Doug Casey’s Top Two Ways to Store Wealth Abroad
Doug Casey’s Top Two Ways to Store Wealth Abroad by Nick Giambruno – International Man
Nick Giambruno: For centuries, wealthy people have used international diversification to protect their savings and themselves from out-of-control governments.
Now, thanks to modern technology, anyone can implement similar strategies.
Doug, I’d like to discuss some of the basic ways regular people can internationally diversify their savings.
For an American, what’s the difference between having a bank account at Bank of America and having a foreign bank account?
Doug Casey: I’d say there is possibly all the difference in the world. The entire world’s banking system today is shaky, but if you go international, you can find much more solid banks than those that we have here in the US. That’s important, but beyond that, you’ve got to diversify your political risk. And if you have your bank account in a US bank, it’s eligible to being seized by any number of government agencies or by a frivolous lawsuit. So besides finding a more solid bank, by having your liquid assets in a different political jurisdiction you insulate yourself from a lot of other risks as well.
Nick Giambruno: Moving some of your savings abroad also allows you to preempt capital controls (restrictions on moving money out of the country) and the destructive measures that always follow.
Doug Casey: This is a very serious consideration. When the going gets tough, governments never control themselves, but they do try to control their subjects. It’s likely that the US is going to have official capital controls in the future. This means that if you don’t have money outside of the US, it’s going to become very inconvenient and/or very expensive to get money out.
Nick Giambruno: Why do you think the US government would institute capital controls?
Doug Casey: Well, there are about $7-8 trillion—nobody knows for sure—outside of the US, and those are like a ticking time bomb. Foreigners don’t have to hold those dollars. Americans have to hold the dollars. If you’re going to trade within the US, you must use US dollars, both legally and practically. Foreigners don’t have to, and at some point they may perceive those dollars as being the hot potatoes they are. And the US government might say that we can’t have Americans investing outside the country, perhaps not even spending a significant amount outside the country, because they are just going to add to this giant pile of dollars. There are all kinds of reasons that they could come up with.