Why, How To Protect Yourself From The Collapse Of The Dollar
January 11, 2012 by Peter Macfarlane
“Trust us. We’re from the government.”
That’s just what those in power are telling you to do. Does it reassure you?
If you rely on the government to protect your hard-earned savings, you might as well give up now. If, however, you would like to protect your family’s future from the worst effects of this crisis, this article is a brief introduction to why and how you should do it.
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.
The only reason it’s not 100 times worse is because of high level international political deal-making. The banksters hope that if all the major fiat currencies go down together, no one will really notice. Under their plan, you will see the same number of dollars on your bank statement and the exchange rates with major foreign currencies will stay more or less constant. All that will be gone is the true value of your savings: the purchasing power. This is what I call “stealth devaluation.”
In November, for example, the Federal Reserve, Bank of Japan, European Central Bank, Swiss National Bank, Bank of Canada and Bank of England jointly announced a plan “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 has failed because “they” created and spent too much money. Yet, those in power think they can solve the problems with yet more doses of the same medicine.
Or do they? Don’t underestimate their cunning. I believe they know full well that what they are doing will not solve the problem at all. In fact, it will only postpone the final outcome, making it even worse in the process. Politicians are concerned about winning the next election — not about the debts that our great-grandchildren will have to pay off.
Whatever politicians’ 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.
First and foremost, you should focus on securing what you can 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 dollar. As Terry Coxon wrote recently: “By keeping all your assets in the country where you live, you commit, ahead of time, to ratify whatever policy your home government might adopt, no matter how objectionable, unreasonable or pernicious that policy happens to be.” Or as Bob Livingston put it, “There is no substitute for getting money out of the United States. The time is coming when it won’t be legal.”
We can already see the imposition of currency controls, like supposed anti-money-laundering regulations. We know that 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 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 Americans, which is another form of indirect currency control.
Finally, the draconian foreign asset reporting guidelines released by the Internal Revenue Service just before Christmas leave no doubt that the U.S. government is serious in its wish 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.
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?
Of course, that 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, 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 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.