A discussion on wealth preservation: gold, foreign currency...

On 13 June, @Ganado posted "Bix Weir: Economic Meltdown Starting" and at that time I researched what Gold has been doing since 1Jan 2016. Gold is now up ~$260 since that date.

I will be blunt...I am concerned that too many things are happening at once which will lead to a HUGE economic global crash. Not the least, Hillary probably will win the election...

I was dirt poor as a child, nothing in the fridge poor, and with no parents - well - I learned the simple lesson that I do not want to be poor again. I have always carried that lesson with me throughout my life and it has served me well. My wife was born and raised in a very poor section of the Soviet Union so we are of liked minds.

I am fairly prepared with stocks of food, water, ammo and medicines and will do more throughout this summer. But, my Achilles heel like most is wealth preservation. I can move my money out of the country and will do so the minute Hillary is elected leaving only enough for expenses for a year. But, when (not 'if') the economy crashes the dollar value will nose dive and with it my financial security. I am too old to start over...

So, this means not only moving the money out the country, but making moves to preserve its wealth: Gold and the purchase of other foreign currencies. I would preferably a country that is not intimidated by the USA so the IRS can't get at it but this is a double-edge sword for most of those countries are not first world countries so one takes their chances. Believe me that I have seen it first hand when the Bank's president goes missing with the entire bank's assets never to be seen again.

Gold. I am not a silver guy - well - not for holding silver but certainly back a return to a dollar based on gold and silver. I think it is impractical and dangerous to personally hold one's Gold assets (we're talking a large amount). To me, it is like asking for disaster to have kilos of gold buried in the back yard. And, no, no paper gold (I.e. gold certificates). So, where? Canada? Good but they are a small nation with no real muscle and rely on a friendly giant neighbor and I cannot believe that if asked they would not turn over American gold assets held in their Canadian vaults. So, where...?

Foreign currency. One will need paper currency for day-to-day trading and bill paying unless we go into the Dark Ages and possibly even then...it all depends how far we fall. Most poor countries always use a mix of dollars and their own currency. Dollars are the reliable, wealth holding currency while their own deviates extremely. So, what currency will become the standard when the dollar collapses: Swiss, Japanese, England...I think we can say it will not be Chinese (since they will fall with us but they ARE buying and hording gold), the Euro, the Russian ruble...So, what currency?

This is a problem that needs careful consideration so I ask for your thoughts, ideas and recommendations...

 

I only have 1 piece of advice, and that is on foreign currencies. Spread your purchases out among 6 to 12 different currencies. What if a year ago you had decided that the British pound was "the one currency" to buy, where would you be today? Just as most investors (in the stock market) don't just buy 1 stock, it does not make sense to purchase only 1 currency. Also spread your purchase of currencies evenly over several months.

I do have a question for you. If I wanted to literally move money out of the country, as you say, how could I do that? As I understand, more and more foreign banks do not allow cash/coins in a safe deposit box. See The End of the Safe Deposit Box for Wealth Storage for a reference.
For bank accounts, I think most countries require that you reside there for several months before allowing you to open an account. I did find an article How to open a bank account in Germany (via Internet) which may prove useful for opening an account in Germany. [I will need to read it more thoroughly]

Anyway, without revealing anything you don't want to, can you tell us how you will move money overseas? I think this would be a useful exercise for anyone concerned about their financial future.

Thanks.

 

One of the first things I did when I first visited a small neutral european country at the age of 17 was to open a bank account. NOT because I was a highly intelligent teenager with foresight, but simply because I could go home and say, "Yeah, I've got a Swiss account.."
The folks at that bank were very kind to a couple of dumbass american teenyboppers and extended every courtesy to us. I still have that account today and it was handy when I was working a lot overseas.

 

@hitchcock4 I think @Tully Mars answered your question by his own experience as a young man. It really isn't difficult to open an overseas account. HOWEVER, you WILL have to tell the IRS about that account and any interest you earn from it when you file your taxes. I recently had my overseas account closed in Central Asia (but might reopen) but that country does not let the USA have access to its customer's personal financial data. But, like I said, it is not as reliable as say a Swiss or Belgium account and one would probably have to be there in person to open it.

I have never done it but I feel certain one could open an account via phone and mail (remember they need your signature) with any major country like Switzerland. Once the account is establish it is nothing more than moving electrons, at some you might have to wire it which takes about 48 hours for money to arrive and to transfer money from your bank here stateside to your overseas bank is cheap. My bank charges me $20 to wire any amount anywhere. Don't even think of using Western Union...they're crooks!

As far as storing cash in Safety Deposit Boxes, most of the first world countries it's not legal but most bank don't look over your shoulder when you are in your box either (so yeah, it's still done but not in huge sums) and bringing large sums of money into a country can be...nerve racking to put it mildly (ask me about the time I took $30,000 into Uzbekistan!) and damn risky. Most countries have a limit of cash you can bring into their country and you have to declare it. The US is $10,000.

I am in the process now of researching overseas banks. I am thinking more along the lines of reliability and security than anything else - just want my money out of the country. But, gold storage is a huge problem as they charge you through the nose for it which is major criteria in my research. Dealing in gold is a different animal, another double-edged sword for while it is the best means of preserving your wealth you must pay a lot to store and keep it and then you can't just take it to the store to buy a bottle of milk. Turning it into paper or barter is the problem, there's no real exchange to do so....at least now there isn't.

Still thinking this through and appreciate any discussion.

 

The problem with gold is, even in the smaller weights you are still having to spend $50 at a time every time.
Plus the smaller sizes of gold IMO anything under 10 grams are an absolute rip off to buy at retail, you are paying about 2 to 4 times the % you pay in spot fees on small gold, the spot goes higher with the smaller gold.
Historically Gold signifies wealth, transfers in gold are usually transfers in property such as land, ships and other large transfers.
Silver has alwasys been used as pay for day to day transfers of goods and services.

 

My grand dad had gold in 1933, turned it ,as required by law, at $20 an ounce and the government than revalued it at about $32 an ounce and stole over half its value, they then redid the paper bills, and you had to exchange the old ones for new, bank went belly up and he got a few cents on the dollar from it after WWII in payment for his deposits, but all of his debts and mortgages were good in 1933 and the banksters either got paid when they came due or you lost your house, car, farm, etc. It isn't if it can happen, its if it can happen again. I think silver is safer than gold, and I know Jews, Viet Nameses, Japanes, Thais, etc that survived and kept their wealth through monetary collapse by owning jewelry, antiques, land, property etc, but in all their cases, the world society as a whole continued and they could "sell" the asset. If there is a total collapse everything is off the table and we might be back to skills, food. and barter again if we wish to survive. I don't know of any country in which I can keep my savings, keep them out of the hands of the US government and live in with safety. At 78 it is a little to late to start over and my life savings are tied up in land and useless paper claims on some mystical paper money stored in a computer somewhere over the rainbow. If things do go to he**, I have absolute faith that the government and my neighbors will demand all my preps, barter goods, and physical wealth and accuse me of hoarding, tax evasion, illegal currency manipulation and only God knows what else until I "share" it with them and it is gone. Wish I could be more cheerful, but that's the way I see it. My mothers grand father had 5 banks, a few hundred acres of land, a lot of stocks, bonds, and other wealth and lost it all. My grandad, on dads side, had land, cattle, crops, food, a little cash, and no debts, and he kept all of his land and assets. Don't know what will work this time, but know what worked last time.

 

I would think very carefully before sending any form of wealth to a foreign country, especially in interesting times.

There are several potentially serious problems with that,

1) In the event of a serious economic crash, money stored in a foreign country (or even just over the nearest state line) may be as inaccessible as the far side of the Moon. How do you recover it when communications are nonexistent or heavily monitored? Or when shipping of every kind is at a dead standstill? And, worse yet, when your need is dire?

2) In the event of a serious economic crash, the governments of foreign countries will loot the accounts of "furriners" first. Then they'll loot the accounts of their own citizens.

3) In the event of a serious economic crash, bankers will rob their own banks before the government can--and then they'll hit the road. It's been done time after time after time. They'll take your gold right along with everyone else's.

4) In the final analysis, when you give your physical gold into someone else's keeping, you are trading it for a paper promise (a receipt or deposit slip) that it will be returned to you later. How is that different from suddenly owning paper gold? Isn't that a futures contract, in its own way?

Promises are very easy to break. How can you trust someone you've probably never even met to give you your gold back? How could you force him to if he didn't? From thousands of miles away, with no money and no friends in high places? When he has all the local lawyers and the local politicians in his pocket?

The only person you can trust to hold your gold is someone who knows to the marrow of their bones that if they screw you over you'll feed them and their entire family into a chipper-shredder, slowly, and that there is nowhere in the world that you could not find them if they ran.

So you'd probably need to be a high-ranking Russian mobster, or maybe a Colombian cocaine lord--in which case you could just keep your gold in you basement vault and guard it with your own personal army.

I don't have any gold (never could afford it) but I know how to hide gold so that it will not be found unless I want it found. Unfortunately, I can't share that method over the Internet. But that doesn't mean that others can't devise ingenious concealments for gold, diamonds, priceless antiquities, or whatever.

 

Uncle Morgan, you have hit the nail on the head, if you have trust in the system and its processes, you don't have to worry about saving your wealth, if you don't, there is no safe place to store it. Back to the chicken and the egg. We can scheme to save pieces of it, bury it, etc, but for it to have value, you have to be able to protect it or have trust, I don't seem to have much faith in my ability to have either item.

 

Don't keep all your eggs in one basket, diversify. If you take some hits, you will probably still have something. Silver before gold, and look at Bitcoin too. Best bank to keep any physical in is in your own backyard, within sight of your bedroom window, and same with that too, more than 1 spot, and bury a lot of metal junk spread around to defeat metal detectors. We need to spread out because incoming is on the way, the thinner you can spread out the less casualties you will take. Good luck, were all in the same boat and it just hit an iceburg, the band is still playing and people are dancing as I manage to start freeing up a lifeboat and to lower it over the side. 777 biggest one day drop in the DOW in 2008, Christine Lagarde, head of the IMF gave a strange speech about magic 7 in 2014 and at start of speech says she is told by others what to say, 7 years, 7 months, 7 weeks, 7 days after the 777 drop on the DOW was 6/24/16 - BOOM, BREXIT vote count is in and massive global stock route. Cameron had moved the vote up from 2017 to 6/23, why?? I think a torpedo is being loaded into the tube and the GOOD SHIP LOLLIPOP is in big trouble. This coming Thursday is 7/7/16 or 7/7/1+6=7, 777, just to illuminate the situation a bit.
May be total quackery, but may not, if not then time is short, everybody better get their A$$ in high gear.

 

You hit the nail on the head @duane we could very well see this before the elections.

Singapore and some of the asian banks are rock solid. You may not be able to access for a while but you will still have your money when all is said and done. NO MAJOR USA banks are safe as they are federally regulated. Go put your money in a small STATE regulated bank in your state.

you can find this easily via the state banking commission site for your state.

the official value of gold in the USA is $32/oz. So I don't buy gold.
Silver has many uses so i have some silver
mostly just pay off your home, and buy whatever physical assets you can, land, and invest in tradeable items and skills. These are, in my opinion, the best wealth preservation things you can buy.

Im not trying to be an alarmist, just my thinking on this.

EDIT: this is another guy's method
Be Your Own Central Bank – Hacking at the Root | Perpetual Assets | Precious Metals IRA, Silver Debit Card

 

The only safe (mostly) way of keeping wealth is The Bank Of Mason Jar or some variation that YOU can watch and protect(maybe). Even if it isn't some form of a paper promise you have no real guarantee that you won't lose some or all of it. diversity is key. Silver,gold,tools,supplies, or anything else you consider to have value. There's no way to know 100% what will hold value in any or all circumstances. Or as said before me who can you trust with your "wealth". Be it a country,state,bank ,or Marvin the martian. If it's a total reset then skills and a wooden hoe may be all you're left with. But man started out with no more so cheer up, it could be worse.

 

Old saying "Cheer up, it could be worse, so I cheered up and it got worse"!

 

@oldawg that is true if they don't change currency from USD to TRN. THe USD are and were Federal Reserve Notes. TRN's are US Treasury Reserve notes they havent released these yet but some talk that they will soon

https://www.treasury.gov/connect/blog/Pages/US-Currency-Brief-History-Part-2.aspx

More on banking stability
https://www.treasury.gov/press-center/press-releases/Pages/jl0503.aspx

 

Unless you have easy access ... like by car to said foreign country, I'd not hold their paper.
If there ever comes a run on the US dollar .. A lot of other currencies are going to fall before we do.
That said, Living here in the Mitten state, I do have a few hundred in Canadian currency but just enough to get me across the border, a couple of tanks of gas, a bite to eat and a place to sleep but not much more than that.

But with the risk of FX every little bump in the road causes exchange rates to fluctuate pretty wildly. Can you accept the risk? And who will cash in your foreign currency if you need to change it back into USD .. what is your plan? Can you afford to lose your entire stash of foreign currency, if you can't you probably shouldn't be in foreign currency. Losing it could be as simple as the currency being revalued, foreign bank where you had an account is closed by government decree and insolvent w/o redress for depositors, bank where you had safety deposit box burned to the ground or was robbed. How much will it cost you to get there to make a claim vs what you have there, will you be exposing yourself to scrutiny by their gov't or ours if you do?

Ditto for just about every currency. If no one is willing to accept it .. is it still currency? (FRNs, Gold, Silver, Platinum, Paladium, Bitcoin, prepaid credit cards, diamonds, a jar of dirt)

I'll keep the bulk of my paychecks in USD for now, as it's mostly what people in the states accept for payment.

PM's (as I've stated many times) in my personal opinion are very useful for hedging against uncertain times (inflation, hyper inflation, brexit, loss of dollar hegemony) but once the times are certain (as in full blown shtf financial apocalypse) better to start bartering and save the PMs as inheritance for your kin when the world rebuilds.

Also with PM's, if you don't have it in your physical possession, it's not really yours. It's a chit for x amount in someones vault and you are trusting them to make good when you want it. Yeah, studying human nature says .. Bwahahahahaha! good luck with that after financial markets go sideways.

Land, buy land .. they aren't making it anymore. Ok, you got me on that one, them stupid sand islands in the indian ocean, new airports in Japan, Taiwan and China and the volcanos, Other than that, there really isn't any more "New" land going to be made out of thin air. I'd suggest buying land some place where you really own it vs lease it or pay property taxes on it.

 

I don't think hold foreign currency is a good idea, either. If FRNs go down the tube I don't see many others still afloat.
PMs may or may not be a viable tool...someone has to be willing to take it at what you consider a reasonable exchange rate if you need to use it, but as a medium to carry accumulated wealth through (xxxxxx) to the other side IMHO gold and silver are hard to beat. Platinum and paladium may have a higher per-ounce value, but not sure how acceptable they might be.
It's all a crapshoot...make your bets

 

I can vouch for palladium. I bought a bunch back in 2008 when its price crashed to $200 an ounce, then resold it for almost $800 an ounce and bought gold with it at about $1250 to my door and in my hand.
But that was always the plan, wait for gold to dip and palladium to surge and lock in a deal.
My advice is don't even think about palladium unless its under $400 an ounce.

 

Lets just put it this way, I haven't been any where yet that didn't take U.S. dollars.

 

have you been watching the new banking laws? Did you see where china has been dumping USD? Have you looked at Basil I, II, or III? Have you seen that the new basket of exchange currency is moving from the USD (aka the petro dollar) to BRICS? YOu might want to reconsider your position on the USD

 

Ganado has it right, folks. Gotta say.

It's an absolute fact that the US Dollar is no longer the world's reserve currency--but it maytake the history books a few decades to point that out. (The MSM definitely won't.)

There are a lot of places where the US Dollar is no longer welcome. At all. To give just one tiny example: You can't buy a ticket into the Taj Mahal with dollars any more--as of about five years ago.

Most of the world has seen the writing on the wall and is getting out of dollars at the safest practical speed.

Some of the smartest people in the world are Chinese. They've managed to dump truly gargantuan amounts of US Treasury Notes--which pay in dollars, when they pay--recently without starting the "inevitable" run that would make them worthless in a day.

And incidentally create huge losses for the Chinese, who would be caught still holding them in the $billions.

How did they manage to do that? With exquisite finesse: they destabilized their own currency, then sold Treasury Notes to strengthen it--to the the benefit of themselves and the world-wide economy.

Bingo: No crash.

And almost no one even noticed.

The Treasury Bills were mostly bought up by anonymous Swiss and Brazilian buyers--who all probably work for the same CIA.

(Oops! Was that supposed to be a secret?)

Ir shouldn't be a surprise, bearing in mind that we (the US) have lately been buying up all or almost all of the Treasury Notes we must sell to foreign investors to keep the US economy afloat. The thankless foreign investors have been ignoring our auctions more or less entirely.

So, that's the State of the Union, folks.

We've been playing with Monopoly Money for decades, and now the game is just about over.

Just for giggles and grimaces: Will the U.S. Dollar Collapse in 2016?

The back-room deals have already been done, and we didn't get an invite.