Issuu

www.executive-global.com | Spring 2020

Productivity | Strategy | Profitability

DAVID MORGAN

Examines the case for silver in 2020

HARRY DENT

Prevailing trends stocks and gold

BILL HOLTER

Looks at the U.S. economic crisis

+ ROMAIN GERARDIN FRESSE

Strategy and stability through crisis

FAMILY OFFICE WEALTH Richard Wilson’s leading insight into capital raising and Family office investing for affluent institutional and private clients

INSIDE

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BEAUTIFUL IS RELENTLESS

Aston Martin Geneva, Pegasus Automotive Group SA, Route de Saint Cergue 298, Nyon 1260, Switzerland T. +41 22 36 38 007, F. +41 22 36 38 017, sales@astonmartingeneva.ch, www.astonmartingeneva.ch Indicative fuel consumption figures in litres/100km (mpg) for the 2020 MY Aston Martin DBX: urban 12.2 (23.1); extra urban 13.5 (20.8); combined 14.3 (19.7). CO2 emissions 269g/ km. The mpg/fuel economy figures quoted are sourced from regulated test results obtained through laboratory testing. These figures are strictly indicative and preliminary and are for early comparability purposes only and may not reflect your real driving experience, which may vary depending on factors including road conditions, weather, vehicle load and driving style. These early prototype figures are intended for indicative comparability purposes. This vehicle is not yet for sale and this information is based on a prototype. The fuel consumption you may achieve under real life driving conditions and CO2 produced will depend upon a number of factors including the accessories fitted after registration, variations in driving styles, weather conditions and vehicle load. The official figures for this vehicle will be released prior to and accompanying this vehicle being made for sale to the public. This information will be updated as testing continues.

CONTENTS

SPRING 2020

EXECUTIVE GLOBAL

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 Executive Global Magazine is published by: Stormcues Limited 405 Kings Road Chelsea London SW10 0BB Tel: +44(0)207 993 4782 www.executive-global.com ADVERTISING advertising@executive-global.com EDITORIAL editorial@executive-global.com 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 © 2020 Stormcues Limited. All Rights Reserved.

• Productivity, Strategy, Profitability

FRONT COVER FEATURE Family Office Wealth

Everything is worth nothing 24

Our cover feature and CEO Profile explores wealth preservation and estate planning for centimillionaires, billionaire families and ultra high net worth individuals in our interview with Richard Wilson, CEO of The Family Office Club.

Strategy & Stability through crisis 20 Executive Global’s bespoke series of interviews on Productivity, Strategy, and Profitability. We sat down with Romain Gerardin-Fresse, CEO of Gfk Conseils-Juridis, to talk about developing robust strategies in challenging times.

Claudio Grass, delivers his hard-hitting critique of the current global state of affairs.

The war on economic freedom The case of silver in 2020

Physical gold the likely safe haven 16 John Williams returns to provide his expert analysis on U.S. macroeconomic trends.

David Morgan returns to give his expert analysis on the upside potential for silver.

Gold's value as a safe haven

Mark O’ Byrne, Research Director, provides his outlook on recent inrease in the value of gold.

Whackamole!

FINANCE

Harry Dent predicts the greatest bubble in modern history will crash as demographic trends worsen.

Demolition of Western civilisation 28

Thomas Hughes reports on the eradication of monetary autonomy through digitisation.

STRATEGY

Stocks topped, gold peaking

Bill Holter, Partner at JSMineset, analyses asset bubbles, negative rates and the economy.

Is fiat losing its fitness and has economic lunacy gone mainstream? Shannon Berkley reports.

Helicopter money

Oliver Taylor delivers an intelligent critique on the inherent problems with offering Universal Basic Income as a permanent fixture.

Why gold and why now? Keith Weiner, CEO, Monetary Metals explains the importance of avoiding exposure to the government’s credit.

Florida Equestrian Estate 954 Acres

LAND - HORSE FARM - CLUBHOUSE - 15 TOWNHOUSES $18,800,000 This gorgeous property features rolling hills, mature oak trees and some of the highest elevations in Florida. Located in Ocala, Florida, the â€œHorse Capital of the Worldâ€?. 90 minutes north of Orlando. 25 minutes from the University of Florida, the 5th largest university in the USA. 636 Acres of vacant pasture land are ideal for equestrian or spa resort development, golf course, farm expansion or an estate home community. The adjacent 318 Acres is a Thoroughbred training and breeding farm and awardwinning equestrian competition venue. Structures include 7 barns with 178 stalls, an irrigated training track, Clubhouse with swimming pool, and 15 Townhouses. Five sub-parcels may be available beginning at $1,050,000. www.ValhallaEstates.com

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CONTENTS

SPRING 2020

EXECUTIVE GLOBAL

18 LEGAL & ADVOCACY

GEOPOLITICAL AFFAIRS

The challenge of protecting assets 42 CoronaCrash Abel Gomez highlights the advantages and opportunities of asset protection in Panama.

Trusts law in Ireland

LUXURY LIFESTYLE 54 The Bugatti Noir

Thomas Hughes reports on the global impact and crisis caused by the Covid-19 pandemic.

44 Central Bank Digital Currencies 56 Royalty Exchange

Oliver Taylor writes about why Ireland could be one of the best countries for trust registration.

Shannon Berkley’s thoughtul outlook on full digitisation and the consequences of CBDCs.

FOREIGN DIRECT INVESTMENT

EXECUTIVE EDUCATION

Investing in Ireland

46 The differing needs of students

With strong legislation and EU membership benefits, Ireland’s future looks bright. Shannon Berkley chimes in.

Living the Good-Good Life

We find out what makes Baden-Baden such an enchanting place exuding sophistication.

North Rhine-Westphalia

Oliver Taylor finds out why British Columbia is one of the most inviting provinces of Canada.

Internationally aware

• Productivity, Strategy, Profitability

Today’s global business environment runs on international collaboration and virtual interaction. Mariella Olivos Rossini tells us more.

50 Examining Impact

Rachel Smith takes a glance at tourism in the North-Rhine Westphalia region of Germany.

British Columbia living

Stuart Robinson looks at motivation, the needs of students and the drive for diversity.

Andrew Main Wilson, CEO of the AMBA, on why the business education sector is open to expansive strategies.

Shannon Berkeley reports on an innovative firm offering music publishing royalties as assets.

Al Muntaha 60

Rachel Smith examines this rare gem in a world of luxury supercars and hypercars.

Thomas Hughes shows us what’s special about this special restaurant at the Burj Al Arab hotel.

Paul Newman Daytona Rolex

Oliver Taylor on the fine details of this exquisite timepiece suitable for Hollywood elite.

DURBAN ICC COMMITS ITSELF TO SERVICE EXCELLENCE

THE DURBAN INTERNATIONAL CONVENTION CENTRE (DURBAN ICC) IS A WORLD-CLASS FACILITY, RENOWNED FOR ITS HIGH STANDARDS OF SERVICE EXCELLENCE AND HAS SUCCESSFULLY STAGED SOME THE WORLD’S MOST PRESTIGIOUS AND COMPLEX EVENTS.

The five-star graded centre prides itself on being leading venue for meetings, business events, conferences and exhibitions on the African continent. However, this is not their own opinion, but rather the overwhelming feedback received from their clients who have voted it in the top 1% of Convention Centres worldwide, as well as “Africa’s Leading Meetings and Convention Centre” no fewer than 17 times! The DURBAN ICC is a versatile venue of enormous dimensions, flexible enough to meet any need, no matter how extraordinary. The Centre offers the largest column-free, multipurpose event space on the African continent.

key factors in the design of this state-of-the-art,

boasting beautiful beaches, warm weather all

technology-driven Centre.

year around and a melting pot of cultures.

Building on the legacy of a number of important

Delegates visiting the Centre can look forward

events including COP-17 in 2011 (the second

to superb standards of culinary excellence and

largest in history), the biggest-ever 21st

hospitality. As part of the Durban ICC’s gourmet

International AIDS Conference in 2016, the 69th

evolution over the past 21 years in the industry,

World News Media Congress, the International

they are completely reinventing their culinary

Society of City and Regional Planners Congress

offering in order to showcase some of Durban’s

(ISOCARP) 2016, the World Economic Forum

authentic African Cuisines. Furthermore a wide

on Africa, Africa’s Travel Indaba and 4th BRICS

range of new innovative packages have been

International Competition Conference to name

designed to meet the unique needs of each

a few, the centre continues to attract major

target market, at the best possible rates.

international events to the City. The Durban ICC offers you first-world

The Centre’s main convention area of 11,600m²

The DURBAN ICC is committed to broadening

convenience and a proudly African meetings

can be opened up to form one enormous

the economic impact of the events and tourism

experience. The Centre is fully Wi-Fi enabled

venue or subdivided using operable walls

sector through contributing to inclusive

and connectivity is complimentary to its

into 22 separate convention halls of various

economic growth and economic transformation.

delegates and guests. The Centre is located

sizes. International and national conventions,

Widely known as South Africa’s entertainment

30-minutes from the King Shaka International

exhibitions, sporting events, concerts and

“playground”, the City of Durban, which lies

Airport and over 3,600 Hotel rooms are

special occasions of every kind can be

along the extensive KwaZulu-Natal coastline,

within a 10-minute walk of the Centre.

accommodated. Flexibility and versatility are

captures the best of the whole of Africa,

DURBAN ICC FAST FACTS • Durban International Convention Centre (DURBAN ICC) comprised of the DURBAN ICC Arena and the Durban Exhibition Centre. • Voted “Africa’s Leading Meetings and Conference Centre” by the World Travel Awards no fewer than 17 times in 19 years and continuously strives to deliver excellent service. • Largest flat floor, column-free multi -purpose event space in Africa. • Maximum capacity at the complex: 22000 delegates, 112 000m2 of flexible event space • Ranked in the world’s Top 17 Convention Centres by the International Association of Congress Centres (AIPC); and • The Centre is located 30-minutes from the King Shaka International Airport and over 3,600 hotel rooms are within a 10-minute walk of the Centre.

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ne of the most spectacular properties offered for sale on the West Coast, U.S.A. Situated on 2 glorious Lakefront Lots of lush forest, lawns and gardens, the Magnificent English Estate is totally private. Impeccably designed there is not another like it! While stately, a sense of warmth and comfort penetrates the grandeur. The English Pub is huge, with a Wet Bar, Pool Table and Ping Pong areas along with a custom tempered Wine Tasting Room for the Connoisseurs. Spectacular outdoor entertaining Pavilion overlooks the Lake. This is a Magnificent Property! Furnishings Negotiable. No expense was spared in the construction and design and there is a gorgeous Waterfall as you wind down the private gated drive. 6 Bedroom Suites, all with Fireplaces. The Grand Master, Gentlemanâ€™s Library and Art Gallery are on the Upper Wing. Presidential Formal Dining Room with Fireplace off the Rotunda and Loggia. The Music Room is sculptured to perfection. 2 story Living Room. Explosive Lake Views! The Kitchen blends into a robust Family Room. Separate Staff Quarters with private entry. 2 Levels of Garage Parking for Boats and Limos. Elevator. Double Canopied Dock plus 2nd Double Dock Rite. Outdoor Spa. Shown by Appointment only. Text or Call Lynne B. Wilson, 951-741-7117. $11,750,000.

Call or Text: (951) 741-7117

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Lake Arrowhead Office: (909) 337-2080

EDITOR NOTE

Foreword

EXECUTIVE GLOBAL Editor’s Note

Unsterilised Bond Monetisation — Is "QE" an Economic Virus? There is an analogy too rich to ignore as COVID-19 grips the world and shuts it down. What major central banks have been doing, “monetising” economies, seems akin to the spread of a pathogen. The behaviour takes root in a comprehensive manner and impacts everyone it touches, very much like a virus. Since the first dubious decision to effect Quantitative Easing (QE), the printing presses now roll on a whim. ery much like a virus, the idea that printing money would be a great plan to address the wheels coming off economies has hopped from bank to central bank, with those exposed ultimately paying the price for allowing such behaviour to run rampant across the global economy. A foreign body to sound economics, printing cash endlessly will sicken its host and demand remedy at some future date. Assuming the host survives, that is. Opinions differ on the eventual outcome of the current money printing madness, largely depending on whether or not an entity has been enabled to continue its own brand of manipulation a while longer by such behaviour. Individual commentators and traders like Gregory Mannarino, however, are unambiguous about the reality of living in what is in effect a total economic meltdown. Many respected economists are aghast at central banks’ generating hyperinflation, or at least blindly ignoring the possibility in a moment of madness, as markets worldwide feel sour and cold. Like an open children’s party, the hosts keep pouring soft drinks, fully aware that someone, sometime soon, is going to have to pick up the tab for such largesse. It will not be them. Indeed, following tried and tested economic models to their logical conclusion, it would appear that central banks will be the only winners when all the debt comes home to roost. The Federal Reserve, the Bank of England and innumerable other central banks the world over are now printing so much

executive global • Productivity, Strategy, Profitability

money that it has masked a meltdown already exceeding the 2008 crisis tenfold. Rather than acting in accordance with social wellbeing and honest economic principles, the central banks of the world are flooding their economies with cash. Much has changed in the fintech arena over the last two decades, but not the fundamentals of economics. Debt eventually has to be paid, and somehow it always seems to become the average citizen’s liability when the payment call is made. The ramifications of monetising bundles upon bundles of debt spell disaster for global citizens, yet the printing presses continue. From a vantage point of protectors of the people and safeguarding broad, national economic interests, central banks seemingly have abandoned such caution and become the source of an economic infection. Despite its propagandist marketing, could QE really be an economic virus? Known by its effects, the monetisation virus is starting to look a lot like a dread disease. Executives must strategise and plan accordingly. EG

John Marshall John Marshall Editor-in-Chief, Executive Global

Pierce Brosnan, Photographed by Marco Grob

L i t t l e Tre a s u r y J e w e l e r s In t h e V i l l a g e a t Wa u g h C h a p e l 2 5 0 6 N e w M a r ke t L a n e G a m b r i l l s , M D 2 015 4

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FINANCE

ShadowStats

When the Fed and the Government Panic, Physical Gold Is the Likely Safe Haven U.S. Coronavirus Response Imploded the Economy and Created an Inflation Risk.

Article by

Walter J. "John" Williams PUBLISHER & ECONOMIST, SHADOWSTATS.COM

n context of the evolving global Coronavirus Pandemic and crashed stock markets coming into early-March 2020, the U.S. government ordered the shutdown of most domestic economic and societal activity. Such upended living and business conditions that had evolved and existed together for many decades and created circumstances that could make return ing to pre-Pandem ic cond itions extraordinarily difficult and protracted at best. That environment also triggered panicked, systemic bailouts, including “unlimited” money creation by the Federal Reserve and panicked, unfettered government spending by the White House and Congress, who already had pushed the Federal Budget Deficit and Debt of recent years well beyond any practical bounds of sustainability. Money Supply tends to drive inflation, while excessive debt expansion raises national solvency issues, which also can trigger money growth,

inflation and relative sovereign currency weakness. The combination of unprecedented money creation, deficit spending and economic implosion produces the potential for a Hyperinflationary Depression, a circumstance where affected investors could seek safe-haven in the holding of physical precious metals, gold and silver. ECONOMY WAS TURNING LOWER EVEN BEFORE THE PANDEMIC COLLAPSE Activity in pre-Pandemic, Fourth-Quarter 2019 U.S. Industrial Production and inflation-adjusted real Retail Sales contracted quarter-to-quarter, and both series were on early track for second consecutive quarterly contractions in First-Quarter 2020. That was before Pandemic-driven, collapsing production, sales and other activity in March pulled the initial reporting of First-Quarter 2020 Gross Domestic Product (GDP) into its deepest annualised quarterly contraction since the Great Recession, initially estimated at down 4.8% (-4.8%). With April 2020 Industrial Production and Real Retail Sales monthly declines the deepest in their respective 101- and 75year histories, Consensus forecasts are for a SecondQuarter 2020 GDP annualised drop of about 30% (-30%). With new claims for unemployment insurance confirming a continuing economic decline in the month of May, my ShadowsStats.com forecast

• Productivity, Strategy, Profitability

is for something close to a 50% (-50%) annualised second-quarter decline. Either number would be the deepest quarterly GDP contraction in U.S. history, not only indicating a headline recession, but a depression, with a quarterly contraction deeper than 10% (-10%). Current economic activity has plunged due to the Pandemic shutdown, not due to normal economic pressures, although, again, that fell on top of what already had been weakening business growth, impaired by excessive Fed tightening in 2019. Economic recovery now awaits a lifting of current Pandemic constraints, with effective testing and treatments needed in hand, and ideally a vaccine, which could restore some confidence in the system. A meaningful “reopening” of the economy likely will be slower than planned. ECONOMIC BOTTOMING COULD BE IN PLACE IN THE NEXT QUARTER OR TWO, BUT FULL RECOVERY WILL NOT BE RAPID The Pandemic-driven economic shutdown and the related disruptions to people’s lives already have been severe enough to alter consumers’ outlook and optimism negatively for a number of years to come, as did the 9-11 Terrorist Attacks in 2001. Around for more than half a century, the dominant surveys of U.S. consumer attitudes, the Conference Board’s Consumer Confidence Index® and the University of Michigan’s Index of Consumer Sentiment, both hit their historic peaks in 2000, before 9-11. Although the series were relatively strong in February 2020,

FINANCE

ShadowStats

THIS CIRCUMSTANCE EASILY COULD SEE MOUNTING PRODUCT SHORTAGES, WITH INCREASING CASH IN CIRCULATION GOING AGAINST TOO FEW GOODS, PUSHING PRICES HIGHER.

neither series had recovered its pre 9-11 peak activity, going into the March 2020 Pandemic-driven collapse. Those February pre-Pandemic peak levels are not likely to be seen again for some time. In like manner, once the U.S. GDP hits bottom in the current Second-Quarter 2020 or next quarter, any activity off bottom going forward will tend show some quarterly economic gain. Still, where full economic “recovery” is defined as economic activity regaining and then rising above its prior, prerecession or pre-depression peak activity, that likely will be some years off. Pre-Great Recession peak activity in real GDP was in Fourth-Quarter 2007, which was recovered only in Second-Quarter 2011. Even so, major U.S. industries such as manufacturing and construction never have regained their preGreat Recession peak levels. Recovery from the current Pandemic-driven economic plunge will be measured against the Fourth-Quarter 2019 nearterm GDP peak. Yet, the current economic decline is so severe that Third- or Fourth-Quarter 2020 GDP could fall back to below pre-Great Recession peak activity levels, wiping out the entire post-Great Recession economic expansion. Accordingly, the full range of Pandemic disruptions has been massive

and could be slow to disappear. Economic “stimulus” in the form of government spending or Federal Reserve accommodation helps systemic liquidity, but not so much current economic growth, which has been savaged so severely by the Pandemic-driven shutdown. Although the pre-Pandemic slowing in consumer demand had been driven by the Federal Reserve’s tightening of consumer liquidity, the Pandemic has overwritten such issues. The Pandemic now is the primary and fundamental driver of the current collapse in business activity. Assuming some Pandemic relief by year-end, the plunge into Third-Quarter 2020 GDP activity could be the bottom here, with activity moving off bottom in Fourth-Quarter 2020. UNSUSTAINABLE 2020 FEDERAL DEBT-TO-GDP RATIO WILL TOP THE WORLD WAR II RECORD HIGH Based on U.S. Treasury debt projections for fiscal year-end 2020 (September 30th), and my ShadowStats.com estimate of full fiscal-year 2020 nominal GDP, 2020 Federal Debt as a percent of GDP will hit an unprecedented and increasingly unstable and unsustainable 138%, up from 107% in 2019 and topping the prior World War II historic high of 119% in 1946. These numbers do not reflect the $3 trillion stimulus package just passed by the Democrat-controlled U.S. House of Representatives, which would take that measure to a further unprecedented 153%. Despite current opposition to that stimulus in the Republican-controlled Senate, significant additional federal stimulus is a virtual certainty in the months ahead and likely in at least the next year or two ahead. FOMC HAS EXPLODED MONEY SUPPLY GROWTH EXPONENTIALLY TO THE HIGHEST LEVEL IN HISTORY The Federal Reserve responded to the financial panic by cutting interest rates to zero, and moving to create unlimited systemic liquidity and money

supply. Annual growth in the latest U.S. Money Supply measures is accelerating rapidly, with M1 up 33%, M2 up 23% and the ShadowStats Ongoing M3 at 25%, versus respective annual growth rates of 6.3%, 6.8% and 8.5% in January. The growth has begun to take on an exponential pattern, consistent with higher inflation ahead, albeit still shy of triggering a hyperinflation. Continued rapid acceleration of the money growth should accelerate inflationary pressures markedly. TOO MUCH MONEY CHASING TOO FEW GOODS CAN CREATE AN INFLATION PROBLEM Again, U.S. economic activity is collapsing at an unprecedented pace, driven by the Pandemic disruption, not by lack of demand. This circumstance easily could see mounting product shortages, with increasing cash in circulation going against too few goods, pushing prices higher. An early example already has surfaced in the last month or two, with domestic meat shortages and rapidly escalating price increases for meat products. A SURGING GOLD PRICE WILL TEND TO SIGNAL AN ACCELERATING INFLATION PROBLEM Gold is a store of wealth, and holding physical gold will tend to maintain the purchasing power of one’s assets and income. Historically, gold often has been the currency, and it has maintained its purchasing power over millennia. The same amount of gold that bought a loaf of bread in Ancient Rome would buy a loaf of bread today. For the same amount of gold today as in 1925 New York City, you could buy a third-row center seat for a top Broadway show. As discussed in the previous issue of Executive Global’s Winter 2020 article Gold Glitters as the Federal Reserve Loses Control, the price of gold tends to follow underlying actual inflation and often anticipates it. EG

For further information, please visit: www.ShadowStats.com

Photo: dpa picture alliance archive / Alamy Stock Photo www.executive-global.com

Spring 2020 •

FINANCE

Economy & Markets

Two Key Trends: Stocks Have Topped And Now Gold May Be Peaking I have been predicting that the greatest bubble in modern history will crash as demographic trends only continue to worsen on top of unprecedented debt and something for nothing stimulus plans. I have always said, you will know when it’s over as there will be a first sudden, sharp crash of 40% or so in less than 2.5 months. Doesn’t matter it was the corona virus out of left field that triggered it. The minor subprime crisis in four states in the U.S. only, triggered the last global bubble crash in 2008. Article by

Harry S. Dent Jr AUTHOR & EDITOR, ECONOMY & MARKETS

his one has begun with that first sharp crash and it could see one more leg down into late April or early May. Stocks are in a topping process after the longest bull market in history since early 2009. But this downturn will be worse – a depression -- after staving off the natural deleveraging of debt and financial asset bubbles last time and creating a much larger financial asset bubble through $17 trillion+ in quantitative easing to at least make the rich feel richer and keep spending money while Main Street kept struggling. I have been showing and tracking the correlation with this first crash of the greatest bubble in modern history with the 1929 and 2000 first crash scenarios. Both are similar and close to the average 42% crash in 2.6 months. This scenario is correlating best with the 2000 tech wreck. Look at this chart.

This bounce has retraced 50% of the crash loss in a short period of time and has come right up against the first wave low resistance of 8,264 on the Nasdaq, and just above it to near 8,600. That means both that this bounce has little or no upside near term, and that even if March 23 was the low of this first crash, the extended 5-month or so rebound ahead would be likely to not go much higher than this. A 62% retracement of the crash is as high as that typically gets historically and would take you to 8,600. With the very strong stimulus in the last month, this rebound could be even stronger. All things considered: This is a very good time to sell stocks, especially on any further rallies just ahead. If the Nasdaq merely retests its 3/23 low of 6,631 that would mean another 20% down. If it hits my best target for a new low of 6,190 (December 2018 mini-crash low) that would be 25% more downside from here. A similar target on my megaphone

2000 CRASH SCENARIO SEES NEW LOW AHEAD AND REBOUND INTO OCTOBER We saw a 1st wave down that was more normal with a 2nd wave bounce, followed by a sharper, deeper 3rd wave down that showed we were indeed in this first bubble crash. The selling got so intense for leveraged traders that to cover their margin calls that they had to sell higher quality bonds causing a spike down even in the safe havens temporarily. In the 1929 first crash scenario there was a briefer 4th wave bounce and then a third wave (5th wave) down to new lows. In this case the 4th wave bounce is more extended very much like the 2000 crash scenario above.

• Productivity, Strategy, Profitability

pattern for the S&P 500 is 2,080, 26% lower. Stocks did rally for the reasons I started touting on 3/30 forward with my S-Curve analysis: That Italy and the rest of Europe to follow would see its progression of infections slow markedly and the markets could see the end of this virus threat in the weeks ahead. That has happened. The U.S. has also now hit that 50% mark and will see a more marked slowdown this week. But… this hasn’t really hit the third world very hard, and Africa is starting to lockdown in case as its medical system would be super-vulnerable. That could interfere with China’s raw material supply chain and disrupt its rebound, and so on. The southern hemisphere is also starting to move into their colder season. April there is like October here with winter fast approaching. So, maybe there starts to be more accelerations there. The Spanish Flu saw its worst eruption in October/November

FINANCE

Economy & Markets crashing over this. Housing starts plunged 27% to 1.216 million, 7% lower than forecast at 1.3 million… Get ready for the sudden deep freeze, or call it “deflation shock,” just ahead! Many companies will default and never come back even with government subsidies. Many Boomers near retirement anyway just won’t come back…and can the government back stop everything? No Way! Andy Pancholi, my co-author of Zero Hour and publisher of markettimingreport.com, is seeing a potential major turning point in gold between April 13 – 23 or so – and he had a strong turn point in stocks for April 14. I looked at his longer-term patterns and it also fits with a low in gold by late 2022 around $950 - $1,000 that I have been projecting as the most likely scenario as well as my best top target at $1,800 for months now. That late 2022 target would also keep in place the longer-term gold trends up from the 1980 top and 2011 bottoms into the next great 30-year commodity cycle into 2038-40.

Photo: katjen / Shutterstock.com

of 2018 and didn’t finally recede until after March 2019 in the northern hemisphere. Overall, past sudden, deep crashes like this do tend to see at least a retest of the lows in the months to follow. This good news on the spread of the virus does increase the chances that March 23 was the low. But the odds still favour a retest or a new low – and I would say a new low more. One way or the other, there will be a substantial rebound likely into at least August and as late as the election. This occurred after the first crashes in 1929 and 2000. This could be a bit stronger than in the past due the magnitude of recent desperate stimulus. The Nasdaq tech index could even make a new high while the S&P 500 and other indices do not. That would be a final sign of the topping process. That will be the time to get 100% out of stocks and most risk assets, including gold, and get into the safest havens like long-term Treasury bonds.

Even investment grade corporates did not hold up in this first crash – nor did gold after the first few day. Overall, the downside for this greater boom and unprecedented stock bubble going all the way back to 1982 is a downside of 80% or more as occurred in the 1929-32 crash and the Nasdaq crash of 2000-02. Not a downturn to sit through and hope for new highs just down the road. GOLD LOOKS TO BE PEAKING IN MID-LATE APRIL Gold has on a tear again and for good reason: “Unlimited Printing and Bailouts!” But there’s one problem: “The Sudden Deflation Shock” in the making right now. In the first four weeks of jobless claims we have seen a total of 22 million or about 14% of the workforce to add to the 3.5% unemployment prior – 17%+ already? State websites and phone lines are

GOLD PEAKING NEAR $1,800 WITH LOW NEAR $1,000 BY LATE 2022? Once gold broke above the critical level of $1,525 recently, my best target of $1,800 – the triple tops in 2012 – came into view. On Tuesday it hit $1,789… close enough! We could retest that high a bit higher at $1,800 or so by the end of next week, or not. If gold does start to fall rapidly and further confirm this top, the first support will be around $1,450 $1,480. After that: Watch Out! This is not baked in the cake yet, but it is a strong likelihood that few will see -- like in 2008 when gold was rallying opposite of the initial decline in stocks with the expectation of money printing. It didn’t see Lehman Brothers and the deeper recession and deflation shock back then. This one will be way worse and we won’t fully recover from it and then the economy will fall into that long 2-year+ deflation and deleveraging phase as occurred in late 2000 to late 2002 and early 1930 to late 1932. Don’t look a gift horse the mouth if you are still holding gold as a safe haven…It won’t be. The gold bugs will be wrong again. THE DOLLAR WILL RISE, NOT FALL, AS IN THE SECOND HALF OF 2008 Despite being right about a debt crisis building, they just can’t get it into their Neanderthal skulls that more dollars in debts and financial assets will disappear through the painful deleveraging process than can possibly be printed to create their neverending hyperinflation scenario. The recent stock crash in just 5 weeks destroyed more dollars than all printed by all the central banks in the last 11 years! There’s much more deleveraging to come with a deflationary downturn like the Great Depression, not an inflationary one like the 1970s and that gold bugs are seeing And mainstream economists are clueless as usual saying everything will be alright with some more antibiotics, i.e. money printing to cover over the pain and symptoms. EG

For further information, please visit: www.economyandmarkets.com www.executive-global.com

Spring 2020 •

PRODUCTIVITY STRATEGY PROFITABILITY

STRATEGY

Gfk Conseils-Juridis

Interview with

Romain Gerardin-Fresse CO-FOUNDER & DIRECTOR, GFK CONSEILS-JURIDIS

Strategy And Stability Through Crisis Our exclusive interview on Strategy and stability through crisis with ROMAIN GERARDIN-FRESSE, Founder and CEO of Gfk Conseils-Juridis, focuses on the activities of a crisis management firm headquartered in the French Riviera with a strong global presence spanning across five continents. Executive Global once again sit down with the award-winning multi-family office consultancy to discuss estate planning, luxury lifestyle management, intergenerational wealth, and investment advisory with the crème de la crème of advisory firms to High Net Worth individuals, affluent families, royalty and governments.

• Productivity, Strategy, Profitability

PRODUCTIVITY STRATEGY PROFITABILITY

Gfk Conseils-Juridis

How important is it to develop a robust strategy in challenging times, to maintain the integrity of intergenerational wealth through several generations? A crisis is a time when everything can rock if RGF each parameter is not perfectly treated. The key element is to maintain composure and scrupulously plan each step of the strategy. Secure assets contain consequences and prepare for the aftermath. Clearly defining the axis of the strategy to adopt, taking into account each specificity both specific to the crisis itself, and to the profile of the client is an essential variable. This is obviously fully applicable in order to preserve the integrity of intergenerational wealth. EG

And how different may the deployment of intergenerational wealth strategies look through successive generations with a Multi Family Office, as opposed to a Single Family Office? The multiplicity of supports, which can be RGF acquired only through a diversification of profiles and a raise in the financial areas of the assets under management, allows us to grasp with much more flexibility over the crisis, whose origin of which matters little elsewhere, because all of them – whether concerning the ecology, health, politic or environment– ultimately result in an economic crisis. The financial markets are absolutely horrified by the uncertainty and the temporary lack of horizon. We saw it with the Covid-19 crisis, where VIX, VXN and VXD (US financial market volatility EG

I AM PROUD AND DELIGHTED TO BE ABLE TO CONTRIBUTE TO A PROFESSION THAT MUST ALWAYS BE AT THE TOP OF EXCELLENCE FOR PARTICULARLY DEMANDING CLIENTS.

indices) reached record highs. The interest of a Multi-family office on a Single-Family Office is therefore undeniable. What are some of the ways you think that investors can diversify portfolios in an era o f heig htene d r is k a nd cap it a l is e on opportunities? One part is to invest in safe haven assets, such RGF as gold, real estate, or the Swiss franc. Bonds are still attractive over the long term. They have a negative correlation with risky assets. But many opportunities can flourish, precisely in correlation with the crisis. As we have seen with Covid-19, the sectors dealing with biotechnology or some start-ups focused on the medical field have sometimes gained 2,000% since the beginning of the year. Completely delirious bubbles induced both by pure speculative syndromes, but also by successive announcements according to the advances that are intimately linked to the crisis in itself are the same, like the approval of specific equipment such as test kits or the ratification of a major contract with a government. EG

Tell us about the strategies you have deployed to help your clients emerge victoriously through some of the greatest crises in the past? Émile de Girardin, a French politician of RGF the 19th century, said that ‘‘governing is planning; and not planning anything is running to its doom’’. Effective crisis management is significantly improved if you anticipated different situations upstream that might have found a similar outcome. This is why constant legal and economic monitoring is particularly useful and effective. It saves time and efficiency. Let us take the example of some major groups that we accompanied during this crisis; We have taken a firm stand with suppliers to temporarily suspend the financial obligations under Forced Majeure, resolved the salar y component in accordance with related legislation, and established a clear communications strateg y for clients. At the same time, we have reorganised the archetype of work and rearranged the patterns to be applied for them, while strengthening their cash flow by taking advantage of the proposed mechanisms, including bank and state support. EG

With expertise in legal, taxation and business strategy fields, what macroeconomic trends do you foresee impacting Multi Family Offices within the next 12 months? The economic impact will be long and RGF particularly severe. In Europe, the recession is now inevitable. Non-essential services closed by government decree, account for about one third of production. It is estimated that every month that these sectors remain closed, this is transposed by a 3% drop in annual GDP. France already foresees that nearly 20 years of growth will be EG

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annihilated by the Covid-19 crisis. Between January and March, GDP fell by 6%. This is dramatically historic. The social impact will also be extremely hard. 30 million unemployed more in the USA. There won’t be a return to a normal situation. Tens of millions of jobs around the world are going to be destroyed. Millions of companies are going to close. Some airlines have dropped nearly 20% of their fleet. All the major states of the world have activated «the money pumps» by «turning the banknotes» in order to compensate. The problem is that this government debt, which is sometimes unheard of, raises fears of historic inflation. We will have to pay particular attention to it. As is a fact that states may want to bail out by raising certain taxes or inventing new ones. These are watch points to scrutinise. Explain why the need for your core competencies covering the breadth of law, ta x ation, business strateg y and crisis communication in one holistic offering, may be more important now than ever? That’s exactly what I was explaining. The RGF management of an effective crisis is improved if, upstream, you anticipated. This is why constant legal and economic monitoring is imperative, and in all areas: tax, regulatory, normative, and financial. The complementarity of the offer is a precious optimisation, in a period where time is limited, more than ever. You can act simultaneously, with precision and speed. EG

Being one of the top 10 legal experts in Europe, as well as advisor to governments, royalty, celebrities and directors of large international groups, how important is integrit y in de veloping net works and relationships? There is a quote by Blaise Pascal that I like RGF very much; “Integrity is the search for honesty to oneself and not the search for integration with others.” I firmly believe that. Moreover, integrity creates credibility. I strive to always improve our services, and to treat all our clients with the same respect and consideration. The recognition which I receive is the result. EG

As an award-winning firm, how may Family Offices depend on GfK Conseils-Juridis as a beacon of stability and strength amidst the rolling tides of change? We regularly exchange with our colleagues, RGF and we gladly give them our opinion on the present situation or on a given subject when they ask us. I have also noticed that some people use our articles or publications on their websites as a reference value for their customers. I am proud and delighted to be able to contribute to a profession that must always be at the top of excellence for particularly demanding clients. EG EG

For further information, please visit: https://www.gfkconseils-juridis.fr Spring 2020 •

FINANCE

JSMineset

Everything Is Worth Nothing The world we live in today is unlike any other past era in that information overload has taken over. One might say this is because technology allows information to disseminate instantly. Others would be correct when suggesting there is simply more happening/changing in all facets of life and in much larger fashion than ever before in history. Article by

Bill Holter

PARTNER, JSMINESET

n fact, when writing on a topic one day, it may be old news by the time it is published, disseminated and read. While deciding on a topic and title for this missive, I realised that almost any single topic would likely be old news before even being published. Titles such as; negative interest rates,

negative oil, the world is headed toward ”no bid”, deficits do matter, free money isn’t free, inflation versus deflation, liquidity versus solvency, were all considered but when put together, ”everything is worth nothing” is the final result. Let’s look at each of the above topics and then tie them together. INFLATE OR DIE! Negative interest rates: at the turn of the century you would have been considered a lunatic if you spoke of negative interest rates. Yes, Japan had already basically zeroed rates out. But negative? This was impossible...or was it? By 2015, some rates were

• Productivity, Strategy, Profitability

beginning to go negative and by 2019, some $17 trillion worth of debt worldwide had negative yields. Negative rates are not sustainable because it destroys capital rather than creating it. Given enough time, negative rates would destroy ALL capital! Any currency with negative interest rates is like a huge neon sign with the word ”worthless” flashing. Think of it this way, if you own an asset (any asset) someone else wants to borrow, they must pay you for the privilege. If you are forced to pay someone to lend to them, your so called asset should be swapped to the other side of the ledger because it has become a liability.

FINANCE

JSMineset

Forced selling is an important concept to understand because this is what always happens during recessionary periods. Historically, bad debt or malinvestment gets liquidated during recessions. This has always been Mother Nature’s way of cleansing the system. The problem is this, official policy has not allowed any recession since 1982 to run its full course and clean out bad debt and renew growth on its own. The Fed has been petrified they would face a remake of the Great Depression should they allow a recession to progress naturally. They always forced rates down and massively printed currency each time to abort the contraction for fear of the domino effect of failed credit. In essence, the Fed is terrified of the margin man because it will cause forced selling that will spread like wildfire as nearly everything, everywhere, is margined or borrowed against. As Richard Russell always said, central banks must either INFLATE OR DIE!

Photo: MikeBKKlife / Shutterstock.com

Now let’s look at what happened to oil on that fateful Monday and Tuesday where the spot price traded as low as negative $40. Storage all over the world is approaching capacity, innovative storage options were being sought such as underused transport tankers. As the real global economy sputtered and basically shut down, so did demand and use of oil. But production kept running at rates prior to the demand shock. As days went by, what to do with all this produced but unused oil? Thus, oil which has always been an asset, turned into an instant liability. As a side note, if you own real estate for investment purposes, could your property(s) end up being a liability rather than the asset you believe it to be? Another potential title was the world is heading toward ”no bid”. As illustrated above with oil, our new world has shown that even something real and tangible can be worth less than zero. No bid can occur because no one is willing (or able) to make a bid for purchase. No bid can also occur due to margin calls. Buyers basically go on strike and will sit back and watch as forced selling occurs. Buyers will only step up when they see extreme value or when they believe the forced selling is over. www.executive-global.com

PROMISES ARE MADE TO BE BROKEN Two other titles under consideration were ”deficits do matter” and ”free money isn’t free”. Dick Cheney once said deficits don’t matter. This past week Chairman Powell said ”now is not the time to worry about debt”. I would say this, deficits don’t matter until they do, and exactly when would be the right time to worry about debt? Deficits in essence are ”free money” as it allows one to live beyond their current means and do not have to pay for now...only in the future. Another way to think about this topic is if something has no cost to create, can it have any real value? If we can print trillions of dollars that supposedly have value, why can’t we print an extra few and give the money to everyone? Just print the money and no one ever has to go to work again, right? And going one step further, why do we even need to pay taxes? The Fed can just print enough extra currency to pay everyone’s taxes and forward the funds to their new partner The Treasury. Nirvana right? But then the question remains, if dollars are free to print...what value do they have? Next we have the age old debate, ”inflation versus deflation”? We have always said the end game to our current system would see both simultaneously in different asset classes. But the very end would see total collapse of the currency. We are already seeing deflation in the things ”we have” such as real estate, businesses (stocks) etc. We are also seeing inflation of the things ”we need” such as food, medicines etc. What must be understood in a world of fiat currency is that the currencies themselves are in fact credit themselves. Currencies are not outright assets without liability like gold or silver, rather they are ”promises”. And as such, in financial meltdown (which is already under way and mathematical in nature), as credit gets liquidated, so does value to currency. The simplest way to state this, credit deflation ultimately destroys confidence and thus the currency itself. A destroyed currency is hyperinflationary as the final endgame. In the end, there can never be true deflation in a fiat world, because central banks will print whatever is necessary...their currency be damned! This leads us to the ”liquidity versus solvency” issue. 2008 was called a liquidity crisis, it was not. Rather it was a solvency crisis in the private sector and in particular, derivatives, and the leveraged real estate

sector. Central banks and sovereign treasuries were still solvent and the only ones with the ability to step in to save the day by absorbing trillions in bad debt/assets. Fast forward to present, central banks and sovereigns have spent 12 years propping up questionable debt/ sectors, and in the process ruined their own balance sheets. They are no longer the solution, they have become a very large part of the problem! Throughout history, fiat currencies have ALWAYS failed in hyperinflationary episodes due to over issuance. Bonds were destroyed in tandem with the currency. Stocks however acted differently. In each and every hyperinflation, stocks would bottom and then move in moonshot fashion...as measured by the failing currency with a caveat. The caveat being that stocks go up slower than the currency loses value, which leaves the owner with diminished purchasing power, but some value nonetheless. Tying all these topics together leads us to the title, ”everything is worth nothing”. Credit has been overly used to bid up all asset classes to the point where we now have an EVERYTHING bubble. Credit is central to nearly all asset valuations creating the problem that everything has someone else’s liability attached to it. Credit flows

HOW CAN ONE HAVE ANY CONFIDENCE IN THE VALUE OF ANYTHING, IF THE YARDSTICK IS CONSTANTLY CHANGING? THE YARDSTICK IS ONE PURE OUNCE OF GOLD.

only because confidence exists. What will happen once confidence is broken or not available ? Asset values will plummet. Lack of credit will not only destroy asset values but also cripple the real economy including most importantly, production and distribution of goods. Can you say ”change of living standards”? The inherent problem with today’s financial system (other than the fact that virtually everything on the planet has been borrowed against), is the fact that the measuring sticks (fiat currency) used to value assets is in constant flux. How can one have any confidence in the value of anything, if the yardstick is constantly changing? THE yardstick is one pure ounce of gold. What was an ounce of gold 200 years ago, is still the same one ounce and always will be. Gold and silver are THE best monies on the planet because they carry no liability and promise nothing- other than purity and the fact they were already mined and minted. All other currencies are inferior, as they are merely promises by the central banks who issue them…and- promises are made to be broken. EG

For further information, please visit: www.JSMineset.com Spring 2020 •

CEOPROFILE

Richard Wilson Family Office Club Chief Executive Officer

It takes dedicated energy, capital and a team to get great direct investment deal access... 24

â€˘ Productivity, Strategy, Profitability

CEOPROFILE

Richard Wilson Family Office Club Chief Executive Officer

FAMILY OFFICE WEALTH Our exclusive interview on Family Office Wealth with RICHARD WILSON, bestselling author, Founder and CEO of the Family Office Club, explores critical elements intrinsic to the formation of generational wealth as Executive Global look at the pertinent investment strategies deployed to manage the investments of Single Family Offices. We gain a fundamental insight into the realm of Family Office investing as we discuss the fine details and advantages of wealth preservation and estate planning for centimillionaires, billionaire families and ultra high net worth individuals. Could you shed some light on what are some of the most important differences, pros and cons between single family offices and multifamily offices? Sure, the main difference is that a single family RW office is built out for a single individual or family and not 5 or 10 or 50+ families like a multifamily office. One way to think about a multi-family office is that it is essentially a more holistic wealth management firm that only serves the ultra-wealthy at the $10M+ level of wealth. Single family offices focus all of their resources on the specific unique needs of a single family or individual so there is a dedicated team to run, specialised solutions, typically a focus on a few types of investments, and no need to do marketing to attract new clients. Multi-family offices on the other hand need to serve a wide variety of families from various industries and locations so there is a platform being leveraged by the clients so they don’t need to setup their own single family office. EG

What would you say is the most distinctive value The Family Office Club offers, compared to other family office organisations? We offer free membership for family offices RW and private investors, we have produced more thought leadership resources, videos, books, etc. then all of our compet-itors combined, and we offer performance fee only solutions to wealth families EG

www.executive-global.com

who want direct investment program development or help starting a family office. Our whole business model is to be generous with insights, share what we are learning ourselves by working with our ultrawealthy clients, and by hosting our 30 live events a year. What are some of the biggest challenges particular to the family office industry that you have to face in order to run a successful operation? The biggest challenges my clients face are the RW recruitment of excellent staff they can trust and employ for the long-term, and identifying family office quality solu-tion providers they can really leverage and get a strategic advantage out of. Many family offices fumble their work on direct investments, and it often takes them 4-7 years to develop a clear strike zone for direct investments, deal origination processes, good access to high quality screened deals, etc. This process can be speed up but between enjoying the wealth, managing family expectations, putting together a basic family office infrastructure, and deciding what new reality they want to live in, just getting great clarity on the family office goals and strike zone is at best a 9-18 month process with most families we work with. It takes dedicated energy, capital, and a team to get great direct investment deal access and many families don’t realise how bad their deal flow is within their first few years of liquidity we have found. EG

Spring 2020 •

CEOPROFILE

Richard Wilson Family Office Club Chief Executive Officer

If someone doesn’t have a truly compelling very high conviction committed team and strategy you should instantly move on to someone who does. CV RICHARD WILSON BORN USA ALMA MATER University of Portland EXPERIENCE 2019 Started Centimillionaire Advisors, LLC to service ultra-wealthy on starting family offices and sourcing direct investments 2018 Hosted 100th Live Event in 2018 2013 Wrote ”Capital Raising” book and acquired www.CapitalRaising.com 2011 Launched Family Office Podcast 2010 Published bestselling book on family offices with Wiley 2008 Purchased www.FamilyOffices.com and started consulting with family offices 2007 Launched the Family Office Club

EXECUTIVE RECOMMENDATIONS

» PRODUCTIVITY

Invest in your health to focus and produce more in less time

» STRATEGY

Focus on acquiring choke points that once seized propel your business or investments forward

» PROFITABILITY

Only spend time and capital on white space areas with little or no competition but high future demand and/or value 26

What is the reason behind the recent increase of interest in real estate investment among family offices? How does that shift affect the investment strategies? I haven’t seen a huge increase in real estate RW investment interest, it has always been there with my clients. I think I have seen an increase an interest in debt/income investments into real estate where there is collateral behind the investment though vs. straight equity investments. Also, I think that anything hard asset, income-producing, or collateral related is going to attract more families late in the cycle. One way to look at an increase in real estate investments though is the general macro trend of family offices and independent sponsor organisations, they are both the result of investors wanting more transparency, control, and active participation in their direct investment portfolio. For some, it was the very reason why they wanted to have a family office setup. The more family offices that get created the more direct investments into real estate will be conducted vs. through funds and nice ”point and click” platforms built for wealth advisors who have never once gotten off their chair to walk a property or vet a piece of real estate in real life with a client. Many multifamily offices are starting to do a better job on direct investment advisory help for ultra-wealthy clients but most still strongly prefer their clients simply put their capital into REITS and funds because it is more scalable and simple to offer that solution..that is a friction point if our space. EG

In terms of net worth brackets, what primarily differentiates wealth management strategies between millionaires, centimillionaires and billionaires? Typically HNW individuals just want RW diversification from their wealth advisor, nobody expects to go from being worth $100K to $5M because their private wealth advisor put them into a nice diversified basket of stocks. Some penny stock or commodity arbitrage traders may promise such things to HNW individuals but the average investor knows that is not realistic. The average HNW individual may own their own house and 1-2 rental properties, they may have bought a few bitcoins, or have done 1-2 angel investments, or picked a couple of stocks like Amazon or Costco, but that is the extent of their investments. This contrasts with those who are ultra-wealthy at $15M-$30M as a starting point up to $100M+ (centimillionaires). These are the clients we work

• Productivity, Strategy, Profitability

with directly through Centimillionaire Advisors, LLC, and have speaking on stage at our Family Office Club investor summits. They typically are breaking up their portfolio into three components. The first is diversified public market exposure, similar to what a private banker or multifamily office would put someone into to diversify their holdings and track the market or slightly beat it. Can we expect to see the decamillionaire and centimillionaire class to become increasingly populous in the foreseeable future? If so, what industries may be positively affected and become even more profitable as a consequence? Right now there are only 3,000 billionaires that RW we know of but 55,000+ centimillionaires and both are massively under-reported for privacy, bribery, corruption, and pre-liquidity event reasons. The number of ultra-wealthy is growing quickly, and when account for inflation as well, we are going to see a whole industry emerge around serving centimillionaires just as we have with family offices over the last 10 years. EG

In the event of an economic downturn (and leading up to it), what are some techniques that family offices can rely upon in order to preserve their wealth? Investing in collateral backed lending RW investments, using gross revenue royalty structures on their operating business investments, and finding collateral within companies so when they do invest with an equity investment they have some claim to a hard asset such as real estate or equipment to recover part of their capital in a worse case scenario. Other strategies include increasing their cash position from 3-7% to 10-20% to wait for a downtown, or only investing in distressed, already dis-counted investments. Some who do real estate lending may do only 55-60% LTV (Loan to Value) deals now when they were doing 65-70% in the past. EG

Considering family office investment trends, which industries offer the most optimal safety and, in contrast, which ones are more risky but potentially yield higher returns? There are high and low risk structures and RW investments in every industry, that is most critical to note with this question I think. You could do a low risk block-chain or cannabis investment and a high risk apartment building investment if you have the wrong team, structures, not right collateral, etc. The right team and unique/excellent EG

CEOPROFILE

Richard Wilson Family Office Club Chief Executive Officer

If you are raising capital I would focus on 1) Unique compelling offer 2) Aligned Structure 3) Focused Geographically & by Asset Class 4) Focused Co-Investor or Investor Target Sets. Too many people raising capital have generic statements about their firm, regular structures with high management fees, try to raise capital from many types of investors, and just have no focus on any level. RW

What are three qualities that make a great billion dollar investor? 1) Focus RW 2) Playing a unique game from everyone else in their industry 3) Integrity/Alignment/Integration to bring their strength to the table to win the game they are playing EG

With the growing wealth of former Soviet countries yet an absence of the family office industry in these places, could it be worth the risk of introducing this concept abroad? I spoke recently in the country of Georgia, in RW Tbilisi and found very few formalised family offices there. Most hadn’t heard of the term and much of the wealth that left still don’t completely trust the situation. Russia occupies 15% of the country of Georgia, yet they are their own sovereign country? That brings into question the definition of sovereign, and after what happened in Ukraine I think many would rather keep their capital mainly in London, Dubai, U.S., Singapore, etc. and they may have some real estate holdings in Georgia, and under-the-radar allocations of 5-20% of their wealth in such areas, but there is a lack of trust. Some other countries aren’t under occupation, but the whole area is under the sphere of Russian influence. If the Russians could influence a U.S. election imagine what they could do in Uzbeki-stan? EG

ABOUT RICHARD WILSON Richard is the CEO & Founder of the Family Office Club, the #1 largest association of over 2,000 registered ultra-wealthy families family offices. Richard also represents 77 investors with an average net worth of $22M through his RIA Centimillionaire Advisors, LLC and the PrivateEquity.com investor portal – where he helps clients access top screened direct investments coming through his investor club.

ACCOMPLISHMENTS

» #1 website & podcast

on the family office industry

» Hosted 130 live events

and published 5 books on the industry

» Built a 20 person team

at the Family Office Club over 12 years

» Hosting 30 live events

a year + 6,500 attendees in 9 cities

» Only author to write a book

on how to start a family office or centimillionaires, and the first to write a book on single family offices

www.executive-global.com

strategy is the most obvious form of risk after being in the business for a long time now I know that, more so then a market risk. One you can control and one you cannot, and you want to focus energy on things you can both control but also that will protect your downside and expand your upside. If someone doesn’t have a truly compelling very high conviction committed team and strategy you should instantly move on to someone who does. Smart families invest only in anoma-lies, deals which are 1 out of 500 or out 1 out of 1,000. If you are around long enough you can spot these, we see 6,500 professionals come through our 32 live events a year and we find just 3-4 dozen exciting deals out of the 6,500 connections and $4M+ in overhead on hosting those events. That is how hard it is to find a truly excel-lent deal in my opinion. Could you give a word of advice for families trying to raise their first million, and those who already have and are aiming for their first $100 million? EG

What are some of the best ways for a family office to increase its profitability? The ways we help clients create more RW profitability in their family office are: >Tax efficiency >Acquiring strategic choke points and assets to give them leverage, distribution, deal flow, etc. >Upgrade to family office quality solution providers and partners who can provide great leverage >Think about how you can completely dominate a niche, roll up small $500K-$2M EBITDA competitors, and then aggregate assets to sell to private equity on a multiple of revenue or high EBITDA multiple vs. what you invested at >Negotiation on fees, performance only fees, CoGP structures, adjusted waterfalls for help sourcing a deal, etc. Many clients give away fees that they could keep as they have lots of leverage at the table, and many times are paying 25%-50% more than they need to for their investments. EG EG

For further information, please visit www.familyoffices.com Spring 2020 •

FINANCE

Independent Precious Metals Advisory

The Controlled Demolition Of Western Civilisation Please forgive me that I don’t talk about the flu called “Corona”. I truly believe it is a deception and will remembered as the attempt to destroy the private economy as well as the capitalistic system. Article by

Claudio Grass INDEPENDENT PRECIOUS METALS CONSULTANT

hat we are witnessing during this “coronacrisis” is simply unprecedented. It is nothing short of a blatant attempt to destroy the private sector, the capitalist system and the financial sovereignty of every citizen. The state denies the right of every individual to work, to put food on the table, to provide for their families and to take personal responsibility for their own choices. On a societal level, is nothing less than the transformation into a technocratic, big data “new normal” that already exists in China and this Orwellian nightmare is already our new and sad reality. Ron Paul wrote the following the other day: “Governments have no right or authority to tell us what business or other activity is “essential”. Only in totalitarian states does the government claim this authority. We should encourage all those who are standing up peacefully and demanding an accounting from their elected leaders. They should not be able to get away with this.” This is what it is all about. Full control of the ones living off taxes over the ones who have to pay them. Maybe you remember my latest article in the previous edition of this magazine when I summarised the definition of capitalism from a Marxist perspective: “the workers spend what they earn and the capitalists earn what they spend”. This is how the original Marxist thinkers defined capitalism. You might have understood that in their eyes the individual is the worker and when everything is under government control, the politicians and bureaucrats become the real capitalist. It is important to understand that the term “capitalism” has been purposefully misdefined and hijacked from the beginning by Marxist thinkers. Six weeks ago, this was just a theory, but now it has already turned into reality. The corona scare shows just how fearful certain cultures and civilisations have become.

WELCOME TO THE ‘NEW NORMAL’ Anyone who believes that world will look the same in a few months’ time and that we will go back to normal, has not understood what this is all about. They have also not understood the importance of all

the rights and the liberties that we are “temporarily” giving away to governments and institutions and the likelihood of ever getting them back. History clearly shows that “emergency” restrictions and concessions have a way of sticking around long after the crisis is over and becoming a permanent fact of life. We already see this process take shape today: The World Economic Forum, among others, has already introduced a proposal about an “Immunity Passport” and a “Digital ID”, including health monitoring to trace every interaction with other people to assure “social distancing” will be part of the new normal. If concepts like that are implemented, you can be sure that you will end up in a scenario where governments and bureaucrats can at any time shut down your business again, and order you, your colleagues or employees to selfquarantine until your health rating will switch from red, yellow to green again. Man becomes nothing more than an algorithm, while data-driven rating systems dominate his life and can at any time lock him away for several days.

FOR EVERY PLATFORM THAT DECIDES TO COLLABORATE WITH AUTHORITIES AND STIFLE FREE SPEECH, A DOZEN ALTERNATIVES POP UP THAT RESPECT AND FOSTER IT.

How could you possibly run a small business under these circumstances? How can you plan anything if you and your employees might be pulled out of work at any moment? Another aspect of these measures of course is that people will mistrust each other, as all kinds of interactions are deemed dangerous and physical proximity is perceived as a health risk. This could be the end of interpersonal relationships, but also the end of a free society as we know it. Under such circumstances, only large “too big to fail-corporations” and crony-capitalists might

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survive, but for a small shop owner it will be the end. This paves the way for the chronic normalisation and mass implementation of “Universal Basic Income”, based on the fraudulent and totalitarian principles of “Modern Monetary Theory”. HOW WILL THE COMING WEEKS LOOK LIKE? First of all, the global deflation that has been triggered over the past few months will have a devastating impact on an already extremely fragile and hugely indebted financial system. This global economic freeze is unlike anything we’ve ever seen before and therefore its precise effects cannot yet be estimated. However, I believe that the majority of the individuals in the current system are going to suffer serious losses over the coming months and many of them will lose everything. When private business can be shut down on a whim and without any kind of due process, the concept of private property simply does not exist anymore. Of course, it still has to be seen which countries will be implementing this “new normal” as quickly and as harshly as the Chinese model, however, if we the people don’t oppose this, we will end up in an economic system which will be steered and planned from the top. This is what awaits at the end of this road, if citizens are incapable of thinking for themselves and instead delegate their decisions and personal responsibility to the state. IS THERE AN ALTERNATIVE? Here is where my outlook turns a little more optimistic: digital technology is highly asymmetrical, and skewed in favour of the individual. A centralised, hierarchical structure is very fragile, when compared to a decentralised, versatile alternative. Let me give you a list of very simple examples: Are you concerned about censorship? Rest assured, restrictions on free speech and other crimes of conscience have become unenforceable. Their unenforceability is becoming increasingly obvious. For every platform that decides to collaborate with authorities and stifle free speech, a dozen alternatives pop up that respect and foster it. Are you concerned about privacy and surveillance? Rest assured, unless you voluntary disclose your personal information on Facebook or Twitter, you can protect your personal privacy

FINANCE

Independent Precious Metals Advisory as well as a head of State, if you want to. You can choose not to carry a mobile phone, or to modify it. You can encrypt your private data so well that no government goon will be able to access it. You can transact with your peers in near 100% privacy. Are you concerned about financial repression? Rest assured, there is always physical gold, the ultimate store of wealth, and cryptocurrencies represent a superior medium of exchange. Those are the two functions of money. How can capital controls still be a thing, in a world where there’s bitcoin and dozens of alternatives that are well beyond the reach of these measures? You see, we don’t need to decapitate the king, if we can simply ignore him. The true revolution of this age will not be a collective movement, but a sum of individual revolutions. People opting out. If there’s suddenly no reason to listen to the tyrant, if his proclamations suddenly become unenforceable, why continue living by them? SO WHAT DOES ALL THIS MEAN? The digital age has a philosophy attached to it and there is such a thing as the philosophy of the Internet. Of course, this philosophy is written by no single individual. Nobody has the authority to edit or claim his version as the absolute truth unilaterally. It is instead an amalgamation of ideas and a result of spontaneous and continuous evolution. This new philosophy of liberty, is a mix of classical liberalism and the hacker culture, resulting in what is called crypto-anarchism. Its core ambition can be summarised as: “Total transparency for institutions, full privacy to individuals.” This philosophy is gaining ground. Tools are being developed allowing people to opt out, to ignore the parasitical intermediaries and the tyrants. A new conscience of individual freedom is growing, fuelled by the hacker culture. People worried about Facebook or Google abusing their position should remember AOL and Myspace, and realise regulation is the enemy, especially if it purports to protect us. And whenever regulation is enacted, you can count on courageous and anonymous developers to propose the means to ignore it, to make it null and void. We, the friends of liberty, are philanthropists. We love that real progress cannot be planned. Even though we can’t know what path free individuals will take, and thus can’t predict how and when beauty will emerge, we trust in the superiority of unplanned initiative, of distributed intelligence. We know in the end it produces more splendour. Therefore, my advice to you is to start reducing your exposure to the current system by moving into hard assets stored in sounder jurisdictions such as Switzerland or Liechtenstein, which still respect private property rights. Focus on private currencies backed up by hard assets (such as precious metals and base metals) whereby the property title can be traded independently of the current banking system. This is not the end of the corona crisis, not even close – the real fight for our individual liberty has only just started! Stay free! EG Photo: Mark Waugh / Alamy Stock Photo www.executive-global.com

For further information, please visit: www.claudiograss.ch Spring 2020 •

FINANCE

Monetary Policy

Total Digitisation And The War On Economic Freedom Believe it or not, there is a war against money - actual, physical, tangible cash. Western stores and businesses are beginning to refuse cash as a form of payment. For now, they are citing ‘health concerns’ due to the exceptional situation caused by the coronavirus pandemic. However, it isn’t unlikely that real money will continue to be gradually pushed out of circulation even after the extreme measures have ended and the pandemic has blown over. Make no mistake, this is no coincidence, nor is it the natural course of things. This is a war on cash, writes Thomas Hughes. hat is happening now is part of a more general trend that forces customers to use debit and credit cards to purchase goods and services. People are losing control of their wealth at a time when many financial institutions are on the brink of insolvency. In addition, global debt has reached record highs since the last global economic recession and the financial crisis of 2007-08, as the second recession is already well underway. If the chaos that the global economy has been plunged into has shown us anything, it is that governments and banks, whom we blindly relied upon as the pillars of developed societies, were shockingly quick to crumble within weeks of business coming to a sudden halt. In these difficult times, the people who merely follow the trend and allow institutions to completely digitise their currency are taking a big risk for trusting their wealth to a system that seems doomed to fail. Fractional reserve banks, the structure used in the United States, the United Kingdom and other developed countries, are excellent in times of prosperity, but they can be disastrous when things go wrong. And things have just happened to go very wrong...In this system, banks are only required to keep 10% of all the money they receive from their customers. The other 90% is loaned in the form of debt. However, when the entirety of the client’s money AND the loaned money begins to

exist in circulation, that means currency is ”created” out of thin air. The fact is: there is more ”money” flowing than banks could ever repay, especially if more than one borrower is in default at the same time. Although bank illiquidity is generally considered a thing of the past, it poses a very real threat if economic conditions deteriorate sufficiently. This lesson was learned the hard way by Greek savers who, during the country’s latest financial crisis, had their withdrawals limited to just 60 euros a day. When you let institutions handle the entirety of your finances, you effectively relinquish access to your own money! The situation has worsened for Cypriots whose government has seized up to 47% of their savings beyond 100,000 euros. If you think that such things cannot happen in the West, think again. FUTURE CRISIS OF DEBT MONETISATION Today, the global economy has even more debt, lower interest rates and geopolitical crises around the world. A recession like the one we are currently going through could lead western banks to insolvency, and they will take your money with them. What do you imagine will happen if the global economy collapses and your money is in the banks? It depends on the severity of the crisis and the currency you have. For savers of weak currencies outside Europe, the United States and other industrialised countries, you can say

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goodbye to your wealth. But for savers in modern economies, governments have a variety of techniques they will use in a crisis. None of these techniques, however, is good news for your savings. Nowadays, developed economies generally insure deposits. Therefore, if several banks go bankrupt, they will have to be bailed out with taxpayers’ money. But where will this money come from? Governments around the world are already burdened with debt and simply do not have the cash to bail out the banks without printing money. Governments will thus be forced to print money and cause hyperinflation, destroying the value of currency both in circulation and held in banks. Savers will be forced to pay the bailout of banks indirectly with the value of their savings. In addition, people may not be able to withdraw their money at will. In some countries, withdrawal limits may be in place to prevent people from draining all of the cash banks have on hand. Those unfortunate ones will be forced to see their wealth evaporate due to inflation. Of course, this depends on the nation and

FINANCE

Monetary Policy Photo: Peshkova / Shutterstock.com

its economic policies. Some countries may want to encourage spending because it stimulates economic growth. Their governments are likely to step in to ban gold, bitcoin and other alternative wealth reserves, in order to keep citizens from withholding their earnings. Back in 1933, the United States banned gold

during the Great Depression. This measure was taken because people were hoarding the metal to protect their wealth from the instability of banks. All American citizens were forced to exchange their gold for $20.67 per ounce. The metal is now worth almost $1,680. While it is unlikely that governments will attempt to seize private gold in our time, it is likely that they will make the purchase of the metal more difficult, which can become prohibitively expensive in a hyperinflation scenario.

GOVERNMENTS AROUND THE WORLD ARE ALREADY BURDENED WITH DEBT AND SIMPLY DO NOT HAVE THE CASH TO BAIL OUT THE BANKS WITHOUT PRINTING MONEY.

DIGITIZATION IS THE LOSS OF FREEDOM Governments can also impose negative interest rates. While negative interest rates are generally only used for banks in Europe, during a severe financial depression, the policy will likely be extended to citizens as well. Savers will be forced to keep their money in banks as negative interest rates and inflation erode their value. Inflation combined with stagnant economic growth is a rare but catastrophic combination. There is a war against physical money in many western countries, and businesses are making it

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increasingly difficult to use cash to buy goods and services. While the use of debit and credit cards may seem practical at first glance, it is potentially dangerous to hold large sums of money in banks during this economically uncertain period. People should take care to control their wealth, because if the global economy collapses, the banks will be the first to go down, and they will take your money with them. The US, for example, is already taking definitive action to reinforce the digitisation of wealth. A recent U.S. legislative bill has put the country’s support behind a cryptocurrency attached directly to the dollar at a 1:1 ratio. The USD Coin (USDC) has existed since 2018, launched by Coinbase and the Circle cryptofinancing company. In the light of recent events, it has only gotten more relevant for the U.S. and the Fed. Naturally, having full control over currency in digital form would give the Central Banks absolute power over the economy, which has been the driving force behind the aforementioned war on cash. And this is something we should be wary of, for history has shown us over and over again, that putting too much power in the hands of a small, select group of people can and will lead to despotism, the total destruction of private wealth and human freedom. Funny enough, Thomas Jefferson warned against this over 200 years ago, stating: ”If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered. I believe that banking institutions are more dangerous to our liberties than standing armies. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” ANYTHING BUT A FREE MARKET This warning is now more relevant than ever. In March, the Fed announced plans to buy out an unlimited number of government debt and mortgage-backed securities (MBS) to support credit markets. It seems as the Federal Reserve is ready to implement even more aggressive stimulus measures than the recent reduction in the key interest rate almost to zero and the purchase of new bonds worth over $700 billion. And it goes beyond just MBS: this time, they’re also going after corporate sector debts, in every industry - any debt instruments collected in bonds and sold to organisations such as pension funds and hedge funds seeking to increase profitability. While the Fed is currently dependent on the market, at this rate, sooner or later, it will replace the market. Time after time, the Federal Reserve’s intervention and artificial stimuli proved to be the only thing that kept the U.S. from a total collapse of consumer demand and thus the entire economyand this was the case before coronavirus disaster. This shows that despite any claims, Americans have anything but a free market, where asset prices are related to their intrinsic value and cash flows. Infinite cash injections remove the true market component in the US financial system. EG Spring 2020 •

FINANCE

The Morgan Report

The Case For Silver in 2020 Most of us know about 20/20 vision, that is perfect vision- seeing something so clearly there is no distortion, nothing but the complete view. It is with this background that this year, my attempt to clarify the picture about silver is my utmost objective. I wish to be crystal clear that anyone that reads and understands this article will not only pass it onward but will also consider whether they have the correct amount of silver in their portfolio.

Photo: Olivier Le Moal / Shutterstock.com

â€˘ Productivity, Strategy, Profitability

FINANCE

The Morgan Report

Article By

David Morgan PUBLISHER & CEO, THE MORGAN REPORT

or me, it is impossible to write an article about silver without including gold, because the similarities and differences must be known to fully appreciate the role each plays in today’s financial system and how they differ in the physical economy. Everyone knows that gold is money (actually very few know this and think currency is money), and if you have enough of it, then you can achieve financial freedom. Something every person that is retired, or plans to retire- strives to achieve. The most fundamental fact that this writer has consistently stressed is simple; all fiat ”money” fails. The track record for unsound money is perfect! In all of recorded history, each time the tie to gold, silver, copper, or some combination of those three metals has been severed, the currency has eventually failed. This is the one TRUTH that all political stripes can agree, but they do not. Many conservatives think it is impossible in today’s world and think the coming technocracy for the monetary system will ”save us.” That is the point however, that the currency de jure had to be replaced with a cashless system for a variety of reasons, with the only truth being that the reserve currency of the entire world was no longer trusted. Gold is often referred to as a hedge or as insurance necessary to protect ones assets from unexpected circumstances across the spectrum. Financial, weather, war, invasion, famine, pestilence and anything else you care to put into this category. It seems to me this is the correct approach to owning the yellow metal. Most of the central banks hold gold primarily for financial/economic reasons, but just like printing paper, owning gold is not the means of production – real wealth and gold can no more grow food or produce a cell phone than paper. Bear this in mind, as the picture of the new world comes into sharper focus. Silver can be of safe haven status and therefore placed into the insurance category, but this is inaccurate b e cause wherea s g o ld b eing worthwhile for the reasons above is excellent to own and may help in numerous ways; silver has a much more critical function. Before going into these salient points, the reader needs to know the truth about Silver. The truth is that silver, not gold is the real money. Now I know most reading this will want to argue the point. However, the fact is that the banking establishment have brainwashed the entire planet into believing

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that gold is money and everything else is credit. Let us look back into early recorded history and find out what one fact stands out. The Hebrew word for Silver is the same word that is used interchangeably for Money in the Torah and Old Testament. The federal reserve notes that we use today in this country in place of actual real Money is not what the Bible calls Money. Isn’t it also a fact that when Silver and gold were both trading as Money that the gold/silver ratio never got above twenty for well over 5,000 years? In 1873, Silver was officially demonetised by the Eastern Economic Establishment and that was when the U.S. went to a monometallic standard – gold only. This act ruined many of the free spirits in the Western United States, because their livelihoods were built on the most fundamental money- silver. The fact is, pure silver is valued far higher as money than it is as an industrial metal. What has brought the global economy to the current level? Simply, energy has been responsible for the tremendous amount of growth in population, lifestyle, and almost anything else imaginable. It has been cheap energy that has brought the global economy to the January 2020 level. If we did not have oil, the substitute for human and/or animal power - water, wind, solar, geo-thermal, would not have produced the energy density necessary for today’s world. Nothing- and I mean nothing, is more of a critical factor for past and future generations, than how much energy is available per capita. The more energy per person, the higher the standard of living. HISTORICAL RATIOS Which brings me to report that oil is responsible for more derivative products than anything else. Silver, however, is the second most useful resource for humanity. There is something like over ten-thousand different uses. My key point, is that although silver may be ”needed” in the sense that gold is used as a hedge or insurance, the fact remains that silver is indispensable, essential, crucial, and an absolute must for today’s way of life. Imagine no silver in existence…No computers, cell phones, electrical power, electronics, and so many others. Yes, possibly other metals could be used in some of the products. Still, in almost all cases, the outcome would be inferior to using silver. In some cases, there is no substitute at all, which means silver truly is indispensable in many applications. Recently the gold-silver ratio hit an all-time high, roughly 122 to 1, which means 122 ounces of Silver is required to buy one ounce of gold. In all of recorded history, the ratio has only been as high as 100 to 1 until mid-March 2020. Many precious metals proponents suggested taking advantage of this and trading Gold for Silver. The historical precedence for this is established, because in the prior extreme gold-silver ratio, an economic mess unfolded, and silver quickly started to outperform gold. Taking the ratio from over 100, back to a much lower ratio. Since gold is held as a reserve asset by many countries (their Central Banks), think of the opportunity. If Mexico, which has 120 tonnes of gold, were to swap for silver, (after all, Mexico is one of the top silver producers year over year.) The USD

value as of April 2020 is $6.4 Billion. That amount put into silver in April 2020, is about 430 million ounces of Silver. This is slightly more than two years’ worth of silver production from Mexico. This is the same amount of silver purportedly held by the iShares (SLV) ETF. In other words, Mexico would be ”hedging” two years’ worth of production, but at a ratio that took over 5000 years to achieve. The timing could not be better. Imagine if Mexico’s destiny is to maintain their national treasure in silver and drop out of the ‘gold only club’ of international banks. Many Central Banks would undoubtedly be more than willing to trade their dying by the day fiat, for physical gold. The problem, of course, would be that fiat is unacceptable, and a physical swap is needed. Put Up or Shut Up, as the expression goes! Admittedly, this industrial commodity would be used to relieve the current hard physical demand for gold. Recently my main presentation has explored the topic- ”What if silver were treated like gold?” The entire argument is that silver is valued far higher as money, than as a mere industrial commodity. This suggests that from the time silver was demonetised in 1873 to present day, that silver has lost its shine because as an essential commodity, it is less valuable.

THE MOST FUNDAMENTAL FACT THAT THIS WRITER HAS CONSISTENTLY STRESSED IS SIMPLY; ALL FIAT 'MONEY' FAILS. THE TRACK RECORD FOR UNSOUND MONEY IS PERFECT!

To come back to the early symbolism, silver (the colour) means truth by some Biblical Scholars accounts. The silver metal, is very closely associated in the scriptures with the subject of redemption. Trumpets are closely related to the topic of redemption in the gospel. In Hinduism, silver embodies spiritual enlightenment, eloquence, and encouragement. IT IS TIME TO RETHINK SILVER The financial definition of redemption is paying off a mortgage, bond, or note. Umm, and how would one pay off these items that are largely created out of nothing by a Babylonian system of Banking (fractional reserve lending)? From a natural law perspective, redemption can mean being saved from sin, error, or evil. At the risk of getting too close to the proverbial ”hot button” for almost everyone, let me ask with the current circumstances, isn’t it time to redeem the monetary system and perhaps ourselves? Is it time to rethink silver and what meaning it has to you? EG

For further information, please visit: www.TheMorganReport.com Spring 2020 •

FINANCE

GoldCore

Photo: Food Impressions/ Shutterstock.com

Gold’s Value as a Safe Haven and a Source of Returns Gold Outperforms Other Assets During Lockdowns and as Recessions Loom.

Article by

Mark O’ Byrne,

RESEARCH DIRECTOR, GOLDCORE

old is one of the top performing assets in 2020 year to date. As the pandemic and lockdown of entire economies tip debt laden economies into financial and economic crises and stock markets fall sharply, gold has risen 16.5% in dollar terms, 21% in euro terms, 25% in pounds and by more in other other currencies. Major stock market indices have fallen very sharply with the EuroStoxx 50, the European benchmark index, down over 22% and the MSCI World Index down 13% (returns as of 18/05/20). The only asset class to have outperformed gold

is U.S. debt- and this outperformance does not look set to continue. U.S. bonds are near record highs and record low yields. They may struggle due to the poor outlook for the U.S. economy, the U.S. fiscal position and the growing risks to the dollar from a very dysfunctional and uncertain political and economic landscape. Most European bonds have fallen in value and German bunds are marginally higher. Property markets gone into stasis or have fallen due to a lack of transactions. KBC estimates that Irish house prices could fall 12% to 20% in 2020 alone. Many property funds have suspended redemptions showing the very significant liquidity risk in property funds. Most analysts are concerned that we are likely to see both residential and commercial property fall in value the coming months due to falling incomes, leading to less first time and other buyers and falling rents impacting

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buy to let investment. Bank shares have fallen too, due to concerns about the outlook for banks, their loan books and the financial system. WHAT ARE THE FUNDAMENTALS OF THE GOLD MARKET IN TERMS OF SUPPLY AND DEMAND? There has been a surge in demand for gold by investors globally. Brokers, refineries and government mints were already struggling to fulfil this demand prior to the government lockdowns which forced most major gold refineries, mints and even mines to shut down. The physical gold market is relatively small when compared to stock, bond and indeed currency markets. All of the refined, investment grade (0.999 pure) gold in the world is 22 metres cubed and would fit on the centre court of Wimbledon. All it takes is a small amount of extra investment demand

FINANCE

GoldCore

Source: BlackRock Insights – May 18, 2020

to push prices higher. Today there are very few sellers and a level of safe haven investment demand not seen since the financial crisis. WHAT IS THE DIFFERENCE BETWEEN PAPER AND ELECTRONIC GOLD AND PHYSICAL GOLD? It is important to understand the difference between real physical gold and synthetic forms of gold in the form of various gold products and vehicles to get price exposure including crypto gold, digital gold via gold bullion trading platforms, gold exchange traded funds (ETFs), gold futures and gold CFDs. If you are bullish on the price of gold and fancy a short term punt on gold, these are good ways to get exposure to the price. All are forms of digital gold, whereby you are trading gold in a digital manner and have the cyber, counter party and systemic risk that goes with this. What is gold bullion? Well bullion is simply a precious metal - gold, silver or platinum - in pure investment grade format which means it normally 99.99% pure. The safest way to invest in gold, either as a lump sum investment or in a pension, is to own physical gold in the form of gold bullion coins and bars where the investor has outright legal ownership of the actual asset and is not an unsecured creditor of a highly indemnified product provider. IS GOLD PRICED IN DOLLARS? The short answer is no- despite the perception by many, including experts, that it is. It is correct to say that the most commonly quoted gold price is the price of gold in dollars. However, German, Swiss and Chinese investors buy gold from brokers and banks in local currency terms – in euros, Swiss francs and Chinese yuan. Similarly, our UK and Irish clients are quoted in and invest in pounds and euros. We make a market in gold bars in all major currencies and have done so since 2009. The spot price of gold as quoted in newspapers including the front page of the FT, is the price for physical gold in very large volumes as traded by large bullion banks including JP Morgan and HSBC. They trade gold between themselves and with central banks and other official players- and they make a market in gold bullion bars. These are very large gold bars called London Good Delivery Bars which weigh 400 troy www.executive-global.com

Gold in Euros -Monthly, 10 Years (GoldCore.ie)

ounces costing about €600,000 per bar – many of which are stored in the Bank of England. Retail and HNW investors, invest in gold bars (1 kilo or 32.15 ozs) which cost around €50,000 per bar, or gold bars (1 oz) which cost about €1,650 per bar (at the time of writing spot gold in euros is at €1,600 per ounce). Physical gold bars command a premium compared to paper or digital gold- and investors are willing to pay premiums as high as 3% on kilo bars and 5% or 6% for ounce bars. The market is buying kilo bars at 1.5% - and one-ounce bars at 2.5% over spot, so the spread is currently some 1.5% for larger bars and 3.5% for one-ounce bars. Premiums rise in bull markets and when there is much demand, and fall in bear markets when there is less demand.

IT IS IMPORTANT TO THINK OF GOLD IN LOCAL CURRENCY TERMS. OUR EXPOSURES AS INVESTORS, PENSION OWNERS AND SAVERS IS CURRENTLY TO THE EURO.

Investors then pay storage fees of between 0.49% per annum and 1% per annum. Its not a low-cost investment option. It is a premium, safe haven asset and in order to own it in an ultra-secure manner, investors are willing to pay premiums and storage fees. The alternative, is low cost but high-risk gold products. As with most things in life, you get what you pay for. Price is what you pay but value is what you get. THE OUTLOOK FOR GOLD IN A WORLD OF MASSIVE EURO, POUND AND DOLLAR CREATION It is important to think of gold in local currency terms. Our exposures as investors, pension owners and savers is currently to the euro. The outlook for the euro is uncertain to say the least, given Brexit and the likelihood of ‘Italexit’- given the very poor state of the Italian economy and banks. Strong safe haven demand for gold continues due to concerns about the outlook for the UK, EU and global economy, the unprecedented monetary response of the ECB, the BoE and the other central banks as well as growing concerns that digital currencies will be devalued in the coming months and years. Gold will protect and grow UK and Irish investors wealth in the coming years, as it did in the 2007 to 2012 period (see performance table above). EG

For further information, please visit: www.GoldCore.ie Spring 2020 •

FINANCE

Central Banking

Whackamole! Monetary Oblivion in the Name of ‘Averting Crises’ It used to be, not so very long ago, that printing money into a widening hole was seen as the epitome of a banana republic. That has changed dramatically over two short decades, although the underlying principles have not. Now that the diverse programs of quantitative (as in voluminous) easing (as in making it easier for the avariciously rich to escape their just deserts) have a new poster child in COVID-19, it has provided the perfect ‘more pressing issue’ to mask the fiscal madness that continues without check, states Shannon Berkley. he fatal decision by so many regimes to print money to ‘buoy markets’ was never subject to much effective public outcry. Now, buoying the markets further in the name of ‘saving the economy from the effects of the coronavirus crisis’ has become something of a fiscal virus of its own. Modern leaders have lost any ideal of the real public good — they boldly and perilously continue to ignore hundreds of years of monetary and broader economic history. It is a history that clearly illustrates how printing money ad infinitum inexorably leads to hyperinflation, the end of price discovery and asset price bubbles. Masked by the intimidating nature of the big picture’s global intricacies — difficult concepts for the layman — as well as aided by this lack of understanding and the desperation that the average citizen feels simply to maintain a comfortable existence on the modern globe, something dangerous has become a habit. Quantitative Easing (QE), for those who can remember, was initially sold as a brief stopgap, an emergency meas-ure, an unavoidable moment that would allow the world’s citizens to move on and forget it ever happened. That hasn’t happened.

FIAT IS LOSING ITS FITNESS Never before has the world seen such a coordinated global effort by money handlers to

effect easing measures. While it might simplistically seem a logical solution, it conceals the far worse potential of a wholesale collapse into worthlessness. That fundamental return has not been removed from the equation. Indeed, the money movers are expecting the consumer end to keep playing by the old rules, while they run the printing presses like a bankrupt island nation. There has been the depiction that ‘saving the economy’ is really for the citizenry, whereas big money is the most buoyed, while those same citizens are accumulating the bill for it. Institutions like the European Central Bank, Reserve Bank of New Zealand, Bank de Mexico, Bank of Thailand, South African Reserve Bank, Central Bank of Iceland, Reserve Bank of India, The Central Bank of the UAE, Sveriges Riksbank, People’s Bank of China, Bank of England, Central Bank of Nigeria and Bank Negara Malaysia, are all engaged in what can only be described as a coordinated effort to lubricate economies by printing cash. Unfortunately, the repercussions of such behaviour remain the same as they ever were: an eventual (and sometimes then sudden) face-off with hyperinflation, driven by thinning market sentiment and spirit. The actions of the US Federal Reserve have at times either laid a blueprint for or exceeded those of the above institutions. Somehow, in spite of the

• Productivity, Strategy, Profitability

very dire and obvious reasons not to, all of these entities are engaged in what can only be described as a coordinated effort to flood econo-mies with cash, when that behaviour is very definitely a poison to economies. The new governor of the Bank of England, Andrew Bailey, has openly stated that he is willing to print infinite money — an alarming statement from a nation’s central bank, and one that borders on virtual insanity. It would seem the malfeasance innate to decades of central banks’ actions are culminating in the surreptitious sleight of hand that their monetary injections and rate cuts represent. Such measures,

THE MORE MONEY IS PRINTED, THE FASTER THE APPROACH TO THAT HIGH-RISK SCENARIO. IT'S A SIMPLE GRAPH AND THE INPUTS DON'T CHANGE. NEITHER DO THE RESULTS.

FINANCE

Central Banking Photo: Xinhua / Alamy Stock Photo

which would be deemed unacceptable under any other kind of market conditions, are attracting none of the alarm they should. Occurring at a time when the whole world is diverted and completely preoccupied with the effects of a ‘viral pandemic,’ economic lunacy has become mainstream. National fiscal suicide now seems an acceptable pastime, if only because the horror-show effects it encapsulates can be delayed. It takes a while to die. WHAT MAKES MONEY VALUABLE? Any nation with any currency can get to a point where the math no longer adds up for citizens, investors and trading partners. Market sentiment can have overnight and catastrophic effects. Very much as former bastions of the financial world disappeared from the face of business forever on the back of their own greed, so too is no country immune from the same dynamics. The more money is printed, the faster the approach to that high-risk scenario. It’s a simple graph and the inputs don’t change. Neither do the results. The bright pink elephant riding the unicycle around the living room must be addressed. Regimes are playing Russian roulette with the global population’s children. What kind of economic stability and prosperity can they hope to bequeath their children, when printing notes has be-come a delirious fascination and default response?! Akin to www.executive-global.com

doctors prescribing rubbing in dirt to heal wounds faster, central banks have brought out a tool for oblivion as some kind of salve. The ephemeral driver of currency value — market sentiment — is something central banks have no real control over. Historically, this was the very thing that guided their behaviour: macroeconomic imperatives and the narrow paradigms of market sentiment. Excessively printing money was seen as prodding a beast, precisely the kind of image such institutions eschewed, presenting (for extremely good reasons) as conservative, cautious, and rock solid to the core. At a certain point, printing money brings home the same results, no matter whether it happens in a developed country or peasant island nation. If Europe is seen as the epitome of tight money management and solid economic stewardship, it’s worth noting that printing infinite money has ravaged many European countries in the very recent past. Unlike the immunity typically wrought by surviving a virus, rolling the printing presses carries an illness that can return time and again. If all of the current, ongoing rate cuts and note printing into monetary oblivion cause a complete loss of faith in a national currency, dramatic devalua-tion is all that ever follows. Those are, after all, the rules of the money game.

Monetary value is still and will remain largely a social contract; an agreement. When one party starts behaving like a delinquent teenager (central banks), the other parties (businesses, investors, neighbours and citizens) have every right to minimise their exposure. In short, they dump the currency wholesale, and an implosion always follows. THE BRIDGE IS OUT, ON THIS ROAD omehow, against centuries of proof and every solid principle that guided central banks’ management of economies during their growing years, the world’s citizens today have allowed the unthinkable to manifest, and the former Joker sits on the throne. Now, facing a possible pandemic, citizens are willing to apply given hope in a dark moment, even a hope that is fatally flawed. Although money-printing madness can almost be seen as a simplistically good thing — especially when many are experiencing non-employment and a stay-at-home nervousness about the future — it isn’t. Certain expert responses to the coronavirus affliction have changed dramatically too, unfortunately often after they spark widespread panic and a renewed commitment to keep the printing presses rolling and economies buoyant! The realities for the international banking consortium that handles the planet’s money are buoyed in their own right by the COVID-19 lockdown. There is a thinly veiled belief by certain money houses that the worst effects of the global debtbomb explosion can be mitigated by the extensive shutdown of the world economy. However, even a newly minted accountant could attest that exposure to debt service is simply too great to stop things unwinding, but perhaps they hope that the coming apart can be slowed enough not to result in a total catastrophe. This game of whackamole can only end in tears. The evidence of the last 5,000 years of civilisation is a book of knowledge difficult to dispute. The Greeks, Romans and other ancient civilisations tried the same thing too, and it seems we have yet to learn. In the modern age, the hope that our clever tech and new ways of doing things can make for different results is deluded. By now, the writing is on the wall. To those who look upon the proliferation of toxic monetary mechanisms and easing strategies and aren’t sold, the indestructible solution lies in gold. Ever the safe haven and shiny anchor in most portfolios, gold has never looked so good. It is utterly irresponsible and unacceptable for governments, aided by central banks and news corporations, to shut down citizens’ economies — and with them the livelihoods of untold millions — in the name of ‘averting a crisis’. Rather unfortunately and surreptitiously happening at a point in time when central banks are monetising debt as though their lives depend on it, the real nature of what is happening is largely masked and unspoken. It’s theft, robbing future generations of any hope of stability and prosperity. Quantitative Easing is a cannibal, and it’s currently enjoying easy passage in a silent and cowed world. EG Spring 2020 •

FINANCE

Fiscal Policy

Helicopter Money Debunking UBI Trying times are upon us. As economies around the globe came to a sudden halt, exposing the instability of a system many thought infallible, the illusion of order began to crumble. Amid this unprecedented collapse, amid closing businesses, lost jobs, unpaid salaries, missed payments and shockingly revealing shortages, governments and institutions are hastily scrambling together solutions to remain afloat, writes Oliver Taylor. he COVI D -19 pandemic ha s demonstrated that even the world’s main superpower was ill prepared to withstand a pause in its money-making machine. The economy of debt was quick to fall apart the very moment people stopped spending money that was never truly theirs. Now, beyond even the perils of a deadly illness, those people are faced with a lack of funds and products, bills they cannot afford, and the shackles of quarantine that no one was ready for. With a large portion of the common folk, the working class, living paycheck to paycheck, the crash that was caused by the novel coronavirus lockdowns proved to be back-breaking. Naturally, if consumers are unable to spend money on goods and pay their bills, everything else will quickly fall apart. Therefore, measures such as Donald Trump’s coronavirus relief bill, or Rishi Sunak’s rescue package, are surfacing to help offset the disastrous financial consequences of the pandemic. A thousand dollars in the hands of every citizen - like a bag of money dropped right out of a helicopter! The authorities in the USA, and other countries, plan to undertake such solutions in the fight against the economic crisis caused by the coronavirus. Yet, will such a recipe really help the citizens of affected countries and the entire world economy in the long run? While the American plan has encountered obstacles in the senate, $250 billion was to be initially allocated to support the population in the form of direct targeted assistance. This suggests that for every adult American with an income of less than 75 thousand dollars a year, there will be about a thousand dollars. If the situation with the spread of COVID-19 does not improve before

the end of April, the US authorities are ready to send another $500 billion to this end. Similar measures have already been submitted by the Hong Kong authorities, who are going to pay each citizen 10 thousand Hong Kong dollars (about $1,300 USD). A STATE POWER MONOPOLY While such rescue packages can be a welcome relief for many, Trump’s and Steve Mnuchin’s promises to hand out money directly to the people, immediately prompted widespread discussion far beyond the United States and its problems. The debate about the controversial idea that is universal basic income (UBI) is back in the spotlight, its flame reignited by the emergency pay-outs. If governments can give funds to cover the people’s essential needs during times of crisis, some believe they can and should do so on a regular basis, even when things even out... The very notion of providing every citizen with the same amount of money fits well with the doctrine of universal basic income, which many left-wing economists have long been promoting in the West. It is believed that the state must provide everyone with regular guaranteed payments that cover basic necessities of life. In theory, this should be done so that most people don’t have to worry about their daily bread and devote their time to more productive activities than earning livelihoods at low-paying jobs. In theory again, it sounds lovely. However, this measure seems popular only at first glance - in reality, it hides a number of systemic economic problems that continue to become ever more dire under the influence of the coronavirus situation. The idea of a universal basic income is

• Productivity, Strategy, Profitability

not only of doubtful achievability, but it also opens the door for a dangerously empowered state and a system of ‘slavery through stipend’. Of course, in times of crisis, the distribution of money can benefit the economy, but it should never be considered as the norm for a long-term system. A DANGEROUS PRECEDENT On one hand, if this helps maintain and aggregate demand for some time, then this measure can only be welcomed - one-time payments in situations such as the current are not without merit. If people are quarantined and employers are unable or unwilling to pay their salaries, the state can and should come to the rescue. On the other hand, if such decisions are made on an ongoing basis, the perpetuation of

FINANCE

Fiscal Policy

Photo: MediaPunch Inc / Alamy Stock Photo

government-issued paycheques can quickly lead to chaos and hyperinflation. While Rishi Sunak’s plan to pay UK self-employed workers £2,500 per month is a potent temporary solution, if it were to become a permanent fixture, such a measure would lay ruin to the prosperity of capitalism. We should be wary of these ‘temporary solutions’, for if left unchecked, they can serve as the precedent www.executive-global.com

to UBI, while their own value is hardly enough to cover a person’s basic needs: a thousand dollars for every American is a relatively small amount, and compared to the money that was given out to banks during the 2008 crisis, it’s nothing at all. Applied long-term, the distribution of money will not help the economy, nor get rid of the problem of low inflation, the answer to which has not yet been found for several years, either in the USA or in the European Union. Increasing the money supply on hand with the help of emergency measures is not a systematic solution; investing in it will not lead to economic salvation. For the normal functioning of the economy in true, free capitalism, it is necessary that working people receive normal salaries, and not helicopter money. In fact, there doesn’t need to be a debate on whether universal basic income works or not. We can skip the pros and cons, and simply look at what came of its 2017 attempt in Finland. The experiment failed. 2,000 Finns received €560 per month for two years. The control group was chosen randomly, but was subject to special requirements: the participants were unemployed, poor and not older than 28. The authorities hoped that unconditional payments would motivate able-bodied, but lowincome citizens to seek out work. In the end, it turned out that they progressed only slightly more actively than other unemployed individuals. Truthfully, €560 is a very small amount for Finland. The allowance is several times less than the cost of living, and it didn’t allow the project participants to get out of poverty, for they were forced to apply for ordinary benefits and other social assistance nonetheless. The same can be said about the helicopter money promised to Americans by Donald Trump. It may be a welcome present for some, which will temporarily (and artificially) increase spending in a stagnant economy, but it most certainly cannot take care of a person’s basic needs - in New York, for example, monthly rent alone is largely between $1,700 to $4,500 USD. If the COVID-19 epidemic has shown us

anything, it is that the global financial system of debt is heavily flawed and was not built to withstand serious challenges. Without fundamental structural reforms of the economy at its core, universal basic income will be naught more than a cosmetic measure. For the left wing, UBI is too focused on the finances and purchasing power of the population, leaving aside the fact that companies produce too many unclaimed goods, forcing employees to work more and more. The program also threatens to lead to budget cuts in other social services. For the right, there are fears that such a system would be extremely costly for the budget, and could create a dependency syndrome for a culture in which people would expect money without doing anything. If material compensation isn’t based on creating added economic value, it erodes the worth of the economy altogether. A THREAT TO FREEDOM & PROSPERITY Those are all valid concerns, but worse yet, the implementation of a universal basic income threatens to pave the way for a system that is inherently dependent on the state. Kiss the freedoms of a capitalist society goodbye, for a government empowered to such extremes is nothing short of a communist dictatorship. UBI is more than a simple hand-out of money - it is a complex system that inevitably leads to a power monopoly of the state as every citizen’s welfare becomes bound to the rations allowed by central banks. Thus, any person that advocates universal basic income, or should we say permanent helicopter money, is calling for communism and a consolidation of power around a totalitarian government, whether they mean it or not. Ironically (or perhaps hypocritically), the supporters of UBI like Tusli Gabbard, Steve Mnuchin and Andrew Yang have all built their wealth as beneficiaries of a free and open democratic society with free markets, a functioning economy and individual liberty - all things that such a system would shatter. If you do not identify as a devout socialist and you think of UBI as an adequate solution, consider the consequences, and think again. It is the complete opposite of capitalism and personal prosperity. EG Spring 2020 •

FINANCE

Monetary Metals

Why Gold, And Why Now? The price of gold has risen to over $1,700, making it perhaps the only asset that has gone up in US dollar terms since the start of the COVID-19 shutdown. For example, the S&P 500 index closed February at 2,951 and as of April 24 is 2,829. And this is after a rally that began on March 24, based on hopes of unlimited liquidity provided by the Federal Reserve and unlimited subsidies provided by Congress. Article By

Keith Weiner

CEO, MONETARY METALS

hether or not bond-buying by the Fed or handouts by the Treasury can help clothing retailers like Macys (whose stock has lost 2/3 of its value) or airlines like Delta (whose stock has lost 60%), one thing is clear. The government is digging itself into a deeper hole, at a faster rate. Long before now, its spending was likened to that of a drunken sailor. And now, spending has surged even higher. In the 12 months ending March 31, the US government’s debt ballooned from $22 trillion to $23.7 trillion, a gain of about $1.7 trillion. This is just the bonds outstanding, and does not include contingent liabilities, such as pension or bank guarantees, or unfunded liabilities, such as Social Security and especially Medicare.

EVER GROWING DEBT So $1.7 trillion is the baseline. President Trump signed the CARES Act into law on March 29, and the spending began to ramp in April. The Act authorises $2.3 trillion worth of spending. In addition on April 24, he signed a bill to add $0.5 trillion more for small businesses. This brings the total new spending in the wake of the virus so far to $2.8 trillion. There will almost certainly be more. But it gets worse. With 26 million people laid off, hundreds of thousands of businesses either bankrupted or hanging on by spending their accumulated capital, and countless people who now have much-reduced incomes, tax receipts will be lower. Let’s assume a decline by $1 trillion, to be conservative. This brings the deficit tally to 1.7 + 2.3 + 0.5 + 1.0 = $5.5 trillion. Not counting any additional spending, which is sure to come. The debt on April 1, 2021 will be over $29 trillion.

Photo: VladKK / Shutterstock.com

IN THE 12 MONTHS ENDING MARCH 31, THE US GOVERNMENT'S DEBT BALLOONED FROM $22 TRILLION TO $23.7 TRILLION, A GAIN OF ABOUT $1.7 TRILLION.

• Productivity, Strategy, Profitability

DO YOU WANT TO BE A CREDITOR TO THIS GOVERNMENT? The risk to lenders is mounting. While the compensation they are paid, to assume this risk, is dropping. About 18 months ago, in October 2018, the 10-year Treasury bond paid 3.2%. In January this year, it still paid 1.8%. However, by the second week of March, the yield had fallen to 0.5%. Whatever case there was to own Treasury bonds at 3.2% yield has all but evaporated now. The case for buying gold is not really about exposure to gold’s price. It is about avoiding exposure to the government’s credit. Monetary Metals investors can earn 2% to 4.5% interest on their gold, paid in gold. EG

For further information, please visit: www.monetary-metals.com

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LEGAL & ADVOCACY

Gomez Tomiczek Law Firm

The Challenge Of Protecting Our Assets In The Face Of A Global Crisis Facing a global economic crisis is a challenge, but above all it is a challenge to protect our investment at any cost. The COVID-19 virus took many people who did not have their assets organised by surprise. Article by

Abel Gomez

FOUNDING PARTNER, GOMEZ TOMICZEK INTERNATIONAL GROUP

t is of utmost importance to know the necessary facts to make an enlightened decision and to decide how to deal with the current situation. A Panamanian Private Interest Foundation (PIF), better known as a Panamanian Foundation, can protect your assets from legal disputes, and ensure that after your death your assets pass to your chosen beneficiaries without undue complications.

ESTATE AND PROBATE PLANNING For legal purposes, the foundation's assets constitute a separate estate from the assets of the founder and the beneficiaries, and are not subject to claims of obliga-tions acquired personally by the beneficiaries or the founder, which allows control of the risk on such assets. Just as in a will, the private by-laws, which is the document that governs the conditions of the PIF and the nominated beneficiaries, can establish how profits and interests will be distributed, that is, who will take control over the administration of the Foundation's assets. In case of illness, mental incapacity or accident of the Founder, it can be established who will remain as administrator of the assets and thus maintain the purposes of the PIF. PRIVACY AND CONFIDENTIALITY The PIF Law prohibits the disclosure of information about the foundation's business. Likewise, the recently created regulatory framework, Law 129 of March 17, 2020 appoints an authority obliged to keep the identity of the final beneficiary protected, called the Private and Unique System of Registration of Final Beneficiar-ies of Corporate Bodies, created for the prevention of money laundering, financing of terrorism and proliferation of weapons of mass destruction, which are also crimes under the Law of Panama.

SUCCESSION: CHILDREN In the PIF, parents may designate a fund for their children's education (designated as beneficiaries of the PIF) with special clauses that regulates their entitlements, for example: "children may not rent limousines to go to school; they may only spend a certain sum of XY for holidays", among others. TRANSFER OF GLOBAL ASSETS By keeping real estate in another jurisdictions, its management is expedited without legal restrictions both inside and outside Panama. The Founder can be ap-pointed as administrator and maintain control over all assets and properties of the PIF. TAX OPTIMISATION PIFs do not pay taxes in Panama on income generated abroad. The PIF can own assets abroad and not pay taxes in Panama, because of the "territorial" tax system that Panama has. This option may be attractive for entrepreneurs who are not tied to any certain place, since they are only taxed on income obtained within the country. It means that a foreign resident in Panama can earn his money in other countries, and the income generated abroad will be tax-exempt in Panama. Under the condition that Panama exchanges financial and tax-related information with other countries worldwide in order to maintain control over the origin of the income and prevent money laundering, financing of terrorism and proliferation of weapons of mass destruction. CERTIFICATES OF DEPOSIT (OFFSHORE CD) As for the basic organisation of banking services in Panama, they are divided into Personal, Commercial and Private (Investment) Banking and these are sub-classified into: Checking and Savings Accounts, Certificates of Deposit (Time Deposits). There are banks in Panama that offer interest rates of 0.250% for a 30-day certificate of deposit, or up to 4% to 5% for a deposit term of minimum three (3) years. The interests generated do not pay taxes in Panama (recent reforms to Panama's tax code). In order to open any bank account in Panama for

â€˘ Productivity, Strategy, Profitability

LEGAL & ADVOCACY

Gomez Tomiczek Law Firm Photo: Rodrigo Cuel / Shutterstock.com

non-resident foreigners, the following documents are generally requested: 1. Bank reference letter (letter from the foreigner’s bank in the country of origin or permanent residence certifying a stable business relationship and its duration; 2. Proof of income and evidence of origin of funds; 3. Passport and second identity card document (driver’s license or personal identity card), 4. Proof of domicile, among others. ELECTRONIC FORMATION OF INTERNATIONAL BUSINESS COMPANIES (IBC) AND PRIVATE INTEREST FOUNDATIONS (PIF) With the new Home Office tendencies, originated by COVID-19, Panama offers the possibility for lawyers to register IBCs and PIFs by means of electronic registration. The online registration process reduces the processing time and gives the client the opportunity to create IBCs and PIFs without the necessity to appear personally before a notary public. When creating a PIF it is not required that the Founder be a resident in Panama. Therefore he/ she can be a national or foreign natural person or corporate body, acting on their own behalf or by means of a third party. PANAMA - OPTIMAL INVESTMENT FOR A PLAN B Housing trends will change after COVID-19. For many the current situation has shown the need for a backup plan. When investing in real estate, purchasing a retirement or second home consumers will want to regain their own space, using the comforts of their home, and not depend on what happens in an apartment complex. The current experience of the COVID-19 crisis could lead people away from city centres, in search of unique spaces, but meeting basic needs such as access to fresh water, electricity and reliable internet connection. Although Panama City is a vibrant and modern city, much of the interior of Panama remains quiet and remote. The isthmus of Panama offers mountains and beaches, and allows you to wake up in the Caribbean and have lunch overlooking the Pacific. Many foreign investors are unaware of beautiful places like El Valle, Pedasi, Rio Mar, Santa Catalina, Boca Chica, Boquete (where by the way one of the most expensive coffees in the world is produced - the Geisha Coffee variety) or the Pearl Islands of Panama. Additionally, Panama is a favourable place for investment in (organic) agriculture, due to the fact that the soil is particularly fertile and the climate is favourable for growth. Since it is a developing country, and the government of Panama aims to make the country attractive for investment, various tax incentives are available to foreign investors. But it is not only the location criteria that will change the tendencies when investing abroad. The second important consideration is legal residence. In order to spend a significant amount of time in a country or move to a second domicile abroad, a residence permit is required. When countries began to close their borders due to COVID-19, tourists were the first group to be blocked. But

www.executive-global.com

in the case of Panama, foreign residents were still allowed to enter. The Panama "Friendly Nations" Visa is a popular way to obtain permanent residence status combined with a Panamanian identification card (E-card) and personal tax number. It is open to citizens of the United States, Canada and most of the European countries. Additionally, Panama's “Jubilado Pensionado” migration program offers special benefits and discounts for foreign retirees, and the opportunity to obtain permanent residence with a Panamanian E-card. Foreign investors will find that Panama has special regulations that favour real estate investments. Unlike other offshore destinations, foreigners and nationals can buy almost any type of property, own property through corporate shares or PIF. In Panama, when buying/selling real estate, the seller only pays two percent (2%) real estate transfer tax and three percent (3%) capital gains tax. In addition to this, there are property tax exemptions that apply to all new construction. Panama is a fully dollarized American economy, with the US dollar being the legal currency, which allows for investment diversification out of the Euro zone. In addition, the country offers a favourable

PANAMA IS CONSIDEERED A ''SAFE HAVEN'' FOR INVESTORS AND BUSINESSES IN THE DOLLAR REGION. THE CURRENT COVID-19 CRISIS WILL REINFORCE THIS EFFECT.

one-season climate, and a unique connectivity in the region that allows you to arrive in a four-hour and twenty-minute flight from New Jersey - non-stop. The Tocumen International Airport, as regional centre of operations, makes it easy to fly to Panama from almost anywhere in the world. Overall, Panama will continue to improve its position as the “Hub of the Americas” and is on track to become the richest country in Latin America in terms of per capita purchasing power by 2021. Opportunities arise from crises. Panama is considered a "safe haven" for investors and businesses in the dollar region. The current COVID-19 crisis will reinforce this effect. Despite the immediate economic contraction, the outlook for recovery according to Moody's is positive (BAA1). Real estate investors are well advised to follow developments in the coming months, as the new pricing environment coupled with the right strategy creates room for promising opportunities. EG

For further information, please visit: www.gomitom.com Spring 2020 •

LEGAL & ADVOCACY

Irish Law

Trust Law & Asset Protection In Ireland The Republic of Ireland is a state in northwestern Europe that occupies most of the island of Ireland, though in the north, it borders Northern Ireland that is part of Great Britain. The republic follows the British common law system and also features several similarities in its economic structure. For instance, Irish trust laws arose and were developed on the basis of the principles of English trust law, writes Oliver Taylor. n one hand, Ireland’s own law on trusts is closely related to the UK’s; on the other, it provides a number of unique advantages for foreign investors. While the UK Trustee Act of 1893 governs the way Irish trusts function to this day, Ireland decided not to pass the English Trustee Act of 1925 which made significant adjustments to the management of trusts. Among such Irish trusts, we can find the discretionary trust, which makes its trustees the absolute legal owners of all its assets and thus distances the original settlor and the beneficiaries, granting them significant tax credits and asset protection. With Ireland’s Land and Conveyancing Law Reform Act of 2009 that effectively repealed the Rule Against Perpetuities and allowed Irish trusts to live on indefinitely, the republic’s trust laws offer an appealing jurisdiction for wealthy international families.

SPECIFIC ADVANTAGES With a long-standing culture of trusts dating back to 1893, Ireland is ripe with experienced professionals in the domain. In fact, the republic is home to a third of the world’s investment funds, and that - in part, thanks to its highly esteemed force of specialists working in the field of taxation and accounting, as well as distinctly developed capital and legal infrastructures. On top of that, foreign investors won’t have to worry about being blacklisted by the OECD and other international tax haven control groups, because Ireland’s regime is fully open, transparent and compliant with the OECD guidelines. As such, Irish trusts have no risk of being tied to a “tax haven” and continue to maintain their international integrity. There are some specific advantages that distinguish Ireland from other jurisdictions. For instance, foreign investors may own the entirety of the trust. The trusts are fully protected for the benefit of their owners and can last for as long as desired. Additionally, foreigners are not obligated to

Photo: shutterupeire / Shutterstock.com

ADDITIONALLY, FOREIGNERS ARE NOT OBLIGATED TO PAY ANY TAXES IF THEIR ASSETS ARE NOT SITUATED ON IRISH TERRITORY AND NEITHER OF THE TRUSTEES IS A RESIDENT OF IRELAND.

• Productivity, Strategy, Profitability

pay any taxes if their assets are not situated on Irish territory and neither of the trustees is a resident of Ireland. While this can certainly be appealing, do be mindful of the taxation laws in your country of residence because its authorities may expect you to declare your income as per your local regulation. A GREAT PLACE TO REGISTER A TRUST Additionally, trust funds registered on Irish soil enjoy complete confidentiality, meaning that neither the names of the settlor nor the recipients will be registered as part of any publicly available documents. Considering its long-running tradition of trusts, highly qualified tax and accounting professionals, legal experts, and a generally advantageous jurisdiction, Ireland is one of the best destinations for foreign investors and high net worth individuals to register a trust. EG

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FDI & INWARD INVESTMENT

Ireland FDI

Investing In Ireland What do you do when your neighbour is the financial capital of the world, yet your economy is somewhat stagnant and agricultural in nature? The Republic of Ireland is a north-western European country, with Dublin its capital and largest city, and a stone’s throw from London on global terms. That proximity has allowed Ireland to enact one of the truly successful turnarounds of the 20th century, writes Shannon Berkley. ather than seek to emulate financial London, which might have been a logical anticipation, Ireland innovated itself into something that capitalised on that proximity, rather than aspiring to compete directly with the local model of success. With London just over the way, it often meant that if people there had to do something a certain way, taking part as they did in clearly defined industries with long-established supporting structures, Ireland could offer the alternative, or at least learn from the UK’s mistakes. That is not the whole story of Ireland’s rebranding into one of the world’s IT hubs, but it has been a largely influential factor. It has spurred the Irish to innovate almost as an insistence on autonomy and value in their own right. When it comes to considerations of company relocation, tax advantages, incorporation, trust formation and even banking and associated costs, both high net worth individuals and companies would do well to look carefully at the Irish offer. With a large proportion of the country’s population of 4.9 million people living in the greater Dublin area, such centralisation of the Irish population has helped the energising turnaround

in the country. It has been a remarkable dance for the country, from relative backwater to tech-savvy hub, EU membership with Britain geographically in between, and also a defiant insistence on competing with other investment venues around the world. Decidedly Irish — and notwithstanding its proximity to the EU — Ireland became and has remained attractive as a venue of incorporation and investment, having woven structures with smart foresight that has buoyed the economy and pleased business no end. Politically, Ireland is a democracy, there are two houses of parliament, and the country is headed by a Prime Minister. Politics are stable and the country has a favourable mindset of getting ahead economically, understanding that government is there to aid that, not hinder it. Ireland adopted the euro currency in 2002 without any fuss, and it has replaced the punt as the currency of choice. BUSINESS IN IRELAND The new tech component of the Irish economy has been the most visible and attractive to investment. A great many American companies use Ireland as their launchpad into Europe, and the country has rewarded them for it. Although since a worldwide slump in 2001 has peeled the gloss from

• Productivity, Strategy, Profitability

the arena overall — and China has risen mightily into the realm, too — the country is still proactively technological and economically dynamic with it. The government initiatives to promote foreign investment have left a lasting legacy of Ireland leaping ahead on a number of fronts, in a jurisdiction so close to the massive European continent. There is standard corporation tax of 12.5 percent in compliance with EU regulations, yet the country is known for its offshore attitude and manifestation. Indeed, while it is demonstrable from a careful deconstruction of EU-Irish negotiations over the years, it remains remarkable that Ireland is very business and investment friendly, but also compliant with EU protocols. This has likely been the greatest achievement of the measures implemented to lift Ireland out of the swamp decades ago. For investors and companies looking to incorporate in Ireland, the best of both worlds awaits. Legitimate compliance with transparent taxation is in place, yet the Irish have, due to their pro-business programme to elevate the nation’s economy, still managed to compete with offshore tax havens further afield. Perhaps most importantly for long term investment, Ireland has set a tone with the EU,

FDI & INWARD INVESTMENT

Ireland FDI

compliant to standard practice, yet maintaining enough autonomy to insist of the perpetuation of a highly enabling business environment. Ireland had considerable success with a programme of subsidies and tax breaks that encouraged film production in the country. Although slightly amended now, the country still has a healthy film industry, just as it remains a dynamic IT centre. The country’s export sector, alongside industry and the service sectors have usurped agriculture as the former mainstay of the Irish economy. Although not as grand and massive, Ireland’s remodelling has equated China’s in many aspects, and at around the same time. The natural melding between online business and offshore regimes has solidified as both realities avoid undue taxation. Internet businesses have gravitated towards Ireland as a low tax jurisdiction, something that has been both symptom and cause in Ireland’s tech proactivity as it sought to build that sector of the economy. Today, the country is a prominent low-tax jurisdiction with thousands of companies already benefiting from favourable tax regimes, which includes a great many trading companies. It is likely only a matter of the next few years that Ireland becomes one of the world’s true e-commerce centres. Its location, telecoms infrastructure and well-developed business infrastructure are all very favourable to emerging and established businesses looking to expand. Now a sophisticated infrastructure locale, with a pragmatic and business-first attitude, Ireland’s membership of the EU is another factor that points to the country becoming something of a global e-commerce hub in the near future. Moreover, up to 2018, Ireland was the locale of the most American corporate tax inversions in history. Indeed, Apple paid in more than a fifth of Irish GDP in that year, and analysts rate Ireland as the biggest tax haven in existence, particularly for American companies

trading into Europe, and larger even than the Caribbean. For businesses looking to trade from Ireland, resident companies will pay corporate tax on their global income. Non-resident companies doing business in Ireland are only liable for tax on their locally derived income, something that makes Ireland extremely attractive to established and new business looking to reach into Europe. While taxation happens on capital gains; there are structural and roll-over exemptions applied to capital gains. As long as companies and individuals work this reality into their business dealings, it is possible to avoid more typical taxation on capital gains. IRISH EXCHANGE, BANKING AND TAX Although the Irish Stock Exchange was essentially a branch of London’s exchange until 1995, the Irish Stock Exchange functions independently today under regulation by the Central Bank of Ireland. It has a strong specialisation in listing investment and mutual funds. Three tiers comprise the exchange, namely the Main Securities Market, the Enterprise Securities Market and the Global Exchange Market for debt and derivatives. The exchange also regulates the trade in Irish government bonds. There is a National Treasury Management Agency that is responsible for issuing new government debt instruments, as well as for the maintenance of such debt. Ireland has been successful as an EU member with a thriving stock exchange, a far reaching network of double-tax treaties, and pro-business taxation legislation, in attracting investment and mutual fund business. Although not the big hitter that Luxembourg is — not yet — the Irish Stock Exchange has persistently favoured the fund market to balance out the absence of more traditional business. The country has been proactive in establishing double-tax treaties with more than

60 other countries, with the foresight to anticipate the implications of a swelling economy. Individuals pay a staggered rate of tax in Ireland, starting at 20 percent for the first €32,800 of income, which climbs to 41 percent on any income thereafter. There are various allowances and other concessions, and unlike many other countries in the world, Irish tax is relatively simple and not overly aggressive towards the average employee. Some permitted deductions include mortgage interest payments and pension contributions. People working on assignment for up to six months in Ireland will not attract PAYE. CITIZENSHIP BY INVESTMENT IN IRELAND Investment in real estate has bounced back from the knock it took with the rest of the world circa 2008. Between investment and trading, it is not hard to see Ireland’s appeal to high net worth individuals and corporations. As for citizenship by investment programmes, Ireland introduced an investor visa programme in 2012. Applicants are required to invest a minimum of €1 million in any of the approved investment funds, and the citizenship process begins upon application. Individuals must be able to demonstrate a minimum net worth of €2 million and be free of any criminal record. Indeed, the “golden visa” programme was rolled out by authorities for the precise reason of stimulating the local economy, by offering residency to noted business professionals. Many high net worth families from around the globe have since moved to Ireland. Low taxation, dynamic business support and infrastructure, as well as access to top universities in Ireland and on the continent, are all compelling reasons for many who qualify. With strong legislation, international treaties and EU membership benefits, the future looks bright for Ireland. EG

Photo: David Soanes / Shutterstock.com www.executive-global.com

Spring 2020 •

FDI & INWARD INVESTMENT

Baden-Baden Tourism Board

Live The Good-Good Life Combining the culture and heady lifestyle of a great city break, with the tranquil relaxation of a serene wellness escape, Baden-Baden is a destination quite unlike any other. estled to the north of Germany’s beautiful Black Forest lies the small and cosmopolitan city of Baden-Baden. The perfect destination for escaping from the stresses of modern life, the city has everything you need for a relaxing, cultural break – a truly unique place, where grand historic intrigue meets contemporary lifestyle. Baden-Baden dates back over 2,000 years to the Romans, who enjoyed the natural thermal spring water to ease their aches and pains. The city has since become an iconic centre of relaxation, developed amid the quite glorious surroundings of the Black Forest. Historically, Baden-Baden has always appealed to those in search of luxury – an appeal that has only grown over time. From natural, hot thermal springs and soothing spas, to quality hotels, gourmet restaurants, tempting shops and a myriad of cultural offerings, there is never a shortage of things to see and do in Baden-Baden. Effortlessly combining centuries of history with contemporary luxury living, Baden-Baden is a perfect haven for the discerning traveller.

historic Friedrichsbad brings traditional Roman bathing culture and Irish hot-air bathing into the modern day. To choose your accommodation in Baden-Baden is choose from a world-class selection of superior spa and wellness hotels. Whether you’re looking for the ultimate in five-star luxury, or romantic, quintessential charm, there is something for everyone.

BEST WAY TO START YOUR DAY The very embodiment of relaxation can be found at the city’s two thermal baths, where the healing properties of the warm, natural thermal water combine with a range of high-quality beauty treatments that luxuriate the skin. The modern Caracalla Spa exudes a gentle ambiance, whilst the

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OUT AND ABOUT From an exclusive shoppers’ paradise, to mouthwatering cuisine and a wealth of exciting cultural events, Baden-Baden truly is a city that has everything. You will fall in love with the picturesque streets, which are home to exquisite boutiques selling luxury brands and locally made gifts. Gastronomy abounds in Baden-Baden, from world-renowned Michelinstarred restaurants, to charismatic local taverns. With

FDI & INWARD INVESTMENT

Baden-Baden Tourism Board

a range of international and local cuisines available, delicious food is always just around the corner, while oenophiles can venture out to the city’s wine region. Far from the hustle of Europe’s metropolises, Baden-Baden is a haven of tranquillity where nature takes centre stage. The city centre is a car-free zone, and everything can be reached on foot. For a breath of fresh air, visitors can stroll through the numerous picturesque parks and gardens, home to some of the

most exotic floral varieties. The Lichtentaler Allee is a green oasis stretching more than two kilometres, where visitors can indulge fantasies of horse carriage rides straight from the pages of classic fairy tales. Those with a passion for the arts can immerse themselves in a veritable wealth of cultural offerings. The Festival Hall Baden-Baden is Europe’s second largest opera and concert hall. Hosting international opera, ballet and concerts, the hall is known for its incredible

acoustics and world-renowned roster of artists. The Museum Frieder Burda, built by famed New York architect Richard Meier, is a must-see for visitors who love art and architecture, whilst the Fabergé Museum – dedicated to the life’s work of Russian jeweller Carl Peter Fabergé – offers a completely unique experience. LAST BUT NOT LEAST Arguably the city’s crowning jewel is the Casino Baden-Baden. For an evening rich in excitement and unparalleled luxury, there is no better place than Germany’s oldest casino, which was once named as the most beautiful casino in the world. Visitors can don their dresses and suits, ready for an adventure into the world of roulette, blackjack, and poker unlike any other. If the casino does not entice, there is an annual variety of events in and around the city, including international horse racing, vintage car meetings, food and music festivals, concerts, opera, ballet, and much more. Baden-Baden is a truly enchanting place, exuding class and sophistication at every turn. However, for every piece of modern luxury, there is an equally charming reminder of the city’s ancient culture. A must-see for any traveller, this is one destination that cannot be missed. EG

More Information Baden-Baden Tourism Board Phone +49 (07221) 275 200 Email info@baden-baden.com Web www.baden-baden.de/en www.executive-global.com

Spring 2020 •

FDI & INWARD INVESTMENT

Germany FDI

North Rhine-Westphalia Tourism The North Rhine-Westphalia (NRW) is a western German state, and possibly one of the most beautifully established places in the world to work and live. everal historic cities dot the region, and the city of Cologne's twin-peaked Cathedral — a Gothic landmark that overlooks the Rhine River — is probably the most commonly recognised postcard reference for the town’s splendour. The joy of being a hale city in a long established region of the world is that tourist delights never cease, as the history runs so deep. Tourism in the region shows the same flush and lean times as anywhere else in the world, but Cologne particularly has a consistency many other destinations lack. Originally named ‘Colonia’ by the Romans when they established the village around 50 AD, perhaps the most striking aspect of the region’s cities is how they have all managed to preserve snippets of such deep history. At the same time, Germany’s cities boast much modern design and sculpture too, and those of the region are no exception.

A BUSINESS MINDED ATTITUDE The culture in the region is modest yet industrious, and fond of beer, for some of Germany’s best beer is to be found here. The Konigsforst — a vast stretch of forest that preserves innumerable plant and animal species — lies east of Cologne too, and as the Rhine river winds its way across the landscape, green belts accompany travellers between cities. Speed trains shoot out from Berlin constantly — the most popular means for many to access the NRW region — and tourists regularly head to Dusseldorf ’s most elegant shopping venue, Königsallee. A boulevard of retail leisure in a city steeped in history, Dusseldorf is emblematic of the cities in the region, which all have a charming balance of wondrously ancient and sleek modern sights. The soaring Rheinturm tower is typical of modern German grandeur, juxtaposed with hale architecture and old farmlands. As a business region, North Rhine-Westphalia has proved the most important economic locale in Germany for years, attracting over 20,000 foreign firms to establish there. Being the most populous

Photo: cucushonok / Shutterstock.com

TOURISM IN THE REGION SHOWS THE SAME FLUSH AND LEAN TIMES AS ANYWHERE ELSE IN THE WORLD, BUT COLOGNE PARTICULARLY HAS A CONSISTENCY MANY OTHER DESTINATIONS LACK.

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region of Germany, as well as its access to many other major European destinations, has made for a business-minded attitude in NRW. INVESTABLE, GREEN AND CLEAN Investment in local commerce and industry is remarkably brisk for such an established region, and the future is set to hold the same steady development of industry to service an evolving European market and far beyond. Visitors can find such global names as Vodafone, M3, Ford, Toyota and Huawei all firmly entrenched in the area. The NRW location is a key component of business success for all of these companies, as well as innumerable smaller concerns, and investors favour development in the region as a default stance. A truly unique area to live in, NRW is also one of the greenest areas in Germany, with some 35 percent of land made up of forests and nature reserves, and a full 50 percent of the region is all pastures and other agricultural land. EG

Kingston, Canada

BUILT FOR BUSINESS Highest % of PhD graduates in Canada

Investor Friendly City

Affordable Hub for Industrial Land R&D Centres

#1 Small City for FDI (Financial Times UK)

Kingstonâ€™s culture of innovation and entrepreneurship is growing and bringing with it new people, big ideas, diverse personalities and a fresh outlook on how to drive economic development. The city is located in an easy-to-access ecosystem, within driving distance from major urban markets in Canada and the United States, offering incredible resources ranging from investors, mentors, acceleration programs, and infrastructure. Kingston is bringing people together, supporting their drive to create, explore and innovate. Kingston develops new talent at three post-secondary educational institutions collectively attracting, educating, training and inspiring more than 45,000 students each year.

www.KingstonCanada.com | @KingstonCanada communications@kingstoncanada.com | +1-613-544-2725

FDI & INWARD INVESTMENT

British Columbia FDI

Photo: Katarina Marsalekova / Shutterstock.com

British Columbia Living & Tourism British Columbia is among the most unique and inviting provinces of Canada. Located on the country’s west coast, BC is bordered to the east by Alberta and to the north by the Yukon and the Northwest Territories, writes Oliver Taylor.

t also shares two borders with the United States: with the state of Alaska to the north, and with those of Washington, Idaho and Montana to the south. The ocean front completely follows the relief of the Pacific coastal chains, beyond which the interior plateau extends over the foothills of the Rockies. With its wide open landscapes and cities imbued with a certain unique charm like nowhere else in the world, British Columbia is home to spectacular views. From its national parks to Vancouver Island, from the coast to the Rockies, whether you're into the great outdoors or you’re about that bus-tling city life, the province is as rich in experience as it is vast. This maritime territory with a mild climate (which is an absolute game changer in Canada!) is the home of many picturesque mountain ranges, which will surely delight all outdoor enthusiasts and nature lovers. If life in Canada has been calling to you, but you’re not keen on braving the cold, you might want to consider BC!

Beyond its great wealth of natural attractions, British Columbia also happens to be one of the most dynamic and competitive places to do business. In addition to an unsurpassed quality of life in terms of housing, city infrastructure and healthcare, the province offers a remarkably favourable busi-ness climate with an advantageous tax jurisdiction and a minimum amount of restrictions. In fact, in British Columbia, the burden of corporate tax is one of the lowest in all of North America, and the personal tax rate is also among the most competitive. Over the years, continued investment in infrastructure and public services have helped to stimulate the economy and make BC a great place to live and conduct business. All of this is reinforced and constantly maintained by a financially responsible government that is quick to respond to and support its citizens’ needs. Another defining characteristic of the province is its amazing diversity as British Columbia welcomes

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business people from all around the world who are looking for new business opportunities. Vancouver happens to be the third-largest port city on the west coast for overseas container transport, boasting a capacity of two million TEU (twenty-foot equivalent units). It is also home to one of the most important ports that connects maritime trade routes with important international players like China, Hong Kong, Taiwan, Japan and Korea. For more than three decades, Canada’s western stronghold has been at the forefront of innovations in wireless satellite, microwave and telecommu-nications technologies and it continues to be a leader in this sector. The province also enjoys a particularly well-developed industry in software and new media development. Since the dawn of the new millennium, the provincial government has initiated significant changes to strengthen the economy and help make British Columbia among the best places to live, work and invest in North America. EG

Buras Stunning and spacious home boasts the finest quality Materials and workmanship. The master suite takes in the view, with a spacious en suite with tub and walk through shower, his and her offices, laundry, and a 2 car garage. Upper level can be bonus room or guest suite with large bath. Lower level has 3 bedrooms family room with morning kitchen, and an additional 2 car garage.

Offered at $1,425,000. MLS# 88564

Hi Farm This highly unique property consists of over 90 acres of rolling land, flanked partially on one side by USFS land. The property has about 27 acres of open pasture with the additional acreage being wooded with streams and flanks to the Chatooga River on a stretch of whitewater, waterfalls and swimming holes. There are views of Blackrock Mountain with rock faces and ridgeline in the distance beyond the pasture. The main house features 3 bedrooms, 2.5 baths with wormy chestnut floors and painted paneling, huge stone fireplace in the living room, gourmet kitchen and a wonderful view of the front pasture and Blackrock Mountain. Guest or caretakers house is ready for some renovation but has good bones.

Offered at $4,500,000. MLS#91498

Bowery Road One of the finest estates available in Highlands! Highrocks features gated access to a large private 3.6 acre lot with stunning views of Whiteside, and the valley vistas beyond. The house is Ultra Quality, and features multiple stone fireplaces, water features, a custom dream kitchen to die for, main level has Living room, dining area, master bedroom, a Carolina room with fireplace that is accessed off of the Kitchen. Antique wood floors, updated baths, lower level has guest quarters with media room and wine cellar. Large 2 car carport with guest efficiency above. A network of trails explore the landscaped grounds. Highrocks is an Eden in Highlands and will not disappoint even the highest of expectations.

Offered at $3,999,000. MLS#93220

Contact Terry Potts Web www.ccphighlandsnc.com Email ccp4terry@gmail.com Office 828 526 2520 Cell 828 421 3417

GEOPOLITICAL AFFAIRS

Global Outlook

CoronaCrash It appears the world has been hit hard by the COVID-19 pandemic - more specifically, the confinement measures that brought economies around the globe to a harsh halt. Whether it is the rapidly climbing death toll or the collapse of the economy, the suffering continues to accrue every day, despite some world leaders recently announcing hopes for a timely reboot even as early as May, thinks Thomas Hughes. n unequaled challenge, this health crisis is unlike anything humanity has witnessed since the dawn of the last century, and it has put us to a test, both as collectively responsible human beings and as economic societies. We are now facing the most serious financial crisis, one that has surpassed the burst of the dot-com bubble and the global crash of 2008. The amplitude of the collapse has been magnified by the fact that, in such a situation, everything is tightly interrelated. While some nations were forced to put a stop to their production, it disrupted supply chains in many others, which effectively undermined confidence in the market and plummeted customer consumption. Naturally, the quarantines and confinement policies were an indispensable manoeuvre to help mitigate the public health crisis of the novel coronavirus. However, these measures have also brought the worldwide economy to a sudden stop, highlighting just how fragile it had been throughout all these years as it resided in a house of cards built on debt. One showstopper was enough to bring the system to its knees, and now that it’s down, even reopening businesses won’t help it rise back up so simply. Of course, at the forefront of everyone’s priorities should be flattening the curve of infection, reducing the loss of life and keeping safe from the deadly

disease. But we simply cannot ignore the fact that the economic crisis in question has sent tremors whose echoes will continue to be felt for the years to come. Thus it’s important to consider what measures are being taken in response to this event and how we will move forward. Already, governments are ramping up interventionism on many levels, from forced lockdowns to state-issued ration pay-outs. While we crave a return to our “normal lives”, we mustn’t forget how quickly and easily that normality had been shattered just a month ago, and we cannot allow central banks to run wild with the opportunities for further meddling in the economy. A WORLD ECONOMY MIRED IN DEBT Despite reports of green shoots in stock markets in the U.K. and the U.S. for example, we are already well too far down to just pick everything back up and keep on going like nothing happened. The instability of financial markets around the world clearly demonstrates that they weren’t built to sustain any considerable damage and thus unable to last, so in spite of the occasional spike, the nosedive of both global and regional GDP is imminent - this much is certain for the world at large, no matter the size and the importance of the economy. From the “global superpower” that is the United States being sent into utter havoc with the highest number of registered COVID-19 cases and an inability to

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Photo: Peshkova / Shutterstock.com

handle them, to the developing countries in East Africa, the Arabian Peninsula and the Middle East, that are simultaneously facing a devastating locust swarm, no one will come out of this unscathed. Once we have survived the peak of the health crisis and reopened the streets, we will be facing its consequences, and all of our previous challenges will only get worse in the face of mass unemployment. Long before the pandemic hit, the global economy was already plagued with more than a handful of problems like unsustainable levels of debt, income disparities and an ever-growing inequality in wealth, which were temporarily swept under the rug yet never addressed head-on. Even in so-called prosperous countries, a considerable amount of people live paycheck to paycheck, so as millions are losing their jobs everyday, many could fall below the poverty line within only a couple months’ time. Obviously, this isn’t rendered any better by trade restrictions, factories shutting down, borders being closed, which all amounts to a crippling disruption of supply chains in almost every essential goods and services industry.

GEOPOLITICAL AFFAIRS

Global Outlook

fall known since the first census of the quarterly growth data in 1970 and twice worse than the contraction in the first quarter of 2009. As a result of troublesome projections, these issues have effectively exposed the real nature of the EU’s dynamic, shattering the illusions of European collaboration and cooperative spirit. The bloc is torn apart and its 27 finance ministers are unable to agree on a common economic response. While the worst affected countries, like Italy for example, call for help and solidarity, others refuse to pool public debts to soften the economic shock. What may come as a surprise for some yet be obvious for others, at the very first signs of the crisis, the European Union’s first reaction was to shut down national borders or install sanitary controls. Within mere days, the Schengen area had disappeared, as allowed by the treaties in a time of crisis. Countries like Denmark, Hungary, Austria, Germany and Italy were quick to reinstate controls. Contrary to the rules of the euro zone’s single market, France and Germany blocked the export of masks and resuscitators to Italy, which was in urgent need. Abandoned by its neighbours, Europe’s worst hit nation found allies not among its own, but in Russia, China and even Venezuela. Now, while the EU is opting for an ‘every man for himself ’ approach during the crisis, it isn’t unlikely that, once it blows over, central banks will push for greater control and interventionism, with their path paved by state-issued financial relief measures such as Rishi Sunak’s in the UK, and Steve Mnuchin’s in the US.

Therefore, beyond immediate health policy responses, the world must take bold and ambitious action. Strengthening international coordination is key to ensuring that mitigation initiatives in many countries succeed in countering the downturn of economic activity. However, while central banks

WE ARE NOW FACING THE MOST SERIOUS FINANCIAL CRISIS, ONE THAT HAS SURPASSED THE BURST OF THE DOT-COM BUBBLE AND THE GLOBAL CRASH OF 2008.

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have already taken decisive steps to support economic activity, financial regulation and supervision remains an area of doubt and concern for the future. The disruption of the economy that was caused by the COVID-19 crisis is affecting the functioning of the financial markets and weakening banks’ balance sheets. A coordinated approach to diagnosing tensions and adopting regulatory measures would have far more positive results than disorderly and inconsistent actions that have been observed among European nations. In fact, the much-needed cooperation in Europe and America does leave one wanting. DECLINING GDP, MORE INTERVENTION The Bank of France revealed that it estimated its GDP to fall by around 6% over the first three months of the year, which would be its worst quarterly performance since the end of World War 2. The UK is expected to lose as much as 5% of its GDP in the first quarter and that would be only the beginning. The eurozone’s main economy - Germany, will plunge by 9.8% in the second quarter of this year - the steepest

THE CONSEQUENCES OF MONETISATION Speaking of central banks, we can most definitely expect them to continue driving interest rates lower and lower, which will only perpetuate the tendency to monetise debt - debt, that will surge even higher. As a result, money will continue to shed its value and deteriorate the economy of various industries even further. In such times of crisis, gold generally becomes prized by investors. Now the magnitude of the coronavirus pandemic and its devastating effects on the economy have reached such importance that retailers specialising in the physical sale of precious metals are crumbling under the surging demand. For instance, in just three weeks since the spread of the pandemic, Gold Avenue has exceeded the number of sales it made in the entirety of 2019’s last quarter. In times of economic uncertainty, gold often appreciates, benefiting from its status as a safe haven. While many central banks are pouring huge amounts of liquidity into the financial system, the yellow metal is seen as a good investment to protect against inflation and maintain purchasing power. Professional investors tend to acquire financial assets indexed to gold, though it isn’t uncommon for high net worth individuals to purchase physical assets in order to ensure ultimate security. After hitting its peak in seven years earlier in March, the gold ounce fell slightly in value against the dollar, which had benefited from higher demand. However, analysts foresee that this bout of weakness against the dollar will likely not last. A similar phenomenon could be observed during the 2008 crisis as well, when gold first collapsed before gradually climbing over the next three years. EG Spring 2020 •

GEOPOLITICAL AFFAIRS

Global Outlook

The Technocratic Tyranny of Central Bank Digital Currencies (CBDCs) The cashless agenda is hundreds of years old. Although billed as a logical development of a modern, sophisticated society, it is no more than a mask concealing something insidious and altogether horrible, writes Shannon Berkley. hough since the late 1900s, the gradual digitisation of cash has acted as a passive capture enclosure for all of humanity, normalising the eradication of actual possession of personal wealth, the same logic so glibly applied to the process comes to a terrible conclusion for individual autonomy and personal freedoms. With the increasing abandonment of physical currency in exchange for goods and services — something that has been the sole paradigm of human monetary exchange for thousands of years — comes the irretrievable and permanent relinquishment of human autonomy. The cashless agenda has very slowly moved from bankers’ fantasy to growing reality. Very much the same as the frog that fails to jump out of a gradually heated pot of water, people have become acclimatised to ever more remote contact with their personal money. Banks are ‘safe,’ and one has ‘made it’ when one has a good bank rating and copious credit. Through custom, practice and ever shrinking choices, modern humanity

has failed to evade the muted yet persistent push from the money masters towards a wholesale disempowerment of every individual’s right to buy, sell, trade and invest from their own reserves as they see fit. The bankers’ defence has been to mock complaint, to denigrate opposition towards an unwarranted, complete trust in third party fintech as juvenile, misinformed or archaic. One need only view the reality of the cashless agenda’s growing manifestation over even the last 50 years, to conclude that there is indeed an agenda, and it holds nothing but malice and enslavement for citizens across the globe. As a prime example, Christine Lagarde, French Minister of the Economy, Finance and Industry from 2007 to 2011, and now head of the European Central Bank (ECB), has advocated for the ECB to expand its role in developing Central Bank Digital Currencies (CBDCs) since assuming the post. It is a strange priority when one considers the myriad of other pressing issues she might address for the good of the citizenry, yet it is couched in the notion of progress, of betterment, and latches onto the

Photo: Stockinasia / Alamy Stock Photo

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egalitarian nature of cryptocurrencies by posing as a friend. Rather than a champion of people’s money, however, the ECB has no plans to lower costs to consumers, alleviate debt or enable lives other than its own by developing such digital currency. Rather, she and her ilk are seeking to ensure that citizens willingly hand over their cash in exchange for digital tokens, generated by central banks, of course. Central Bank Digital Currencies might be trading on the more personally enabling reality of cryptocurrencies like Bitcoin and others, but they are wholly different. Firstly, they are not a decentralised ledger, but rather the same control in a new guise and, unlike decentralisation, rather a ridiculously absolute centralising of financial control, an omnipotence. Secondly and axiomatically, they are the final step to completion of total control of money matters wherever they manifest in the world. Glimpsing the absurd notion of quite literally being able to control people’s lives with the push of a button — which is what a society running on central bank digital money would be, whatever else it might contain — the central bankers of the world, their lackeys and henchmen are trading on the fragmented world view of the average citizen, wilful disinformation, and their positions of power

GEOPOLITICAL AFFAIRS

Global Outlook

to dupe humanity. It is as wholesale and outrageous as it sounds silly but, again, looking at the last few decades’ evolution of matters financial, it becomes clear who the winners will be in the cashless stakes. All of the power in the hands of a few, and none of it for anyone else. Whether a legacy of Lagarde or simply because no one makes it into the big chair without singing the same tune, France’s central bank is now avidly pursuing the notion of digitising the nation’s fiat currency. Broadly selling it as an “improvement” on having all of that dirty, cumbersome cash in pockets weighing people down, the French money house is one of innumerable central banks pitching the same idea. Of course, along with the “hassle” of cash goes personal freedom, autonomy and the ability to order one’s affairs. And along with its digitisation comes the central bank’s ability to dramatically reduce its own costs, enact and blithely maintain comprehensive economic conditions and enjoy utter and complete control of everyone’s money. CENTRAL BANKS HOPE TO PACKAGE SLAVERY AS ‘CONVENIENCE’ The narrative is banal, but the ensuing reality is typical of the slow eradication of individual freedoms perpetrated over generations by the banking estabishment. In an era where modern retail banks really would rather you stuff your cash into an ATM outside and not bother them while they play on the money markets (with your money), the ultimate ownership and dictatorial power behind money is becoming increasingly brazen. There are remarkable dangers to human liberty, freedom and prosperity inherent in the notion of central bank digital currencies. Along with the deliberate and long-standing effort to demonise cash, through opportunistic parasitism, central bankers have cautiously but concertedly

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THERE ARE REMARKABLE DANGERS TO HUMAN LILBERTY, FREEDOM AND PROSPERITY INHERENT IN THE VERY NOTION OF CENTRAL BANK DIGITAL CURRENCIES.

latched onto assorted developments of the last 30odd years and spun them to their own ends. Various financial crises — brought about by banking greed and yet ‘resolved’ with bankers posited as the saviours of nations — and especially Satoshi Nakamoto’s Bitcoin, have all reinforced both the idea that central banks have a hand on the tiller looking out for the common man, and that the citizenry should be just fine with a complete digitisation of its cash. It is noteworthy that globally, humanity is currently suffering a further setback for cash under the COVID-19 lockdown. Cash notes carry contact with countless people, and that is something to eschew as the virus begins to reach its peak in countries across the globe. It might be the worst kind of unsubstantiated conspiracy theory to

suggest that central banks somehow had a hand in unleashing COVID-19 upon humanity, but it is equally and bluntly obvious that they are taking the opportunity to market the notion of digitised fiat as the way forward after the coronavirus pandemic. There has never before been a greater impetus towards electronic payment on-boarding. Companies like WorldRemit and others who offer mobile money services could not have hoped for greater growth within such a short time. Advertising and great service simply cannot buy the kind of enforced patronage that Africa in particular and other predominantly cash societies are now being forced to show digital money movers. Electronic transactions have spiked and the move to eradicate cash will continue long after COVID-19 is forgotten. Fiat has intrinsic qualities and massive refuge for the citizenry. While it can suffer dramatic inflation and succumb to vicious trading on forex markets, its value is inescapably linked to humanity’s ability to travel with it and hand it over in exchange for goods or services. It is precisely this mobility and autonomy that is standing in the way of complete dominion by central banks. It is easy to dismiss these contemplations as those of the lunatic fringe, especially for those accruing their wealth through participation in the system. The trajectory, however, is visibly planned, determined, and can be seen slowly coming to fruition. It leads to only

Spring 2020 •

GEOPOLITICAL AFFAIRS

Global Outlook

Photo: PixieMe / Shutterstock.com

one castle, and there live the global bankers who are quietly coming out of the closet about simply wanting to control everything. It is the capitalist model taken to its logical extreme, after all. When business is expected to both make and grow profit year on year, what would be the logical pinnacle for those whose business it is to control people’s money while piling up their own? CBDCs inevitably bring with them an Orwellian desire to eradicate cash, which ultimately results in the complete debasement of the total specie in circulation. There are two current fronts where central banks are focusing their attention in order to effect complete dominion. The one is an ongoing entrenchment within most developed nations that already have 'digital' currency in the form of debit and credit cards, and the other presents as the collective of peasant bastions that stubbornly still favour cash in hand. Somehow, the central banks need to get that money into their own pockets. Holding up the fiat digitisation in developed nations as a logical upshot of a strong economy and vastly improved lifestyles, is the lure to the cash havens of Africa, India and some South American nations, among others. Of course, that further digitisation would be less about convenience and more about top-down authoritarian control, is something withheld from the discourse within the developed nations, while it is being falsely advertised as an ‘improvement’ for everyone in less developed nations around the world.

In a nutshell, central banks’ effectively being able to tax citizens into oblivion through downward (negative) interest rate manipulation at the touch of a button is the ultimate goal. Complete civilian subservience because of a desperate desire to stay afloat as individuals and families within the given paradigm is the stuff of central bankers’ dreams. If that sounds impossible, it is nothing but a logical and indeed inescapable end result of eradicating cash notes from a fiat-run society. There would then be no tangible, fungible, divisible store of wealth and unit of account with which to physically, freely transact. There would be an all-powerful money house — the central bank — within which

COMPANIES LIKE WORLDREMIT AND OTHERS WHO OFFER MOBILE MONEY SERVICES COULD NOT HAVE HOPED FOR GREATER GROWTH WITHIN SUCH A SHORT TIME.

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a push button paradise exists, rewarding, controlling, making and breaking lives at will. Combined with the outrageous level of surveillance that constitutes the norm in modern societies, the shrivelling of the social contract and the perverse rise of alt-right politics the world over, the digitisation of fiat would amount to a massive and irreversible decline in individual freedom. Indeed, it is impossible even to talk of personal freedoms without personal financial autonomy. Central banks dream of farming the world, and its citizens are the sheep that will be slaughtered generation upon generation. EGALITARIAN CRYPTO OR EGYPTIAN CRYPT? It is no secret that major world banks are falling over themselves to patent blockchain applications. From the very top tier downwards, banks have developed blockchain apps as though their futures depended on it. Indeed, their futures certainly revolve around it. Egalitarian Bitcoin gave banks an unexpected bonus: a way to roll out digitising humanity’s cash in the name of the greater good and modern convenience. In truth, it is unlikely that central banks and their retail lackeys would have been so bold so soon with the push towards fiat digitisation were it not for Bitcoin’s emergence a decade ago. One has to assume that the anonymous “Satori Nakamoto” is not code for “the ECB,” but in a great irony, the

GEOPOLITICAL AFFAIRS

Global Outlook

decentralised nature of cryptocurrency is slowly being swung towards authoritarian control, which is all it will be once central banks are allowed to digitise fiat currencies. The potentially amazingly egalitarian and super smart nature of cryptocurrencies is not merely tainted, but completely convoluted in the hands of the banks. From this perspective, digital tokenism becomes a boomerang in the hands of central banks. All of a CBDC’s power comes back home to roost in those sacred halls, and central bankers are wilfully confusing their subjects as to the wholesale differences between cryptos and CBDCs. Artificial Intelligence combined with pseudodistributed ledger technologies applied to the digitising of fiat currencies would pose a direct threat to the individual sovereignty and autonomy of people and businesses in the global economy. The institution(s) presiding over control and issuance of CBDCs would have a totalitarian level of control over every minute transaction, as well as whether the client in question could transact at all! In other words, biblical, Revelations-style implications will manifest for everyone potentially not being able to buy or sell. This exquisite level of money control would surely be connected to a central bank or government database containing all of the sensitive information and private data of individuals and businesses, enabling manipulation and direct punitive measures against dissidents or any entity or persons with whom the state has a problem. Long the lackeys of the global banking powerhouses, governments would look to their own benefits derived of CBDCs, and there will be no salvation there. Such extraordinary power could only be dreamed of by the world's most tyrannical historical despots. The likes of Mao, Stalin, Hitler, Trotsky, Lenin, and Pol Pot could not have hoped for such crushing and absolute power. For all of their evil intentions, they could never have dreamed of such push-button control of human lives, no matter how furiously they worked at it with the technology available in their time. Sweden sets the precedent for complete control over human autonomy and potentially, the litmus test example of modern slavery, albeit with the slaves’ consent. Having started chipping its citizens like cattle as Sweden has done with the e-Krona, the Swedes are a prime example of people about to suffer an appalling breach of human rights. What Sweden has done is hardly conducive Photo: Xinhua / Alamy Stock Photo

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to the supposedly God-given individual freedom, liberty and inalienable rights that every human being is entitled to. Additionally, the example shown by China's social credit score system (and flagrant disregard for individual citizen's rights) is another example of what can be expected should the state gain this level of authority over the liberty of its citizens through central banking. No amount of 'money laundering' or 'terrorism financing' accusations can justify the sheer magnitude of this kind of power grab by central banks. Allowing the emergence of CBDCs will permanently and terminally throttle individual freedom and make the issuing institutions demigods amongst humankind. The only other category then available would be ‘slave.’ CENTRAL BANKS ARE WHERE FREEDOM GOES TO DIE This is not entirely true, as the mere advent of central banking meant that freedom went there to die a long time ago and has been suffocating in that vault for centuries. It has taken the advent of shameless crony capitalism to enable central banking’s truly ghastly ideas to become mainstream, however. As the citizens of the world deplore crony capitalism for its hedonistic disregard for human and indeed all life, central banks are tut-tutting as though they are not both origin and destination of such merciless behaviour. With big business the

target of most notions of curtailing such exploitative greed, central banks have woven themselves into society’s fabric as ‘one of the good guys’, looking out for everyone, thus largely escaping ire to date. Nothing could be further from the truth. Although central banks are never the face of the bad actors and thus recipients of bad press, crony capitalism in its entirety has become nothing but their working arm. In an incestuous symbiosis that saw central banking and commerce and industry emerge as logical partners in a new era after the industrial revolution, the banks have ingratiated themselves into societies the world over, skilfully avoiding being labelled as the rampantly profiteering money masters that they are. It is useful to remember that money is produced from nothing. Central banks print it at will, while the average citizens of the world spend their entire lives desperately trying to accrue enough of it to be able to die with honour and leave no debt behind. These were never concerns of any real substance for central banks — all they want is all the money. It’s a simple formula in the final analysis. CBDC is a short acronym, but one laden with poison for every individual on the planet. The ultimate tool of any draconian, state-sponsored tyranny, CBDCs have the potential to enable a complete, fascist power grab and ensuing monopoly by the state, ushering in a dark age where individual liberties and freedoms are crushed forever. This is precisely why Thomas Jefferson stated that banking institutions were more dangerous than standing armies, and why Andrew Jackson killed the Second Bank of the United States during his tenure. There has been a history, especially in the United States, of presidents warning the people of what is going on behind the scenes. It has not really helped. Sweden again leads the developed world in uptake of cashless apps — it ties in nicely with an implant in your hand after all — and the world’s marketplaces will surely start to follow suit. There is pushback, however, and many commentators and even more citizens are complaining about the microchip implant that others find so exhilarating. It is obnoxiously noteworthy that one of the given reasons for CBDCs being ‘better’ was forwarded by the IMF, which said that they would make for a more efficient payment system as the costs associated with managing cash are high. The costs are high for the citizenry because they are set by the banks! And they are also high for central banks and their retail lackeys, at least in comparison to not printing anything and reducing staff to a mere handful. That humanity is entitled to have physical money to transact with is not merely essential, it is a fundamental right. Without it, almost all other rights fall away. Digital currency enabled by modern technology, along with the eradication of cash as mandated by the state, would imply the permanent destruction of human freedom. If CBDCs see the light of day, it is all over. We are witnessing the beginning of the end. EG Spring 2020 •

EXECUTIVE EDUCATION

EFMD

Motivation: Balancing The Differing Needs Of Students The drive for diversity is a key issue for many business schools. Most business school professionals would agree that it is important to have a diversity of gender, nationality and socioeconomic background in students as well as staff. Article by

Stuart Robinson

ASSOCIATE DEAN (PROFESSIONAL EDUCATION), UNIVERSITY OF EXETER BUSINESS SCHOOL

ooking out at the faces of my current MBA class, the other diversity aspect that is striking is the range of motivations for embarking on a course of study like the MBA. While colleagues and I are teaching a class, the individual students within it can be interpreting the content and how it will serve their hopes, ambitions and plans in very different ways. It is very rewarding for an MBA teacher to have diversity in a classroom as this serves up the alternative opinions, views and arguments that encourage breadth and depth of learning. However, it also brings with it the challenge of addressing the different motivations of students and meeting their diverse objectives. How do you ensure that programme design caters for different motivations? You certainly can’t design sessions on one-by-one student needs. I argue that we can identify five broad categories of student motivations, each calling for different approaches to be combined in teaching. These are the Entrepreneur, Career Changer, Corporate Climber, Badge Acquirer and Lifelong Learner.

THE ENTREPRENEUR Over the last decade, entrepreneurship has become a fundamental subject area at many schools and help with developing entrepreneurial skills is a key need for students. In recent editions of the Tomorrows MBA study by CarringtonCrisp and

EFMD, entrepreneurship has consistently been in the top 10 of most-demanded subjects. At Exeter we have a dedicated entrepreneurship research centre and, like many schools, we find increasing numbers of students using their MBA as a springboard for launching new ventures. So what do these entrepreneurially inclined students need from an MBA programme? First is space and encouragement to experiment and put ideas into practice. For many, an MBA programme is seen as a safe environment in which to try to new business concepts and develop skills through initiatives such as start-up competitions and Dragons’ Den-style panels. Second is access to mentors for support, whether that is faculty, alumni or corporate partners. Finally, is the help to turn ideas into reality and advice on how to access early-stage funding opportunities. THE CAREER CHANGER An MBA is seen by many as the springboard to a significant career change. According to GMAC’s 2018 Alumni Perspectives Survey, approximately one in three prospective MBAs plan to use their management education to pursue opportunities in new industries (27%) or job functions they have not worked in before (36%). In addition to industry or career, it sometimes means just doing something utterly different. For example, Exeter MBA alumna Sandra Norval trained as an accountant and her career had taken her into a senior environmental role in a rail operator. But for Sandra, the MBA at Exeter supported a significant change in direction. Since graduation in 2014, she has set up her own professional coaching and business change consultancy, leading her into

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Photo: Monkey Business Images / Shutterstock.com

several senior advisories and non-executive board roles. The fundamental nature of an MBA gives people like Sandra exposure to a host of different management disciplines. For many Career Changers, some of the softer leadership skills such as influencing and working with others are particularly important. These students place an emphasis on networking and CV-building, and career support needs to be clearly linked to the content of the programme. Ultimately this group of students are focused on taking up opportunities to learn what it is like to work in different organisations and contexts. Activities such as individual consulting projects, which many business schools run, are particularly valued and can act as a catalyst for a career change. THE CORPORATE CLIMBER The third group of students are those concerned with using an MBA as a means of promotion and increasing salary within their current organisation. This is especially true with part-time or executive MBA students and with full-time students fortunate enough to have an employer that is supporting their MBA. For Corporate Climbers, the focus is on acquiring

EXECUTIVE EDUCATION

EFMD

them prepare for life post-graduation. This group will also attach significant importance to a business school’s performance in rankings, accreditations and awards as these add credibility and perceived value to their MBA qualification.

I ARGUE THAT WE CAN IDENTIFY FIVE BROAD CATEGORIES OF STUDENT MOTIVATIONS, EACH CALLING FOR DIFFERENT APPROACHES TO BE COMBINED IN TEACHING.

knowledge, skills and behaviours that can add to their personal reputation and build up their confidence to tackle new roles. For example, Nick Beilby, supported through his MBA by his employer, Centrax, found that he was able to use the knowledge, skills and vision he gained from his MBA at Exeter in the workplace. This, along with the opportunity to engage with www.executive-global.com

other students to share ideas from their industries and perspectives, was key to accelerating his career progression in his organisation. Measurement and accredited learning are something that this group values, which means that business schools need learning assessment systems that create impact back in the workplace. With the advent of Degree Apprenticeships in the UK, where business schools have the dual customer of individual and organisation, the Corporate Climber type of student is becoming more common. THE BADGE ACQUIRER For this group, a masters degree is the pinnacle of academic achievement. Having the letters “MBA” after their name is a major motivation for many students. Their thinking is that an MBA represents a “finishing school” from which they are ready to go on and pursue a variety of career goals. Similarly to the Career Changer, Badge Acquirers may not have well-formed career goals beyond that of completing the MBA programme successfully. As with Career Changers, they will, however, place a great focus on career support and coaching that can help

THE LIFELONG LEARNER Finally, there are a group of students that can be labelled Lifelong Learners, for whom an MBA is one step of many they take in continuing their professional education. In the 2019 Tomorrow’s MBA study by CarringtonCrisp and EFMD, when asked about study motivations, prospective students placed “I had always planned to do an MBA as part of my personal development” second only to “improving earning potential.” For these students, the focus is on how they can use an MBA to expand on previous education and learning to build for the future. They may be attracted by the intellectual avenues that MBA study can open and may value connections with the wider university beyond the business school itself. Within this group will be some that consider a PhD and an academic career as possible routes forward. The variety of motivations that students bring to the MBA calls for careful responses from programme designers. First, it underlines the importance of the functions and learning opportunities that sit around a core MBA curriculum. This can include entrepreneurial and new business incubation support, career services, project opportunities with external organisations and executive coaching. To best serve the diverse needs of students, the MBA should be an integral part of the wider business school and university, partnering with other areas on research, teaching and opportunities for students. I think the best business education is one that reflects the full breadth and depth of business activity that students will encounter in the real world. Second, it supports yet another argument about why a business school must have an engaged alumni community. The relationship with an MBA student needs to be treated as a lifetime commitment not just the one or two years of study, with alumni relations needing to be an integral part of programme design and development. Third, corporate connections with organisations ranging from large corporates to small start-ups as well as from the public sector to the third sector are vital. All can be valid and valuable partners in business school programmes. MBA students want the holistic experience of learning and engaging with organisations and individuals outside the classroom. In this regard, the MBA programme design needs to look at how an external network of different partners can be built and maintained. Finally, it points to the value of efforts that recognise, guide and value students as individuals. This is work that, given the limited time available in many contemporary programmes, must begin on day one and be maintained throughout the programme and after graduation. EG

For further information, please visit: www.globalfocusmagazine.com Spring 2020 •

EXECUTIVE EDUCATION

Latin American Council of Management Schools

Photo: SmartPhotoLab / Shutterstock.com

Businesspeople Must Be Both Internationally Aware And Digitally Literate Today’s global business environment runs on both international collaboration and virtual interaction. This means that, to be successful, businesspeople must be both internationally aware and digitally literate. Article by

Mariella Olivos Rossini PH.D, EXECUTIVE COORDINATOR, CLADEA

usiness school accreditation standards reflect these realities and the job market also demands that in Business graduates hold a sufficient base of international experiences. These experiences include study programs abroad, dual degrees, and visiting lecturers. However, these faceto-face international learning opportunities can be prohibitively expensive for institutes of higher education in the developing world. Therefore, in 2019, CLADEA, the Latin American Council of Management Schools began developing a solution to provide opportunities for virtual internationalisation to its 254 member institutions in the form of the CLADEA COIL Ecosystem, which is set to include multiple ways for professors and Business students to engage in collaborative online international learning.

THE LINK CLASS PROGRAM CLADEA COIL’s first official program, the Link Class Program, provides professors with the opportunity to give or receive a guest lecture, called a “Link Class,” from another professor at a CLADEA member institution in another country, via videoconference.

The Link Class Program was chosen as CLADEA COIL’s first program, due to its agility and relative ease of implementation. Once professors from CLADEA member institutions sign up for the program, CLADEA generates the match: seeking a sending and receiving professor who speaks the same language, teaches at the same level (undergraduate or postgraduate), and is interested in the same field. It then coordinates with the presenting and receiving professors on an individual basis regarding the day and time of the class. Once an agreement is reached, CLADEA provides the two professors with the videoconference link and each professor’s contact information, as well as materials on digital teaching methodology. Opportunities for technological training are also provided. A BENEFICIAL ENVIRONMENT In last year’s pilot “Link Class 2019” program, which ran from late August through early December, over twenty hours of Link Classes were received by over 350 end users. Participants came from CLADEA member institutions in four different countries: Colombia, Ecuador, Peru, and Mexico. So far in 2020, numerous Link Classes have already taken place, because the context of the COVID-19 pandemic does not interfere with this format of digital internationalisation in the classroom, as it does with face-to-face internationalisation programs. Undergraduate and graduate-level professors from over 20 universities in 10 different nations in Latin America and Europe, have signed up to

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participate, and 100% of those who have successfully participated in Link Classes have indicated that their Link Class experience was beneficial, their students profited from the Link Class experience, and that they would like to continue to participate in the Link Class Program in the future. Similarly, 80%

IN LAST YEAR'S PILOT ''LINK CLASS 2019'' PROGRAM, WHICH RAN FROM LATE AUGUST THROUGH EARLY DECEMBER, OVER TWENTY HOURS OF LINK CLASSES WERE RECEIVED...

of participating students have indicated that they believe other students at their universities would profit from a Link Class experience. EG

For further information, please visit: www.cladea.org

EXECUTIVE EDUCATION

Association of MBAs

Examining Impact, Performance And Strategy At Business Schools Across The World Leaders at Business Schools believe the business education sector to be both robust in an uncertain world economy and open to expansive strategies, according to new AMBA & BGA research, canvassing the thoughts of more than 350 decision makers in the sector. Article by

Andrew Main Wilson

CEO, ASSOCIATION OF MBAS AND BUSINESS GRADUATES ASSOCIATION (AMBA & BGA)

MBA & BGA's Business School leaders’ study aims to provide insight into how Business Schools are operating, as well as their plans to expand and adapt their offering in today’s economic climate. The study finds that Business School leaders feel optimistic about the future of the sector in which they work, as well as those with whom they compete. This is underpinned by leaders rating Schools highly across a range of factors and in the belief that the calibre of applications to a range of programmes is increasing. It is also supported by an optimism in the future of Business Schools. These positive perceptions show that leaders foresee opportunities for growth and development, despite the challenging global economic climate. Business School leaders believe that their Business School is high-performing with almost nine in 10 (84%) rating their institution as either ‘very good’ or ‘excellent’. More than nine in 10 leaders (94%) are optimistic about the future of Business Schools in their own country. Two fifths of leaders are ‘very optimistic’ (41%) and more than half are ‘fairly optimistic’ (54%). Just 4% of leaders are ‘not very optimistic’, while none of the leaders are ‘not at all optimistic’. This optimism is reinforced by a strong belief that Business Schools are well positioned to grow capacity in the next three years. More than eight in 10 leaders (84%) are confident, while just over one in 10 (13%) are not confident. Looking outside their institutions, most leaders have a positive view of the value corporate partnerships have had on their Business School, especially concerning their image, and the positive impact that these partnerships have on their students. This is important, as it suggests that well thought through strategic partnerships with organisations can make a

Photo: GaudiLab / Shutterstock.com

THE STUDY FINDS THAT BUSINESS SCHOOL LEADERS FEEL OPTIMISTIC ABOUT THE FUTURE OF THE SECTOR IN WHICH THEY WORK, AS WELL AS THOSE WITH WHOM THEY COMPETE.

real difference to the experiences of Business Schools. It is also noteworthy that a significant minority of leaders believe it is likely that Schools will open overseas campuses soon, something that could have a profound impact of their student coverage, as well

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as their international reputation and brand. The survey asked leaders whether they felt the calibre of applicants, across a suite of qualifications, had increased or decreased, compared to five years ago. Leaders are more likely to think that the standard of applicants has increased across each of the qualifications available at Business Schools, rather than decreased or stayed the same. They are most likely to say that the calibre of applicants has increased for MBAs (60%), followed by master's and undergraduate degrees (55% for both). The study demonstrates that leaders at Business Schools believe the sector to be both robust in an uncertain world economy and open to expansive strategies. The management education community and beyond should take confidence from the conviction Business School leaders have about the perceived positive future of the higher education sector. EG

For further information, please visit: www.mbaworld.com

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LUXURY LIFESTYLE

Bugatti Automobiles S.A.S

The Beauty of The Bugatti Noir In the world of supercars and hypercars, advancing hand-in-hand with technological progress, there can be no limit to perfection. When we saw the masterpieces that are the Bugatti Veyron and Chiron, it seemed that it would be impossible to come up with something more chic and expensive, reports Rachel Smith. ut, Bugatti knows how to surprise and impress, lighting up more and more dazzling stars time after time. It is during its unveiling at the 2019 Geneva Motor Show, that this impression, akin to the blinding magnificence of sky-peppering cosmic bodies, startled the audience with a new hypercar from the French manufacturer - Bugatti La Voiture Noire, which immediately received the title of the most expensive and luxurious car in the world. Since then, hundreds of publications and websites have written about this car. However, many of them seemed to ignore an important detail - La Voiture Noire is still just a prototype. At the time of its grand entrance, it was but an “unfinished” layout that lacked a working transmission and door handles, had an interior that was yet to be completed, and six exhaust pipes that did not lead anywhere. For these reasons, at the auto show, the most expensive car was all closed up, and no one could see what it looked like from within. While La Voiture Noire was created specifically for the Geneva Motor Show in just 12 weeks, the manufacturer has promised

to make this model into a full-fledged, operational vehicle no earlier than 2021-2022. Naturally, given the circumstances, the question arises: how come its price has already been revealed and ranges from 11 million to 19 million euros across different sources? In truth, Bugatti’s La Voiture Noire has already been sold for €16.7 million euros, even in its currently unfinished and undrivable state. It is unknown who the mystery buyer is, as Bugatti only described them as “a Bugatti enthusiast”. However, rumour has it that La Voiture Noire will belong to the former head of the Volkswagen Group, Ferdinand Pihu, the grandson of the legendary Ferdinand Porsche. It has also been speculated that it was sold to the legendary footballer Cristiano Ronaldo, but the latter’s spokesperson has denied those claims. A TRUE WORK OF ART Due to the fact that this car is still just a mockup, it won’t be possible to find detailed technical specifications for the Bugatti La Voiture Noire at this moment. There are, however, planned specs

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that we will cover a bit further in the article. So, if we do not currently know much about the functionality of the vehicle, why did the most expensive car in the world cost as much? And is it really worth the asking price? It is hard to imagine what €16.7 million looks like. Such an enormous sum of money in the largest denominations of the currency - €500 each, will amount to 33,000 pieces of paper weighing 37 kg. And if you count it in €100 bills, then the weight will already be as high as 168 kg. For that kind of money in the United States, you can buy yourself a private island of 4.5 hectares with a luxurious mansion built on it. In Europe, somewhere in France or Britain, a magnificent castle will cost about as much - with a century of history, dozens of rooms and an enthusiastic workforce of servants. For €16.7 million, you can buy 846 units of the brand new Volkswagen Golf of the latest generation, or 1,269 Renault Duster cars. Yes, that is a lot of money. On one hand, you could say that it is perhaps too much money for one single car, and you may not

LUXURY LIFESTYLE

Bugatti Automobiles S.A.S it provides an amazing level of protection, at the same time, this material is incredibly light. Of course, it is also extremely expensive. Therefore, more often than not, even among supercars, only some parts of the model will be strengthened by carbon fibre reinforced plastic. In the case of La Voiture Noire, the whole body and even some of the engine components are made out of top-quality carbon fibre. Some say Bugatti’s La Voiture Noire is nothing more than a modified copy of Chiron. However, that is not true, because the new Bugatti comes equipped with a whole new range of tools that differentiate it from its predecessor. For starters, you could start by stealing a glance at the area of the engine compartment, and notice that it is unusually “perforated”. This part in particular has been designed in such a way that it ensures the airing out of high temperatures generated by an 8-litre W16 engine with four turbines that offer a capacity of 1,500 horsepower to all four wheels and 1,600 Nm of torque at 6,700 rpm.

Photo: Grzegorz Czapski / Alamy Stock Photo

be entirely wrong. Now, on the other hand - built as a “one-off ”, enjoying absolute exclusivity, and assembled by hand at the French manufacturer’s workshop, La Voiture Noire is akin to a canvas painted by a great artist, the price of which will continue to grow with each passing year. Bugatti created this vehicle as a modern interpretation of the personal grand tourer that belonged to Jean Bugatti - the famous Type 57 SC Atlantic, which mysteriously disappeared in 1940 from a train as they were attempting to rescue the car from the Nazis. And to this day, no one knows anything about the fate of that one model. The vehicle’s official name sounds mysterious and romantic, does it not? Simply put, in French La Voiture Noire translates quite prosaically - a black car. But whether you find its name enigmatic or mundane, the main reason why its price is as high as €16.7 million, is that this hypercar will remain the only model to ever be created. This, indeed, makes www.executive-global.com

La Voiture Noire a work of art. No one will produce it again, as the automaker has already officially announced. And while artists have managed to pull off some incredible knock-offs of chef d'oeuvres, it’s unlikely that anyone will be able to recreate this car. So, in the end, is it worth it? If you are a connoisseur of cars, then Bugatti’s La Voiture Noire will for sure justify its stellar price tag. After all, in addition to uniqueness, the hypercar’s owner will also benefit from its absolutely unsurpassed characteristics. MORE THAN 'JUST ANOTHER CHIRON' First, about the body of this car, built in a style that pays homage to the last century’s 1930s. Said body is manually welded from carbon fibre components. The use of this material in particular is not surprising. Carbon fibre is a composite that boasts strength and durability greater than that of alloyed 25KhGSA structural steel. And while

A ONE-OF-A-KIND HYPERCAR Another difference from the Chiron is La Voiture Noire’s feature of ventilation slots in the hood, and the design of the front bumper with huge air intakes; it is also distinguishable by its very special head optics adorned with curved tail lights that occupy the entirety of the width. The remarkable Bugatti brand is displayed with pride in the custom designed wheels, a large aluminium “shark fin” that runs along the entire body and the six tailpipes. For several years now, Bugatti has been experimenting with 3D-printed titanium parts that it mounts on hypercars. The manufacture of these parts is quite laborious because titanium isn’t the easiest metal to work. However, the French company does not intend to abandon this technology and the 3D-printed titanium tailpipes are featured on La Voiture Noire. The design of this one-of-a-kind hypercar also comes equipped with its own special blackened front pillars, which create the effect of a solid glass flowing from the windshield to the side and reflecting the colors of the environment. All of this provides the most expensive vehicle in the world with a characteristically smoother, softer and more flexible shape than the Chiron. However, at the moment, it is only from the outside that we can appreciate the quality of this unique car. To this day, little remains known about its abilities on the road. Presumably, they will be somewhat similar to the Divo and the Chiron. This comparison means that the hypercar will accelerate from zero to a hundred in 2.4 seconds, developing a maximum speed of 420 km / h. According to the manufacturer, this particular model will have an energy efficiency class G according to the WLTP system, with a fuel consumption range from 18.3 to 43.3 litres per 100 km. So far, that's all that has been made public about the Bugatti La Voiture Noire. This unique beast may provoke amazement or bewilderment, but it is undeniable that it looks exceptionally sensational, and will go down in the history of the Bugatti brand as another masterpiece of automotive art. EG Spring 2020 •

LUXURY LIFESTYLE

Royalty Exchange

Photo: ZUMA Press, Inc. / Alamy Stock Photo

Royalty Exchange: Music Publishing And The Gateway To Rockstar Revenue Royalty Exchange (RE), an American company operating an online platform that enables investors to buy and sell royalty dividends, is part of a new approach to investing, writes Shannon Berkley. oyalty assets of all types (but predominantly music) are offered to investors via the platform, where performing and recording artists can seek funding by selling off future royalties. It is mostly songwriters, film producers and the creatives behind the arts that offer royalties for sale through the company. Chic and extremely viable as alternative assets, the trades hosted by the company are enabled by auctions in a sleek online marketplace. Currently, more than 22,500 investors of all kinds have made or regularly seek deals with the owners of royalties or royalty-based assets on the platform. The Denver-based Royalty Exchange was founded nine years ago, and initially operated from North Carolina. Three entrepreneurs in the form of Sean Peace, Reggie Calloway and Wilson Owens built the platform and populated its startup warehouse with a variety of royalties. Spence brought the exchange to digital life, while Calloway brought industry acumen, being a multiple Grammy-nominated song writer and artist. Owens had been managing bands and marrying pop music into the digital marketplace for years prior to Royalty Exchangeâ€™s formation. The company was then acquired in 2015 by a consortium of private investors, and in 2017 became a member of the Techstars Music Accelerator initiative. Although focused on creative royalties, many other asset types can be traded on the platform, such as intellectual property and patent royalties, and those derived of trade secrets and technology licensing. There are renewable energy land leases, tax credits and franchise royalties on offer too, even agricultural royalties. Although music, book publishing and

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LUXURY LIFESTYLE

Royalty Exchange

straight up copyright royalties form the bulk of trading, the company has managed to present a mixed basket of extremely viable alternative investments to traders — and has eliminated the historical barriers between creative income ownership and outside investment. The RE founders brought these innovative asset types to market, providing huge potential liquidity to the creative process, while also offering investors an exciting alternative investment structure with measurable viability and likely outcomes. Although the creative process has typically been seen as not amenable to legacy investment analysis, nor giving in terms of consistent returns, the assumptions are unfounded and perceptions are changing. ROYALTY EXCHANGE IS SINGING A NEW SONG Long a niche construct closed to outside investment, creative royalties are those dividends derived of both the initial popularity and longer term use of recorded music, movies, or written works. As a novel and profitable investment option, royalties are simple to understand, yet demand the same due diligence of investors in order to gauge likely future profitability. Just like stocks, fair purchase value and future prospects are the prime considerations for investors looking at these alternative investments. Royalty Exchange foreshadowed a growing number of heavyweight financial concerns that have made alternative investment funds attractive to investors, such as AGI Partners’ Unison Fund and big hitter BlackRock’s Alignment Artist Capital. RE gleans a modest percentage of each sale made on the platform, presenting very much as a traditional brokerage.

OTHER INVESTORS MIGHT FEEL THAT BIGGER MONEY IS BETTER SPENT INVESTING IN ASSETS WITH A FASTER RATE OF RETURN, BUT IN BOTH CASES THE SAME GAUGE IS APPLICABLE.

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That said, RE also presents investors with unusual and potentially exciting alternatives to stocks and bonds. The drive behind the company’s presentation to potential investors is to illuminate and demystify these particular alternative investment options, while also facilitating their trading on a platform with a known format and all available intel that accompanies the typical investment process. All manner of assets are monetised and offered for investment on RE, and monthly trading figures are now reaching impressive volumes. As the yield is often different to the more staid and well known accumulation associated with the annual cycles of legacy investment classes, investors heading into the auction will need to determine their appetite for the unusual. Although returns from RE investments do usually follow the traditional path, the assets traded present the opportunity for far more initial dynamism, as well as longer term accumulation. In effect a perfect passive income, assuming one backs the right horse, the asset class holds appeal for many who want to marry their pop culture savvy with financial investment. Passive or long-term income from RE assets can be erratic — anathema in legacy investment circles — but investors who understand the sometimes slow accumulation of royalties and their long term payback potential have found a home with RE. ALTERNATIVE PLATFORMS LIKE ROYALTY EXCHANGE ARE RISING Whether it’s the Black Eyed Peas, Robbie Williams, Britney Spears, Jay-Z, Usher, TLC, Boyz II Men, Luniz, Coolio, or Barry White, there is now a new trend of recording artists willing to sell the performance roya lties of their world renowned hits to private investors seeking the residual cash flow that royalty income provides. Via the online crowdfunding platform provided by RE, investors can appraise royalty purchases along the same lines as any other asset class, while enjoying the unique dynamics of income derived of creative work. In appraising RE’s offered assets, correctly valuing such royalties is a more critical point than when dealing with the valuation of stocks, ETFs, bonds or mutual funds. Broadly illiquid assets, royalties bought via RE are not subject to daily trading, but rather present as buy-and-hold assets. This means that investors won’t be buying and selling such intellectual property on a daily basis as with traditional investments. Indeed, when buying into IP, investors would do best holding them over the longer term, as its gradual accumulation of dividends is what will outstrip the value of more traditional investments. Any investment involves buying into the future value of its income. In the case of creative assets, the price-to-earnings (P/E) ratio needs to be gauged, notwithstanding that there is an understanding that these are illiquid, longer term assets that

will provide a slow accumulation of dividends. The current valuation level of creative assets will determine the timing and nature of returns, and although there are many variables in pegging such a level with alternative assets, there are also broad market norms that can steer investors. For many, the time value of money might make such calculations unpalatable, although the formulaic route is the same as for stocks and bonds. RE provides the tools and intel to plot the likely return on what for those new to the arena might experience as unknown assets, and to date has managed to fill the ‘diversity’ niche of many traditional portfolios. ALTHOUGH SLOW AT TIMES, ROYALTIES NEVER END As long as the price is fair for the asset involved, returns from royalties can be pleasantly consistent when seen over the longer term. Again coming back to the appetite of individual investors, many find the smaller but gradually accumulating dividends from royalty purchases to be a welcome alternative to the dynamics of commercial and industrial stocks, and just what they hoped for. Other investors might feel that bigger money is better spent investing in assets with a faster rate of return, but in both cases the same gauge is applicable. When looking at how much of a return over how long a time can be anticipated from any asset, creative or otherwise, Royalty Exchange’s offered buy-ins perform comparably with other options. They come with the added value of participation in a creative society, though, and that holds its own unique value for many of the company’s traders. Like traditional investment incentives, royalty purchases provide the working capital to expand the sphere by enabling creatives, thus expanding the potential for a growing IP investment market. While the P/E ratio might look better on commercial stocks for those who know the business space far better than the profitability of the creative industry as a whole, the fundamentals remain the same. Buy at a fair price and with a strong likelihood of solid returns over time. Royalty prices can be hyped — just like tech and other stocks experience cycles of over-enthusiasm from markets from time to time — and streams can be variable. The same can be said of any other investment, however, and buying into creative IP holds the promise of both sharp initial climbing (in the case of new releases) or perpetual, reassuring earnings (where royalties stem from work that is already embedded in human culture, and can be evaluated in an historical context). That big names in investing have added this asset class to the books, also goes some way towards assuring aspiring investors of the viability of the sector, and RE along with other alternative investment companies, can expect good growth going forward. When retail investors are often faced with great yet prohibitively expensive stocks on legacy exchanges, RE’s pitch allows for a lower barrier to entry and far greater diversity in investing, with at least as much confidence that returns will be worth waiting for. EG Spring 2020 •

LUXURY LIFESTYLE

Burj Al Arab

The World's Most Expensive Restaurants - Al Muntaha The iconic seven-star Burj Al Arab Hotel is a place that captivates with its unique beauty and distinguished opulence. It is a majestic building with an interior of breathtaking luxury and a picturesque location. Among its many merits, the Burj Al Arab is especially well-reputed for its signature restaurants. One of those venues that is particularly worth mentioning is the Al Muntaha, whose name so fittingly means “The Ultimate”, writes Thomas Hughes.

Photo: Jan Butchofsky / Alamy Stock Photo

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l Muntaha is undeniably among the best European restaurants that you can enjoy in the United Arab Emirates. Located on the 27th floor of the Burj Al Arab, it is a luxurious restaurant with a breathtaking view on Dubai’s white sand Jumeirah beach on the coast of the Persian Gulf. Such a location truly makes for an unrivalled dining experience at 200 meters above the sea, with unforgettable views on the UAE’s most prized jewel. The Burj Al Arab’s “Ultimate” is a restaurant specialising in contemporary French cuisine, where you can revel in European dishes that will appeal to your palate in a familiar fashion. However, prepared at an altitude of 200 meters above the Persian Gulf, they tend to treat you to an unsurpassed gastronomic experience. Its chefs manage to achieve a menu that remains sophisticated yet never too confusing, as they masterfully combine the very best of European cuisine with a distinctly oriental twist. Among its most notable dishes we recommend its selection of seafood dishes, the meats (namely the wagyu filet), the soups, and a variety of exquisite desserts that have something for everyone’s tastes. The dining area is open and spacious. Surrounded on all sides by floor-to-ceiling windows, it gives the sensation of hovering in the air, with a memorable view on the sparkling Dubai skyline at night. When you arrive at this dimly lit room imbued with luxury, you may need a few minutes to get used to your surroundings and the altitude of your location. However, the blue-green mood lighting, the elegance of the European-styled furniture, the regal decor and the sophisticated company of other guests and staff alike will soon plunge you into a relaxing ambience as you enjoy the selection of world-renowned dishes. To maintain the high standard of its clientele, Al Muntaha has an obligatory dress code. Gentlemen are expected to be clad in long sleeved, collared shirts, formal pants (no jeans), and dress shoes (no sneakers). Women should wear a formal dress or a light suit. The best practice for both, however, is to arrive in the UAE national dress. Children under 10 years are only allowed for brunch and lunch. Adding to the harmonious atmosphere, Al Muntaha features quiet background music that is just enough to plunge you into relaxing luxury, but never overbearing. During later evenings, the restaurant occasionally features live music acts, such as a jazz band that unobtrusively entertains the guests. Other artists also take the stage at different times. Check out their schedule to know what happens when! EG

Max Ernst – The Würth Collection

18.07.2020 through 17.01.2021 Max Ernst: Le lion de Belfort, 5 (The Lion of Belfort, 5) Reproduction after a collage from the surrealistic novel in collage entitled »Une semaine de bonté ou Les sept éléments capitaux«, 1934 Würth Collection, VG Bild-Kunst Bonn, 2020

LUXURY LIFESTYLE

Rolex SA

real credibility from action lives. His rugged but stylish attitude, steely gaze and strong chin have made the watch a definitive piece in large part for the memorabilia it represents. Few other items of American pop culture can pull so strongly on so many fraternities, all of whom sport top end watch collectors. Historians desire the watch for its Americana appeal, motor sports enthusiasts who might collect expensive watches could not do better, and Hollywood style fanatics consider it a prize asset, too. Officially titled Ref 6239 Rolex Oyster Cosmograph Daytona, the Newman wristwatch is a stainless-steel chronograph elegantly styled in the manner that has made Rolex such a desirable brand.

Photo: UPI / Alamy Stock Photo

World’s Most Expensive Watches - The Paul Newman Daytona Rolex Very few watches outlive time in the way that the Paul Newman Daytona Rolex has, writes Oliver Taylor. orn by the now-deceased actor, the watch has gained in value like few others. Perhaps because of its solid American feel, harking back to the days when actors were rugged but decent and America was still a good guy, there is the sense that owning

the watch is like buying a slice of American heritage. A gift from his wife Joanne Woodward, on the back appears the inscription “DRIVE CAREFULLY, ME.” Newman’s love of racing at Daytona defined a male archetype, when action stars could have

• Productivity, Strategy, Profitability

SUITABLE FOR HOLLYWOOD ELITE It is impossible to tell what the late Paul Newman did for Rolex in wearing the timepiece, but it has appreciated in value far better than stocks and bonds. Indeed, Paul Newman’s watch epitomises the ultimate in a trade largely unseen by others. Top end watch collectors rarely sell for anything other than a large profit, and the Paul Newman Daytona Rolex beat previous records by a large margin. When bidding was opened in New York by Phillips Auctioneers in late October 2017, Aurel Bacs of specialist vintage watch agency Bacs & Russo described it as “the most iconic Rolex wristwatch in the world, possibly the most iconic wristwatch of the 20th century.” It went on to sell for $17,752,500. Phillips’ Paul Newman sale beat a whopping $5 million paid for a Bao Dai Rolex sold in May 2017, and a subsequent record, also held by Phillips, of a staggering $11 million for a Patek Philippe. This makes the Newman timepiece the global king of expensive timepieces — fairly apt for a watch worn by a man who was once the most bankable actor in Hollywood. A LONG TERM INVESTMENT The price tag did not surprise top end watch collectors, it merely represented solid confirmation that expensive and unique watches can be a better safe haven than gold, spotlighting the reality of the trade in investment watches. Newman was part of a select group of actors that together formed the iconic image of a leading man, although his exploits on the Daytona racetrack have added an extra legendary feel to his life, his legacy, and ultimately, his watch. It is something of a holy grail for watch collectors in a time when the tech-wealthy, street level bling and numerous influencers have latched onto the elite investment vehicle of high end watches. EG

Baden-Baden

the Spa & Culture Town

Casino Baden-Baden

Friedrichsbad

Museum Frieder Burda

Seldom is it easy to find a cosmopolitan city in the heart of the countryside that offers both tranquility and excitement. Yet, that is exactly what Baden-Baden is; an idyllic international spa town in Germanyâ€™s Black Forest. Established more than two thousand years ago as a place for people to reconnect with themselves, the city has since become a place of enchanting natural beauty with a spectacular variety of opportunities for adventure and excitement.

Baden-Baden Tourism Board Phone +49(0)7221 275 200 Email info@baden-baden.com www.baden-baden.com/en

Passionate about your business. ARNECKE SIBETH. It takes a strong regional standing and an international track record to deliver what makes us special: Mehr als Recht.

FRANKFURT AM MAIN • MÜNCHEN • BERLIN • DRESDEN

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