The Billionare next door? Or overseas...

I will start today with a quote by Thomas Jefferson in a letter to the Secretary of the Treasury Albert Gallatin in 1802:

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

To truly understand what Bush, Cheney, Bernanke, and Paulson, and the .5% elitists are attempting to do with their "brilliant" ideas to strongarm our House and Senate to pass the "BailOut Package" is to create more unregulated options for the elite to buy stock.

You see, we are currently in the beginning stages of an unprecedented global financial boom. It may be hard to see right now, but that is part of the reason why. This is going to be bigger, longer lasting and with even a greater number of impossibly predictable outcomes than we've ever seen or thought before. The top wealthiest people have been preparing and are currently putting their ducks in a row, so to speak. By doing so, the "average Joe six pack" or "Joe the plumber" is getting left behind. The funny thing is, they have convinced the average taxpayer that is all in their best interests.

According to the highly read and financial industry respected report recently released by McKinsey Global Institute, from years 2005 to 2010 alone, the value of all the stocks, bonds, CDs and other financial assets held worldwide will soar from $118 trillion to $200 trillion. That’s an increase of $82 trillion in 5 years, or 69% in five years!

As I have stated previously in this blog, in the articleThere's a hole in my pocket we are experiencing the largest redistribution of wealth this world has ever seen. It is so profound it will also radically alter the global economic pecking order in a huge fashion.

Right now, Asia and the United States each account for 28% of the world economy. The World Bank estimates that America’s share of the world economy will slip a bit, dropping to 24% by 2030. But Asia’s share will double, reaching a staggering 55%. This simply means that the Asia of tomorrow will be twice as economically powerful as the United States is today. Why is that? And how can we get in the game? Let's take a look.

Our current means of portfolio investment has been coached to us, by our financial industry brokers over the past, you know those people on Wall Street that are the most privy to the rules of the game that helped create and fuel this economic crisis we have found ourselves in, to hold 5%-15% of international funds in ones portfolio. Perhaps you can begin to see that this will be a negative trend in ones future portfolio based on these two paragraphs alone. Keeping this pace, U.S. investor will soon realize that they are being left behind financially. Based on these changing economic indicators and global expansion we need to change our investing practices, not only for an individual investor to survive, but for our country to stay in the game. The questions is, can we?

Jeremy Siegel is a Wharton Professor and best-selling author who recently said investors should should have 40% of their holdings in overseas investments. If the government continues to allow, and pay tax credits (according the the Bush administration and the McCain campaign)for our corporations to send jobs overseas, doesn't it seem prudent to put your money there? It is best to invest in the companies that are the most profitable, right? Not a very American thing to do on both counts, but money has no allegiance to any country.

Doing that though is not as easy as one would think. You see the average American doesn't have the access to the market information that is necessary to capitalize and profit from the Asian boom. Getting your hands on the market intelligence is not as easy as one would like. The seasoned, wealth and well connected investors can and do.

Wall Street has know about this economic trend for a long time, and some could say, are helping to drive this global economic boom. Why do you think there is such a sell off in our stock market today? Perhaps it is partly based because the largest investors and institutions are buying overseas. I mean, have you ever had the chance to be in on an IPO? Chances are NO. These are saved for the wealthiest and largest investors. The rules are different.

Even investors who see and understand what’s happening could end up watching this wealth explosion from the bottom end of the ladder to success. That’s because federal regulations prohibit most American investors from buying many foreign stocks, even though overseas markets clearly will offer the greatest returns in the months and years to come.

Here is why...If a foreign company isn’t registered with the Securities and Exchange Commission, its shares are off-limits to most investors. Due to the costly registration process and myriad of paperwork it is discouraging many of these foreign companies from listing even American Depository Receipts (ADRs), a type of security U.S. investors trust and are willing to buy. These financial vehicles are easy to trade for the average investor, but becoming harder to come by.

Wealthy investors don’t have this dilemma. There is an obscure SEC regulation, Rule 144A, allows them to circumnavigate that rule and form investment pools through investment banks, so they can buy foreign-company shares.

Now, you can begin to see why the $700 Billion is going to the banks and bailing out the wealthy and not the average Joe sixpack...The big question I have then, is when will it reach the little guy? That trickly down thing we all seem to hear about but never see the advantage of?

We'll be looking into this in the coming weeks and bring what information we can muster to the Banter Table. Stay tuned.