. There are a million different justifications on the lips of economists, politicians and top money handlers, but the personal implications are simple enough to understand. In an International Monetary Fund (IMF) paper on negative interest rates, the fund stated: “This paper demonstrates that a subset of these tools [rates] can have a big effect in enabling deep negative rates with administratively small actions on the part of the central bank.” What the IMF is saying out loud is that banks can strip a person of the value of the currency they call wealth, with only minor tweaks to the system. The personal implications are that money is being stolen; nibbled at by negative interest rates, all

The IMF’s paper: Enabling Deep Negative Rates to Fight Recessions: A Guide by Ruchir Agarwal and Miles S. Kimball (April 2019)


Monetary Policy Photo: Nathaniel Noir / Alamy Stock Photo


electronically managed in the digital ether. While despots of old had to cut gold coins with copper to slowly bluff the citizenry, the digitisation of cash makes it so much easier today. As for that cash, employing negative interest rates would likely mean the slow and complete elimination of cash, forcing everyone to migrate to a wholly digital platform, making the future brighter than ever for those who want to sack the

world’s citizens. When cash is plentiful, enforcing negative rates becomes impossible. Guaranteed, the push towards digitised fiat currency will continue. The IMF’s paper: Enabling Deep Negative Rates to Fight Recessions: A Guide by Ruchir Agarwal and Miles S. Kimball (April 2019) also states that ‘’the zero lower bound is not a law of nature; it is a policy choice.’’ It is surely only that the average citizen doesn’t understand the implications of others making choices about their financial status that allows this kind of chicanery to pass without revolt. As an economic tool, negative interest rates are possibly the biggest attack on private wealth in the history of humankind. Making the shift from a paper standard to an electronic, digital monetary standard will allow governments to tax ad infinitum. A despot’s dream — endless control over everyone’s money. Linking all wealth and title to a digital system would also mean the complete eradication of freedom, privacy, personal autonomy and simply the right to a libertarian existence. When viewed in this light, negative interest rates applied to a digitised money standard, reveal themselves to be what they really are: masters and breakers of the populace.

ANARCHISTS, USURPERS AND OSWALD GRUBEL The fintech fraternity of investment bankers all the way up to central and global banks is a jargonised, technical and challenging realm for many, possibly most of the world’s citizens. It is thus easy to marginalise the complainers and defiers who would rally against the notion of negative interest rates. There has always been an elitism that precluded “common” participation from the realm. It is less easy to dismiss the loonies, however, when someone like Oswald Grubel speaks out against the notion of negative rates, dubbing the concept ridiculous. A former Credit Suisse CEO, Grubel has openly stated that “negative interest rates are crazy!” While Grubel’s remarks referred to his concern for the financial industry at large, every citizen of earth should be equally and justifiably alarmed. UBS Group AG’s CEO Sergio Ermotti, has also stated: “The ECB’s imposition of negative interest rates has created an absurd situation in which banks don’t want to hold deposits.” He and many other noteworthy commentators have also pointed to the implications for savings rates, social programs and society as a whole. The European Central Bank (ECB) itself has said: “While removing the effective lower bound by abolishing cash can be envisaged, such a step should be the outcome of changing technologies and social perceptions, not of policy prescriptions” — a little rich coming from an institution pivotal to making this lunacy come about, and sounding more like mock concern than any real hesitance. We told you — we’re the good guys — we’re just following social perceptions — we didn’t make that policy. NEGATIVE INTEREST RATES IN A (DARK) NUTSHELL There is mounting evidence that the application of negative interest rates is not working to boost any economy so far. It has been noted that no financial crisis — and, wow, have there been some in recent history! — has ever precipitated the implementation of negative interest rates. There are many levels to the debate — it is good for banks or bad for them; it will stimulate the economy or destroy it — but the one debate unlikely ever to happen would feature the world’s working adults gather to consider the implications head-on, from their respective points of view. It is worth noting that the IMF’s recently released paper is more about how to present a “negative interest rate program” to the public. The pending scenario going forward is that banks are going to charge depositing clients for holding their funds. Or gambling with their money, basically, to see where they can earn dividends from it while clients pay. When one deposits money with a brokerage, one expects an improved return. How is it even possible that we will all soon accept a complete reversal of roles, where we pay banks to make money off our money? Supranational bureaucracies are engineering a more beaten, more accepting, docile, and poorer citizen. The cost to everyone’s quality of life, human endeavour at large and the public trust will be carefully managed to avoid disruptive upset. Negative interest rates are an insult to private wealth, yet ever so slowly, such manipulation will become the norm, it appears, in the 21st century. EG Autumn 2019 •



Central Banking

Are the Central Banks ‘Out Of Bullets?’ Let’s face the harsh truth: the monetary techniques of central banks around the world have become ineffective. No matter what they do now, governments are already over-indebted and there is no easy solution. Yet with the crisis rapidly approaching, what can be done to mitigate its destructive effects and help salvage the economy after the crash? Writes Oliver Taylor. on’t buy into attempts to downplay the situation and make it look like they have it all under control: central banks and governments themselves are struggling to figure out what to do next! In fact, these institutions will not be able to mitigate the impact of the upcoming collapse the same way they did a decade ago. The overnight rates — the central banks’ main tool for influencing monetary policy, have already hit rock bottom and do not appear to have any success in stimulating growth any longer. What’s happening in the European Union is perhaps the most obvious example of how this system has failed. Despite negative rates, the economies of the eurozone, especially its primary sources of income, are decelerating. Meanwhile, the response to these challenges has not quite been updated to meet the new realities. By continuing to promote negative interest rates, the European Central Bank might actually be doing more harm than good. As it is right now, governments will have to intervene heavily with investments and other fiscal stimuli if the global economy continues to slow down. However, governments are already drowning in debt and their ability to act is limited. Just take a look at the national debt of some leaders in the world…The public debt of the United States is at an all-time high, sitting at $22 trillion USD! Japan’s national debt is $9.087 trillion USD - 234.18% of its GDP. Greece, Portugal, Italy, Belgium, Cyprus, Spain - all these countries rank in the top ten worst



debts in terms of debt-to-GDP ratio. Let us also not forget that central banks were critical in bringing upon the last economic crisis. They made it seem like we have recovered since 2008, but these last ten years were anything but a recovery it was the period during which the central banks have used up all of their ammunition to create an illusion of stability and prosperity. And now, judging by the situation we have ended up in today, considering the upcoming collapse that will hit harder than most can possibly imagine, it becomes clear that there was no stability or prosperity to begin with. Now, they are running out of juice. Frankly, it almost feels like bankers and governments no longer recognise and connect with the world around them. Having missed, or


• Productivity, Strategy, Profitability

perhaps deliberately ignored all the red flags, they have become ill-prepared to help the markets in this upcoming recession. One of the truths they must face is that the economy will not return to any sort of normality before the next crash. The other, is that the trade wars between some of the world’s leading countries are actively undermining any possibility of remedying the situation. OUT OF AMMUNITION With regard to stability and prosperity, it is rather shocking to witness that central bankers still have not figured out how to manage inflation, even ten years after the last crisis. If they are already struggling to maintain some semblance of economic growth, imagine what will happen when the actual recession peaks? Mind you - when and not if, because it is unavoidable. Japan and Europe have already crossed a point of no return and the United States is well on the way toward the same fate. To complicate matters even further, the world


Central Banking Photo: PictureLux / The Hollywood Archive / Alamy Stock Photo

is no longer the same that central bankers knew and were used to, especially since the recent rise of populist governments. Not only do these movements fearlessly question the foundations of the economic orthodoxy in terms of free trade and respect for the rule of international law, but they sometimes defy even economic common sense. Such is the case, for example, with the Federal Reserve not having a single clue on how to respond to the challenge of Donald Trump’s many trade wars, which damage the economy of the United States and the world as a whole. Considering that nowadays, the US only accounts for 15% of the global economy and 10% of its trade, it has become irrational to keep two-thirds of the bond market in US dollars. This is a drastic change that the greenback-dependent economy is not prepared for, but a change that is coming one way or another. The unsettling, unreasonable importance of the US dollar in the global economy has been questioned before, but it didn’t appear to be quite

as problematic back then, when the United States was still seen as the leader of the global economy. Now, with the undoing of the illusion created by unsustainable debt and a currency that has no intrinsic value, the failure of the American economy is becoming apparent and shattering the trust it used to enjoy. Meanwhile, central banks cannot manage to understand the new reality they have been plunged into and they no longer have sufficient ammunition to sustain the next crisis. That is the definition of being stuck between a rock and a hard place. A CASE OF LIFE IMITATING ART? On the one hand, if interest rates are raised, it will indubitably scare and alienate the market; on the other, launching another round of Quantitative Easing, will destabilise the situation even further, only hastening the inevitable. In a nutshell, the conventional monetary policy tools can no longer adequately respond to these new challenges. The predicament is somewhat similar to a scene from the 2007 action thriller feature Live

Free or Die Hard, in which detective John McClane manages to down a helicopter by racing in a speeding automobile and ejecting from the car at the last minute, launching it through the air like a projectile at the aircraft, in sheer desperation. After this feat, his sidekick humorously quips: “You just killed a helicopter with a car!” To which McClane replies: “I ran out of bullets.” This is the predicament we have currently arrived at: with central banks that are out of bullets and that may very well need to do the impossible monetary equivalent of killing a helicopter with a car, in order to overcome the next great crisis. The keyword here of course, is impossible. It is a shame that the financial community has only now began waking up to this problem. Central Banks have not rebuilt their stockpile of anti-crisis “bullets”. Then again, where would they have found the resources to restock? Thus, they are going into what may perhaps be the greatest recession the modern world will see, completely unprepared to deal with it. They have understood this a little too late. By the time the byproduct of irresponsible monetary policies hits the fan, countries will have too little room for manoeuvring in terms of what they can do to mitigate the damage. A few years ago, this article may have read like an economist’s wild fantasy. Yet nowadays, many mainstream press outlets are writing about the prospects for the global economy in less than optimistic terms. So what happened? Why the sudden change of tone? Well, at some point, you can no longer continue to hide the pink elephant in the room and you must address the issue. TURBULENT TIMES AHEAD? Some argue that the next crisis has been underway since 2018 and it is getting more dangerous by the day. If you have been paying attention, you may have seen its many symptoms: economic slowdown, recession of global industry, declining activity in many countries and a strong deceleration of growth worldwide…The worst part, is that the institutions we would normally look to for help in rebooting the economic machine are all out of options themselves. In fact, only the countries with significant foreign exchange reserves and/or significant fiscal space have enough to cope with this next crisis, and those countries are few — mainly China and Germany. Aside for Germany, the eurozone is ill-prepared: its refinancing rate is already at 0%, public debt is too high and printing new money has had, and will likely have very few positive effects on economic growth. In these conditions, the crisis of 2020 may be even more dire and destructive than that of 2008. It all comes down to the fact that, in order to weather the storm of the next crisis and prevent further degradation, it is crucial to apply deep reforms to the economy at its core — even to the philosophy behind the way we treat finance. Meanwhile, investors, consumers, business owners and everyone else that will be affected by the recession, must realise that they can no longer count on institutions to hold their hand through the turbulent times ahead. EG Autumn 2019 •



Kaiserwetter Energy Asset Management GmbH

Asset Management Through Iot Our interview with HANNO SCHOKLITSCH, CEO at Kaiserwetter Energy Asset Management GmbH once again charts the inner-workings of a firm changing the world of wind and solar asset management. Executive Global explore the impact of smart data analytics, machine learning and predictive analytics upon the portfolios of renewable investors as we delve deeper into the realm of sustainable investing. How may High Net Worth and institutional investors benefit from investing in renewable energy in 2019? Institutional investors can and should take HS advantage of the significant pull of renewable energy this year. 2019 is an important year in the sector in order to comply with the agreements that had been agreed for 2020, so renewables need more investment to comply with them. In addition, the innovation that is being developed around renewable energy, such as Kaiserwetter’s IoT platform, ARISTOTELES, allows investors to maximise their profits, minimise investment risks and to create the highest transparency standards in order to attract more capital. The IoT platform uses the possibilities offered by digitisation and intelligent data analysis. Based on smart data analytics, predictive analytics, and machine learning, we can achieve a decisive performance improvement of renewable energy assets and entire portfolios. ARISTOTELES aggregates technical, meteorological, and in particular- financial data, transforming unstructured data into a structured database. EG



electricity by 2030. Is now the perfect time to invest in renewable energy? Germany has set a target of generating 65% HS of its power from renewable sources by 2030, requiring an increase in wind and solar generation capacity to between 215 and 237 gigawatts (GW) from the current level of 120 GW now. Renewables account for about 44% now. Investments in renewable energy were halved in Germany in 2018 compared to the year before, landing the country in fourth place in global renewable investments. Germany leads in Europe


Germany is working towards having renewable energy sources supply half its

• Productivity, Strategy, Profitability

if the investments over the past ten years are taken into account, but a drop in wind power investments brought total financial flows in renewable technology down significantly. However, since prices for renewable power installations, especially for solar power, have also fallen sharply over the past decade, Germany’s capacity growth has not fallen as much as monetary investment and has also remained positive during last year. In what ways may digitisation and intelligent data analysis improve productivity in this sector? Kaiserwetter is a pioneer and leader in the HS digitalisation of renewable energy worldwide. It provides Data Analytics as a Service (DAaaS) to persuade investors and financing institutions in the renewable sector to invest more in renewable energy and thus accelerate the flow of investments towards emission-free energy production. The company is dedicated to IoT, Smart Data Analytics, Predictive Analytics and Artificial Intelligence, with a focus on renewable energy and because of that, it is showing the world how data intelligence and digital innovations can contribute to help stop climate change. Thanks to the integration of technical, financial and meteorological data, we are able to maximise returns and minimise investment risk, which increases the performance of the asset portfolio. EG


Kaiserwetter Energy Asset Management GmbH the entire performance should be monitored by digital technology and algorithms to ensure the planned ROI.

How would you define the perfect portfolio of renewable energy investments? That depends as always, on the risk-returnHS ratio an investor is going to take and what is defined within their investment strategy. In the end, the investor has to decide what risks he is ready to take to achieve a certain predefined IRR and this automatically leads to a geographical investment allocation. The technology to be chosen depends on the local conditions and the regulations implemented by authorities for different asset classes. We can contribute to the investment decision process as our clients can take advantage of our benchmarking capabilities showing the best technology to be installed in certain areas, while knowing the OPEX to be planned. EG

How can investment managers successfully utilise IoT based technologies for greater returns? Improving investment risk assessment is now HS possible, thanks to IoT-driven data analytics platforms. Thanks to ARISTOTELES and our implemented algorithms, we can use AI processes to determine the best possible performance of a wind turbine- hence an entire wind farm. In some rare cases our IoT platform called ARISTOTELES, has detected potential improvements to be made of up to 20%, but even with smaller improvements of 3-4% to be made, the impact on the investment rate of return can be substantial. In other words, harnessing AI and technology will determine the split between winners and losers. EG

Tell us about how your technologies may combine with cryptocurrency to aid investors in the future? The situation could not be more divergent HS for cryptocurrency and renewable energy. The former face blockades from large companies and banks such as Lloyd’s, which has recently banned the purchase of digital currencies with its credit cards, joining the Americans- JP Morgan Chase or Citi. Renewables, on the other hand, cannot enjoy better health after the Paris Agreement and the Marrakesh Climate Summit, which committed countries and investors to adding to the almost $300 billion already spent annually on the sector, with another $100 billion a year until 2025, a figure that should also increase after that date. EG

According to Goldman Sachs, double digit growth is expected for utility-scale solar capacity in 2019-2020. What opportunity does this present for investors? Solar energ y investors may find good HS investment opportunities in utility-scale solar capacities, but also on smaller solar parks in 2020. It depends on the aforementioned risk-return-ratio and the energy market price, but falling investment costs make the investment in solar parks quite attractive, especially by having a grid-parity situation or better- as the LCOE (Levelized costs of energy) are already below conventionally fired power stations. Therefore, investing in utility-scale solar parks could be an attractive investment, but

What does the future hold for predictive analytics and machine learning in relation to investment management? Just like unpredictable weather conditions, HS the operational yield of renewable energy assets had previously been mostly impossible to foresee. Automated data compilation was difficult to implement and collecting data from different energy portfolios, was too time-consuming. In addition, the analysis of high data volumes oftentimes tested the limits of what investors and operators could do. As a consequence, reliable information about the technical status of assets and ultimately their future yield- was hard to come by. Kaiserwetter has recently presented a new innovative predictive analytics approach jointly developed with SAP: A new feature is that ARISTOTELES, relies on Machine Learning that uses historical technical data of wind turbines, in order to feed the self-learning algorithms. These algorithms have been programmed to recognise potential technical failures on an early stage, which could lead to a negative impact on the investment. This allows investors to react to reduced yields proactively and at an early stage. EG EG


Photo: Gutzemberg /

For further information, please visit:

Autumn 2019 •



Family Office Club

Centimillionaire Investing There are around 3,000 billionaires and well over 60,000 centimillionaires globally, according to sources such as the Financial Times and Bloomberg. Article by


owever, these numbers are underreported due to lack of access to data as well as under-reporting by the families that have wealth spread across several family members or hold wealth in secret, due to fear of media invasion of their personal lives, kidnapping/ ransom, or being the target of potential government corruption or regulatory actions. In other words, we do not know how many billionaire or centimillionaire families there are out there—we never will—but we do know that there are roughly 20 times as many centimillionaires as there are billionaires. Mainstream media often talk about and sometimes vilify billionaires, but most have never heard of centimillionaires as a term. In fact, this last month, “billionaire” was searched for 49,500 times on Google, while “centimillionaire” was searched for just 320 times. It is important to shine a light on this area so ideas can be cross-pollinated, evolved, and customised to this specific segment and their needs. To show just how little this niche is talked about, there has never been a book written with the word “centimillionaire” in the title, most likely because it is thought of as too niche of a market to bother with. As the number of centimillionaires grows, it is inevitable that more resources and statistics will emerge on this area and that more tools will be developed to help those with challenges and



opportunities specific to this level. My hope is to start that process, to provide dozens of tools that will genuinely be valuable and used by thousands of ultra-wealthy families globally. I get asked several times a week how I got started working with ultra-wealthy families. I grew up around my father raising over $1B+ for hospitals, universities, and non-profits via capital campaigns. I was around when he met with donors regarding gifts, endowments, and managing their foundations. Through that, I was exposed to this world early, and after starting and running five businesses before I had graduated from college, I was hired at a capital markets firm in Boston. There I stumbled on the term “family office” and found that it meant a holistic wealth solution for the ultra-wealthy. I decided I would only meet with and talk to those types of firms going forward but had a very challenging time doing so. I found that the only way to learn about them was to meet with them as otherwise I was relying upon articles from Bloomberg and the Financial Times, and there was not much even from them back in 2006. From that point, to capture what I was learning and share it with others and to make sure I was remembering the insights I was picking up, I started writing about the industry online. WEALTH BUILDING STRATEGIES Now, after 12 years, we have advised dozens of families varying in net worth from $30M–$5B+ in net worth who want less chaos, more aligned advisors, and additional strategic investment opportunities. Among the families we serve, 80% of our clients are centimillionaires with a net

• Productivity, Strategy, Profitability

worth of $150M–$700M, with over two dozen families under contract currently. Many times these families seek help because they are creating a new organisational system to manage their wealth called a “family office,” and all share common challenges. With the exception of inheritance, most of those who are ultra-wealthy that I work with have been in control of the appreciation of their wealth. They have run the operating business or part of it. They selected the real estate assets or developed their portfolio of holdings through careful decision making and iterating on lessons learned over time to accomplish their goals. Every investment you make typically is made up of the following types of energy and resources: 1. Strategic Planning : Investment Focus + Designing the Portfolio 2. Sourcing of Investment Opportunities + Originating Deal Flow 3. Screening of Potential Investments 4. Due Diligence + Research of Opportunities 5. Negotiation + Structuring of Investments 6. Management of Holdings + Exits/Sale of Assets Many families come to me asking what other families are investing in and how they think about


Family Office Club Photo: oneinchpunch /

their portfolio. While the size and industry focus differ, the most consistent approach I have seen is taking three levels of outsourcing and control and diversifying across assets and control levels. It is challenging as no generic investment advice is ever possible or appropriate to give, but as a general framework for breaking it down, I typically see families dividing things into three simple buckets: DIVERSIFYING THE PORTFOLIO A. Diversified Market Exposure Segment: Many families will hire an outsourced chief investment officer (CIO), private bank, or multifamily office for this allocation. They will help design the strategy with you and you may help originate some investment opportunities through your own connections, but most of the six layers mentioned above will be carried out for you by this wealth advisory solution. This segment is typically seen as a way to generate some income in the portfolio while also serving as a defensive buffer or a way to track beta market exposure, in case you need liquid or semi-liquid assets somewhere to at least beat inflation while you allocate to direct investments further. It is important to note that the best multifamily offices can help with holistic trust and estate

WITH THE EXCEPTION OF INHERITANCE, MOST OF THOSE WHO ARE ULTRA WEALTHY THAT I WORK WITH HAVE BEEN IN CONTROL OF THE APPRECIATION OF THEIR WEALTH. planning in-house and with direct investments, but a firm capable of helping greatly in both areas is hard to find. B. Conservative & Cash Flowing Commercial Real Estate: Most families of significant wealth separate this from the wealth advisor above and like to own assets more directly than is possible when only allocating to the public vehicles often offered by wealth advisors or outsourced CIOs. In this area, many families buy some properties that

are small or local directly using a property manager to oversee those assets. They then get to know and allocate through 5–10 investment firm boutiques, which allows them to select deals on a deal-by-deal basis so they have transparency on exactly what deals their capital is going into. This segment is also served by real estate investment funds, but many families do like to invest deal by deal first while they are building trust with an investment manager. The result is typically a focus on just one to three cashflowing real estate asset types diversified across regions and sponsors. This results in having various levels of control, transparency, fees, and flexibility on what levels of debt you apply to properties in your portfolio. This segment is typically seen as a vehicle through which to grow net worth steadily over time while producing income and is viewed as a conservative portion of the portfolio and very long-term minded. FOCUSED DEAL FLOW C. One to Two Niche Industry-Focused Investments: This segment is where most families retain the most control in house as they typically created their wealth in this space they are reinvesting in. It is their reputation, knowledge advantage, distribution advantage, or assets still in place that allow them to move more swiftly through valuation, due diligence, and opportunity sourcing stages of investing. Families invest in this area as they have high conviction that they are superior managers of these asset types against competitors and they have proven that to date. This is typically the most aggressive portion of a family’s portfolio. We have found families can use help in originating deal flow in these areas and working with other like-minded families as well as some help with structuring deals, but otherwise it is an area where they enjoy maintaining a lot of control. You can see from the descriptions above that A typically leverages others in almost everything, B has some outsourced investments and some managed in house or selected directly at least, and then bucket C is where families typically outsource the least. This is different for each family, and areas of focus will be different per family, but this approach helps provide a framework of discussion on where to focus the most energy internally. One truth I have found is that not all deal flow is created equal, and nobody wants just lots of investment pitches of any quality or location. Everyone wants more highly focused and qualified deal flow. All else being equal, if your family is seeing 50 deals per year, then you may only be focusing on the top 10% of those deals— the top five for any sort of due diligence or serious consideration. Imagine, however, if you were seeing 300 deals per year. You could focus just on the top 2% and be conducting due diligence on six deals a year perhaps. As long as the quality of those investment opportunities stays high and as focused if not more focused, then your chances of finding an anomaly among the deals available is greater. EG

For further information, please visit: Autumn 2019 •



Independent Precious Metals Advisory

The Destruction of Civilisation - Implications of Extreme Monetary Interventions When I was asked to write an article about the impact of negative interest rates and negative yielding bonds, I thought this is a chance to look at the topic from a broader perspective. Article by

Claudio Grass


here have been lots of articles speculating about the possible implications and focusing on their impact in the short run, but it’s not very often that an analysis looks a bit further into the future, trying to connect money and its effect on society itself.


QUI BONO? Let us begin with a basic question, that lies at the heart of this issue: Who profits from a loan that is guaranteed to pay back less than the amount borrowed? Obviously, it is the borrower and not the lender, which in our case is the government and those closely connected to it. Negative rates and negative yielding bonds, by definition- favour the debtors and punish the savers. In addition, these policies are an affront to basic economic principles and to common sense too. They contradict all logical ideas about how money works and they have no basis and no precedent in any organic economic system. Thus,


now, in addition to the hidden tax that is inflation, we also have another mechanism that redistributes wealth from the average citizen to those at the top of the pyramid. Thus, this very concept of a central authority being able to bend and twist the rules, even when the result is illogical, has implications that extend way beyond daily economic activities. In fact, it ultimately divides society into two classes: those who profit from this arbitrary and unilateral re-writing of the rules, and those who are forced to pay the price, even though they never agreed to it; in fact, they weren’t even asked. A SYSTEM OF COLLECTIVE CORRUPTION Of course, we can also look at it from the collective perspective of the so-called “Social Contract” of Rousseau, and argue that this system of overt (taxation) and convert (monetary policy) redistribution is therefore legitimate, or even benign. You might still believe that the state will take care of you in the future, and thus you are willing to sacrifice a part of your wealth and savings today to make sure that happens. In that case, it is useful to remember that the current central banking system is not that old. It’s only been around for about 100 years or two long-term debt cycles combined. The first cycle ended when President Nixon officially

• Productivity, Strategy, Profitability

tried to demonetarize gold in 1971, empowering a centralised system whereby a few decide who receives the currency first and at what interest rate, allowing them to create bubbles in certain asset classes, protect different key industries and to use it to finance wars and enrich politicians and those close to them. So far, total credit on a global scale stands around $240 trillion. It’s hard to conceive of such number, but if you consider that 1 trillion seconds are equal to 31,709 years, you might begin to wrap your head around just how leveraged the system has become. We should never forget that debt is always consumption brought forward. That being said, debts need to be paid back or forgiven – there is no other outcome. In addition, the amount of debt that a system can take on, is limited and when a credit-based system can’t grow any further, the logical outcome is the collapse of the whole system. As Ludwig von Mises described this a long time ago: “There is no means of avoiding the final collapse of a boom brought about by credit expansion.The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved”. It is thus clear that the current path that governments and central banks have selected is utterly unsustainable and their attempts at short-

[1] [2]


Independent Precious Metals Advisory The masses are trained and forced to consume and spend money they don’t have to buy things they don’t need. Our monetary system in combination with this kind of public policy is therefore the cause for mass-overconsumption, the destruction of wealth, capital consumption and the destruction and exploitation of nature. People significantly add value to society if they are able to save, as this allows them to invest at a later stage, once they have accumulated as much as needed, and thereby aid others in their own efforts to succeed and to reach their financial independence. Parents can help their children and investors can help budding new companies that bring innovative ideas that benefit the economy and society as a whole. As this virtuous cycle continues, based on productivity, long-term thinking and responsible financial management, “the rising tide lift all boats”. To the contrary, when this natural process is forcibly disrupted and reversed, the effects are deleterious and far-reaching : massoverconsumption, the destruction of wealth and the exploitation of nature and the environment are all symptoms of this institutional and massive push towards short-term thinking and of being forced to focus just on today, at the expense of tomorrow.

Photo: Michael Gordon /

term “patches” have little hope of stopping the inevitable implosion, that has already been decades in the making. Pretending otherwise, is as futile as it is naive. As Ayn Rand would have it: “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” THE ‘’DE-CIVILIZATION’’ EFFECT Negative interest rates are a great example of these short-term patches, only in this case, they are not just useless as a cure for our economic ills- but they actually do more harm than good.


The outcome of this policy is that time becomes worthless. As one’s hard-earned money, set aside for a rainy day or for their children’s education, instead of appreciating, as logic would dictate, instead diminishes day by day, it does not make sense any longer to produce and to save. The basic motivation for each individual to get up in the morning and to work hard to achieve a higher living standard is removed and time, therefore, turns into a dimension without any value. If people can’t save any longer, by government decree, then there is no other way than to consume. And with all traditionally safe investment options gone, they are only left with the option of speculating in rigged financial markets, and the massive risk that comes with it, especially now, when we’re nearing the end of a long-term debt cycle. The individual is thus turned more and more into a state dependent, as the basis for a free life is the ability to increase financial independence and have savings on the side that keep you selfreliant. The core fundamentals of a successful system, require individuals that live a decent lifeknowing that they must first produce before they can consume. According to Jeff Deist, President of the Mises Institute in Auburn:“Civilization requires accumulation and production; de-civilization happens when too many people in a society borrow, spend, and consume more than they produce.” [1]

WIDER IMPLICATIONS Thus, what is at stake is not only the world economy, but the accelerating decline of western culture which, based on liberalism (personal freedom and private property rights) and Christianity (personal responsibility), laid the foundation of a decentralised Europe, that allowed for competition of goods and services, but especially the competition of ideas. This dangerous decline is nothing new either, as it began after WWI, when Europe turned towards a more centralised approach, with all sorts of collectivist ideas causing all kinds of schisms that we still see today in modern societies. Today, we see a rapid acceleration of this decline, as our economic system can barely remain standing and as our politics and our societies devolve even faster into tribal or more precisely into “political identity” groups, fighting each other over meaningless feuds. All the while, they are distracted from the real threat, the one that governments and central banks pose to their future and to their children’s future. As long as people are afraid of liberty and falsely delegate their self-responsibility to a central authority, hope is dim. It’s time to think independently about whether today’s centralised system really makes sense, if it is sustainable and for how much longer. If the answers to these questions scare you, it is pointless to expect solutions to come from above. It is then time to act directly and responsibly, with a solid plan, hard physical assets privately owned and long-term strategy that does not depend on the whims and caprices of those in charge. H.S.H Prince Michael of Liechtenstein stated that: “It is easier for governments to control the spending of people in debt than those with savings. A person with financial resources is free, while debtors are hostage to their creditors.” [2] EG

For further information, please visit: Autumn 2019 •



Monetary Metals

Earning Interest on Gold People are buying gold with good reason. The Federal Reserve is now undoing its meagre rate hikes. Savers are being sacrificed for debtors, especially the government whose debt has reached $23 trillion. Forget about repaying, they just need to service it. And they hope to lighten this burden by lowering interest rates.

Article by

Keith Weiner


here is scant interest to be earned, and Fed policy is to create two percent annual inflation. This means that after one year, a dollar will be worth only $0.98. In ten years, its value will drop to $81.71. Gold is a better deal for long-term saving. Unfortunately, there is a cost to store gold. For example at a storage cost of 0.75%, you spend 0.0075oz to store an ounce annually. So your ounce is down to 0.9925oz in a year, and 0.9275oz in ten years. Most people accept the slow dwindling of their gold is as the cost of avoiding the faster erosion of the dollar. It may seem a small price to pay.


EARNING A YIELD ON GOLD It is an unnecessary price. Gold should even earn a positive return, as it did prior to 1933 when President Roosevelt voided gold clauses. Traders say that you can earn a return on gold by


selling derivatives. For example, a call option grants the right to buy your gold in the future at a price fixed today. Suppose gold is $1,500, then you might sell a June $1,550 call for a $30 premium. If the price of gold goes up to $1,650, then you have sold your gold for $1,550 plus $30 premium, or $1,580. This is fine, if you just want a 5.3% return on your $1,500, but not if you want to keep your gold. When you try to buy back your gold, you only have


• Productivity, Strategy, Profitability

Photo: mnimage /

enough dollars for 0.96oz. You actually lost 4% of your gold, and you will pay tax for the privilege! A gold yield on gold cannot be earned by trading gold or gold derivatives. There is a way for institutions to earn something, by leasing their gold to a bullion bank. My company, Monetary Metals, publishes a daily chart of this gold lease rate. It is currently less than 0.2%. I wrote about a scheme to pay 1% gold interest on gold in India. Unfortunately, it looks like the bank is selling the gold and investing rupees or dollars. As described above, they cannot buy back the full amount of depositors’ gold at higher prices. Without a government subsidy, they could default. IN SUMMARY When you earn a conventional dollar yield on dollars, you do not sell the dollars. You finance a productive enterprise. Earning a gold yield on gold is no different. There are companies who need financing for gold inventory, and for gold-related capital investment. They are happy to pay gold interest out of part of their profits. These companies are in all parts of the gold supply chain, from miners to jewellery manufacturers and retailers Monetary Metals is making a liquid market for gold yield on gold. EG


Gomez Tomiczek Law Firm

How to Protect Your Investment in Panama and Manage Your Assets One of the most common questions we receive is: What happens with my assets in Panama when I die? What kind of rights and/or obligations will my heirs have under the laws of Panama or even overseas? Article by

Abel Gomez


f you do not have a Testament in Panama or if you have one, in fact in both cases, all assets in Panama will be subject to a judicial probate in Panama. With the aim to transfer all property rights of all assets that belonged to the deceased to his/her heirs, a procedure that our legislation calls SUCCESSION. What is complicated about this process is how long it takes and how expensive it is to your heirs, because the lawful fee structure for lawyers in Panama (by the National Bar Association of Panama) establishes a minimum legal fee of 15% of the total value of the estate. While the average time frame to complete the succession and administer the estate is one to two years. Which means that practically after having inherited a debt with the lawyer your heirs must wait one to two years in order to receive the final decision of the Panamanian Judge and finally accept their inheritance. For this reason, a Private Interest Foundation in Panama directly competes with a Trust as a vehicle for wealth and estate management, permitting separation of assets between the founder and the beneficiaries, but without necessarily losing control of such assets, as it happens in a Trust. A Panamanian Private Interest Foundation is the combination between a corporation and a will. In general, a foundation has some similarities with companies; once registered in the Public Registry



of Panama, the assets of this legal entity are kept separated from the incorporators, considering that they are created to maintain the confidentiality of the owners of the mentioned assets. Foundations differ from corporations in relation to the presence of an owner, or the need to issue share certificates (corporations). Unlike a Corporation, a Private Interest Foundation can be created as a tool for a living will. A Private Interest Foundation is created when one or more natural or legal persons formalise a document called the “Foundation Charter”, which must be registered in the Public Registry of Panama. By means of this act of incorporation, the members commit to offer a declared value of no less than $10,000.00 USD as Initial Capital or “Assets of the Foundation” (Panama Foundations do not require Paid-In Capital.). This amount may be raised when additional assets are aggregated to the foundation. This amount may be endowed at any time, being only a declarative amount for tax purposes when the Foundation is registered. The assets will be managed by the Foundation Council under the supervision and authorisation of the “Protectors”, for the benefit of the “Beneficiaries” or “Successors”. The main focus of Private Interest Foundations in Panama is to provide asset protection. For this reason, the Law provides that the Founder may designate natural or legal persons as professional advisers, auditors, supervisory or protection bodies, and any others to supervise that the foundation achieves its purposes, that the rights and interests of the beneficiaries are protected, to request accountability from the Foundation Council, supervise the management of the assets of the foundation and to ensure these are used for the purposes described in the Foundation Charter.

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MAIN CHARACTERISTICS OF PRIVATE INTEREST FOUNDATIONS IN PANAMA Below is a description of the main characteristics of Private Interest Foundations in Panama: - Asset Protection: For legal purposes, the assets of a Private Interest Foundation in Panama constitute a separate entity from the assets of its founder and those of the beneficiaries, preventing asset seizure, confiscation or any other action or precautionary measure, except for obligations



Gomez Tomiczek Law Firm Photo: Cris Young /

incurred in, or damages caused when carrying out the purposes of the foundation, or related to legitimate rights of its beneficiaries. - Foundations can be holders of securities and are able to receive dividends from company shares. - Considering that Foundations are not contingent on the life or death of their founder, they have a permanent character subject to the terms established in the Foundation Charter, which makes Foundations similar to Trusts, Corporations, and Testaments, avoiding the testamentary proceedings and probate. A specific duration may be stipulated for the Foundation in the incorporation document where the Foundation is created, and then it may be registered. - The Law regulating Private Interest Foundations indicates that all members of the Foundation Council, Protectors, or any entity that is related to the legal activities of the Foundation, must maintain strict confidentiality, even after the Foundation’s dissolution. Any breach to this provision constitutes a crime that has a penalty of six (6) months in prison and a $50,000.00 USD fine. - The Law does not require that the names of the Beneficiaries or Protectors are disclosed or published in the Public Registry or in a Public Deed. This shows how with the new regulations

governing bearer shares and the taxes that must be paid after a transfer of corporate shares, Private Interest Foundations and its by-laws have become the new legal vehicle, providing confidentiality in all aspects, and replacing the legal figure of bearer shares as used in companies. - They are not required to file annual Income Statements. In fact, Private Interest Foundations must not be used to participate in traditional businesses such as the provision of services, the sale of goods, opening restaurants, offering consulting services, or wholesale or retail transactions. If this is the case, they are authorised to carry this activity sporadically, from time to time, but not as a permanent activity. - Foundations are only required to pay $400.00 USD as an Annual Franchise Tax, together with the annual resident agent’s fee; they are exempt from paying other taxes. - The foundation books may be kept both in Panama and abroad. - There is no restriction regarding the maximum amount of permitted initial capital, but it must be at least ten thousand dollars ($10,000.00 USD); as mentioned before, this amount does not need to be deposited, and you do not need to prove to own such an amount, nor should it be accredited

within a period of time. - The Law does not require Annual Meetings of the Foundation Council, Founders or Protectors to be held. - Founders and Members of the Foundation Council may hold meetings anywhere in the world or may be represented by proxy. - Founders, members of the Foundation Council, Beneficiaries and Protectors may be both natural and legal persons of any nationality and domiciled anywhere in the world. - Founders may be different from the Foundation Council members. - Founders, Protectors or Custodians or members of the Foundation Council may be Beneficiaries of the Foundation. - Foundations of other jurisdictions may change their domicile to Panama to continue developing activities as Private Interest Foundations and vice versa. DIFFERENCES BETWEEN PRIVATE INTEREST FOUNDATIONS AND CORPORATIONS The main difference between corporations and foundations is the purpose; while the former is created to carry out commercial activities, foundations are created to protect assets (family assets) and/or “Private Interests”, preventing them from carrying out commercial activities on a regular basis. For this reason, they are called “Private Interest Foundations”. They also differ in terms of their legal structure. With the structure of a Corporation, the shareholders are the owners and are entitled to the enjoyment of assets, since the share capital is the contribution of each member. In foundations there are two features: the founder transfers assets to the foundation as a capital contribution, and the beneficiaries are legitimated to the enjoyment of such assets. Still, the founder may also be a beneficiary. With Foundations, there is an entity that oversees the actions of the Foundation Council, the Protector, while with Corporations, the actions of the Board of Directors are not supervised. INCORPORATION PROCESS To begin the incorporation process of a Private Interest Foundation, the Foundation Charter will be drafted by a lawyer according to the client’s instructions. Once the Foundation Charter has been approved by the person wishing to establish the foundation (the Founder), the founder in the company of the lawyer must be present before a Notary Public of the Republic of Panama to sign the Foundation Charter (Public Deed). Subsequently, the Foundation Charter will be duly filed with the Public Registry - Mercantile Section of Panama. Opposite to the process for Public or Social Interest Foundations which require the approval of the Ministry of Government and Justice, a Foundation of Private Interest does not require any governmental authorisation, which is a big difference, considering that a foundation requires only the intention of the founder. EG

For further information, please visit: Autumn 2019 •



SOG / Samardžić, Oreški & Grbović

New Law on Alternative Investment Funds Adopted On its way to becoming an EU Member State, Serbia has been harmonising its law with the EU acquis. Within the Negotiating Position of the Republic of Serbia for Chapter Nine - ”Financial Services”, the Republic of Serbia undertook, inter alia, to transpose Directive 2011/61/EU of the European Parliament on management of alternative investment funds in the national legal framework of the Republic of Serbia by adopting a separate law governing alternative investment funds. Article by

Article by



Milan Samardžić

Petra Sretković

he Alternative Investment Funds Act (Act), entered into force on 19 October 2019 and will be applicable upon expiration of six months from the day of its entry into force, that is, from 20 April 2020, while the provisions governing small investors, public offering and crossborder activity shall be applied from 1 January 2021 or from the date of accession of the Republic of Serbia to the European Union.

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NOVELTIES The Act defines establishment, activity, and operations of Alternative Investment Fund Management Companies, as well as establishment, organisation, and management of Alternative Investment Funds (AIFs), types of alternative investment funds, depositary activities and duties, as well as the competencies of the Securities and Exchange Commission. Key provisions of the Act which shall start to apply six months after the entry into force of the Act, are the ones regarding: Managers of alternative investment funds (AIFM) which are legal entities headquartered in the Republic of Serbia whose primary activity is the management of one or more alternative investment funds on the basis of a license issued by the Securities Commission. The AIFM is established in the form of a limited liability company or a joint stock company which is not a public company, while a large AIFM is established in the form of a two-tier joint stock company. Depending on the value of the portfolio of AIFs managed by the AIFM, the Act differentiates two types of AIFM: small and large. If the value of the portfolio of AIFs managed by AIFM exceeds €75 million (or €25 million if AIFs use financial leverage), the AIFM must be organised as a large AIFM. Consequently, if the value of the portfolio of AIFs managed by AIFM amounts to less than the above


figure, it can be organised as a small AIFM. The main difference between small and large AIFM is that some provisions like additional capital, the minimum number of the Management Board, compliance monitoring, risk and liquidity management, etc. do not apply to small AIFMs. There are also capital requirements that AIFM must satisfy in order to conduct business operations. For a large AIFM, €125.000 in Serbian Dinar (RSD) equivalent, €300.000 in RSD equivalent of a closed fund which has its own legal entity with internal management, and €70.000 in RSD equivalent for a small AIFM, or €150.00 in RSD equivalent of a closed-end fund which has its own legal entity with internal management.

• Productivity, Strategy, Profitability

Different organisational forms of AIFs: An AIF may be organised as an AIF which can be marketed publicly or as one which can be marketed only to professional investors and semi-professional investors (investors who invest at least €50,000 into one AIF and have proven knowledge and experience in capital markets). AIFs which can be marketed only to professional and semi-professional investors can be organised in different forms, including venture capital funds and private equity funds. Depositary: An AIF must have a depositary which is appointed by the AIFM. In RS, the depositary may be a credit institution with headquarters therein, which has the approval of the Depositary Commission for a specific fund. A depositary is responsible for monitoring the AIFs’ cash flow and keeping AIFs’ assets. The depositary is liable to the AIFM and its members or shareholders. Article 3 of the Act specifies entities to which the Act does not apply (holding companies; voluntary pension fund management companies, and voluntary pension funds; insurance and reinsurance companies; supranational institutions; national, regional, and local authorities and bodies or other institutions managing funds that support pension and social security systems, etc.). OBJECTIVES OF THIS ACT The objectives of the Act are to provide a greater degree of protection in case of risky investments in alternative investment funds and to define in more detail the rules with respect to alternative investment fund management companies. Aside from the new legal concept and harmonisation with EU law, the goal of this Act is to develop micro, small, and medium-sized enterprises through alternative forms of financing, i.e. through venture capital funds and private equity funds. The Securities Commission shall enact bylaws which will further regulate AIFMs, AIFs, and depositaries within six months from the entering of the Act into force. EG

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Curacao FDI

Business and Foreign Investment in Curacao The Caribbean is often seen as a beautiful holiday destination frequently dependent on tourist dollars to offset meagre economies, but there are places where such a blunt appraisal doesn’t tell the whole story, writes Thomas Hughes. he country was part of the Netherlands Antilles up until 2010, but gained independence as a state within the Kingdom of the Netherlands thereafter. The World Bank defines the Curacao economy as “high income,” yet the island does also display the typical percentage of many Caribbean populations who are living a beautiful but poor life, disconnected from the main economy. Bold initiatives have been enacted to resolve disparities, and with a population of only around 150,000, economic remodelling initiatives that aim to better the lives of every citizen are succeeding. The country initiated such measures post political turmoil after independence and is making strong progress towards a 2030 due date, as is often achieved by relaxing traditional structures of taxation on foreign economic activity and investment. An anomaly to some extent, Curacao has one of the highest Caribbean standards of living, ranked 46th globally on GDP (PPP) and 28th for nominal GDP per capita. After functioning as a deep-water port for the Dutch for hundreds of years, the culture is eclectic and hopes for the future are high. In common with many Caribbean destinations, Curacao tourism is a mainstay of the local economy, with the country also nursing ambitious plans to become an offshore business and taxation hub. Dutch influences are everywhere, including the naming of the capital, Willemstad (William’s town) and the secondary, uninhabited island of Klein Island (small island). Officially known as the



Country of Curacao, a wonderful mix of Dutch, Spanish, English and the local Papiamentu is spoken, with most citizens able to flit between languages with ease. A large land mass of some 444 km² enables the development of infrastructure — specifically the persistent development of hospitality and associated services — in order to remain an attractive tourist destination. With the support of the UN, tourism and maritime business keep expanding, and current developments make the island nation highly attractive for foreign investment. OFFSHORE BUSINESS AND TAXATION IN CURACAO The Willemstad port’s shipping activities and international trade, tourism and even oil refining give Curacao a strong base to build on. Part of the Dutch ship registry, the island nation is optimising such currencies while also rapidly developing its IT and financial services sectors. In common with many far-flung destinations, Curacao is engineering tremendously attractive incentives to draw international business and investment. High net worth individuals looking for an eclectic mix of established economic activity, low taxation and possibly even residence, are drawn to Curacao for all the right reasons. The port of Willemstad already has a Free Trade Zone which contributes significantly to GDP while also facilitating the island’s survival, with Curacao importing much of what is consumed by the

• Productivity, Strategy, Profitability

population. Determined to diversify its economy, the government has also initiated the Open Arms policy, designed to attract start-ups and individual investors looking to incorporate or trade. The oil refinery in Curacao is managed by troubled neighbour Venezuela, whose state oil company PDVSA depends on the island for its despatch of crude oil to China, another strong component of Curacao’s economic life. The local currency is presently still the Netherlands Antillean guilder (ANG), although a Caribbean guilder is in the offing. US dollars cross the palms of many on a daily basis as well. In a sense having the best of both worlds — an established, traditional business base, but also a fledgling excursion into highly beneficial taxation



Curacao FDI

and incorporation policies — high net worth individuals looking to preserve and grow their wealth are investigating Curacao with renewed interest. Particularly in the current market, Curacao presents as a thriving destination offering tax breaks, returns well above average, and the surety of future financial stability — both for the island itself and individuals looking to safeguard their wealth. Dutch Civil Law governs the island’s affairs, making for relatively simple, unambiguous legal familiarity for most foreign investment. The typical constitution of Curacao companies is that of private company, limited, and shareholder liability is limited to the extent of their shareholdings. CURACAO’S BENEFITS ARE IN THE DETAILS Definitions of share capital also follow international norms, and a Curacao company may be incorporated by one or many resident or nonresident shareholders or corporate bodies. Details of local companies’ shareholders are not listed in a public registry. Well-developed financial and professional infrastructure often leans either to the Netherlands on one side, or to South America on the other. The principal current offshore sectors are banking, mutual funds, licensing, shipping, and holding companies. Curacao companies are required to file annual reports with financial statements, but only larger companies require audit. Tax-exempt businesses simply need to have their books verified by an independent consultant, making for a simplified and non-invasive approach to annual accounting. All other companies are asked to file an annual tax return, and those owned by non-residents not conducting their core business on the island are granted a license from the Bank of Curacao that exempts them from all exchange control regulations. Some transactions that involve foreign exchange are subject to a minimal 1% license fee. Repatriation

of capital or income from Curacao also necessitates a license, but this is given automatically on application. Overall, tax on offshore activities is extremely light. Since 2001, the country has enacted E-zone legislation, offering an advantageous fiscal structure to those who would do business from the island. Seeking to rise as an international e-commerce and distribution centre, online sales and subsequent distribution, for example, can be wholly separated by Curacao companies. The E-zone legislation sets corporate taxation at a minimal 2% until 2025, although it’s unlikely to jump dramatically thereafter. This 2% tax applies only to profits, and companies are exempt from import and export duties, excise duties and sales taxations. Although there is a mandatory framework such as the need for a local accountant in many cases, government interference in business affairs is remarkably low. Corporate profitability is determined along the same lines as current EU legislation. Depending on the nature of incorporation, companies may need to comply with legislation that mandates local directors’ managing their firms’ daily affairs, but several fiduciary service providers specialise in providing such services. Business with local, islandbased companies outside of the E-zone fence will attract conventional taxation of 34.5%. MAINTAINING A HIGH NET WORTH IN CURACAO Curacao’s E-zone legislation is not deemed “harmful tax competition” by the EU, making for an exceptionally beneficial structure particularly for European residents incorporating on the island. European residents can easily employ Curacao incorporation to avoid onerous taxation in their

home countries. An ideal scenario arises when all shares in a company are owned by a Dutch company, in which case, the Curacao company will repatriate money at a 2% taxation rate. Thanks to the Netherlands’ “participation exemption” legislation, the remaining 98% dividend is distributed tax-free. For foreign individuals looking to reside in Curacao, capital gains are not taxed — unless gains are derived from a period of more than five years, where an individual held 25% or more shareholding. Local Sales Tax (VAT) is pegged at 6%. Residence or work permits are easy to obtain for those having resided on the island for 10 years or more or who hail from the previous Netherlands Antilles, and new residence applications are typically well met, too. In such a small population, work permits where a company needs to advertise for specific skills before hiring abroad are easy to tweak to enable work-based residence. After 10 years, permanent residence becomes a formality. Trust formation in Curacao has only very recently been defined, and since 2011, it has been a simple and attractive option for many. In a nutshell, as long as the trustees are not conducting business on the island, funds therein remain wholly tax-exempt. Other perks include a simplified yacht registration procedure for European residents at highly competitive rates, and the ability to incorporate without immediately attracting a raft of typical obligations as elsewhere. The overall ability for people and capital to move remarkably freely between states, unlike within most of the global economic framework, remains a huge spur for many high net worth individuals looking to do business with minimal headache. Prospects for Curacao’s future are bright, as government initiatives are showing results, various sectors are rising, and giant China continues to grow — all good news for the Caribbean port island of Curacao. EG

Photo: emperorcosar /

Autumn 2019 •



Marshall Islands FDI

Investing in the Marshall Islands Genuinely favourable jurisdictions for high net worth individuals to conduct business and investment in are not as common as one would expect, and oases can be vexing to get into, thinks Rachel Smith.

hat said, even among the basket of welcoming , business-enabling destinations, the Marshall Islands are seldom mentioned at the top of the list. A closer look at the benefits of doing business in this domain calls into question why it doesn’t feature more prominently. A geographically unusual country comprising over 1,000 islands far into the Pacific Ocean, the Marshall Islands are officially known as the Republic of the Marshall Islands (RMI). For those willing to do their homework, the Marshall Islands can be highly attractive as a business base, with the government offering tailored incentives to aid foreign business and investment. Certain sector investments are exempt from paying duties and taxes, regardless of whether their founders are citizens or foreign nationals. Hospitality, manufacturing and new recreational maritime businesses, to name a few, can enjoy a full five-year gross tax exemption. The RMI are made up of two main parallel chains of coral atoll islands that number 1,200 in total. The Ratak (Sunrise) lies to the east, while the Ralik (Sunset) lies to the west. Around 200 km apart and running over 1,200 km between the northwest and the southeast, the islands that some 53,000 people call home sit just above the equator. The capital Majuro accommodates



around two-thirds of the population, together with Ebeye, the second most important urban centre in Kwajalein Atoll. Seen as open-ended residents in the US, there is a lot of movement between the islands and the United States, with the US also contributing aid to its far-flung neighbour on a regular basis. Only around 5,000 visitors come to the islands every year, making the Republic of the Marshall Islands among the least visited countries in the world. While this might seem a damper on tourism and other touristrelated business ventures, it has nonetheless resulted in several highly attractive incentives for foreign business as a whole. The US military employed several areas in the island chain of 181 km² as nuclear test sites several decades ago, and a strong US military presence remains to this day on some of the islands. MARSHALL ISLANDS OFFSHORE COMPANY FORMATION The Marshall Islands government has developed very attractive incentives to draw business to these easternmost Micronesian islands. An investment of $1 million, or paying local wages exceeding $150,000 per annum, opens up a swathe of subtle and overt benefits for foreign investors. In this predominantly Christian, Englishspeaking nation where Marshallese remains the mother tongue, the island government has long recognised the

• Productivity, Strategy, Profitability

need to incentivise business incorporation and maritime registration to attract foreign capital. Considered a cooperative tax haven in terms of OECD regulations, thanks to the practice of recognised transparency standards, the RMI’s stable political and economic climate are in themselves incentives for foreign entrepreneurs who want to incorporate offshore. The islands present as the most favourable location for particularly neighbouring Americans to establish investment or holding companies, for a number of reasons. These begin with the fact that company registration takes just 17 days, with the process defined by only five procedures that have been simplified for ease of application. In the case of initial company registration, there are no minimum capital requirements. Associated fees are also minimal, with retail business licenses, for example, costing as little as $100. Yet possibly the most attractive corporate incentive to invest in the Marshall Islands is the statutory exemption from any income tax, corporate tax, withholding tax, taxes on corporate profit, asset or wealth tax, stamp duties and even exchange controls. The government recognises that most foreign investors and corporations do not conduct their business within the Marshall Islands jurisdiction, and in order to accommodate this, has structured generous legislation around it.


Marshall Islands FDI

Photo: big sea /


To this end, foreign owned business profits are completely tax exempt. There is also no resident director stipulation on company formation, and one does not have to submit the usual annual financial statements and associated paperwork upon registration. THE NATURE OF NON-RESIDENT DOMESTIC CORPORATIONS Foreign nationals who register companies in the Islands are recognised in the category of non-resident domestic corporations. This is the RMI’s offshore company registration vehicle, which avails a generous raft of possibilities when compared to traditional domestic company formation. For example, such corporations can be taken public in order to raise capital. They can conduct third-party trading, trade as an investment advisory service and, indeed, conduct any nature of business apart from gaming, banking or insurance while enjoying such wholesale concessions. Any non-resident domestic company is also exempt from paying any local municipal or other taxes. In order to deliver on its mandated social obligations

and keep the wheels of government turning, the RMI also offer a blanket tax exemption for certain sectors to both foreign and citizen entrepreneurs. Hotels and resorts, most recreational facilities, deep sea fishing, farming and manufacturing for local use and export — or exclusively for export — are all industries that enjoy an extended period of zero obligation. The only prescriptions for qualification are that $1 million or greater be invested in the business, or that such businesses pay a minimum of $150,000 per annum in local (citizen) wages. EASY BUSINESS AND EASY LIVING IN THE MARSHALL ISLANDS Widely known as a “fixed taxation location,” Marshall Island companies pay very few annual taxes after any period of complete concession. Taxes levied are also not linked to annual profits, which implies that there is no need to submit annual returns, as tax is not determined by a company’s profitability. The tax liability is determined in advance and minimal in nature. Besides this nominal annual tax, companies are free of any other obligations — a very different picture to what is typically encountered elsewhere in the world. As an added bonus for those who spend their leisure hours on the water or travel frequently between the islands, yacht registration is also simplified. Particularly for personal use, many find the most cost-effective maritime registration here, although commercial maritime registration is comparably easy and inexpensive. Charter boats are classified as business pursuits, while private yachts remain free of commercial levies. There is, however, a large margin for occasional profitable excursions using private vessels. For the above reasons, many corporations select the Marshall Islands to incorporate — both new ventures and established companies seeking reregistration. For the purpose of avoiding onerous tax in their home countries, many investors and high net worth individuals have been known to take advantage of the

islands’ minimalist stance on tax in general and minimal individual obligation to fill government coffers. While some establish their affairs here on paper, many in effect end up living here, too. With local sales tax only 2-4 percent, living is simple and inexpensive in this dollar economy. In terms of running an established business based in the Marshall Islands, company obligations are 7 percent retirement fund contribution, 3.5 percent healthcare, with employees enjoying maximum taxable wages of only $5,000 per quarter. Foreigners wishing to make the islands their permanent home can investigate citizenship by investment options. Joining a swathe of other remote islands, the Marshall Islands still run on a personalised application system where foreigners merely need to send a letter to the relevant authorities to apply. While a formally established practice elsewhere, citizenship by investment is also broadly doable in the Marshal Islands. Such arrangements are not onerous in terms of minimum investment requirements, and individual applications are considered on merit. Exceptionally beautiful as a holiday destination and residence, the Marshall Islands eclipse many other tax havens when it comes to long-term benefits such as savings on registration and taxes. The complete lack of prying eyes into one’s personal wealth and even business conduct makes the country an attractive destination for many who would simply preserve their wealth. It is prudent to note that the islands are listed as under threat from immersion due to global warming, according to green watchdog bodies. Estimates vary on timelines, with the more dire predicting major loss of habitat by 2030, yet to date, all remains business as usual. To any foreign company incorporated in the islands but trading elsewhere, and for that matter, for any high net worth individual looking to avoid taxes by investment in the islands, this possibility might be noteworthy, yet of negligible immediate concern for the intended business purposes. EG Autumn 2019 •




Investing in Zug When you have considerable capital and you wish to get the best out of it without giving half of it away to opportunistic politicians, a sure bet is to invest it into a jurisdiction with generous taxation laws. You can find those places all around the world and make your choice depending on your personal and professional interests. The options are many. However, few “tax havens” get as heavenly as Zug, thinks Oliver Taylor. ug, the capital of the Canton of Zug in Switzerland, lays at an equal distance between Lucerne and Zurich. According to a study by Credit Suisse, this little Swiss-German city offers its residents the best quality of life in terms of taxes, education, transport and employment. In fact, Zug itself is the richest canton in Switzerland, with the highest average income, followed by Nidwalden and Glarus. The economy is booming, wages are high and the active real estate market is in a favourable position. The capital is defined by its distinctly serene setting: beautifully renovated farmhouses, dreamlike meadows, lovely lakeside homes and prestigious city apartments with views on the Lake of Zug. It is about as clean as a city can get, treating its citizens to gorgeous parks, optimal security, a high level of education and a great location in proximity to plenty of points of interest.


ATTRACTIVE FOR BUSINESS With the decor consisting of bourgeois houses, narrow streets and mansions in a particularly medieval style, its historic ambiance proves incredibly immersive! Zug’s setting, both physical and economic, has earned it international renown. In fact, more than a quarter of its population consists of foreigners. It attracts newcomers from all around the world with its multicultural, linguistic and gastronomic allure. The Canton of Zug also enjoys a tax policy unlike any other in the country. Each canton, as part of Switzerland’s federal system, gets to choose and apply its own rules of taxation. Zug’s attractive jurisdiction has proven to be a welcoming home for the headquarters of companies like Siemens, Xstrata and Glencore. That is, in no small part, due to the fact that its tax rate on corporate profits is the lowest in Switzerland and businesses are only required to pay taxes on their local turnover. Since most such companies earn their money abroad, the canton


Photo: Sam Chadwick /


• Productivity, Strategy, Profitability

proves to be their ideal jurisdiction! If we’re talking numbers, it is an absolute champion of tax planning. The profit tax sits at 4% for annual incomes below 100,000 CHF and only rises to 7% if profits exceed this threshold. Thanks to the tiny tax of 0.02 for each 1,000 on the capital of holding companies, the canton has attracted over 200,000 businesses to relocate on its soil. HALF THE TAXATION It is also worth noting that taxation there does not only go easy on big corporations. The citizens of Zug (called Zuger or Zugerin in German) are kept happy as well. They pay half as much tax as any other canton in the country and enjoy an incredibly attractive real estate market! EG

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Enjoy the best New York has to offer by staying in this prestigious luxury Manhattan apartment rental. Your private luxury condo has postcard-perfect and sensational views of Central Park and is situated in one of the most celebrated luxury buildings in all of New York. Amenities rival those of a five-star hotel and feature a health club, gym, and round-the-clock room service in the city that never sleeps. Make yourself at home as you enjoy the spectacular Central Park views. The spacious main living area features large windows, plush sofas and white oak hardwood floors. Dine at the large modern glass table with six neutral-colored side chairs. This spacious apartment is located in a prestigious building at the south border of Central Park. As our guests enter the grand foyer of our two bedroom residence they have immediate central access to the master bedroom, dining room, Kitchen, and living room.  In the master suite, guests will find a plush king-sized bed, a 40 in HD flat screen television, 2 sizeable walk-in closets, and a private bathroom equipped with marble flooring and heat lamps. The Two bedrooms boast en-suite bathrooms. In the master, sleep well in the king size bed and enjoy the added convenience of walk-in closets. The master bathroom features marble floors and heat lamps. The second bedroom can be configured as either a twin or queen size bedroom upon request, and includes an en-suite marble bathroom, an office bureau and a mini kitchenette. A sleeper sofa in the living room provides additional sleeping space. There is an option to add a third bedroom which is right next door to the two bedroom unit with a separate entry through the hallway and is not interconnected with the two bedroom unit.  The residence houses newly refurbished white oak hardwood floors that truly complement the architecture and furnishings. Large windows offer our guests an unparalleled panoramic view of picturesque Central Park and its lush green foliage, a sight that most do not have the privilege of observing. In addition to our enormous master suite, our spacious living room is a second option for comfortable sleeping arrangements, but don’t let the idea of an upscale pullout-sofa fool you. The guest(s) who decides to retire in the living room is awoken to the very best view in all of New York City. 


Global Outlook

Mortgages in Hyperinflation - A Venezuelan Case Study

In contrast with the past, mismanagement and offshore loyalties in the top tier, are presently enough. Managing a country’s affairs for the benefit of the citizenry was always an ideal, a dream. Today, it can be considered a bad joke — and the global economy has never been more brittle for many nations’ citizens.

Did the global economy ever truly recover from the sub-prime lending fiasco years ago? A new and rather nasty tone has infiltrated financial reporting over the last few months, writes Shannon Berkley.

HYPERINFLATION DEFINED Hyperinflation typically comes about as the symptom (and a subsequent cause) of severe recessions. As investors and consumers lose confidence in the government’s ability to manage the financial situation, faith in the currency plummets, and the money trust is broken. It was economist Phillip Cagan who, in 1956, defined hyperinflation as monthly inflation rates above 50 percent. Typically, however, it can be a slippery slope after a country’s inflation rises in excess of 50 percent a month. Hyperinflation gives rise to units of currency worth billions in a single note, and thus worth nothing at all. The repercussions of hyperinflation reverberate among lenders and borrowers. “Settling debt” takes on skewed meaning, credit dries up and currency becomes worthless. Case studies of Venezuela, Zimbabwe, and even as far back as the Weimar Republic of Germany, show destitution and hopelessness essentially returning a people to peasantry under conditions of hyperinflation, which happens when the country’s bond market goes bust. At this point, a sovereign nation can no longer fund itself. With falling bonds, the government either defaults or starts printing money. Rising interest rates subsequently consume a large portion of the

he term (or threat of ) “hyperinflation” has become commonplace, and points of view often pivot around stemming any monumental collapse of local or global markets, as well as how to steer clear of terminal loss-making situations. Looking back to the last decades before the turn of the century, those previously relatively simple and solid markets are forever changed. Dark commentary has increased, particularly around the Federal Reserve’s behaviour, while the world may also, at the same time, be witnessing the toppling of the US dollar’s charmed status. Almost 1.4 billion Chinese nationals are hard to argue with, and Beijing understands only too well that it needs to instil the notion of the yuan as a reserve currency. Even if it is only partially successful, the old world will forever be gone. From distant vistas, the gritty machinations of the global economy are now very directly impacting retail investors, consumers and business at large. Some incredibly poor management, some aggressive currency manipulation, the slow squeeze necessitated by the subprime handouts, as well as political allegiances and hostilities, have seen a number of nations go into hyperinflation in recent history. It is


worth noting that the last prompt for hyperinflation played out in many countries post WW2. A world war, then, was what it took to savage an economy to ridiculous levels. Over the last few decades, Angola, Brazil, Bulgaria, Mexico, Yugoslavia and Zimbabwe have numbered among dozens of countries that have suffered hyperinflation, laying bare what many thought to be impossible volumes of debt. The persistent push for profit inherent to capitalism, has allowed at least unethical and risky behaviour by money handlers and governments alike. The incestuous nature of global finance in 2019 means that no war is needed to spark hyperinflation anywhere.

Photo: Ruben Alfonzo /


• Productivity, Strategy, Profitability


Global Outlook

national budget. The spur of a government or its central bank printing money, causes consumers to lose faith in the currency value, and it is only a short route to collapse from there. In likely the most modern and classic case of an A-Z hyperinflation scenario, Venezuela in November 2016, was experiencing disruptive political and socioeconomic turmoil. Indeed, since 1983, the country began posting double-digit annual inflation figures. Leader Hugo Chávez pointed to decreasing inflation rates over a period of years until his succession in 2012. Nicolás Maduro took over in 2013, and turmoil peaked in 2016. Inflation in Venezuela had increased to over 1,000,000 percent by 2018. Unbelievably, the figures that Venezuela has recently been defined by have exceeded those of Zimbabwe during its period of ridiculous hyperinflation in the early 2000s. In a nutshell, in a country dependent on oil for around 90 percent of its foreign earnings, a slump in the oil price in 2014 hit Venezuela hard. Caught within a bold strategy of supplying its neighbours with subsidised oil for political allegiance, the economy reeled, the bolivar became a pariah currency, and supermarket shelves stood bare. In a recent CNBC report, commentator Valentina Sanchez touts “shock therapy” as a viable solution to Venezuela’s current hyperinflation of 10 million percent. Water stops coming out of taps, groceries stop filling shelves, all semblance of normal economic activity fades, and people perish as a direct result of hyperinflationary episodes. Desperate times call for desperate measures. Indeed, while Brazil, Nicaragua, Argentina, Peru and Bolivia suffered severe hyperinflation between the ‘80s and ‘90s, the current ongoing hyperinflation in Venezuela is worse. Predicted by the International Monetary Fund as the likely figure for end 2019, Venezuela has hit 10,000,000 percent inflation ahead of schedule. HYPERINFLATION AND DEBT The impact of interest rates upon fixed and variable debt, as well as the effect on house prices under hyperinflation makes

for grisly viewing. During hyperinflation, central banks usually up interest rates to dry up liquidity, encouraging people to save rather than spend. This is expected to dampen inflation as spending dwindles. Typically, the pointer for consumer economic wellbeing, mortgages are often either on a fixed or variable rate. During hyperinflation, those who had secured a fixed interest rate are better off, while those whose optimism drove them to select a variable rate are often faced with impossible obligatory payments in a currency that has lost all meaning. Hyperinflation also affects the value of the property itself. Although it is usually better to have bought in before hyperinflation impacts mortgages, the ultimate value depends on whether payments remain manageable during this time. Many consumers lose their homes as they cannot maintain payments under such unnatural conditions. All things considered, very few glean any longterm benefit from hyperinflation ravaging the country’s economy. THE ALL-IMPORTANT CHAIR Policy from successive US Federal Reserve Chairs, from Alan Greenspan to Ben Bernanke and Jerome Powell, has led to a current malaise. Malinvestment, asset price bubbles, misallocations of capital and price discovery mechanisms have been completely corrupted. If the Fed’s policies over recent times were consumer goods, they would be returned to the shop for a refund by the rational consumer. Far from cutting off the hands that impoverish a nation, Fed policy has rather wilfully or otherwise contaminated

everyone with the suffering caused by manipulative avariciousness and the excessive greed of the few. Although national economic management has a formula that usually contains elementary, broad steps to contain risk — including the risk of unmanageable hyperinflation — the Fed’s persistent approach has not resulted in a safe economic environment. The blatant truth is that countries like Japan which have previously avoided hyperinflation in spite of all the necessary factors weighing in, have had savings. Countries with reserves to fund daily life are those that best escape when hyperinflation looms. As a whole, reserves are typically alarmingly low in the modern nation state. Rather than prop up the system that gave rise to the sub-prime collapse, the Federal Reserve should be adopting a more mercenary strategy that protects the citizenry as a whole. Strategies to ward off hyperinflation as needed vary from country to country. There seems no one size to fit all, as factors are varied and often hard to evaluate before things collapse. Yet one persistent truth remains universal: governments need to be less fearful of tarnishing the gilded perceptions of “everything’s OK” as hyperinflation precursors accumulate. Far greater reserves than typically mandated are needed if any country is to steer well clear of hyperinflation when disaster strikes. It may seem disingenuous to suggest that greater honesty would go a long way towards eradicating the very possibility of hyperinflation in the future. Yet the phenomenon almost always exposes the huge lean towards lending every dollar, milking every loan, and squeezing for more until something breaks. “Conservative” as a term means many things, but a decidedly conservative strategy that demands substantial reserves of both citizens and lenders, along with far greater oversight of private money houses, is the only strategic cure for the hyperinflation that has ravaged so many countries in such a short space of time. Nothing beats fiscal caution, discipline and extreme conservatism. Detractors point to a stifling of economic growth and the national sense of wellbeing, but the cost of hyperinflation for any country is too high. Worthless trillions, to be precise. EG

Autumn 2019 •



British Politics

Ever Closer Union? Brexit, from the citizen’s perspective, has become a disgrace. Although British politics have always been rather frank about engineering things to go a certain way, with snap referendums and impromptu votes peppering the litany, Brexit has become an albatross around the nation’s neck, states Oliver Taylor.

Photo: Xinhua / Alamy Stock Photo


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British Politics

hameless politicking, it has to be said, has thwarted what could have been a far simpler, far more British, modest exit. Showing more self-interest than any real integrity, the British population has become fed up with political shenanigans that plainly delay what was once a clear and democratic choice. It is worth remembering that already in 2007, members of the European Parliament were expressing serious reservations about aspects of an EU constitution. Those concerns were enough for the British public to vote to exit the EU, being unwilling to subject themselves to what remain possibly unspoken special interests behind the whole concept of union. What has ensued has been a vulgar display of those interests obfuscating and holding Britain to account for its desire to leave the might of Brussels behind. The average Briton’s ire, however, is currently focused on the home front, where local politicians have been so busy point-scoring and playing oneupmanship that Brexit has yet to happen. A microcosm of the political jostling in the European Parliament, British politics is starting to anger British people. The Irish were forced to vote twice on the issue of unity, and the current staging of general elections


(unusually due in early December — the first time a British election will happen in the month of Christmas) by UK Prime Minister Boris Johnson, is tainted by the same shenanigans. Although Johnson wants to win a majority in order to pass his Brexit deal, and is not contesting the fact of Brexit itself, the current politicking is exasperating the citizenry. Johnson’s “deal” for an exit has to be sanctioned by parliament, and it’s becoming grittier and more convoluted with each passing week. Leader of the Brexit Party, Nigel Farage, initially responded to Johnson’s scheduling of a general election by saying his party would contest every seat possible. He subsequently deviated and said that his party would go hammer and tongs for Labour seats only, ostensibly to avoid splitting the Brexit vote. Labour under Jeremy Corbyn has become a pariah to many, and some feel the party could suffer a major defeat in the background of overarching Brexit concerns — some saying so from within the ranks of Labour itself. Farage was adamant about a clean break Brexit, but now seems to have softened that stance, likely in a bid to limit backlash if British political posturing continues much longer. As things currently stand, the election is now scheduled for Dec. 12, 2019. Although a UK general election is not normally an acrimonious affair, there will be a lot of sour in

the mouths of ordinary people when Britons go to the polls in December. BRITAIN MAY PROVE TO BE THE FLOAT ON A LONG LINE It appears that the longer an actual Brexit takes, the surer the British public becomes that it is the right thing to do. Unfortunately for the EU, euro-scepticism is being exacerbated elsewhere, as other nations watch with interest at how “obligations” and other terms from the EU come into play. Ireland particularly feared the common defence force an EU would spawn, as mooted by the Lisbon Treaty, something that is now a reality. While casual observation might show Britain having to wrangle modestly in order to exit the union, more damning for the future of union might well be the example Britain really paints of a nation trying to extricate itself from the sticky EU web. Britain might well be an indicator of future issues with other member states, as the world watches the quid pro quo between London and Brussels. For now, disappointment in watching their votes not count to date has vexed the British population. The coming elections are likely to discern some unusual motivations, regardless of the turnout, although likely to be substantial. The unpalatable truth of union is still the structure of big bosses, the top tier, the top cabal, now to be housed far away from local concerns. The longer British politicians dally with Brexit, the more they’ll be lumped into the same basket. What the architects of union have consistently downplayed is that it’s a very polite and ostensibly democratic notion, but also the gameplay of any committed dictatorship. The reality visible in Britain’s squirming to exit, both for Britons and any other nation bothered to look, is that of a far more remote, uncaring master in Brussels. From a clean vote to exit, years down the line, the contamination by association is bending British politics in all the wrong directions. ”Ever closer union” is a stance enshrined in the EU Treaties. That might sound warm and welcoming, but the reality as it plays out in the lives of British nationals right now is anything but. The very notion demands a huge amount of trust in common decency and shared aims, and look where that got America. The US today is a nation of puppets, blindly manipulated into “voting for” candidates whose only common denominator is that nothing will change for the better after they’re elected. It was French President Emmanuel Macron who recently blocked the three-month Brexit postponement that Britain requested, although unlikely spurred by concern for the British electorate. Rather, those on board likely fear Britain becoming a noisy child, graduating from a “naughty child,” and one that will lay bare the elegantly imagined democracy of a European union for what it really will become. The EU is happening — it still has a critical mass of participants. Many commentators are

watching Britain’s current political furore, however, and cannot but draw the unpleasant conclusion that they’re seeing an ugly power struggle at play. Always suffused in the “joy of union” rhetoric, Brussels looks less like a regional saviour right now than a polite tyrant, remotely forcing a European state to jump through hoops of fire merely to exit union. THE EU REALITY CANNOT SUPERSEDE INDIVIDUAL RIGHTS The British electorate voted “no thanks” in what now seems a long, long time ago. Instead, they have been dragged through obligation and consideration time and again, with Brexit becoming a rallying point, a terminal issue, a thorn in the public flesh. It’s notable that the referendum among the UK’s citizens was not, in fact, played out in all EU member states. Indeed, a simple calculation points to the decidedly non-democratic arrival of the EU. There are 27 member states, and there have not been 27 referendums sampling nations as to whether the common man actually wants union to come about. As the political class continues to kick the can down the road — many for the purpose of subverting the result of the referendum, as has been done in so many other EU nations — the fundamental dichotomy between free and independent, thinking individuals and the authoritarian establishment chosen to govern them is being exposed. The warnings of erstwhile British Prime Minister Margaret Thatcher concerning EU federalism, a European Central Bank, and centralised military control seem particularly poignant now. Her Bruges speech of 1988 saw her at pains to point out that the then- European Economic Community (EEC) plans were around political union, as opposed to being merely a friendly business overture concerned with economics. Thatcher said at the time, ”We have not successfully rolled back the frontiers of the state here in Britain, only to [see them] be reimposed at European level with a European superstructure exercising a new dominance from Brussels.” She warned that the advent of the euro would spell the end of democracy as European nation states understood it. Snapping at jeers from the gallery, Thatcher said then that the euro was nothing short of “federal policy by the back door,” and she despised it. Britain is the current poster child for the rather ludicrous nature of EU institutions, think tanks, and organisations holding member nations to ransom. The “United States of Europe” actually slipped in with the Lisbon Treaty some time ago. Now, the bluntly uncompromising and anti-democratic nature of such institutions, as they march forward in their quest for centralisation of power through “ever closer union,” seems beyond doubt. A union of nation states where the sovereignty, autonomy and ultimate destiny of individual members is stifled and strangled for the joys of a collectivist federal state, is all Britons can see. With rising frustrations and a growing sense of disbelief that something so clear can become so convoluted, all British eyes will be on the coming elections. At stake is more than Brexit, but also the nation’s ability to perform according to its own understanding of democracy, at the risk of losing British autonomy forever more. EG Autumn 2019 •



Cathay Pacific

Business Travel With Cathay Pacific Imagine taking an intercontinental flight that lasts a good eight hours. Traveling is exciting, but it can often come with a load of troubles that will mercilessly drain you of your energy, writes Rachel Smith. ow, imagine that eight-hour flight -check-in lineups, customs, trying to locate the correct gate, waiting for boarding, kids being way too loud… Oof! Once you touchdown at your destination, you are lucky if you managed to catch some shuteye during the flight, otherwise you’re about ready to crash. Such is the reality of economy class flights and that’s why we’re going to look at some of the most comfortable and luxurious options available on the market instead! As the world continues to open its borders, as people travel more and more across the globe, the airline industry is rapidly advancing. It’s a business that runs on deals - each one more interesting than



the other, and companies are constantly competing to offer the best service to their clients. And there are so many! How do you know which one to choose? Some offer good cheap flights, others specialise in luxury, some are just not worth your time… Therefore, we’re constantly on the look-out to find the most suitable options for your travel plans. THE FINE DETAILS Now, a company that truly takes the cake in terms of quality is Cathay Pacific - a Hong Kong-based airline that serves nearly 200 destinations in Asia, Europe, North America, Africa and Australia from its hub at Hong Kong International Airport. It is widely considered to be among the most esteemed

• Productivity, Strategy, Profitability

airlines in the world, having been voted airline of the year 4 times (in 2003, 2005, 2009 and 2014). Skytrax rates it a whopping 5 stars! It is also a founding member of Oneworld - the world’s third largest airline alliance, just after Star Alliance and Skyteam. Cathay Pacific was founded by Roy C. Farrell and Sydney H. de Kantzow in Hong Kong, on 24th September 1946. It began by connecting Manilla, Bangkok, Singapore and Shanghai, which led to a rapid expansion and, in 1948, Cathay became one of the most profitable companies on the Hong Kong exchange. In the 1960s, the company extended its operations to Osaka, Fukuoka and Nagoya, and Japan. Enjoying continuous growth throughout the


Cathay Pacific for your flight a little earlier, because some gates are quite far from the lounge and can take an extra 15 minutes to reach. Following a quick and painless boarding, you may find yourself aboard the A340-300. What’s particularly great about the business class seats is that they are arranged in diagonal formation, which offers a great deal of privacy, completely isolating you from neighbours in front and on the side if you wish to be alone. The seats are lined with a plastic coating that mimics the texture of textile in shades of beige and ultramarine blue. Each place is equipped with a foldable reading lamp and a power plug. The seats can be adjusted at the backrest, lumbar and feet with two automatic positions, switching between the reclined position for sleeping and the sitting position for take-off and landing. The comfort is nothing short of amazing and it’s actually well adapted for those who wish to take a nap — you get a homely blanket and two pillows, one of which is especially soft.

Photo: Stars and Stripes / Alamy Stock Photo

rest of the century, by the beginning of the 90s, it was actively serving many destinations across the world, including Paris, Zurich, Amsterdam, Vancouver, Rome, Manchester, London and others… Nowadays, Cathay Pacific is one of the best companies to fly with, especially if you’re heading for Hong Kong, China or anywhere else in Asia. Its business and first class flights live up to the reputation of the company with optimal privacy, a wealth of Asian culture in entertainment and gastronomy, and an efficient, professional service. Read on for a review of some of its most remarkable features. Business Class from Hong Kong. Your experience begins with the airport. As you await your flight at the Hong Kong airport, Cathay Pacific invites you to spend some quality time at The Wing lounge. It is a modern and luxurious piece, clad in imitation stone walls with soothing tones and comfortable armchairs. There is a dining area and a very popular noodle bar, as well as self-service computers and free internet access within the lounge. The computer area is quiet and perfect for working, equipped with armchairs so comfortable that it’s almost too difficult to get up. Cozy seats aside, we advise you to depart

QUALITY SERVICE AND FIRST CLASS The service isn’t lacking either! You can expect to be offered a selection of champagne or fruit juice before the take-off. Once the plane is in the air, you will be given an amenities kit including socks, a night mask, toothpaste and skin products, along with a refreshing towel and a snack. Do not miss out on their selection of cocktails - these are delicious! When it’s time for lunch, Cathay’s menu features traditional food, where you can expect to find high-end dishes prepared by dedicated, renowned chefs. In terms of drinks, there is a selection of wines including Sauvignon, Sancerre Drouet, Shiraz RockBare and more. Once the lights go off, you get to enjoy their Studio CX entertainment system that offers an impressive choice of over 300 TV series, 800 music albums, 100 movies and 70 video games. There is something for every taste, from Hollywood blockbusters to Chinese action movies - you will find a wealth of content to keep you entertained! The comfort, privacy and service that you will find on Cathay Pacific’s business class, rivals some of the first class flights of other companies, and many business class seats aboard other airlines don’t offer anywhere near its quality. Now, if you were intrigued by the luxury of the business class, we invite you to check out the perks of flying with Cathay Pacific in first class! In fact, in the beginning of 2019, the company had accidentally listed its first class tickets at the price of economy class… And, despite the error, it has pledged to deliver on every booked flight, so dozens of people have had the chance to test its most opulent service! Flying with Cathay Pacific first class, you may find yourself enjoying the quickest boarding you could ask for. From Chicago to Hong Kong, it was an absolute treat! A hostess will show you to your place, which you will learn to be one of the most intimate experiences when it comes to airplane travel. Aboard the Boeing 777, the seats are set in a 1-1-1 configuration. It’s one of the most private cabins you could possibly ask for among first

class flights, unless you’re going all in and getting a private suite! A VERSATILE OFFERING TO CONSIDER Though, speaking of private suites, that is exactly the word you would use to define your seats. While there are no walls separating you from the rest of the hallway, even compared to some of the most expensive seats on the market, you are guaranteed to be in your very own personal space bubble no matter what! Perhaps the only eye contact that you could have with another passenger is when you’re waiting for the toilet! Additionally, the 80-inch flat bed aboard the 777 is one of the most comfortable beds you could wish for in the sky. The 500-thread duvets go quite well with the chair massage. And, with the extended dining table option, you can enjoy a meal with a companion, if you’re traveling with a friend, who can sit on the ottoman. Even if there is turbulence, they can remain in place, because the ottoman has a seatbelt of its own! As of January 2019, Cathay Pacific has unveiled its new onboard dining concept called Hong Kong


Flavours which offers first class passengers a taste of local flavours. The menu features such dishes as lobster wok with crispy rice and steamed rice noodle soup, fish or braised soy chicken with Chinese sausage on jasmine rice, and more…Hong Kong Flavours celebrates the diversity, the richness and the wealth of Hong Kong’s culinary traditions. This variety of local specialties prepared for Cathay Pacific passengers are offered on long-haul flights in all travel classes, departing from its hub at Hong Kong-Chek Lap Kok Airport. Perhaps you will get a chance to enjoy a glass of Krug and an appetiser of mango and shrimp. More champagne? You got it! Caviar and blinis, cream and chopped eggs — there is something to satisfy even the most discerning traveler! Another detail international travellers may enjoy aboard Cathay Pacific’s first class flights, is the fact that they have hired teams from all around the world. You may find yourself with an Australian captain, while the two first officers are Chinese and the second officer is American. Considering the versatility of its offerings, the quality of its service and safety of its flights, Cathay is most definitely among the top companies to consider for your first and business class flights! EG Autumn 2019 •




The Bombardier Challenger 605 Even the world’s most opulent first and business class cabins have their downsides. You may have a suite all to yourself, but you would still be just another customer among many others, bound by flight schedules, any potential delays, baggage check-ins and check-outs, and a whole plethora of unfortunate, yet necessary realities of airplane travel. Now, imagine a different scenario, writes Thomas Hughes. ou recline within the most luxurious seat in a cabin that is absolutely yours to do with as you please. Whether in peaceful quietude or in your entourage of partners, family or friends, you get to spend quality time whilst traveling the world. You set your own schedules, you plan where and when you need to land, and you get to enjoy whatever selection of drinks and meals you wish during the flight…Nothing can quite compare to the feeling of slicing across the international skies within the comfort of your very own private jet. So, now you want your own personal airplane. Which one do you get? It’s an alluring purchase, but the options are many, and how do you know which one is right for you? We constantly scout the market for the best jets out there, so read on to find out more!


SPACIOUS AND COMFORTABLE This time around, we would like to introduce the Bombardier Challenger 605. Part of the Bombardier Challenger 600 series - a family of business jets in the super-midsize category produced by Canadair from the early 1980s, the 605 was introduced in early 2006 with improvements from the 604 in avionics and structure. Among other things, it features larger cabin windows and a new display system for pilots. Speaking of pilot systems, seeing as your pilot’s efficiency is instrumental for your safety, the Challenger 605 features a fully configurable Rockwell Collins Pro Line 21 avionics suite that offers pilots instant and intuitive access to critical flight data. The integrated package includes four vertically aligned, 10”x12” LCD displays and the Rockwell Collins Integrated Flight Information System (IFIS). Now, in regard to your own comfort, the 605 is renowned for its particularly commodious 1,150-cubic-foot cabin. It is 8.2-foot wide, and offers 6 feet of headroom, which is plenty of space


Photo: ITAR-TASS News Agency / Alamy Stock Photo


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to avoid feeling like you’re crammed into a can! The spaciousness is reinforced by its wider windows, that are set higher, on eye-level with a seated passenger. The configuration of the cabin is normally set up for 9 passengers and it can be adjusted between individual, fully reclining chairs or couches lining the sides. Each seat is equipped with sidewall tables and footrests. A WELL BALANCED JET The Bombardier Challenger 605 is particularly popular with long flights, having a maximum range of 4,000 nM and a take-off weight of 21,863 t. Sitting at $26,700,000 USD, it is also among the more affordable jets on the market! While it is primarily used by airline companies, some celebrities own it personally, such as Lewis Hamilton. Overall, the 605 is a very well balanced jet with great features and a competitive price tag. EG

APR IL 21-23, 2020

SAVE THE DATE FOR THE PREMIER BUSINESS AVIATION EVENT IN ASIA Business aviation is an important emerging market in Asia, driving economic output and providing organizations opportunities for growth. Over the course of three days, from April 21 to 23, the Asian Business Aviation Conference & Exhibition (ABACE2020) will provide the perfect venue for those considering purchasing an aircraft as investment opportunity; companies thinking of using an aircraft for business; and flight departments who have long used aircraft as a critical business tool. There is no better place in Asia to discover every facet of this dynamic industry than at ABACE2020.



Sheridan Resolutions Ltd

Executive Coaching For Leaders Our interview with CAROLINE SHERIDAN, CEO at Sheridan Resolutions Ltd, examines the importance of executive coaching and leadership development for companies. Executive Global investigate why an organisation is only as successful as its people, as we catch up with one of the UK’s pre-eminent coaching and leadership development specialists. How may executive leadership coaching for senior management productively benefit an organisation at lower levels? Almost every organisation ultimately takes CS its tone from the top. So those at the top show a certain set of management behaviours, the next layer down will seek to demonstrate them too, and then the layer below that and so on. Effective leadership has well-proven benefits for retention and morale, which in turn obviously boost productivity and profitability, and hence the organisation’s ability to look after its people better. EG

Why is it so important for board level executives to undergo an extensive coaching programme? Many executives are promoted because they CS are technical experts and integral to the business in that way. However, not all players make good managers. Board level executives must additionally be able to persuade, convince and deal with conflict, and the technical expertise which has got them to the Board will not always help them so much when they get there. EG

Is there a great correlation between senior level executives who have undergone a leadership development programme and their continued success? Our experience tells us that there is such a CS correlation provided that both the content and delivery of leadership programmes are tailored to executives’ individual needs and those of the business. EG

What has your extensive experience as a CEDR Chambers Mediator taught you about dispute resolution? EG


Two main things. First, workplace disputes are often fed by issues arising outside the workplace. This may not even be clear to the complainant until the safe space of the mediation allows it to emerge and be taken into account as necessary. Second, far too many businesses see mediation as the end-point of a grievance process, where I think it is far more effective right at the beginning , before positions become too entrenched. CS

How important is team coaching to strengthen morale and encourage a balanced collective outlook for management? Team coaching is on the increase and while CS not every team will benefit equally from collective coaching of this sort, there is certainly no need for there to be active problems before team coaching can be positive. It helps surface issues which all the team might each have seen as someone else’s to raise and helps different levels within the team see others’ perspectives. That won’t mean that difficult decisions or difficult conversations won’t be necessary, but where there is greater awareness there is greater understanding and that in turn brings less conflict. EG

What are some of the greatest challenges have you faced in your career as a successful executive coach and mediator? Initially, the biggest challenge was just CS awareness – business leaders and employee representatives saw mediation as a “fad” and not as a means of resolving workplace disputes at minimum cost in time, money and important professional relationships. The industry has a way to go on that but we are definitely making progress! The same is

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true of executive coaching – it has taken a long time for it to be commonly accepted at Board level that coaching can be a more efficient developmental tool than pressure imposed externally through the threat of formal processes. Tell us about the positive impact your firm has had on organisations in the financial services sector? Sheridan Resolutions has directly influenced CS building a UK-wide inclusion cultures for major retail and international banks, implemented a global 360 degree review process for a leading Exchange and presented well received female leadership programmes within asset management, and its appointment as sole provider to Lloyd’s for all coaching services, enables us to surface organisational themes which might otherwise be lost by a less cohesive service. EG

You have wonderful testimonials from some of the UK’s premier banking and academic institutions. What can clients expect when working with you? Thank you. We are always delighted when CS clients take the time to tell us what they think. Sheridan Resolutions prides itself on the commitment which clients will know that we put into their work. Our clients know that they will get a product tailored for them, that we will not offer them any service we cannot provide to the highest standards and that whichever of our associates they use, they will be getting among the best in the market. EG EG

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We are always delighted when clients take the time to tell us what they think.


Association of MBAs

Supporting business educators to have an ever-greater impact on communities and society AMBA & BGA’s financial year ended in September and I’m pleased to report a record year, in terms of growth. In 2018/19, we hosted three of the biggest events in the organisation’s history in Istanbul, Quito and Oslo, welcomed our 270th AMBA-accredited Business School, and were pleased to reach 45,000 student and graduate members. Photo: Matej Kastelic /

Article by

Andrew Main Wilson


ut, beyond accreditation and membership, AMBA & BGA is focused on exploring and promoting the impact that its networks of Schools, make on the business community and on our societies, with the view that business education is a force for good in an uncertain world. One of the most rewarding parts of my role as CEO of AMBA & BGA is having the opportunity to meet with deans, MBA directors, students and graduates from Schools across the world, share insights and ideas with them and discuss ways in which AMBA & BGA can support our growing family of Schools in facing the challenges we face collectively, and devising solutions to complex problems in our world.


DEVELOPMENTS IN LATIN AMERICA As such, AMBA & BGA has appointed a Latin America Advisory Council, which will be instrumental in developing management education in the region and in reinforcing our relationships with Business Schools. Enrique Bolaños, President of INCAE Business School, with campuses in Costa Rica and Nicaragua, has been appointed as the Chairman of the Council. The creation of the Council comes just months after the launch of the Business Graduates Association (BGA), a global membership organisation of Business Schools committed to responsible management practices and lifelong learning, and to providing positive impact on their students, communities, and the economy. The AMBA & BGA Latin America Advisory Council aims to help shape the future of business education in Latin America through enhancing Business Schools’ business models in the region; advise AMBA & BGA on relevant themes and major trends that influence – or may influence in the future –business education in the Latin American region;


champion responsible management and ethical business education in the region; support Business Schools in cementing their relationships with the corporate world; promote collaboration and networking among Business Schools in the region and those across the world; provide advice to AMBA & BGA to identify and/or better understand the


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needs and expectations of the region’s stakeholders; and explore ways in which Business Schools can have an ever-greater impact on communities and societies. FUTURE GLOBAL DEVELOPMENT In addition to Mr Bolaños, the Council is comprised of eminent deans and Business School leaders from another eight Business Schools across Latin America. This Council of highly-respected Business School leaders will be pivotal in generating impact in business education throughout the region and beyond. The first meeting of the AMBA & BGA Latin America Advisory Council took place in early September, and we’re already working towards implementing the plans discussed. We’re also looking to develop further regional councils to ensure we’re mindful of the regional perspectives across our global network, and that we are able to respond to local – as well as global – challenges, in offering support and services to business leaders. EG

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Sun Yat Sen University

Lingnan’s Leading MBA Programme We sit down with Kevin Li, associate director at the Lingnan (University) College of Sun Yat Sen University, to discuss why this award-winning institution’s MBA programme is among the top ten programmes nationally and currently still enjoys an unshakeable position in Southern China. Does the Lingnan MBA program count any famous entrepreneurs, in China or abroad, among its alumni? Lingnan MBA is a young and developing KL program and our alumni are actively involved in different industries. We certainly do expect some famous entrepreneurs come from them in the future. EG


What has been the greatest challenge the program has faced since its inception in 1998? From the very first day of the Lingnan MBA KL program, the greatest challenge has been always the same; to complete with other famous business schools with an excellent reputation internationally. EG

What are your proudest achievements in how the program has developed over the two decades of its existence? More than four thousand alumni graduated KL from the Lingnan MBA and they have subsequently contributed greatly to the growth of China and the world. EG

Considering your status of excellence among academic institutions, what are some specific qualities that set your program apart and above the rest? We heavily focus on the application of what KL our students have learned from the class, and it is part of the fundamental core in our “Projectbased Learning” program.

Can students count on the guidance of professionals actively working in the business? If so, do you have partnerships with any notable companies or individuals? Of course, we have a very good relationship KL with The People’s Insurance Company (Group) of China, as well as the Ping An Insurance (Group) Company of China, in addition to Olympus China, Deloitte China, and many others. EG


Once the program receives the AACSB EG accreditation, how do you plan on improving it even further? Lingnan MBA is a triple-crown accredited KL program with AACSB, EQUIS, AMBA accreditations and we will continually improve the


In terms of social life, what are some benefits that students enjoy on campus for pastimes, stress relief and personal growth? Students are encouraged to participate in KL several different kinds of sports to regenerate themselves and Lingnan MBA has organised teams to contest in the Asia Pacific Business College Desert, Jungle and Glacier Challenges in recent years. EG EG

overall quality of the program under the review of these accreditations. In regard to the challenges currently faced by much of the Western markets, how do you dedicate efforts to teach the new generation of businessmen sustainability? Sustainability is the guarantee of future KL development and it is one of the important core topics in our course, “Ethics and Leadership”.

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For further information, please visit:


LINGNAN-MIT INTERNATIONAL MBA Full-time and part-time International MBA programs

MIT Co-operation Global Immersion China Experience

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MIT Co-operation An experienced faculty team works with MIT professors. One study module in MIT campus, Boston. Visiting Fellow in MIT Sloan for one semester. Exclusive opportunity for MIT Degree. Receive MIT non-diploma certificate. Global Immersion Dual-degree programs with ESCP Europe and RSM, Erasmus University. Exchange study opportunities for 14 universities in 7 countries. Study tours with partner schools in Europe, including ESCP Europe, Antwerp School of Management and London Business School. China Experience One of the top schools of economics and management in China. In Guangzhou, an open coastal city neighboring Hong Kong and Macao. The center of the Pearl River Delta, one of the most economically dynamic and flourishing areas in China.


Lauren Berger Collection

The Queen of Luxury Hospitality Our interview with LAUREN BERGER, President & CEO at Lauren Berger Collection places the spotlight on one of America’s finest luxury hospitality firms, providing thoughtfully personalised interiors and warm customer service to discerning clientele. We catch up with one of New York’s most renowned professionals delivering elegance and sophistication to the world of decoration and furnishing, while also gaining a fundamental understanding of what makes this brand fit for royalty.


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Lauren Berger Collection

Tell us how your business began and how it is currently increasing profitability and adding value to clients? I began my business strictly through my husband LB Dr. Sidney I. Berger. He was one of the top implant doctors. I had the pleasure of taking care of so many of my husband’s patients after they were operated on. EG

How important is it to build relationships EG in this business? There is simply nothing more important than LB having a relationship with your guests. It’s all about trust, when you are sending them to the ends of the earth. What are the challenges associated with delivering mansions, yachts, exotic automobiles, and one-of-a-kind experiences to the world’s wealthiest people? There is always a challenge, but I take nothing LB for granted and I am the one that goes to the ends of the earth to make sure all is as close to perfect as possible. EG

You are also working with the British Royal Family. What do you think it is that has made your company so successful in the world of hospitality? There is only one thing that makes anything LB you do successful; Experience. When you fanatically, obsessively love the world of hospitality, you get really good at it. EG

Tell us about some of the things you do to create unique and unforgettable experiences for your guests? My business has taken on a new life since travel LB has become so important to so many. We are able to offer our guests a truly once in a lifetime experience. EG

How may you assist in the demanding relocation requirements of successful executive travellers? Experiences we create for them. It is all about LB them. We take what they are about very seriously, and work from there. I have been working with top executives all my life and the most important thing for them is time. I make sure never to waste a second of it. EG

With over 450 properties around the world, what markets cater best to certain kinds of personalities? Travel has become very sophisticated for those who LB are all about experience. You need to know your guests to make sure you are sending them to the best of the best for the kind of experience they are looking for. EG


Tell us more about your VIP membership? As I develop my relationships with all that I work with, so do my vip membership. EG

For further information, please visit:

Photo: Who is Danny /

Autumn 2019 •



The Ring Group Compass Luxury Real Estate

For The Finest In Los Angeles Westside Luxury, Ring Shelby We sit down with SHELBY RING, Director at The Shelby Ring Group at Compass Luxury Real Estate to talk about the market and the latest opportunities, as Executive Global return to the familiar realm of Los Angeles luxury real estate in an exclusive interview with one of the Westside area’s pre-eminent realtors. As someone who grew up on the Westside of Los Angeles, what would you say makes this area so attractive for luxurious living? The basic reasons are the same reasons the SR movie industry decided to move here in the 20’s! The weather couldn’t be more perfect, temperate all year round, particularly nice when we have days with 70F in December. Then there’s the location itself – being close to the ocean is always a luxury, and having LA’s vibrant film, arts and restaurant culture while being on the ocean is unbeatable. Another factor is the economic fundamentals – Los Angeles has a diverse set of industries that keep real estate a good long term investment, which allows clients to invest in a city everybody recognises and see a good return on their investment, even if they don’t want to live here full time. EG

What fundamental factors are key to successfully selling real estate at the full asking price in Los Angeles? The most critical point is to understand the SR hyper local market – the exact same homes a mile apart might need to be marketed differently – timing, pricing and presentation. The market is changing, and it is critical to present the property correctly, to understand exactly which buyer is looking for this type of property and appeal to them. Presentation is huge here, and all buyers have high expectations about their new homes, so presenting the home tuned to the exact niche is important to create that initial buzz – which in turn generates multiple offers and a sales price over asking. EG

You are also fully bilingual, having worked in France. How did your experience in Europe deepen your insight into the real estate market? My time in France – and Europe generally – SR gave me a range of experiences that serve me in all my relationships. The first and most important is that there is no one “normal”. There are different EG


versions of normal, so it is very important to listen first and understand the other person’s assumptions and start points so that you can speak to those immediately. Also, how we use space and the types of space we value varies culturally, so again, not making the assumption that every buyer wants the house that works for most local buyers is important. In what ways would you say that your degree and expertise in Urban Studies and Design presents additional benefits to clients? I speak planning! SR Seriously, that can be helpful for clients to understand what a property can be – either because they would like to make changes to the property and improve it, or because they want to be sure a property will hold it’s value – or because they want to invest in property that will appreciate or that they can force an increase in value. With the price of real estate in Los Angeles, it’s important to understand the investment value of a property, even if it will be a family home. So the ability to recognise the effect of infrastructure change, changing planning rules and ongoing development on neighbourhood desirability and property values in a medium to long term time line, helps my clients make decisions that suit them and their longer term financial priorities. Real estate pulls together the skills I’ve used along my career – my marketing and PR history is also called into use on a daily basis. EG

How can investors strategically position themselves for opportunities in the next 5-10 years? Purchase in a desirable area in Los Angeles, SR and understand why others purchase in the area. If you have a 10-year time line, Los Angeles real estate is generally a good investment. If you invest in desirable neighbourhoods, they substantially outperform the LA average. For example, Santa Monica housing prices recovered a full 3-4 years before the average Los Angeles price.

• Productivity, Strategy, Profitability


Investment properties, particularly residential rentals are a great investment right now, as long as an investor is well informed, given the ongoing pressures on housing stock. As a native born resident, what can clients expect when being represented by you in the Los Angeles Westside area? Full service focused on them and their goals SR – I’ll help them define what they want and make it happen. In addition to really understanding the local market myself, I work with my clients to help them be very clear on their goals and what Los Angeles has to offer that will suit them. And since I’ve moved internationally, I understand the process from both sides. And of course, I have a great list of people and services that can help my international clients with the process as well, from the financial, to construction, to child care. EG

Tell us more about your latest luxury listing? It’s a unique property that is in the middle of SR downtown Santa Monica, a private Zen retreat that is walkable to everything – restaurants, cafes, shopping and also the beach. The property was built by a couple – a sculptor and renowned scientist – as a labor of love and art. The wife created the building and spaces as a sculpture. Upon entering the property you’re greeted by a private, light filled gallery with two story ceilings, which then leads a remarkable artist’s workspace. The husbands’ workspace and office are right next-door. Heading up to the top floor by private elevator, you step out into the stunning penthouse suite, made for privacy, entertaining and displaying treasures. The master suite has it’s own library. There is a huge amount of outdoor space, with patios off of every room that all connect – it’s an incredible place to entertain. EG EG

For further information, please visit:

If you have a 10-year time line, Los Angeles real estate is generally a good investment.


Casas de Mexico

Photo: Rory Gardiner

Architecture shaped by the character of people who will inhabit it As architects we’re in a constant search for uniqueness. We believe architecture can shape the behaviour of people, contributing to their well-being and prosperity. Article by

Article by



Marq. Javier Dueñas Estrada or us, it is an ethical commitment to understand the needs of each client through careful observation and analysis, so we can portray architecture that fits the desires, values, and character of those meant to inhabit it and thrive within it.


A TAILOR MADE EXPERIENCE This philosophy has led us to a career of over 20 years designing and building homes for several families in the United States and Latin America, consolidating our firm internationally. Our purpose is to achieve spaces that you can relate to, that embody your lifestyle, and that meet all the requirements for an optimal quality of life. Aided by thoughtful design, we seek to create atmospheres through spaces that reflect the spirit of the one who dwells in them. In doing so, we


Arq. Rodrigo Carreon transform a house into what every home should become: the extension of one’s self. When it comes to beach and coastal residences, this spatial quality in the atmospheres becomes the true pinpoint of our ethos, where leisure is the ultimate goal. We take profit of each of the individual “bits of paradise”, already existing before the project even takes place, as a source of inspiration. We transform the place, we reshape the atmosphere, and we “recreate” that paradise into an experience that is unique and tailor-made. EACH PROJECT IS UNIQUE Local techniques, craftsmanship, and aesthetics are strong allies in our quest to intertwine both the character of the emplacement and that of the people who will enjoy it, in order to create the perfect scenario for a constant dialogue between nature and soul.

• Productivity, Strategy, Profitability


We believe each project has its own particular essence, strongly tied to the essence of each of our clients. It is our mission to find and materialise that essence into your own individual “bit of paradise”. EG

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January 6-8, 2020 Omni Scottsdale Resort & Spa at Montelucia, Scottsdale, AZ

The Public Funds Summit provides a unique environment in which members of the public sector can exchange ideas and learn from other delegates, money managers, and consultants. Although attendance is not limited to those in the public sector, the conference takes aim at topics that are of particular relevance to public pension funds. The exchange of ideas both in and out of the session halls are key in educating and identifying viable alternatives that will address these concerns. Beyond the investment sphere, we also address legal issues facing pension plans, ethics regulations and the importance of on-going education for plan sponsors and their fiduciaries. We will also discuss the importance of politics and public perception of pension plans and the role that trustees and pension officers have in creating a positive image for their plans.


If you are interested in attending, sponsoring, speaking or exhibiting at this event, please call 212-532-9898 or email

REGISTER To register, visit us online at or email us at


Valhalla Estates

Florida Horse Country When most people think of Florida, they envision palm trees and beaches, or perhaps Miami high-rises or Orlando theme parks. Less well known is Ocala, Florida, the “Horse Capital of the World”TM. There are more horse farms in Marion County than anywhere else in the USA, with 50 breeds of horses. Article by

Erik Nygaard,


his is not by coincidence; the area has the same limestone-rich soil as Lexington, Kentucky and Newmarket, England. Ocala is best known as being the ideal place to launch the training of young Thoroughbreds. In fact, 17 of the 20 horses in the 2017 Kentucky Derby, received their early training in Ocala.


Ocala features exciting opportunities for almost every equestrian discipline. A few examples are: • When completed in January 2021, the World Equestrian Center will be the largest equestrian complex in the USA, with 1.5 million square feet of riding space. • The HITS (“Horses in the Sun”) Winter Circuit takes place for 10 weeks every winter. Riders flock in from around the world for this show jumping competition which offers $4 million in prizes. • Live Oak International features a Combined Driving tournament is held every March. • The Ocala Jockey Club hosts the most prestigious 3-Day Eventing competition in the southeast USA. The November 2019 “Horse Trials” competition is a qualifier for the 2020 Tokyo Olympic Games. The venue mentioned just above, the Ocala Jockey Club, is now available for sale. Please see the “Florida Equestrian Estate” display in this issue. The 954-acre estate is one of the most beautiful large parcels in Florida. Most of Florida is flat with low elevations, whereas this property features rolling hills and oak trees, and some of the highest elevations in Florida. It appeals to equestrians and non-equestrians, as two-thirds of the property is vacant land awaiting your design. This would be an incredible location for a family compound or a destination resort. Visitors from abroad frequently comment that the property resembles British parkland. The Clubhouse in the center of the property has stunning views in all directions. Florida is famous for its sunshine and weather. The Ocala Jockey Club is an hour from both the Atlantic Ocean and the Gulf of Mexico, which double the fishing, boating and beach options. Because of its inland location, a hurricane has never hit Ocala.


Also, as fresh water becomes more precious each year, Marion County residents and agricultural businesses take comfort in knowing that they are situated above the largest aquifer in North America. The University of Florida, the 5th largest university in the USA, is located just 25 minutes from the Ocala Jockey Club. Having the college


• Productivity, Strategy, Profitability

town of Gainesville nearby offers a multitude of cultural activities and a wide variety of restaurants. Also minutes away are Silver Springs State Park, the Ocala National Forest (with its 660 lakes), 80 miles of acclaimed mountain biking trails at Santos Bike Park, and Canyons Zip Lines with runs through 100 acres of oaks with 5 lakes. Three International airports are located 90 to 120 minutes away: Orlando, Tampa, and Jacksonville. Ocala has its own private airport, with the distinction that more horses than humans board flights here! So come join us in Ocala for the ideal combination of Florida weather, a horse industry rivalling Kentucky’s, and farms with Virginia’s beauty. EG

Competition preview: Property overview: For further information, please visit: Email - Contact - 352 484 1223

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American Farm & Ranch LLC

Marketing Land and Rural Estates International Sporting Properties (“ISP”) came together to market a traditionally under-serviced corner of the land and rural estate market. Some of the finest estates and properties in the world continue to be marketed following the traditional approach: “List and wait, spend some money on a few ads and online banners hoping to catch a qualified buyer . . .” SP recognised the need for a process built on relationships, access to pre-qualified buyers, and an existing network connected at the very highest levels. The partners have spent many years working on the edges of this industry, creating points of access to the individuals participating in some of the largest global real estate transactions. Many of these never involve the traditional real estate model. The ability of the principals of ISP to pick up the phone and direct-dial many of the most qualified buyers and sellers around the globe is a key differentiator allowing ISP to assist you to achieve a successful transaction. This 30,000-foot marketing program hovers over the traditional slow burn approach, by offering a private and exclusive environment…many times working in conjunction with the brokers and agents following the traditional model. In a very short time ISP has been entrusted with a



collection of the most unique lodges, farms, and estates in the world. With almost an intentional strategy of minimal traditional branding or advertising, word has moved quickly amongst the elite of land ownership. We welcome conversations regarding your potential property sale or assisting in your search for the most unique and exciting properties globally. ISP has offices in Luxembourg, Belgium, and the United States…covering the world. AN ACCOMPLISHED PROFESSIONAL Frédéric de Bonhome is a true nature-lover. He grew up—and still spends most of his time— in the Belgian countryside where hunting, fishing, and breeding are truly an art of living that he loves, shares, and cultivates with his wife and his three young children. Because Belgium quickly became too small for him, Frédéric set out at a very young age to travel in

• Productivity, Strategy, Profitability

larger, wilder lands. He studied, first agronomy and then Real Estate. After five years in a real estate office, he started and managed two real estate businesses, one brokering high-end properties and the other focused on real estate investments—all this in the space of 10 years. Though his peers admire his easygoing professionalism, with Frédéric, nothing is left to chance: That is his strength. Given his professional background, network, and interests, Frédéric’s choice to join the International Sporting Properties adventure was a more than obvious one. Tel.: +32.476.21.48.87 THE RURAL REAL ESTATE SPECIALIST David Light is a publisher and Co-founder of Open Fences Magazine, recognised as the premiere rural real estate magazine in North America. Large land acquisition and marketing consulting now take much of David’s time, with a focus on the international market at the highest level. Born in Southern England, David moved to the United States in 1991. By 1996, he had entered the world of publishing, where he found a niche in the Real Estate publishing market in 2000. Combined with a strong background in equestrian pursuits, fishing, and hunting, as well as an abiding love of the land, David is in a unique position that affords access to, and a singular perspective on, the rural real estate market worldwide. David splits his time between his home on the coast of Maine with his wife and two young boys and his office in Houston, Texas. EG Tel.: +1.207.449.2918

For further information, please visit:

@Mininginvmt Mining Investment Conferences & Exhibitions Mining Investment Events Mining Investment Conference



17 - 19 MARCH 2020 Singapore Confirmed Speakers


Executive Director Indonesia Coal Mining Association (APBI-ICMA)


CEO and Co-Founder HelloGold, Malaysia (Former CFO, World Gold Council)

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Hôtel Martinez

Pure Luxury in Côte d’Azur with Hôtel Martinez When you’re traveling, whether on business or on vacation, it’s always a special experience. You visit new places, get acquainted with new people, take in memorable sights…Of course, you’ve got to think about getting the best service to make this trip truly outstanding, writes Thomas Hughes. etween the airplane tickets and local itineraries, there is an essential question: where are you going to stay? And, most importantly, how accommodating will it be? In the last decade, the hotel industry had witnessed disruptive rivalry from the emergence of online marketplaces, like Airbnb, that offer accessible and affordable lodging. However, this competitiveness led to many hotels stepping up their game and offering an even better service than before! Now, if you’re traveling to France, more specifically the Côte d’Azur, you absolutely have to take a look at the Hôtel Martinez.


A LUXURIOUS HIGH END HOTEL Hôtel Martinez is a luxury art deco style hotel, part of the Hyatt hotel group, operating since 1929. It’s located in Cannes, on the Croisette, facing the Mediterranean Sea and the Lérins Islands. Only 25 km from Nice Airport by the seaside road, 1 km from the Cannes train station and 500 m from the Palais de Festivals, it’s right in the heart of the action, surrounded by other illustrious neighbours like the JW Marriott Cannes, the Majestic Hotel and the Carlton.

Its premises feature 409 rooms, including 99 suites whose vast majority enjoys balconies with gorgeous seaside views on the Mediterranean sea. There are also 2 terrace apartments spanning 500 m2 each and the exclusive “Suite of Olives” that comes equipped with its own private jacuzzi! The rooms are furnished in a distinct 1930s style, adding to its luxurious atmosphere. Other than suites, the Martinez has 15 prestigious 2,500m2 modular lounges that can house from 15 to 1,000 people for organised conferences, receptions, cocktails and gala evenings. Naturally, such a high-end establishment comes with its own chef-d’oeuvre of gastronomic arts. Guests should check out “La Palme d’Or” restaurant, spearheaded by Christian Sinicropi - the chef de cuisine rewarded with two Michelin stars and an 18/20 rating by Gault-Millau. Two more restaurants are also available: “Le Jardin du Martinez” and “La Plage du Martinez”. Hotel Martinez comes equipped with its own, private white sand beach reserved to its clients, and

Photo: Mandoga Media / Alamy Stock Photo


• Productivity, Strategy, Profitability

a high-end bar on the seashore. Guests may also access the 900 m2 wide L.Raphael Beauty Spa on the 7th floor - a temple of aesthetics with a fitness center, massage parlour, beauty salon and an onsite hairdresser. There is a Kids Club, a variety of boutiques, safes in each room, a doorman, and all other necessities of a hotel. A RICH HISTORY AND A PRIVATE BEACH! During the Cannes Film Festival, the Hôtel Martinez is one of the favourite palaces of international film stars and industry professionals. From 2004 to 215, the Canal+ television studio “Cannes Festival Special” was annually hosted on the hotel’s private beach. If you’re passionate about culture, particularly cinema, this is a unique location with a rich history that won’t leave you indifferent! EG

F O X H I L L FA R M 3 8 0 U P L A N D R O A D, K E N N E T T S Q U A R E , PA 1 9 3 4 8 U S A A taste of the Sublime Nestled among Chester County's rolling hills is a farm, a gracious yet comfortable home that evokes the best of Europe and southeastern Pennsylvania. Among ancient beeches, centuryplus old spring house and barns, the house built in 2006 holds the most modern amenities while offering the authentic feel of a breathtaking historic stone home. Whether you seek solace or space for family, guests and friends, two-footed or four, your quest is fulfilled. A few things to add: In ground pool, hot tub, tennis courts, indoor riding arena, two outdoor rings, easy to ride out over the countryside. Fox Hill Farm 380 Upland Road, Kennett Square, PA 19348 USA Offered at $7,995,000

Margot Mohr Teetor RE/MAX Preferred 1595 Paoli Pike Suite 101 West Chester, PA 19380

Main Office: 610-719-1700 Cell: 610-476-4910

Located on a private dead end lane, We are pleased to offer this quality 4 bedroom, 3 1/2 bath home located in the Cotswolds. Vaulted ceilings, two story glass, custom kitchen, large master suite, motion light switches make living easy. Large outdoor areas to enjoy the lovely mountain vistas. 2 car garage.

Offered at $1,195,000. MLS# 90157Â

Stillmont Large and spacious Ranch plan is in move in condition with a spectacular view. The owners and just added a new roof . Designer quality with 3 bedrooms plus a family room with full bath, plus a 2/1 bath guest house. Cathedral ceilings in the living room, updated baths, carport. Estate sized lot. The best closets you have ever seen

Offered at $1,795,000. MLS#92227

Do not miss this wonderful and charming home that boasts a noisy stream and end of drive privacy. 4 bedrooms, 4.5 baths with soaring ceilings and designer charm. 2 fireplaces, lovely screened porch with kitchen pass through. plenty of parking and estate landscaped grounds that even the Garden club would be proud of. Great getaway or investment property with great rental history.

Offered at $1,750,000. MLS# 91548

Contact Terry Potts Web Email Office 828 526 2520 Cell 828 421 3417

Profile for Executive Global

Executive Global Autumn 2019  

The Premier Business and Luxury Lifestyle Magazine for C-Suite Executives and High Net Worth Individuals Worldwide.

Executive Global Autumn 2019  

The Premier Business and Luxury Lifestyle Magazine for C-Suite Executives and High Net Worth Individuals Worldwide.