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Alex Daley is the senior editor of Casey’s Extraordinary Technology. In his varied career, he’s worked as a senior research executive, a software developer, project manager, senior IT executive, and technology marketer. He’s a technologist who has collaborated on the development of... More
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  • Jim Rickards: Obama's Abandoning The Saudis For Iran And Dooming The Petrodollar

    I sat down with Jim Rickards, author of many best-selling economics and investing books, including his latest, titled The Death of Money. In this exclusive interview, Jim shares his view on the changes in US foreign policy-the newly announced partnership with Iran to help fight ISIS and recent moves away from the petrodollar deal with Saudi Arabia-and what they mean for the dollar, gold, and investment markets in general.

    This interview just scratches the surface of the topics Jim covered in his speech at the most recent Casey Research Summit in San Antonio. You can grab a complete recording of that speech, and all 25 of the others, in the Summit Audio Collection, which is on sale with a juicy preorder discount for just a few more days.

    Alex Daley
    Chief Technology Investment Strategist
    Casey Research

    Oct 07 11:13 AM | Link | Comment!
  • Why I REALLY Moved To Puerto Rico, And You Should Too

    Much fuss was made yesterday when my colleague Nick Giambruno released a report outlining the incredible tax benefits to be had, by Americans no less (the only people in the world to be taxed back home even when we leave), in Puerto Rico.

    As you may have seen, that report was based in large part on my personal experience relocating to the island, a process I started in earnest last October. And, yes, I am here, writing you at this moment from beautiful Palmas Del Mar-if you ask me, the most beautiful piece of coastland on the island, but only just being rediscovered after a long hiatus from the spotlight.

    What can I say, I love a comeback story, especially when it looks like this…

    Yes, my decision to move to Puerto Rico was influenced by the tax incentives. But they were only one contributing factor. Why I chose to land in Puerto Rico is much more nuanced than that.

    It all boils down to one thing: Opportunity.

    Everyone likes to save on taxes. That's a given. But if I've learned one thing in my short business life thus far: it's that it's always better to make $4 than to save $2.

    No disparagement intended to Ben Franklin, but a penny saved is not a penny earned. Not if, in the time and effort saving it took, you could've created two or four or eight more pennies for yourself.

    I'm here in Puerto Rico because I believe it will provide me with the opportunity to make many more pennies.

    Here's why.

    Infrastructure and Convenience

    Unlike many other low-tax jurisdictions, Puerto Rico is in the unique position of having been a US territory for a century now. That means all sorts of things, from familiar legal systems to easy travel. But one of the most surprising implications is that US companies and even certain US government agencies have a presence down here.

    My town is a few miles down the road from the world's fourth-busiest Walmart. There is a Costco here. Closer, in fact, than the one we had in Vermont. There's also a Cartier-I'm not much of a jewelry buyer, but you get my point. Many if not most of the conveniences of the US are to be had here.

    And the same goes for far more than shopping. The highways across the island are much like in the US, including, unfortunately, the traffic into and out of the big city. But I'll take that any day over the frightening, windy back roads that litter Jamaica, Grenada, St. Kitts, the Caymans, and many of the other places considered before settling on this place. And gas here is just a tiny fraction more expensive than back in the States.

    Of course, roads rarely matter for me since I work from home, where my simple Internet connection is at least 10 times faster than the one in the office in Vermont-courtesy of Liberty cable. My cell phone, on AT&T, works much better here too.

    What's not the same here (they have the FBI, DEA, etc.) is at least comfortingly familiar (courts, MPH speed limits, and AutoExpreso, i.e., EZPass). But most importantly, it's fully developed. There's no grass hut customs office, no lack of a UPS store-the entire infrastructure needed to run a business well is here.

    We tend to lose power often, yes. A few times each month for a few hours at a time. And electricity rates are about twice as high as in the States, though we use so much less of it here without any need for heat and barely any for AC. Still, the power bill can be a drag. But not everything can be perfect, even when the weather is:

    86 and sunny. All year. 'Nuff said.

    Though my belly says differently, I like to exercise. I spent the last decade of my life split between some of the rainiest and snowiest locations in the US. And I hate gyms.

    Since coming here, I've lost 14 pounds and counting, just from getting outside to swim, walk, golf, and play tennis-activities that have been closed (to me) most of the year, and that apparently constitute enough caloric burn to make up for my awful, airport-heavy diet. I have more energy, I feel better.

    Many people are looking for that same lifestyle. Which, ironically, makes it far easier to recruit talent to the island than to many mainland destinations. I've already convinced a handful of people to make the move, and I'm not even actively hiring down here just yet-I'm waiting for some red tape to clear.

    If you're thinking of starting or expanding a business, think carefully about whether it will be easier to recruit people to the tax-free (state tax-free only, mind you) zone in Albany, NY, to the expensive and tiny island of St. John, or to a country bigger than Rhode Island or Delaware with year-round sunshine.

    But it's not like I need to recruit that many people here. There are already plenty here.

    Labor, Services and Networking

    The other day, during one of those intermittent power outages, I took the opportunity to swing up to Sam's Club and pick up a few things-all commercial sites, and most high-end homes, have generators to cope. $400 worth of crap I didn't really need later, I was waiting in line at the checkout, as the obligatory pile of cash was counted out at the register in front of me (almost no one here uses bank accounts or credit cards, and it's part of their well-known fiscal troubles…).

    While waiting, I told my wife about my struggle finding qualified PHP developers. These are jobs that pay $40-50/hour, i.e., $60K to $100K/year, and way up from there. Yet it takes us months to hire for them. The woman behind me in line must have overheard our conversation, because she started asking me if I worked for Palmas and were we hiring-she'd applied a dozen times already.

    She, like many others here, was looking for work. The official unemployment rate is 15%. According to the CIA World Factbook, it's 26%. The median household income is also a relatively low $18,000/year. That's double most places in the Caribbean, but still quite low compared to the States. Looked at societally, that's bad. For a business operator, though, it has distinct advantages.

    Yes, with high unemployment comes crime. But the reputation this island has garnered in the States is undeserved. The crime rate in San Juan is about the same as in Baltimore, Detroit, Cleveland, or Atlanta. Any large city has crime-ridden areas. But like those cities, San Juan has wonderful neighborhoods too. And it's surrounded by some beautiful suburbs. Go into the country, like I did, and it's calm and quiet and borderline idyllic.

    Our community is triple gated (community, development, building), which garners comments from friends and family who visit. But it doesn't need to be. It reminds me of the much more unsightly seven-foot walls with razor wire and broken-glass tops in Spain's posher areas, which are 90% to convey status. Once you understand the small cultural differences, not moving here because of crime is like not moving to Missouri because of St. Louis, to Florida because of Miami, or to Tennessee because of Memphis.

    When you do go to hire, employment laws are close to the same here as in the States. They have Social Security, Medicare, and worker's comp. Workers from the mainland can come here without a visa (and vice versa). It's familiar, yet there is a big labor surplus holding down wages.

    I've been thinking about starting a call center down here-just searching for the right person to run it (I've got a job I love and don't need another one)-as it's an ideally suited location:

    • A highly educated population. 94% literacy rate (India is 78%; China 96%). A 67% high school graduation rate (about the same as Florida and Georgia; well above Nevada, Louisiana, Mississippi, etc.). 22% of the working population have college degrees, not far behind the States' 33% average and well ahead of many of those same southern states.
    • Better average English skills than India or other common call center locations. 50% English-speaking population, versus 21% in India. In reality, I rarely meet anyone who doesn't speak enough to get along fine with me, a dolt who has yet to learn the language here. But for working purposes, about half the population speaks English.
    • No time zone issues. It's the same time here as Florida or New York (though here they are smart enough not to observe the idiotic tradition of "daylight savings"-it's the same amount of daylight here all year round and I never have to go to or leave work in the dark, let alone do both for months at a time).
    • And plenty of available labor to expand rapidly. The population of Puerto Rico is 3.7 million, a number that is slowly shrinking as more and more people emigrate to the US in search of work-something they can do freely as all Puerto Rican citizens are US citizens.

    One of these days-hopefully soon-I'll find that call center operator who will work for sweat equity to get things off the ground, or the bootstrap customer to pay them. But the labor is there.

    And not just labor for lower-skilled work, either. The island has a very large skilled labor population, too, thanks to that high college degree rate. There are hundreds of law offices, accountants, engineers, and other professional firms. Investment banks, construction companies, you name it. The colleges here are strong in math and business. And virtually any service provider or knowledge worker you'd look for in any other major metropolitan area can be found here. I've even got investment bankers knocking on the door.

    Then there are the other entrepreneurs. One of the things that attracted me most to Puerto Rico wasn't the tax incentives themselves, but the idea of living near and collaborating with so many like-minded people. And that's proven as good or better than I hoped. Between everyday social activities and organized mixers like the meetings of the "Act 20/22 Society," there has been a non-stop barrage of new people to meet, all of whom are as entrepreneurial as I am. Business ideas floated around dinner, hiring tips over golf, late-night real estate investment discussions, dozens of emails to share investment ideas-all just this week.

    The one thing that really stuck with me when I read Rich Dad, Poor Dad many years ago was the part that if you don't hang around with the kind of people who talk about money and how to make money, then you'll never learn how or find opportunities to make more of it. In life, I have always looked for those kinds of communities, and every place I've lived I've found small pockets of like-minded people. But here, it's like I just struck pay dirt.

    Ease of Starting and Operating a Business

    The same factors that make hiring in Puerto Rico easy make starting a business simple here too.

    I fully intend to learn Spanish-it's good for me, and good for the kids too. But I cannot be expected to do so in a matter of months, and certainly not as a prerequisite to doing business. Thankfully, that's not been an issue at all.

    All federal laws and forms are available in English, for one. Just about everyone you deal with in the business and government world speaks enough English to help you, and the majority, especially the younger population, speak it very well. Unlike farther-flung Spanish-speaking countries like Belize and Panama, running into someone at the local government office who cannot speak enough English to help you rarely happens here, except far outside of the cities. When it does, there are lawyers and accountants everywhere to help.

    LLCs, partnerships, corporations, and all that other stuff is effectively the same here as in the US. Payroll services can be had from US companies like ADP or from local ones. Same with insurance for your business, cars, health, and more. Banks are a little slower than in the US, but offer the same services like ACH, wires, credit lines, online access, etc. It's familiar, simple, and not overly burdened with red tape-you can even set up a corporation online in a few minutes.

    Sure, there are some tough parts about starting a business here. For one, they've yet to come to terms with virtual work, and the idea is at direct odds with one of their most stubborn bureaucracies: the town office permit folks.

    On the US mainland, at least anywhere I have lived, you do not need any special permit to use your home as an office, only as a retail business. Want to found an Internet startup from your garage? No problem. Want to sell antiques from your front lawn? Problem. In Puerto Rico, the model is backwards. To set up an office, you must register it with the town. The towns inspect your office to make sure it is real. They contact your neighbors to make sure they are OK with it. And they come back regularly to do it again and again.

    That struck me as odd at first. But the more I considered it, it's not much different than in the States: to own a business in Vermont, I needed half a dozen forms from half a dozen offices and paid a fee for each one. I didn't have to pay a fee to get a sales and use tax permit in Puerto Rico, though. They don't want to get in the way of my ability to pay taxes, as so many US agencies seem to want to. Instead, they are focusing on a different set of problems. Ones unique to a largely urban island with high unemployment. Like trying to stop the streets from looking like a Turkish bazaar as they do elsewhere around the Caribbean-something they've managed very well here.

    The quirks are just different from the quirks many of us grew up with, because the circumstances are different. But it's the big things that matter-things like tax policy, access to smart people, services, technology, and more. And there, Puerto Rico scores very highly.

    And, Yep, Lower Taxes

    I work hard for my money. I work hard to find great investments that translate into profits. And I work hard to run my businesses. And the more of each I get to keep, the more I earn next year by investing it further.

    Hopefully, growing up, someone taught you about the magic of compounding interest (I got it from my dad, who more than once said, "Hey, read this article on mutual funds in Esquire.") Well, one of the things almost none of those lessons include is the effect of taxes. When you pay taxes on your investment income, it decreases dramatically over time. The longer you can defer taxes, the better for your pocket book. If you can reduce them or remove them entirely, the benefits are huge.

    For instance, say you invest $100,000 in a 5% CD that compounds yearly. If you pay 35% tax on the interest each year, and reinvest the rest, then at the end of 20 years you've earned $89,583 in interest. Not bad for an incredibly conservative investment.

    However, take those taxes on interest down to 0%, which Puerto Rico's new tax incentives provide, and you earned $165,329, or 85% more income. That's a pretty big tax penalty the US imposes, and that many more years you have to work before you can retire.

    If you live in California, where the combined tax rate for some is now in excess of 50%, the effect is even more dramatic. You would have only earned $63,861, losing out on over $100,000 in earnings. That's enormous!

    Yes, you could earn $165K inside an IRA thanks to tax deferral. But then try withdrawing it. At 39.6%, federal taxes chip it right down to $99,858. Get stung by that California 50% and you're even worse off again.

    Now, here's the real kicker. In order to invest that $100K back home, you already had to pay taxes on it -they don't let you put nearly that much in an IRA or 401(k) each year. Before you paid those payroll taxes, it was probably $165,000 (assuming the same 39.6% in federal taxes). If instead you earned that income in Puerto Rico at a net effective tax rate of 15%-which can be easily achieved with Act 20 benefits for your business and a 4% tax on earnings-then you would have $147,283 to invest to begin with.

    After 20 years at 5%, you'd have saved $243,500 for your retirement-that's nearly three times what you would have earned in the United States, getting taxed again and again and again. Or about 2.5x what your IRA or 401(k) would have netted you.

    It's not about how much money you have to invest. It's how much you have to reinvest. And a big part of that is how much you have left over after taxes. Here in Puerto Rico, you could have much more left over, and many more opportunities to invest.

    The New Land of Opportunity

    To me, this is the new land of opportunity. There is a critical combination here of an underutilized but well-educated workforce, a culture that is obviously changing for the better, and a tax regime that is committed to letting entrepreneurs reinvest more of our money back into our businesses.

    Add those three together, and there would be something good going on down here. But there's another factor: The Internet. With the ability to do many jobs from the convenience of anywhere, thanks to Skype, GoToMeeting, Gmail, Dropbox, and thousands of other tools that finally make the home office a reality, the opportunity is enormous. Computer programming. Asset management. Graphic design. Public relations. Marketing and advertising. Research and development. Information processing. Customer service. The number of service-based businesses that can operate from here is amazing-far more potential than the manufacturing sector ever brought.

    Puerto Rico is off to a slightly slower start than its predecessors in India, Singapore, Hong Kong, and even around Latin America in recognizing the value wooing the service economy can bring to its people. However, it is on the right course now and has some tail winds to help it catch up-advantages that no other nation on earth can provide to the world's largest market of investors and entrepreneurs, Americans.

    It's hard for me to sum up all the things I like about Puerto Rico in a few pages-and there's no way the editors here will let me go longer, lest I bore you to death. But if you made it this far, then I encourage you to go one step farther. Consider joining me and your like-minded investors and entrepreneurs in Puerto Rico. Join me and the 200 or so other pioneers here in the new land of opportunity. Read my firsthand account of how, right here. And feel free to ask me any questions you'd like-in the comments below, or via email.

    The article Why I REALLY Moved to Puerto Rico, and You Should Too was originally published at

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: puerto rico
    Apr 07 1:45 PM | Link | Comment!
  • The Healthcare Crisis Of The Century

    It's hardly a state secret that we Americans are getting old. Both in raw numbers and as a percentage of the overall population, the 65+ cohort is growing rapidly as the baby boomers slide into retirement.

    On the plus side, these data confirm that more Americans are living to a ripe old age than ever before-many of them in good health well into their seventies and eighties.

    But all too often, with age comes susceptibility to ever more serious ailments and a diminishing quality of life-especially if you contract a disease that obliterates your innate sense of self and destroys everything that makes life worth living.

    That's what Alzheimer's disease does. This most common type of dementia was first described by the German physician Dr. Alois Alzheimer more than a century ago… but to this day science isn't sure what exactly it is and what causes it.

    It is also increasing in incidence, as would be expected with an aging population:

    (Source: Alzheimer's Association, 2012 Alzheimer's Disease Facts and Figures, Alzheimer's & Dementia, Volume 8, Issue 2.)

    Right now, about 5.2 million Americans suffer from Alzheimer's-already a large number-but in just 26 years that number will have more than doubled, to 11 million.

    Here's just a glimpse at the monstrous healthcare costs we're facing:

    • In 2013, the direct costs of caring for those with Alzheimer's to American society totaled an estimated $203 billion, of which $142 billion came from taxpayers through Medicare and Medicaid.
    • Total payments for health care, long-term care, and hospice for people with Alzheimer's and other types of dementia are projected to increase from $203 billion in 2013 to $1.2 trillion in 2050.
    • This dramatic rise includes a 500% increase in combined Medicare and Medicaid spending.

    It's a serious healthcare crisis in the making-significant today, and on its way to astronomical levels in short order-putting an ever greater amount of stress on a medical establishment that is already coming apart at the seams.

    What About a Cure?

    As I've mentioned before, despite decades of research, until recently scientists knew precious little about the specifics and causes of Alzheimer's. Their best guess was that it involved a combination of genetic, environmental, and lifestyle factors. But there was no reliable biomarker that would help indicate who would be affected, let alone a sure pathway to a treatment.

    The best the pharmaceutical industry managed to come up with were treatments that slowed down, rather than stopped, the progression of the disease-and even then only for a short period of time. In fact, to this day there are just five FDA-approved drugs to treat Alzheimer's at all, and none is particularly effective.

    According to a stark appraisal from Consumer Reports Health, "When compared to a placebo, most people who take one will not experience a meaningful benefit."

    The Alzheimer's Association reports that on average, the five approved AD drugs show some efficacy for only about six to twelve months, but only in approximately half of the individuals who take them.

    Nevertheless, despite their lack of efficacy, these drugs posted some impressive sales figures before cheaper generics became available. A real breakthrough in the treatment of Alzheimer's, the scientific world agrees, would be a game-changer for modern medicine.

    And that breakthrough may just be on the way. Right now, there's a small company that looks like it may beat its competitors to the finish line.

    Metallic Catalysts

    Alzheimer's disease diminishes the ability of neurons in the brain to communicate with one another. That ultimately leads to neuronal death and, over time, destroys memory and thinking skills.

    Although scientists have yet to pinpoint a single cause for the disease, they're getting far closer to understanding the disease than ever before.

    Beta-amyloid plaques, for example-the infamous "plaques" that form in the brain as part of the disease's development-show links with chronic and persistent infections, such as gingivitis. Also, the interaction of these amyloid plaques and biological metals (zinc, iron, copper, etc.) seems to result in deterioration of brain cells.

    It was once thought that beta-amyloid plaques were the primary cause of the damage to neurons seen in AD, because they're the most visible when the brain of a deceased AD patient is dissected. But now a growing number of researchers believe that the small, still-soluble beta-amyloid oligomers may be the main culprits because they're often found in the spaces between neurons (synapses), where they are believed to disrupt communication by interacting with the metals and creating a short circuit. With nothing firing across the synapses, information is no longer transmitted from one neuron to another, and the cells start to die off from lack of use.

    One small biotech startup has been moving forward with the development of compounds to render these biological metals inactive, preventing this short circuit and allowing the brain to resume normal function or even heal.

    Today, that company sits on the cusp of what may prove to be the single most important data readout on the subject since its inception-a trial that should prove whether this technique shows as much efficacy in a large group of human patients as it has shown in animal testing and in anecdotal evidence from early human trials.

    In the months since we started following this small company, many investors have caught on to its potential. Once a tiny company with a $30 million market cap, news of its successes, including positive readouts from a study of the much smaller but related Huntington's disease, have driven the stock up nearly 400% in the last year.

    While that might sound like much of the good news has been priced in, we beg to differ. Global investment firm Deutsche Bank, for instance, recently pegged the global Alzheimer's drug market at $20 billion per year. With no real competition in the market, the company could easily capture 20% of that market-or about $4 billion annually.

    Even if this small company can only realize a quarter of that revenue after working through big pharmaceutical partners to manufacture and distribute the treatment, it could see $1 billion in annual revenues.

    If we compare this company to other companies with similar revenues in the same industry, it means that in the long run, its shares could be worth 10x what they trade at today, even after the recent run-up-and that's with many very conservative assumptions along the way. A real breakthrough treatment could make these numbers seem ridiculously small.

    But investors won't have to wait that long to make money. Positive trial results, which are due in March, could easily double the share price as the company moves steadily closer to market. Of course, there aren't any guarantees, but the company doesn't even have to provide groundbreaking news at this point. If early trial results can simply be repeated, the potential is enormous.

    Click here to learn more about this amazing Alzheimer's breakthrough and the potential windfall that could happen just weeks from now.

    The article The Healthcare Crisis of the Century was originally published at

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Mar 06 12:40 PM | Link | Comment!
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