prudent strategies for greater self-reliance, freedom, and wealth! · 2016-08-19 · another way,...

At Last, Reinvent Yourself Over 50

The Art of Making “Off-the-Grid” Cash

By Lee Bellinger

4 Announcing a new way to bring in money that doesn’t involve Wall Street, your broker or even another financial newsletter subscription.

4 Self-Reliance 201: Make off-the-grid money that no one can take away from you ever.

OKAY, one more world to conquer – or maybe even two or three. You need a fresh, new way forward, especially if you are over 50.

Milling about waiting for your invest-ments to “pay off” just isn’t good enough anymore. Yes, there are lots of very good investment newsletters out there – some with ideas on how to go forward.

Independent Living too has a very good track-record on steering you away from dan-gerous investment fads – and toward more reliable spots and openings in the market.

Independent LivingPrudent strategies for greater self-reliance, freedom, and wealth!

Volume 11, Issue 2 February 2016

Closer to An AbyssBy Seth Van Brocklin

4 As artificial stimulus fades, the outlook for the economy and financial markets darkens.

4 Inside: The gravitational pull that could bring most investments crashing down.

Investors beware. Volatility has returned, and downside risk will likely be elevated in financial markets for some time to come.

U.S. stocks began 2016 with their worst start to a year in decades. The Dow Jones Industrials dropped 6.2% in just the first five trading days of January, then whipsawed violently in the following days. So far, it’s just a “correction,” as the financial media like to put it.

That’s all it is if you look at the U.S. large-cap averages in isolation. But looking at the big picture backdrop reveals that the recent “correction” is part of a much bigger and more ominous trend. Some-thing akin to a gravitational pull is causing asset classes and indicators around the world to drop like a rock.

See Closer to An Abyss, next pageSee The Art of Making “Off-the-Grid” Cash, page 23

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Inside This Issue“Audit the Fed” Finally Wins… But Not By Enough . . . . 4We Have Some Great Questions This Month for Lee . . . 5Attacks Against Power Grids Mount . . . . . . . . . . . . . . . . . . . . . . . .6How to Build Your Own Panic Room for Pennies on the Dollar . . . . . . . . . . . . . . 7Ask Lee Now: Answering Readers’ Questions . . . . . . . . . 8New Dietary Guidelines Still Protect the U.S. Illness Lobby. . . . . . . . . . . . . . . . . . . . 11Steps to Protect Your Family from Massive Economic Melt-Down . . . . . . . . . . . . . . . 12

Get Cheaper Money Than Most Others . . . . . . . . . . . . . 13Inside Secrets of How Credit Reporting Agencies Make You Pay More for Loans. . . . . . . . . . . . 15The Risky Business of Having a Day Job . . . . . . . . . . . . 17TSA Bureaucrats Curtail Your Right to Opt Out of Full Body Scans . . . . . . . . . . . . . . . 18Pipelines May Not Be Too Busted to Lead You to Profits . . . . . . . . . . . . . . . . . . . . 19Top 5 Greatest State Tax Havens. . . . . . . . . . . . . . . . . . 21Physical Cash vs. Digital Fiction. . . . . . . . . . . . . . . . . . 21

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Independent Living2 February 2016

Independent Living • $139/12 issues • 377 Rubin Center Drive • Suite 203 • Fort Mill, SC 29708

Taking a step back from the chart of the Dow, other indicators are flashing bear market, recession, and pos-sible financial crisis. Small-cap stocks and transports have broken down to multi-year lows. Crude oil and most commodities are in massive bear markets. China and emerging markets are imploding. Europe is a mess. Junk bonds are in free-fall.

Virtually all economically sensi-tive asset classes are deflating. Some have been doing so for many months now. The broad blue-chip U.S. stock indexes held up longer than everything else. But they may now be in the process of being taken down by the deflationary pull. If it weren’t for the government artificially inflating healthcare costs, we probably would be in an outright deflation.

Will Deflationary Forces Overwhelm the Fed?

Yes, deflation is now a serious threat. And yes, that cuts against the thesis that the easy money policies of the Federal Reserve will unleash massive inflation. However, in the inflation/deflation debate, we never ruled out the possibility that a bout of deflation would come first.

Deflation is the market’s way of unwinding excess leverage and overvaluations. Deflationary forces have been in place since the housing bubble burst several years ago. But they’ve been largely countered by all the bailouts and money printing from the central bank. The Fed has certainly succeeded in re-inflating capital markets.

That, in turn, has encouraged a ramp up in leveraged speculation, which has sent stock market valuations back into bubble territory. The market’s natural tendency is, again, to wipe out the Fed-induced froth in

markets and the economy through deflation.

We Think the Fed Will Combat Outright Deflation With New Steps

It remains our belief that the Fed won’t allow deflation to run its course. Federal Reserve officials themselves tell us that they’ll do anything to stop deflation – asset purchases, negative interest rates, helicopter drops of cash if necessary. The Fed’s

frantic efforts to stop deflation would then cause the next major wave of inflation.

That could happen perhaps starting next year as the next President assumes office. In the meantime, we’ll look for signs of a commodity price bottom in the

months ahead. Raw materials like oil, copper, and iron should begin to advance out of their bear markets before inflation indicators turn back up.

Commodities are closer to a bottom than the stock market and economy. Fed economists have to be aware of the growing number of indicators flashing recession dead ahead. In January, bellwether retailer Wal-Mart announced it would close 269 stores worldwide (with more than half of them being in the United States). The company told investors that it expects earnings for the coming fiscal year to fall by12%.

Another recession indicator now flashing is office furniture. The Business and Institutional Furniture Manufacturers Association reports a steep decline in sales growth starting in the second half of 2015. According to Tony Sagami of Mauldin Economics, “The office furniture business is an extremely useful economic indicator… [that] our economy is headed for a severe slowdown.”

Should You Really “Sell Everything?”A “severe slowdown” could be putting it mildly.

Closer to An Abyss continued from previous page

Independent Living (ISSN 1943-1686) (USPS 24-808) is published monthly by American Lantern Press, Inc. Known office of publication is 377 Rubin Center Drive, Suite 203, Fort Mill, SC 29708. Periodicals postage paid at Fort Mill, SC, and other mailing offices. POSTMASTER: Send address changes to Independent Living, P.O. Box 1240, Clover, SC 29710-4240.Editor, Lee BellingerKenneth F. Fairleigh Operations Center377 Rubin Center Drive, Suite 203, Fort Mill, SC 297081-803-802-1344 • Fax 1-803-802-1349 • [email protected]

Contributing Editors, Seth Van Brocklin & Heather RobsonToll-free customer service 1-877-371-1807

Visit www.IndependentLivingNews.comCopyright 2016 by American Lantern Press, Inc.

All rights reserved.

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Recent “correction” is part of a much bigger and more ominous trend.

Independent LivingFebruary 2016 3


Analysts at the Royal Bank of Scotland see 2016 as a “cataclysmic year” and urge investors to “sell everything.”

So is now the time to sell everything and bury yourself in a bunker? In a word, no. If you liquidate all your investments, then you’ll effectively be going all-in on cash. That’s probably the worst place to be in the long run.

In the short run, being in cash could indeed provide shelter from a market crash. So it’s not a bad idea to increase your cash reserves. But it is foolhardy to bet 100% on a single scenario. What if the Federal Reserve suddenly announces a radical new stimulus program and devalues the dollar by 20%? Then the value of cash plunges and the value of virtually all assets surge in terms of depreciated dollars.

No one knows the future. That’s why it’s always wise to stay diversified for a variety of scenarios, including ones that seem improbable. The past few years have produced a series of extraordinary moves in markets that virtually no one would have predicted in advance.

The best time to diversify your investment portfolio is now. And the best time to sell everything and abandon diversification is…never.

Dow to Gold Ratio Will Become Important Again

Contrary to some popular beliefs, now is a great time to be diversifying into hard assets, especially the monetary metals gold and silver. During a deflationary

episode, gold can be expected to retain value better than economically sensitive investments such as stocks. Put another way, the Dow:gold ratio can be expected to fall.

In a crisis, the Dow:gold ratio could return all the way back to the 1:1 level seen during the Great Depression and again in 1980 when precious metals prices spiked. Even if the ratio only gets down to the 7:1 level seen during the 2008 financial crisis, that represents a massive

amount of downside for stocks (and relative upside for gold). It would represent more than a 50% drop in stocks priced in gold, based on the current 15:1 ratio.

Gold and especially gold miners have frustrated precious metals investors over the past couple years. The market has been characterized by fleeting rallies and false breakouts that quickly reversed.

A recent column in Barron’s (January 4, 2016) is snarkily titled, “Gold Likely to Stay Tarnished.” Setting aside the fact that gold doesn’t actually tarnish like silver and other metals, the author also fails to grasp that rate hikes (assuming the Fed will actually be able to follow through with them) aren’t inherently bad for gold prices. (I went over the historical relationship between gold and interest rates in last month’s issue.)

Repeating myths about what causes gold prices to fall and mocking gold bugs is typical of how the mainstream media portrays gold as an investment. Naysayers and perma-bears always point to reasons why owning gold is dumb at any given time. If gold has gone up a lot recently, then it’s too expensive. If it has gone down a lot, then it proves the gold bugs were wrong and you should never listen to them again.

Ignore the Perma-Bulls AND the Perma-Bears

On the flip side of the anti-gold narrative is the perma-bullishness on stocks you’ll find spewed out of Wall Street’s allies in the media. After the market gyrations of the first few trading days of the year, economist, com-mentator, and former CNBC host Larry Kudlow advised, “Don’t get too bearish right now” because “we’re not going into a recession, we’re not going into a stock market crash, we’re not going into a banking crash.”

How does he know? Larry “perma-bull” Kudlow didn’t predict the last recession, stock market crash, and banking crisis! He never warns people not to be


See Closer to An Abyss, next page

Yes, deflation is now a serious threat.

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bullish, even though there are times when bull-headed optimism is quite dangerous.

The perma-bulls at least have the advantage of history showing that in the very, very long run stocks have always moved higher in nominal terms. The perma-bears, some of whom have been calling for the Dow to crash below 1,000 for more than a quarter century now, will probably never see their bearish calls vindicated.

Here at Independent Living, we don’t have any mandate to promote a fixed point of view on markets and the economy. Our only mission is to provide value to readers – and I take that to mean presenting investment ideas that represent good value. We’ll be happy to tout stocks when their valuations are compelling.

Right now, the best we can say for stocks is that their dividend yields are superior to the yields on cash and government bonds. Therefore, stocks remain superior long-term investments. But on that relative yield analysis, most foreign equity markets are more appealing than the U.S.

Counter-Cyclical Assets Are a Good Option to Consider Right Now

In the near-term to intermediate-term, dividend yields won’t offer much protection against the potential capital losses than can occur during a bear market. Counter-cyclical assets such as gold can serve as a safe-haven function during downdrafts in financial markets. Pre-cious metals should always be part of a well-diversified portfolio – but especially during times like now.


“Audit the Fed” Finally Wins… But Not By Enough

Former Congressman Ron Paul’s once lonely crusade to bring greater transparency to our monetary system finally achieved majority support in both the House and Senate. His son Rand Paul led the charge on behalf of the “Audit the Fed” bill in the Senate. On January 12, the Senate voted 53-44 to subject the Federal Reserve to a full public audit.

But the bill still lost. That’s because Fed-beholden obstructionist Democrats threatened a filibuster, and Republicans didn’t have the 60 votes needed to overcome it. Only two Democrats supported the bill – one being presidential candidate Bernie Sanders.

The Federal Reserve has its own team of lobbyists, like any other special interest. And they worked over Democrat Senators to dissuade them from forming a bipartisan consensus on the need for greater oversight and transparency in our monetary system.

“The biggest lobby against auditing the Fed is actually coming from the Federal Reserve,” Senator Paul said in an interview with alternative media

talker Alex Jones. “They called every senator in advance and lobbied them to say, ‘We don’t want more oversight.’”

Fed Dusts Off Legal Provision Giving it Greater Regulatory Reach

In addition to successfully manipulating the legislative process to avoid an audit, Fed officials are expanding their regulatory reach. As the Wall Street Journal reported (January 10, 2016), “The Federal Reserve is dusting off a legal power it has largely ignored for four decades, a move that could significantly expand the Fed’s influence over financial markets.”

Specifically, the Fed is working with other central banks to impose new global margin requirements on securities and repurchase agreements. Fed officials say the regulations are needed to help prevent dangerous asset bubbles from forming. But the real motivation seems to be thwarting offshore capital flight and so-called “shadow banking.”



See An Interview with Lee Bellinger, page 24

We Have Some Great Questions This Month for Lee An Interview with Lee Bellinger

What is going to be the big thing in November’s presidential election?Donald Trump is the first major national presidential candidate who got there by tapping into decades-long resentment of political correctness. When and if that peters out is hard to know. My personal belief is that political correctness is a form of white voter guilt that stretches all the way back to the Civil War. What’s changed is that the white majority vote have elected and reelected a half-black man.

Obama responded back with extremism, and has made small comments telegraphing that he thinks his critics are racists. Obama and Al Sharpton are paranoid about so-called “white privilege” and way overplayed the over-used, very tired race card.

It’s sunk in with chunks of the majority vote that they are being unfairly bashed. And it all came out of Donald Trump’s outspoken views on building a real wall, halting Middle Eastern refuges, and unapologetic stances on forcing immigrants to respect our laws when they come here.

Give me your take on why establishment GOP candidates are faring so poorly.Had Trump not entered the race, massive illegal immigration would have been a forbidden discussion among the GOP candidates. Note the high viewership of those debates once folks realized someone was seriously challenging political correctness.

The Karl Rove/Bush wing of the GOP want to proceed as though the true electorate majority is in fact a demographi-cally doomed helpless giant – unable to win in the electoral college going forward. That is a patent falsehood – an excuse for the GOP to go left under the banner of diversity.

The black vote is nearly 14% of the electorate; but it has amazing influence because the left leverages this monolithic voting block for maximum effect. If the huge dormant majority vote were to turn out in larger numbers and realign itself even slightly, it would have an even more amazing impact.

The Bush-Rove wing of the GOP wants the party to reach out to minorities by greenlighting illegal

immigration and other politically correct ideas. For 20+ years it has been politically incorrect to even talk about the subject. Taken together, this has suppressed majority vote turnout since the Reagan years.

No Republican is against better outreach to minorities – provided the GOP doesn’t go left to do it. Trump, by design or not, put his thumb squarely in the middle of this issue.

So this next election tests one of your big ideas.Yes, the conditions are in place to validate my view on this one way or the other. The majority vote is the true 900-pound gorilla in U.S. politics. Due to the GOP leadership chanting the false god of political correctness, the majority vote has become a politically cowed, under-represented and dis-unified chunk of the electorate. So they’ve dropped out.

This year, many in the real majority will be wary of telling pollsters what they plan to do in the privacy of a voting booth – so the potential for surprises next November is high.

So my take is that even a slightly more unified majority vote would change all politics – and the political climate is about as good as it is going to get for it to happen this year. If not, then the Bush-Rove crowd may be right that there aren’t enough pro-freedom voters left to sustain a serious movement.

So who wins next November?Never underestimate the left’s will to prevail. Still, Hillary Clinton is stuck running for a third Obama term whether she admits it or not. That’s a lot of baggage to lug about. Obama continues to run at under 50% approval, meaning he could be a big drag on Hillary.

The Wall Street Journal guys note that in the past 50 years, only one president has won the White House in the wake of two terms held by a president of the same party. When Ronald Reagan completed his second term, his vice president George Bush won.

What is the biggest bubble in the economy right now?One I’m watching is new car finance. Cheap credit for cars combined with super-cheap fuel has morphed



Independent LIvIng is designed to provide the opinions and findings of its contributing writers. these findings are based on research, experience, and analysis of the subject matter covered. sources for information are believed reliable, but absolute accuracy cannot be guaranteed. this information is not provided for purposes of rendering financial, legal, accounting, or other professional advice. it is intended purely for educational purposes. the authors and publisher disclaim any responsibility for a liability or loss incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein. because the united states currently functions under an evolutionary system, the reader bears the burden of ensuring that the principle or law stated in this work is current and binding at the time of an intended use or application. caution: the law in this country is subject to change arbitrarily and without prior notice.

Attacks Against Power Grids Mount This New Weapon of Choice Can Disrupt All of Society

By Roger King, Independent Living News

December 23rd, the city of Kiev, Ukraine was plunged into darkness…In fact, nearly a quarter of the country’s power grid was down. Citizens panicked. As the outage stretched out for hours, in the cold, customers got nothing but busy signals on the utility company’s customer service phone lines. Within hours, Ukrainian security officials believed they’d targeted the source of the outage.

Russian hackers. They’d made their way into the utilities’ software. They shut down the grid. And at the same time, jammed the phone lines, to keep customers from alerting anyone.

They managed to knock out 30 of the country’s 135 power substations, creating an outage that lasted six hours. They’d gotten into the system, and used the industrial control devices to disconnect the substations. Then, they installed a virus that wiped the computers, making them inoperable.

The virus was traced back to a Russian hacking group known to perpetrate pro-Russian attacks.

Look What’s in Store for UsThe same group was known to carry out attacks against Ukraine and NATO in 2014. And against journalists covering the Ukrainian elections last October.

The speculation? Well, that someone in Russia wanted to show Ukrainian citizens that their govern-ment wasn’t strong enough to protect them.

This is the kind of hacker-caused blackout we’ve

been warning you against.

We WILL see more hackers taking down more power grids.

Bloomberg and others say Ukraine was especially vulnerable because they’re using more outdated equipment. It was easier to hack into, and easier to use to disconnect the substation.

Trying to pull off the same attack against the US or European grids would be much more difficult. They write it off as nearly impossible.

And yet, they warned that if a similar strike were to hit New York City, for example, it would be far worse…

Our Grid is Wide-Open to This AttackIn the Ukraine, they simply threw a bunch of breakers, then disabled the computers that could automatically bring them back online. The outage was fixed within hours by simply sending a tech out to each substation for a manual reset.

In order to perpetrate an attack against most of the US power grid, they’d have to find a way to physically damage power transmission equipment, or generators themselves. But it’s been proven that this is possible, using nothing but an internet connection and sophisticated code.

The hackers would simply have to find one hole that let them through, to insert the code. And then it could take weeks or months to bring power back online.

It’s not a matter of if, but when a major hacking attack against the U.S. power grid occurs.



How to Build Your Own Panic Room for Pennies on the Dollar

They are in demand among the rich and famous who want a highly secure hideout inside their homes. They are called “panic rooms” or “safe rooms.”

And even if you can’t afford the $50,000 to $100,000 price tag a typical well-equipped panic room carries, you can still turn your bedroom into a safe(r) room for a fraction of the cost.

The idea behind a safe room is that you and your family will have a place to hunker down in the event of a home inva-sion, a tornado, or other emergency. A dedicated panic room will typically have a bullet-resistant door, fortified walls, an independent venti-lation system, an independent source of power and communication, an alarm button, and some water and food reserves. It’s like a miniature multi-purpose bunker built right into your home.

If you have the money, you can get a panic room professionally built by a company that specializes in them. But a more practical option for most people is to shore-up their existing bedroom to make it more resilient to threats.

Turn Your Bedroom into a Safe(r) RoomIf your home is broken into while you’re sleeping, you may not have the time or capacity to either defeat the threat or flee from it. You could become another victim in your own bedroom.

Locking your bedroom door won’t do much good if it’s a standard interior door. Interior doors aren’t meant to thwart intruders. Often, they can’t even stand up to temper tantrums from kids!

So if you want to sleep more securely, then one of the

first things you should do is replace your bedroom door. Replace it with an exterior-grade door clad with metal or made of thick, solid wood. At minimum, it should have a deadbolt lock.

The other big vulnerability in most bedrooms is the windows. An intruder can easily break through most windows with a rock or hammer. They can shatter from flying debris or broken tree limbs in the midst of a violent storm. Or they can fail in the event of a high-temperature fire.

Replacing your existing bedroom windows with wire-inlaid glass will make your windows more durable. But the wire doesn’t actually prevent glass from shattering or intruders from breaking in.

A better option is so-called “shatterproof” glass, which may be

bolstered with a layer of polycarbonate plastic. This type of glass is not literally unbreakable, but it is far more shatter resistant than regular glass.

Instead of (or in addition to) replacing your windows, you can install metal security bars outside of your window frames. You may not like the aesthetic look of security bars. But if your aim is to create a safe room, then a fortress feel isn’t necessarily a negative.

The only functional downside to security bars is that they can prevent you from being able to use your windows to escape during an emergency. As such, they can be considered a fire hazard.

Types of Security Bar Release DevicesThe National Fire Protection Association suggests only installing window security bars that have built-in emergency release. This is a legal requirement in some areas. In other communities, all types of barred windows and doors are illegal.

Ready For Anything

Source: National Fire Protection Association

Pull down on lever. Push open bars.

Push in on button. Push open bars.

Step down on pedal. Push open bars.

Kick in lever. Push open bars.



Are We Done With Obama Yet?Robert P. writes: Why has Congress and the Senate not impeached Obama yet? Looks to me like they are all traitors. Are they all that stupid or are they all in on it with him?

Lee responds: At this point, that’s a question for political historians to answer. Republicans missed their opportunity to bring up articles of impeachment years ago when the President began overreaching with Executive Orders. Now with less than a year left in Obama’s final constitutional term in office, we need to focus on electing someone more suitable to inhabit the White House. It is doable!

There’s no point in waging battles that have already been lost. There are many winnable battles in the months ahead. It’s not all about the presidency, either. The composition of Congress is crucial. Control of the Senate is up in the air. Control of leadership positions is up in the air.

In the latest budget deal, Republican leaders caved on nearly every one of Obama’s spending priorities, signing off on hundreds of billions of dollars in new debt. House and Senate leaders rammed through a Democrat-backed bill without majority Republican support. The way to voice your opinion about Republicans who supported the Obama budget is to support opposition candidates in the primaries.

Watch Out for This Nasty Tax PenaltyJoseph L. writes: You had some info on how to avoid 50 percent tax penalty on required distributions. How can I get that information?

Lee responds: After age 70½, the IRS requires you to take minimum distributions from retirement accounts based on the value of the accounts. Some people tout annuities as a way to avoid early withdrawal penalties and the 50% penalty for missing required minimum distributions.

It’s true that you can annuitize an IRA to take regular, penalty-free distributions. But if you want protection specifically against the required minimum distribution penalty, look into a Qualified Longevity Annuity Contract (QLAC). A financial planner can help you set up a QLAC within your IRA.

What You Need to Know About Self-Directed 401(k)sMark B. writes: Can you recommend a trusted 401K custodian that I can transfer my retirement assets to? I’d like to invest in some alternative asset classes that are not available through my plans.

Lee responds: You can try to set up a Self-Directed 401(k). Or you may be able to roll over existing 401(k) assets into a Self-Directed IRA. The latter move will give you more options as far as custodians and alternative asset classes are concerned.

Ask Lee Now: Answering Readers’ QuestionsWe love to hear from readers! Please email your question or comment to Independent Living editor Lee

Bellinger ([email protected]). Please include your name and home state. You may also reach us via postal mail (P.O. Box 1240; Clover, SC 29710-4240).




A Self-Directed IRA can own tangible assets including precious metals, investment real estate, and other types of assets not available through conventional brokerage accounts. Reputable firms that specialize in Self-Directed IRAs include New Direction IRA (303-546-7930; www.newdirectionira.com) and Pensco Trust (866-818-4472; www.pensco.com).

Coping With an EMP Blackout in Your Third Floor CondoRay R. writes: I read Lee’s articles re: EMP attacks and survival. Living on the third floor of a condo which is 100 percent electric and no place for your Whisperer or for solar panels. How would you suggest we survive winter cold and no water - since our water reaches us via a pump (electric) in the basement of our building?

Lee responds: There are a few ways you can give yourself backup heat and backup water.

For heat, consider a ventless indoor fireplace. Some are fueled by gel cans, while others burn clean-burning ethanol. Some smoke-free fireplaces are designed to sit on the floor, while others are small enough to sit on tables or thin enough to mount directly on walls. In addition to having a flame, get a portable electric space heater. During an outage, it can be plugged into a battery-based power source. You can find units that jumpstart cars and contain outlets for powering household appliances. Some even have hand pulls so that you can recharge the battery when you have no access to power.

For water, the most direct way to ensure you have it when you need it is to store some water jugs inside your condo unit. If you don’t have space inside your home for water jugs, what about garage space? Or space inside a storage unit? The important thing is that you have enough drinking water to last you a few days in case of an emergency. You could accomplish that with a couple dozen 1-pint bottles of water from the grocery store.

How Can I Move Precious Metals Out of the Country?Dohrman S. writes: How can one get money/silver/gold etc., out of this country without worrying about FATCA?

Lee responds: By doing it very carefully! Yes, it is possible to move precious metals out of the country without having to report them to the IRS or declare them on Customs forms. But it’s also possible to wind up in tax and legal purgatory if you transport metals in the wrong form or hold them in the wrong manner.

The Foreign Account Tax Compliance Act (FATCA) mandates detailed reporting of all overseas accounts with more than $50,000 in assets. That includes gold-backed accounts. But reporting requirements do not apply to actual gold bullion or jewelry stored in a safe-deposit box or vault.

Bullion rounds/bars and jewelry aren’t “monetary instruments.” But government-minted gold and silver coins (such as American Eagles) that have a face value are considered to be monetary instruments. They therefore must be declared on Customs forms when their value amounts to $10,000 or more.

These are just basic guidelines. I can’t tell you everything you need to know about reporting requirements here. So before attempting to move precious metals out of the country, I highly recommend consulting with a qualified legal advisor who specializes in offshore finance.

Continued from previous page




How Does Obamacare Threaten Me?Charles B. writes: Reference is made [in the December 2015 issue] to small businesses with fewer than 50 employees being threatened. It is my understanding that small businesses in that situation are not required to do anything under the act. If that is so, how can they be attacked?

Lee responds: The new Obamacare mandate applies to small businesses with between 50 and 99 full-time employees. These businesses must now provide insurance benefits and subject themselves to the same compliance duties that had already been imposed on companies that employ 100 or more people.

Businesses with fewer than 50 employees aren’t being directly threatened (yet) with having to carry the same burdens. But they are being disincentivized from hiring more full-time people.

All small business owners must comply with the so-called individual mandate. They must obtain health insurance coverage for themselves (at a price that’s artificially inflated for healthy people) and their children. This year the penalty for failing to buy the health insurance industry’s products is $695 per adult (compared to $325 last year) and $357.50 per child (up from $162.50 in 2015).

Do I Have to Move to Remain Safe?Anonymous writes: What suggestions do you have for people who have spent their whole lives in one place? Everything they have is at that place. You feel that you could survive everything as long as you can stay at home. And you have many of the advertised survival items that will help.

And the talk is about leaving and going somewhere else? Why? And where? For instance...In case an EMP hits...I believe it would be dangerous to try to go somewhere else.

Lee responds: There may not be any need to relocate. Your vulnerabilities will depend on where you live, and what steps you’ve taken to fortify your home and emergency reserves.

If you live out in the country on some acreage, then you will be less vulnerable to threats such as crime, terrorism, and social chaos. You can build a bunker, if you have the means, to hide out in case of a natural disaster or other emergency. You’ll also have the ability to erect power backup systems and become independent of the grid. In the event of an EMP, you’ll ideally have a backup EMP-shielded power generator, plenty of manual tools, and some sort of alternative emergency vehicle such as a tractor or ATV.

If you live in the city or suburbs, you can still take steps to make yourself and your home more resilient. You should also have some sort of Plan B for where you’ll go and how you’ll get there in case you need to flee. Ideally, you’ll have a well-prepared friend or family member who lives in a rural area nearby and will let you hunker down with them.

Continued from previous page

“Ask Lee Now” is presented for general educational purposes only. Because we don’t know enough about readers’ personal situations, the opinions expressed here should not be construed as a recommendation to buy or sell any financial instrument at any time. We will not be responsible for financial decisions that readers make, and they should be made in consultation with their own advisers.



New Dietary Guidelines Still Protect the U.S. Illness Lobby

In January, the government released its latest Dietary Guidelines for Americans. As we’ve noted in previous issues, the official diet recommendations (which help determine school lunches and packaged food ingredi-ents) are flawed. They are marred by outdated science and politically motivated inclusions and exclusions. Despite making some needed revisions to outmoded guidance, the latest Dietary Guidelines remain flawed.

The government did at least make a few improvements to its recommendations. It finally walked back some of its misguided anti-cholesterol posturing and no longer vilifies eggs (which are loaded with nutrients). The new Guidelines rightly caution against excess sugar consumption. For the first time, they suggest limiting added sugars to under 10% of daily calorie intake.

These are generally good changes as far as they go. But government nutritional advice should still be approached with skepticism. It certainly shouldn’t be swallowed whole.

You Should Ignore These Politics Posing As Nutritional Advice

The government in recent years has come under intense pressure by environmental and vegetarian activists to urge Americans to eat less meat. The meat industry launched a counter-offensive and scored a victory, as the new Guidelines continue to say it’s okay to eat lean meat as part of a balanced diet.

Overall, though, the Dietary Guidelines repeat the same basic call for a low-fat, high-carbohydrate diet, ignoring evidence that low-fat products can actually be unhealthy and that carbs are the big contributor to the nation’s obesity epidemic. Reports Politico, “the guidelines largely repeat the same health advice to a country plagued by obesity and other diet-related diseases.”

The corn lobby and the beverage industry managed to persuade the government to refrain from singling out high-fructose corn syrup and sweetened sodas as major risks. Yet according to the Centers for Disease Control, a third of all the added sugar calories consumed by Americans come from sweetened drinks such as colas.

It’s important to minimize these sorts of empty calories in your diet. If you enjoy drinking sodas, consider

switching to the smaller 8-ounce cans and drink plain water (or water with lemon juice) along with the soda. You want most of your calories to come from nutritious foods, not sugary drinks.

Why “Healthy” Labels on Food Are Very Misleading and Yes Dishonest

Eating healthy isn’t that complicated. Eat lots of varieties of fresh fruits and vegetables. Eat fresh fish regularly. Minimize consumption of salty and sugary junk foods and factory-produced artificial ingredients.

It’s not complicated. But it can be confusing when junk foods are labeled “nutritious” or “natural” or “heart healthy” or “part of a balanced diet.” Then sometimes producers of genuinely healthy raw foods, such as fruits and nuts, are legally prohibited from telling you about their health benefits.

Last year, the Food and Drug Administration sent a Warning Letter to KIND over its Fruit & Nut bars. The FDA insisted its products can’t be called “healthy.”

One of the FDA’s rules is that nothing that has three grams or more of fat per serving can be called “healthy.” To see how senseless this is, consider that a serving of avocados, almonds, or salmon would fail to qualify, even though these are widely regarded by nutritionists as healthy foods. At the same time, makers of junk foods such as packaged puddings or toaster tarts can replace natural fats with artificial fillers in order to qualify as low in fat and therefore “healthy.”

KIND filed a petition this past December in protest of the FDA’s findings. Daniel Lubetzky, founder and CEO of KIND, noted, “The current regulations were created with the best intentions more than 20 years ago, when the available science supported dietary recommendations limiting total fat intake… The petition reflects a broad base of support within the food science and nutrition com-munity to call attention to the importance of eating foods made with wholesome and nutrient-rich ingredients.”

You don’t need to wait for the government to officially recognize healthy foods as healthy and unhealthy ones as unhealthy. That may never happen. You can educate yourself, use your common sense, and take matters into your own hands for a healthier diet now.



Steps to Protect Your Family from Massive Economic Melt-Down

By “Doberman Dan”

If you’d like to have a significant second income that keeps coming in month after month, year after year, I think you’re going to get excited about this article.

Over the next few minutes I’m going to show you it’s possible to enjoy a strong second income (and even possibly get wealthy) from your own part-time “life-style” business – even if you have zero business experi-ence.

Before we get into the details, I should probably introduce myself and explain why I’m uniquely qualified to show you how to do this.

My name is Dan Gallapoo, but I’m better known as Doberman Dan, a nickname I got when I was a writer in the bodybuilding world. I’m an ex-cop who is now a copywriter and serial entrepreneur. I prefer to call myself a “kitchen table entrepreneur” because the businesses I create can be started with nothing but a yellow pad and pen and

the 3 lb. mass of gray stuff between your ears.

Start a Real Business on a Shoestring to

Hedge Against Economic Collapse

In addition to running my own companies, I occasion-ally work with individuals to show them the fastest path to becoming a “lifestyle entre-preneur” like me.

What exactly is a “lifestyle business?” It’s a business you start “bootstrap style,” at your kitchen table with very little money, equipment or inventory. This business used to be called mail order. But it’s even better these days because your customers can order by phone and Internet, too.

How You Can Turn Talk into Cash

It’s the only business I know that allows you to be successful on a shoestring budget. And it’s a model perfectly suited to those who want a second income

without having to leave their full-time job or business.

I started my first lifestyle business with nothing but a yellow notepad and ball-point pen. This process has allowed me to live in three different countries, enjoy two bouts of mini retirement and earn an income I never could have imagined when I was a full-time police officer.

I think telling you how I started my first lifestyle business is probably the best way to explain the concept to you. Let me take you back a few years (okay, decades) to my exploits as a teenager in Barberton, Ohio.

I was a skinny kid tired of getting sand kicked in his face. I wanted to bulk up so I could defend myself when necessary... and hopefully attract a few ladies. (Both of which I’ve accomplished, by the way.)

I immersed myself in muscle magazines, bodybuilding

Editor’s note: My friend Dan Gallapoo is a copywriter and serial entrepreneur. He is an expert on starting small businesses at home so I invited him to introduce himself to you. Dan has started businesses in many different consumer and business niches and his ads and articles have appeared in hundreds of magazines and newspapers. He regularly publishes articles about entrepreneurship and running a “lifestyle business” at www.DobermanDan.com

MAKE MONEY AT HOME EXCLUSIVE




courses, bought nasty-tasting protein powders and other “goop” that was supposed to transform me into a mini version of Aaahnold in six to eight weeks. None of that stuff actually worked. But I was hooked and became a rabid mail order buyer of bodybuilding products.

You Don’t Have to Be Rich to Retire on a Guaranteed

Income for LifeWhen I discovered the mail order business, naturally the first niche I chose to focus on was bodybuilding. After all, I

was already a customer in that market and I understood the hopes, dreams and desires of the customers.

And that, my friend, is rule #1: choose a market you know and enjoy.

You see, I was going to read bodybuilding publications and buy bodybuilding products anyway – so I might as well make a few bucks, too.

I dove in and created my first product, a bodybuilding course for beginners. (I’ve since learned some secrets how to get products created

for you. On the cheap, too.) It wasn’t a runaway success initially. But it put some extra coin in my pocket that was sorely needed at the time. Only eleven months later, my little lifestyle business allowed me to leave the police department and travel the world.

That is the kind of income and freedom you can enjoy from your own lifestyle business. And even better, it can be a lot of fun, too.

Stay tuned for more lifestyle business secrets soon.

Protect Your Family from Economic Meltdown continued from previous page

Get Cheaper Money Than Most OthersGetting a credit card or not is a very personal decision. It’s OKAY to go for a home busi-ness even if you are against having credit cards.

Still, there are some really excellent credit cards that are ideal for a home-based business. Many credit card services do nothing but issue high quality credit cards to folks with excellent credit. You can and should take full advantage of them if you qualify. Here are seven very good cards to consider if you

have excellent credit:

Citi Simplicity® Card: Make big purchases then carry that balance into the follow-ing year without interest. The Citi Simplicity Card offers a 21-month 0% introduc-tory APR for purchases and balance transfers. And there are no late fees, convenient if you sometimes forget to pay your bill on time, as well as no annual fee. Their customer service number is 1-877-678-9227.

Blue Cash Preferred® Card from American Express: Cardholders earn 6% cash back at supermarkets (up to $6K in purchases), 3% on gas and at department stores and 1% on everything else. The 3% cash back at department stores comes in handy during holiday seasons, as do 6% at supermarkets if you’re hosting any holiday dinners or have guests visiting. Plus there is a $150 intro bonus that you’ll get after making $1,000 in


See Get Cheaper Money than Most Others, next page



purchases with your new Card in the first three months – that’s a 15% cash back bonus on the first $1,000 you spend! In addition you’ll enjoy a 0% 15-month intro APR on pur-chases and balance transfers. There is a $75 annual fee. To get more information, call 1-877-278-7357.

Barclay Arrival Plus™ World Elite Mastercard®: You get 2 miles per dollar for every purchase, and a bonus 40,000 miles – equal to $400 in travel – after spending $3,000 in the first 90 days of card membership. To use your miles, just book your travel and redeem your miles for a statement credit. You can make your travel arrangements however you’d like (by phone, online, using an agent, etc), fly any airline to any destination, and enjoy no blackout dates.

If you use your miles to pay for travel you’ll receive 10% of those miles back. So redeem-ing 10,000 miles will actually earn you a 1,000 mile bonus that will be deposited into your awards bank. If you take the 40,000 bonus miles and redeem them for travel they’ll actually be worth 44,000 miles or $440. That’s a pretty nice bonus just for signing up and using the card. Plus there are no foreign transaction fees, so you’ll save money when you

travel outside the US. There is a $89 annual fee, but it’s waived the first year. Confirm this card’s terms by calling 302-622-8990.

Citi Double Cash Card: This Citi Double Cash Card features an effective 2% cash back on ALL purchases. Not bad for a card that offers a single cash back percentage on everything you buy. Use your card to purchase the item(s) for the first 1% cash back. You’ll receive the second 1% cash back after you’ve paid for your purchase(s), for a total of 2% effective cash back. As long as you’re paying the minimum due each month you can take as long as you want to pay off your balance and get the additional 1% cash back (aka, 2% total effective cash back). You also get 15 months of a 0% APR on both purchases and balance transfers – giving you a little bit of a cushion to help pay items off. There’s no annual fee and no caps on the amount of cash back rewards you can earn. Call 1-877-612-7614.

BankAmericard Cash Rewards™ Credit Card: A great cash back rewards card that also has a 12-month 0% APR. You can transfer over balances from your high-inter-est cards to the BankAmericard

Cash Rewards card – and pay zero interest for a full year. And you get the same 0% intro APR on new card pur-chases. Plus you’ll earn 3% cash back on gas and 2% cash back on grocery stores (for the first $1,500 in combined grocery and gas purchases each quarter) and 1% cash back on everything else. And you’ll earn an additional $100 cash back after spending $500 in the first 3 months. Nice stuff – cash back, an extra cash back bonus, a lengthy 0% intro APR on purchases and balance transfers AND no annual fee. Call to learn more at 1-800-932-2775.

Slate® from Chase: Slate Chase offers a 15-month, 0% introductory APR on both balance transfers and purchases. Plus, there are no balance transfer fees during the first 60 days of card mem-bership. This is a big deal, as depending upon how much you plan to transfer, balance transfer fees can really add up. In fact, a $0 intro balance transfer fee can save you hundreds of dollars in fees, and the $0 annual fee is also a money-saver. So if you have excellent credit, you need not be paying any credit card interest. Get this card and transfer your balances. Call 1-800-935-9935.


Get Cheaper Money Than Most Others continued from previous page




Important NotePlease do NOT apply to all these cards! Remember, every time you apply for credit, it can damage your credit score. And be careful about cancelling old credit card accounts suddenly.

That changes your rating too because it affects the average length of your credit history.

You need to pick and choose your credit cards carefully. Remember that terms and con-ditions can change so verify all

details before applying for any card.

Take full advantage of the best credit cards you can get. Every edge helps as part of success-ful home business thinking.

Get Cheaper Money Than Most Others continued from previous page

Inside Secrets of How Credit Reporting Agencies Make You Pay More for Loans

By Lee Bellinger

Let’s talk about good credit, because that can matter to your

home-based business. You have more options when your credit is good than when it is not. There is lots of misin-formation about how credit reporting really works – so let me tell you about who your friends and enemies are when it comes to your credit rating.

How Your Credit Gets Caught Between Lend-

ers and Credit Reporting Agencies

Let’s start with credit reporting operations like FICO. When you order a credit report from

Experian, TransUnion, or Equifax, you generally pay for the reports after the “free” offering mandated by law. Just know that FICO selling you a copy of your own credit report is not how these agen-cies make their real money.

FICO, Experian and others sell your credit performance infor-mation to banks. The banks are their biggest clients.

So what do the banks want? They want to loan you money, yes. But if there are blemishes on your credit history that reduce you from an excellent rating to just a “very good” rating, the banks can charge you considerably more for money.

Lenders expect credit ratings

giants to send them loan seekers who are very low risk – but with enough cosmetic credit blemishes to let the bank jack up rates.

So there you have the true hidden against-you bias of credit reporting agencies.

Banks love you if you are low risk, but have enough cosmetic mistakes on your FICO rating that they can whack you for higher interest on that car loan or mortgage.

Why They Really Don’t Want You Optimizing

Your Credit ScorePut another way, FICO, Experian and the others tend to be very resistant if you try to challenge mistakes on your


Industry Insider Report

See Inside Secrets of Credit Reporting, next page



credit. And they are very sneaky about defeating your efforts too. Remember who they are – credit reporting agencies mainly answer to banks that want to loan, but want to charge you more.

That’s why credit reporting agencies have set up distrac-tions, traps and frustrations to wear you down in efforts to get your optimal credit score.

Let’s talk about how they’ve made it “easy” to challenge credit mistakes on your credit report. You can go online and check an “I dispute this” box. But in that convenience, they have set up a very bad trap for you.

When you do the whiz-bang web-based challenge to your bad credit mark online, you leave no documentation behind you. So when lots of time passes and nothing happens to remove that bad mark, you have no way to prove that you asked them to lawfully investigate your claim. So you lose 3-6 weeks. Then you try again, no result.

That’s why most people just give up on repairing their credit. The system wins. Experian keeps reporting your bad credit marks to the bank, and you keep paying higher interest. Everyone wins, but you.

Don’t Fall for This Common Online Trap

Take note that the credit report-ing agencies don’t go out of their way to show you a physi-cal mailing address where you can send your challenge to bad credit marks by mail. They want you to file your chal-lenges to their mistakes all on their website – where they hold the high cards on proof that you have challenged their mistakes.

When you challenge them online, you have no proof or leverage to ensure that they follow the law and look into the mistake you have identi-fied. If you do it right, the law is actually on your side. They have to remove bad marks on your credit that they can’t verify within 30 days. The burden is on them, technically.

So the next time you detect a mistake on your credit, do this: Call the customer service folks at the credit reporting agency, say Experian. Find out a physical address where you can send an actual letter requesting an investigation into their mistaken reporting of your credit history.

Send that letter challenging the mistake you found on your credit report by return receipt USA mail. Make a copy of the letter. State the mistake, and

provide the date, file number and all other information about the mistake you found. Be certain you accurately include your date of birth, social security number and full legal name. Put in a copy of your driver’s license as well.

Use This Tactic to Surprise and Force Credit

Reporting Agencies to Treat You Fairly

When the proof of delivery receipt comes back, keep it and wait a few weeks. Send a copy of that letter again with a cover note requesting status of the investigation, and again do this by return receipt mail. Remember to challenge only one mistake at a time.

This is a tedious process, but it is intended to wear you down. Because they know the law basically favors you. The burden is on credit reporting agencies to correct the record when information challeng-ing a mistake is received and processed.

But in order for the law to work in your favor, you have to have proof that you made a proper challenge to the mistake in question.

Your biggest takeaway: Don’t challenge credit mistakes online. It is a sucker’s bet.

Inside Secrets of Credit Reporting continued from previous page




The Risky Business of Having a Day JobIf You Depend on Your Employer as Your

Main Source of Income, You Need to Read This…By Chris Mason

“You’re hired!” That’s what the person on the other side of the table told me in 2007. I had been looking for work for months and with a family to support, I was getting desper-ate. So when I heard those two words, I breathed a heavy sigh.

And let me tell you I busted my hump for my employer. I was the first one in and the last one out. I had a steady paycheck, was saving a little each month and paying off some debt. Life was good.

Then 2008 happened.I came into the office one morning in late 2008 and something felt different. That morning, members of HR roamed the halls selecting employees for a little “talk.”

This, my friends, was a layoff.

I watched as colleagues were escorted out. What will I do to provide for my family?

I won’t lie, even though I wasn’t making a TON of money, we were used to a certain lifestyle. I certainly wasn’t worried about where my next paycheck would come from. Well, I’ll fast forward a little here.

Turns out I wasn’t let go that day. And in fact, I survived FIVE more layoffs in the span of 18 months. I felt like I should have gotten a medal or something.

Today I am thankful for this experience.

You see, I thought that all I had to do was get a good job with a good company and the rest would take care of itself.

But here’s what I learned.

When you put all your eggs in one basket, you’re inviting pain into your life.

I realized I needed a way to make money outside of my day job. If someone had the power to take away my income one day, I’d better have a plan to replace it the next day.

I needed to start a side busi-ness. So that’s exactly what I did. Through trial and error, I was able to finally build a business that paid me 40% of my salary.

And the best part? NO ONE could take this source of income away from me.

I don’t have enough space here

to walk you through exactly how I built my side business, but let me leave you with this…

We all know the importance of having a Plan B. And you probably believe, like me, that WE are the ones responsible for creating that plan.

You certainly can’t rely on your employer to save you.

So my advice? If you’re a full time employee, start thinking about ways to decrease your dependency on your employer to support you and your family.

Starting a business on the side is a great option but it’s not the only option.

IF you’re interested in learn-ing more about how I started my side business, I have a one question survey set up at a link below. If you tell me what you’d like to know FIRST, I’ll write part 2 of this article in next month’s issue.

www.independentlivingnews.com/side-business




TSA Bureaucrats Curtail Your Right to Opt Out of Full Body Scans

When the Transportation Security Administration began rolling out full body scanners at airports in 2009, it attempted to allay concerns over privacy and health hazards by allowing people to opt out. Passengers could refuse being subjected to advanced-imaging technology and subject themselves to a pat down instead. Neither option is appealing, but at least you have a choice between them.

Maybe not anymore, though. In late December as Americans were heading to airports for Christmas travel, TSA quietly changed the rules to require full body scans for some passengers. As a TSA official explained, “Some passengers will be required to undergo advanced-imaging screening if their boarding pass indicates that they have been selected for enhanced screen-ing…”

In other words, you can be required to go through the invasive machines if you’ve been pre-selected by TSA for a mandatory full body scan. It’s totally up to TSA bureaucrats, and they don’t have to tell you why you have been selected.

TSA officials have been known to single people out for purely punitive reasons. We know this from various accounts of people who have exercised their right to film TSA screenings or who have voiced complaints. They have often been subject to retalia-tion in the form of “enhanced” screenings.

As we reported in the August 2015 Independent Living, TSA agents have been trained under a nebulous program called SPOT (Screening of

Passengers by Observation Techniques). According to the program manual, TSA agents are supposed to subject passengers who engage in “excessive complaints about the screening process” to extra scrutiny as potential terrorists.

Lots of B.S. for Very Few True Gains in Flying Security

Apparently we’re not supposed to complain about TSA screeners who continue to pat

down grannies and toddlers but fail to detect prohibited weapons 95% of

the time (according to last year’s performance audit).

TSA seems to be trying to improve its scores and

cover up for incom-petent TSA agents by shuttling more passengers through advanced-imaging

screeners. Yet the machines themselves have a high failure rate.

After more than $160 million spent on advanced scanners, they may not even be doing

any good. “To date, the scanners have not thwarted

a single attempted terrorist attack,” notes the Huffington Post (January 3, 2016).

To “fix” that problem, some in Congress are demand-ing that TSA spend even more money on all-new x-ray machines and require passengers to go through two separate stages of scanning before being allowed to go to their gate. As always, it’s the taxpayer and the air traveler who pay the price for TSA failures.

The “fix” for people who are fed up with all the hassles and indignities of airport screening may be to avoid air travel whenever possible.



Pipelines May Not Be Too Busted to Lead You to Profits

One of the big casualties of the oil bust has been master limited partnerships (MLPs). Could they now be one of the biggest opportunities?

MLPs are typically (though not always) involved in oil and gas pipelines or other modes of energy transporta-tion. These pipeline operators were touted by analysts who recommended them as higher-yielding and less sensitive to commodity prices than energy producers.

Unfortunately for investors, many MLPs and pipeline companies have cut their distributions in recent months as MLP exchange-traded funds have plunged in value. It turns out that energy transport stocks aren’t necessar-ily any safer than other types of energy stocks.

Industry behemoth Kinder Morgan (KMI), which operates an 80,000-mile pipeline network, ran into a financial rough patch last year. Its stock fell by more than 60% and management slashed the dividend by 75%. (In late 2014, Kinder Morgan changed its structure from a master limited partnership to a regular corporation. But some MLP-focused funds still hold Kinder Morgan shares.)

In a World of Low Yields, These Investments Stand Out

The wreckage in the sector has exposed the financially weak and vulnerable players. It has also created tremendous value opportunities in MLPs that remain fundamentally strong. Some solid MLPs are now

trading near historically low premiums versus their underlying book value. You can buy real assets on the cheap and get hefty income flows.

In fact, the average MLP yields 7.7%. That’s more yield than you can get from any sector of the stock market or any basket of investment-grade bonds. There’s a risk that some MLPs could cut back on distributions. But there’s a greater likelihood that, in the years ahead, more MLPs will be able to raise their distributions as their business prospects improve.

As Daren Fonda argues in Kiplinger’s Personal Finance (January 2016), “Crude oil and natural gas still need to be piped around the country, and MLPs haven’t stopped making money as the middlemen in the industry. Some MLPs are seeing business dry up and are scaling back expansion plans. But well-managed partnerships are earning enough cash to cover their distributions…”

What to Do if You Want to Take Advantage of the Energy Crash

Rather than speculate on which MLPs will recover strongest out of their recent slump, you can own the entire patch through a diversified instrument such as an exchange-traded fund. In recent years, the number of MLP-tracking instruments have grown. Many are structured as exchange-traded notes (ETN), which are debt obligations of the issuer.

Here are the currently available MLP-focused exchange-traded products with at least $100 million in assets:• Alerian MLP ETF (AMLP) • Alerian MLP Index ETN (AMJ) • E-TRACS Alerian MLP Infrastructure Index (MLPI)• Global X MLP ETF (MLPA)• North American Energy Infrastructure (EMLP)• X-Links Cushing MLP Infrastructure ETN (MLPN)• ETRACS Alerian MLP Index ETN (AMU)• iPath S&P MLP ETN (IMLP)• Barclays ETN+ Select MLP ETN (ATMP)

There are also a few closed-end funds that concentrate specifically on the MLP sector. The advantage of closed-end funds is that they sometimes trade at sub-stantial discounts to net asset value. One standout is

Contrarian Corner

2011 2012 2013 2014 2015 2016

10

11

12

13

14

151617

© StockCharts.com19-Jan-2016AMLP Alerian MLP ETF NYSE

Close 9.23 Volume 25.0M Chg -0.58 (-5.91%)

Maybe a good place to cash in on energy glut.

See Pipelines May Not Be Too Busted, next page



Fiduciary/Claymore MLP Opportunity (FMO). In the early goings of 2016 FMO traded at a discount of more than 10%. That’s a record low for the fund, which normally traded near NAV or at a premium. If you can get an MLP fund at a discount, you’ll effectively be getting more yield for your money.

MLP Tax Traps – And How to Steer Clear of Them

Exchange-traded master limited partnerships are indeed considered by the IRS to be partnerships. Therefore, you could face some extra paperwork and accompany-ing headaches at tax time. Reporting MLP income is not as simple as reporting dividend income from a stock. With MLPs, you typically must fill out a more complicated Schedule K-1 form.

You can avoid some of these extra tax obligations by holding your MLP in a tax-deferred account such as an IRA. Or you can buy shares in one of a few specialty ETFs or closed-end funds that contain a basket of MLPs. A closed-end fund is treated by the tax law like a stock, so even if it receives limited partnership income, you won’t necessarily be on the hook for the extra accounting duties. (Check with the fund company to verify the tax status of its distributions.)

The basic promise of an IRA: the money you put in doesn’t get taxed until you take it out (and doesn’t get taxed at all in

the case of Roth IRAs when your withdrawals occur after age 59½). However, if you hold certain types of income-producing assets within your IRA, the IRS can reach in and tax them before you take any distributions!

Caution: Stepping Into This Tax Minefield Could “Blow Up” Your IRA

When your retirement account conducts or invest in a business activity, you could incur “Unrelated Business Income” and owe “Unrelated Business Income Tax.” If gross income from businesses (including limited partner-ships) amounts to $1,000 or more, you may be required to file IRS Form 990-T and calculate the tax owed.

Explains CPA and Forbes contributor Robert A. Green, “Noncompliance with Form 990-T rules can lead to back taxes, penalties and interest. It can lead to ‘blowing up’ a retirement plan, which means all assets are deemed ordinary income.”

This tax trap can ensnare anyone who holds a substantial position in an MLP within an IRA. Since MLPs trade like stocks, you could easily buy an MLP in your brokerage account without even knowing that it carries totally differ-ent tax implications as compared to an ordinary stock.

The incoherent monstrosity that is the tax code sometimes requires strange and counterintuitive tax planning strategies. In this case, it can be less risky and more advantageous from a tax standpoint to hold MLPs in a regular taxable account rather than a qualified retirement account.

Pipelines May Not Be Too Busted continued from previous page

FULL OPTIONS LOADED PowerWhisperer Now Available!Great news for PowerWhisperer M-Model owners. We have gotten lots of calls asking about auxiliary power cells and added solar panels and when they would be available. Well, that time has come. We can now ship you an extra battery pack and solar panel that’s made for your PowerWhisperer.

This fully loaded M-Type literally doubles the amount of time you can run a freezer and cuts your recharge time in half. If you currently own the all-metal M-Model, it is already set up to accept the extra power cell and solar panel as soon as they arrive.

To find out more, contact us (preferably during business hours), and ask for Mike Gallick or Luis. Call toll free at 1-877-371-1807.

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ilnadb00415

Physical Cash vs. Digital FictionBy Simon Black

Think of the word “money” for a moment. What’s the first image that comes to mind?

Perhaps the folded paper in your wallet. Or the balance in your bank account. Or perhaps the investments in your brokerage account.

In our modern financial system where unelected central bankers wield totalitarian control over the financial system, all three of these are forms of money. But the relationship between them is very tenuous, and very risky. I’ll explain:

Paper Cash Still Nearly UniversalNo matter where you live in the world, just about every civilized nation on the planet has some form of physical currency in various denominations. Dollars. Pounds. Euros. Yen. Renminbi. We pass around these pieces of paper as a medium of

exchange.

You can go to the grocery store, and, as long as you’re in the US, you can pay for your food with US dollar physical cash. Or if you’re in Canada, with Canadian dollar physical cash. Simple.

Don’t Mistake Bank Balances for Actual Money

This is where it starts getting more complicated. When you log in to your bank’s website, you see a balance printed on the screen. Let’s say it’s $100,000.

Don’t think for a second that there are one hundred thousand pieces of paper sitting in your bank’s vault. In fact most banks have very little cash on hand. Your balance is nothing more than an accounting entry on your bank’s balance sheet, which is likely maintained in a computer database somewhere in a building with no windows.

Guest Commentary

See Physical Cash vs. Digital Fiction, next page

Top 5 Greatest State Tax HavensFor some citizens, state and local tax burdens can be nearly as onerous as federal taxes. If you live in a high-tax state like New York or California, you might consider “expatriating” to a lower-tax state like Wyoming or Delaware. There are still states where you can live free of income taxes; and others where you can live free of sales taxes.

In order to assess which state is the most tax-friendly to you, you need to take into account your financial situation and lifestyle. If you are in your peak earning years, then a low (or no) income tax might be a top

priority. If you are in retirement and spending more than you are earning, then you might prefer a state with a low (or no) sales tax. If you view your home as your most important financial asset, then a state with low property taxes might be to your liking.

There’s no single state that comes out on top in all categories. But based on Kiplinger’s analysis of state-by-state tax policies in 2015, a handful of states emerge as leading contenders for top tax haven status. Here are the five states that impose the lowest overall tax burden on residents:

5. AlabamaIncome tax: 2% - 5%Sales tax: 4%Gas tax: 21 cents per gallonProperty tax: Second lowest in U.S.

4. LouisianaIncome tax: 2% - 6%Sales tax: 4%Gas tax: 20 cents per gallonProperty tax: Third lowest in U.S.

3. AlaskaIncome tax: NoneSales tax: NoneGas tax: 12 cents per gallonProperty tax: Above U.S. average.

2. Wyoming Income tax: NoneSales tax: 4%Gas tax: 24 cents per gallonProperty tax: Eighth lowest in U.S.

1. Delaware Income tax: 2.2% - 6.6% Sales tax: NoneGas tax: 23 cents per gallonProperty tax: Fourth lowest in U.S.



There’s no physical “money” backing up this bank balance. It’s an annotation in a computer. Every bank customer’s savings is part of this complex system of accounting entries.

When you transfer money to your kids, the bank doesn’t send them a FedEx full of cash. They merely make an entry in the ledger reducing your balance and increasing your kids’.

The same thing happens when you swipe your Mastercard to pay for something. Banks exchange accounting entries that credit the vendor’s account and debit your own.

Nothing physical ever changes hands; it all takes place in digital ledgers. Given that this type of money exceeds physical cash by a factor of 10:1, you could argue that most modern currencies are digital.

Government Bonds And How to Really Use Them

Most people will keep the majority of their life’s savings in the second form of money-- in the bank. But big banks or companies like Google or Apple that have tens of billions don’t keep such vast sums sitting in the bank. Certainly not all of it.

Banks only have a certain limit on deposit insurance. In the US right now it’s $250,000… which doesn’t quite cover Google’s $70 billion savings.

These companies and institutions need a safe, highly liquid alternative to banking (i.e. they can quickly buy and sell the investment). And that’s why they turn to government bonds.

In finance, government bonds are typically considered cash equivalents. Especially in the United States. U.S. government bonds, in fact, are the most popular, most liquid investment in the world. You can buy and sell them in an instant.

Companies, institutions, banks, and even foreign governments around the globe buy US government bonds precisely because of this cash equivalent status. This means that if the Chinese government is doing a deal with an African government for $1 billion, they can conduct the transaction using US government bonds as the currency.

Right now, each of these is basically considered the same thing. It’s just different versions of the same money; i.e. $1 million in government bonds equals a $1 million bank balance equals one million pieces of paper with George Washington’s face.

But in actuality they are three entirely separate cur-rencies: Physical cash, digital cash, and government IOUs. At the moment they just happen to have a 1:1:1 exchange rate; i.e. they’re freely interchange-able at parity.

But that 1:1:1 exchange rate depends on financial stability. And when there are serious problems, the exchange rate breaks down rapidly.

Here’s the Real Problem With Bonds…Think back to 2013 when the government of Cyprus froze bank accounts across the entire country. For weeks no one could access their bank balances. Clearly in an instance like this, the value of a bank balance becomes worthless. The only way to conduct a transaction was with physical cash.

It’s the same thing in a government debt crisis. It’s bizarre to think that the bonds of a bankrupt govern-ment are a widely accepted form of “risk-free” savings among institutions.

But what happens when that bankrupt government defaults, or has to restructure its debt? The entire system breaks down. Suddenly the bonds are no longer cash equivalents, and there’s a scramble to dump them and find another safe, reliable investment.

Similarly, the 1:1:1 exchange rate quickly breaks down, just like it did recently in Greece.

This is ultimately why it makes sense to hold some physical cash. You certainly won’t be worse off for holding some physical cash savings in a safe at home, especially since interest rates on bank balances are essentially zero.

Editor’s note: Guest commentator Simon Black is The Sovereign Man (www.sovereignman.com). His publications are highly recommended for those who wish to consider expatriating or getting a second Passport. To get started, go to his web site and sign up for his informative emails.

Physical Cash vs. Digital Fiction continued from previous page



But honestly there are just too darn many investment letters. Here’s why this matters to you: Because an additional strategy is called for. If you aren’t most of the way to your financial goals by age 55, getting there with “shrewd investing” is far from a sure thing.

Obama’s Debt Bubble is Now Dangerously Big – Look at This

You need to backstop your investment strategy with outside revenue that has nothing to do with investments or Social Security. The key here is to get yourself to the retirement lifestyle you want, need and deserve.

What financial advice newsletters don’t offer are real options in real time for people over 50 to boost their personal income. Independent of a job, or starting a full-size business, or spending a ton of your precious retire-ment capital on something risky.

Look, investment newsletter gurus can actually be a big help. But most don’t help you to quietly create new income streams.

Maybe you don’t need “off-the-grid” extra cash– if so, that’s great news. But someone you care about could probably use another reliable revenue stream or two. Or maybe a well-to-do associate who looks for larger, smarter opportunities.

They might really need a reliable boost to their pension or Social Security. Perhaps a friend, family member or just a neighbor you like.

You may have noticed recent “cost-savings” changes to Social Security (reported in last month’s issue). These are just the beginning because publicly funded safety nets are strung out – funded by a bankrupt federal establishment that lives strictly off leveraged cash flow.

You can’t count on just publicly controlled programs to see you through the rest of your life.

Little-known Secrets for Living Larger Than You Are Now

First, let me show you how to completely reinvent yourself and prosper going forward. Don’t ever let

anyone tell you that you are too old for that – besides its total bull. And you don’t want to end up as a slave to one of the many crappy low-pay jobs out there.

What you need is an entirely new way to get fat during retirement. Just learning about it will give you greater peace of mind, even if you never act on it. In the meantime, you can be a sage or hero to someone in your extended family by passing my research ideas along.

Now before you get the wrong idea, you don’t have to become an Internet whiz to get new cash coming into your home. That’s a myth, plus we have too many Internet whizzes anyway. Most people who get rich on the Internet do so by selling others courses about how to get rich on the Internet.

Some perceptive observers see the Internet as a hidden oligarchy of super elite data barons. The game is already rigged so that most can’t play.

Independent Living has been carefully looking into “non-web” businesses that you can even start on a shoe-string budget and still make something of it. I’ve hinted at this in previous editions. My focus is on finding what you can actually do with extremely

limited resources. Or do something bigger perhaps. One way or the other you improve your financial options as you get older.

And get something back you may not have had for a while – that sense of ascendency you used to feel in your twenties and thirties, when all good things lay ahead.

How My Bad Experience Made Me Determined to Get This Right for You

I recently joined a very high level “how to make money in your retirement” service offered by a major newsletter publisher. The buildup to the sale said all the right things.

But when I bought it, they dispatched an email to tell me that all my coming daily essays would arrive by email. Thud. I just don’t respect email-only content anymore. To me, publishers who send you their prod-ucts strictly by email are chained to a junk medium.

So if this package of make-money-at home essays is

The Art of Making “Off-the-Grid” Cash continued from page 1

See The Art of Making “Off-the-Grid” Cash, next page

Backstop your investment strategy with outside revenue that has nothing to do with investments or Social Security.


Lee Bellinger is Editor of Independent Living. A 30 year veteran to newsletter publishing, Bellinger has made it his life mission to help his subscribers protect their freedoms, assets, privacy, wealth, and health from geometrically increasing threats, especially from the federal government and its corporate cronies and other “stakeholders.” A Capitol Hill insider for 30 years, he is a graduate of Hillsdale College in Michigan, worked as an aide to two congressmen, and led a grassroots advocacy group.

really so valuable, why not also print and mail them to me, or send me a DVD or CD so I can listen to it while driving or at the gym?

Starting now, Independent Living has increased to 24 information packed pages each month from 20. And in those 4 extra pages I will show you those first key steps to reinventing yourself over 50 – turning yourself once again into a net-money provider for your family.

There is no cost to Independent Living readers for this extra information each month.

My approach to off-the-grid revenue is different. Watch for more in the coming months.

What You Really, Really Want and Really Need Too – Right Here

Picture where you want to be by this time next year. By then you will know much more about making new revenue streams that are far more than a hobby and much less than a full time job.

The time has come to help you take charge of your income. True self-reliance begins with independent finances. And don’t worry – I won’t steer you anywhere near anything that is illegal or improper.

OKAY, I’ve explained what I want to help you achieve. Watch for upcoming issues on what to do next.

Lee Bellinger

P.S. I’d love to know what you think of this article. Can you please drop me an email? [email protected]. It really will get to me. Or drop a note to my attention, 377 Rubin Center Drive, Ste 203, Fort Mill SC 29708.

The Art of Making “Off-the-Grid” Cash continued from previous page

An Interview with Lee Bellinger continued from page 5

car finance into a nightmare bubble. Note that General Motors is overbuilding one of its plants with a $1.4 billion ramp-up. The much larger overall debt bubble that Obama built still hangs over our heads, but the auto finance bubble could trigger a bigger slide.

Do you think that left-wingers are mentally ill?Now that you mention it, probably not. I think at least one-third of human beings are hard-wired to believe in false cause-and-effect logic. Such as: Take away people’s guns and gun crime ends. Take away the profit motive by regulating businesses to protect society from capitalism’s excesses. Take away your right to speak out and hate speech dies.

Then we have rising social malevolence – which may partially come from the over-use of antibiot-ics too. There is a new book called “Infectious Madness.” It suggests that the rise of people doing crazy things may be tied to the rise of microbes that are no longer affected by antibiot-ics. The book cites convincing science that some forms of mental illness – like schizophrenia – are triggered by microbe infections in the brain.

Seriously Lee, are you making medical excuses for stupid political positions?No. Over-education in malevolent, freedom-stealing ideology is key. There are definitely plenty of very healthy elitist extremists in positions of high authority.

Take the European Commission, which is an arm of the European Union. It’s headed by an aggres-sive enforcement bureaucrat, Margrethe Vestager. Vestager recently nailed Anheuser-Bush beer with a massive fine for some technical infraction. Her super-strange and odd title? The European Union’s “competition commissioner.”

prudent strategies for greater self-reliance, freedom, and wealth! · 2016-08-19 · another way,...

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