To a great extent the world economy and the value of your local currency is largely dependent on the value of the “greenback” ($US). As goes the US economy goes the world economy. Short term swings in the value of $US dollar can be effected by current events and world reaction to it, but the long term trend it tied to the US economy. The US government tries to influence the economy domestically in an effort to protect the US dollar and hence your money. If you rely on the government to protect your hard-earned savings, well their tract record is less than stellar. If, however, you would like to protect your family’s future from the worst effects of the current economic crisis worldwide, the following might be of some help.
There are still people around who are wondering “if” or “when” the American dollar is going to collapse. But I can tell you that there is no if or when; the collapse of the U.S. dollar is happening right now. The depression it is causing is highly visible. The people are already in the streets: in the United States and around the world.
High level international political dealings are tempering this depression making. The amount of actual dollars in your savings, investment and your current bank account will be the same but its purchasing power will severely devalue. These international dealings among government bankers are hoping that a globally collective devaluation of currencies will make this devaluation imperceptible or “stealthy”. Recently, for example, the Federal Reserve, Bank of Japan, European Central Bank, Swiss National Bank, Bank of Canada and Bank of England jointly announced a plan1 “to make more dollars available at cheaper prices in an effort to ease liquidity strains in financial markets.” In plain language, that means they are printing yet more dollars.
That’s right. The economy is failing because “they” created and spent too much money. Still, those in power think they can solve the problems with yet more doses of the same medicine.
On the other hand, they, the politicians may well know that it’s a fools game and doomed t fail in the long run, but the immediacy of the next election drives their actions, not the debts that our great grandchildren will be faced with.
Whatever their goal, it’s far too late in the day to waste time pointing fingers across the political divide. Actions speak louder than words — or, in this case, they offer better asset protection.
Principally, the focus should be on securing what you can and get out of this mess — no matter how big or small your portfolio. In practical terms, that means globalizing your assets so they are no longer dependent on the US dollar. If you keep all your assets in the country where you live, you commit, ahead of time, to ratify the policy your home government, no matter how objectionable, unreasonable or destructive that policy happens to be.” We can already see the imposition of currency controls, like supposed anti-money-laundering regulations.
We know that Canadian and U.S. banks are making it exceedingly difficult to wire money overseas, sometimes even refusing outright to send money according to client instructions. Meanwhile, because of onerous Canadian and U.S. imposed regulations that in many cases run contrary to local laws, thousands of foreign banks have no choice but to refuse to do business with Canadians or Americans, which is another form of indirect currency control.
The severe foreign asset reporting guidelines released by Revenue Canada and the IRS recently leave no doubt that these governments are serious wishing to know everything about everything you own, anywhere in the world. The only reasons they could legitimately need this information would be for full-scale capital or exchange controls and/or the imposition of a wealth tax — a form of tax on assets rather than income, unknown in the U.S. until now. The “rouge” of “anti-money laundering” to justify the actions, while real are but a small portion of the “big picture”.
Then, isn’t it too late to go offshore? If privacy is a thing of the past and everything has to be reported, what is the point of moving money overseas?
That, in fact, is what they want you to think. But it is still 100 percent legal and ethical to do what you like with your own money. There are no official capital controls yet — and there are simple actions you can take to avoid them when they come. Here are a few:
Retirement accounts are first in the firing line for government seizure. Right now, in the US, you could legally take your individual retirement account and invest it in physical gold stored in a Swiss vault or foreign real estate (how would they force you to repatriate that)? But laws already being discussed would force you to invest your retirement accounts domestically, in “safe” things like government bonds — all in the name of “investor protection” of course.
There are still pockets of the world with strong economies and healthy banks; Singapore and Hong Kong come to mind, for example. You can still open a simple multi-currency bank account in these places without leaving home.
There are countries where you can quickly and relatively cheaply establish a legal and official foreign residency — a bolt-hole if the going gets too tough — that can also lead to a complete second passport in as little as three years. Privacy, freedom and property rights in these countries are much greater than in Canada or the United States.
Last but not least, there are still quite a few places on Earth where, with a small, speculative part of your investment portfolio, you might actually be able to get extremely rich.
Sure, protecting and growing your assets internationally will take some effort. But freedom, unfortunately, is not free and cannot be taken for granted. The time to start learning about it is now.