Simon Black Explains How To Diversify Sovereign Risk

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Sun, 12/26/2010 - 15:28 | 830644 lynnybee
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I like this Simon Black / Sovereign Man !!  ..... what a life to be able to visit 50 countries a year .......

Sun, 12/26/2010 - 17:54 | 830790 Quixotic_Not
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"Against the insidious wiles of foreign influence, the jealousy of a free people ought to be constantly awake; since history and experience prove that foreign influence is one of the most baneful foes of Republican Government...Tis our true policy to steer clear of permanent Alliances, with any portion of the foreign world." ~ George Washington

"Bad men cannot make good citizens. A vitiated state of morals, a corrupted public conscience are incompatible with freedom." ~ Patrick Henry

"Americans [have] the right and advantage of being armed, unlike the citizens of other countries whose governments are afraid to trust their people with arms." ~ James Madison

Mon, 12/27/2010 - 12:56 | 831683 DosZap
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All truisms in their day, now we are the melting pot of Pussydom, and fascist lovers.

Sun, 12/26/2010 - 15:30 | 830649 jimgcpa
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This guy's a blowhard.  If he goes to 50 countries per year, he can only spend an average 7 days per country.  Chances are he doesn't travel every single day of the year so his avg. is probably more like 2 or 3 days in each country.  And he claims to know everything that is happening in those countries by a 2 day visit?  LMFAO!!!!!!

Sun, 12/26/2010 - 17:20 | 830768 Bearster
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Anyone who can say in one breath "paper money is worthless" and "sign up for my premium service" (which is paid for in paper money is a blowhard, or a hypocrite.

If Black manages to convince anyone that "investing" is a matter of breezing into a new country, drinking for a few days, giving money to someone, and blowing out on the next flight, then he has done that person a grave disservice.

I should say that agree 100% with his assessment that everyone should diversify their sovereign risk.  There was an old parable about putting your eggs into different baskets.

But I think he is way too US-centric in his assessment of the coming disaster.  Every paper money system including Singapore is going up in smoke.  The world's reserve currency will burn down last.  Short the USD (or not!) accordingly.

Mon, 12/27/2010 - 00:02 | 831178 virgule
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I like his writings, but I tend to concur with you on that one. You haven't even counted the jet-lag between these 50 countries. I travel to 10-12 countries per year, and I can assure you, it's quickly tiring.

How much real business can you get done in a 3-day visit anywhere? You can do some fact finding, but you're not going to build a solid business foundation.

Maybe he's a financial advisor - tons of those traveling around the world trying to pick some crumbs from your pocket ;-)

Mon, 12/27/2010 - 15:41 | 831959 pazmaker
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Although, I don't agree with some of your comments I have seen on other threads, you are spot on here.

I don't know know why you were junked, maybe people have a hard time with the math?    365 days/50 countries = 7.3 days per country  plus travel time.... means this guy spends at maximum 4-5 days per country and he has businesses in how many countries?

If these businesses are going so well why are you trying to sell me your newsletter Mr Black?

Sun, 12/26/2010 - 15:35 | 830658 lynnybee
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! Porter Stansberry, End of America video ...... I clicked on the link in the posting & get nothing !   also, I googled it & when I click on that link get nothing !   DID THE U.S. GOVERNMENT CENSOR THIS VIDEO ? or, am I not knowing where on the net to find this ?

Sun, 12/26/2010 - 15:42 | 830663 French Frog
Mon, 12/27/2010 - 13:48 | 831757 Bananamerican
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i'm as gloom/doomy as the next but my B.S. detector went off listening to Porter's presentation. He "padded" things...Is that really even necessary in 2010/11?

Sun, 12/26/2010 - 15:40 | 830660 fiftybagger
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The Petrodollar Explained


Sun, 12/26/2010 - 15:41 | 830661 centerline
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When the SHTF, I am not sure very many places won't be hit hard.  The last place I would want to be is in a major population center - Singapore or Hong Kong would scare me in this regard.  Got a feeling that China is going to get pounded straight back to the stone age too.  South America?  Hmmm.  Maybe...

Sun, 12/26/2010 - 16:36 | 830729 BorisTheBlade
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Shit has already hit the fan and being distributed in slow motion all over the place. The safest place is behind the fan, not in front of it, thus going with the flow isn't a good idea either - think of places very few think of, quiet, outside of mainstream attention and limelights. Comfortable to park some money, relatively hard to get in and relatively easy to get out. Not sure if usual tax-friendly jurisdictions would do the job this time - government is too hungry for taxes.

Sun, 12/26/2010 - 15:48 | 830669 lynnybee
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thank you dear friends .... believe it; i'm not that computer savy & am still learning / love ZEROHEDGE ... I learn so much.  Holiday regards !!

Sun, 12/26/2010 - 15:51 | 830675 French Frog
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We're all friends in here


Sun, 12/26/2010 - 15:52 | 830676 RobotTrader
Sun, 12/26/2010 - 16:03 | 830689 sabra1
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being canadian, i will gladly allow all of you to place your money into my bank account! yours truly, M. Bezler.

Sun, 12/26/2010 - 16:09 | 830696 DosZap
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Your not foreign, your part of the beast as you will soon see.

Not a nickels diff between the two.

Sun, 12/26/2010 - 16:21 | 830711 Amish Hacker
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Canadian accounts (not your personal account, sabra) seem like a good idea, but I wonder... It's not against the law to open a foreign bank account, though it's illegal not to report it on your 1040. In other words, your assets won't really be hidden from the US government's grasping claws when the shtf. And I'm not sure it's even possible for Americans to open a brokerage account in Canada (this is based on what I was told a couple of years ago, though, please, someone correct me if I'm wrong).

If you're going to try to stash assets abroad, be sure it's in a country that won't just roll over and cooperate with the IRS. "Neutral" Switzerland? Don't make me laugh.

Sun, 12/26/2010 - 20:52 | 831018 ZeroPower
ZeroPower's picture

You need a Canadian address to be able to do so. Doesnt matter if its a vacation home up North or your aunt's place...

Mon, 12/27/2010 - 06:27 | 831382 Azannoth
Azannoth's picture

The only sure way of escaping the IRS is to stop being a US citizen

Sun, 12/26/2010 - 19:40 | 830948 Blano
Blano's picture

Canada is the 51st state.  Sorry.

Sun, 12/26/2010 - 16:11 | 830698 woolybear1
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yes, a blowhard. if things get that bad there will be no place to run. the usa will probably remain the best the glue factory.

Sun, 12/26/2010 - 17:59 | 830811 dizzyfingers
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Not making a pun...but if the like-minded stick together we'll all be better off.

Sun, 12/26/2010 - 16:26 | 830717 Glasgow Gary
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Black, who visits 50 countries each year and actually performs due diligence, summarizes his thoughts on all those pundits who base their macro views on a tourism brochure.

I'm sorry but do people not spot the trademark newsletter techniques that Black uses to attract subscribers? I think what you mean is: Black writes about visiting other countries and peppers his essays with standard fare such as "visiting friends in Buenos Aires, doing some business, and oops I'd write more but I have a plane to catch." C'mon. Who are we kidding? And besides, Black's take on the current macro situation and developments in opther countries is hardly unique. We all agree the USA is in deep trouble. But so are most of the other big regions in the world. Post-collapse (if that's your thing) the natural resources of North America are actually huge. What's the relationship, btw, between these newsletter writers and ZH?


Sun, 12/26/2010 - 18:38 | 830856 Motorhead
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Black claims he as a graduate from West Point and a former MI officer.  The fact that he's not still in the US Army shows that he didn't totally "drink the Kool-aid", so I guess that should count for something.

Mon, 12/27/2010 - 13:51 | 831764 Bananamerican
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fair questions GG...

Sun, 12/26/2010 - 16:59 | 830748 malikai
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I saw things as getting bad in the states in 01 and by 04 I had decided it was time to go. At the first opportunity I elected to transfer to the London office of the company I worked for. I've never looked back, but I do miss the states from time to time.

1. Sovereign risk is a big deal. Will all of you shoot your way out of the FBI raiding your houses for gold when the next gold standard is set and your gold is confiscated "to save the nation"?

2. Being tied fully to the US makes you part of the system. If you disagree with the politics and there is a drastic shift to the political right (under whatever guise), everyone on this board is likely to be considered a "domestic extremist" or some other machination of political enemy, and may find themselves in a camp somewhere some day. Being able leave on the outset of troubles may just save your neck. And don't count on Canada and Mexico being suitable refuge, especially if you haven't already made arrangements. Being financially prepared and having a plan ahead of time, combined with recognizing when to go may be the best thing you can do for your family.

3.  How would you really deal with the bands of gangs running around robbing and killing if TSHTF? The police won't last very long and even the army will be powerless when they suffer desertions due to clearly immoral orders, famine, and worst of all, having no value in their pay or benefits.

4. Do you want your children to grow up in 1920s Germany? Do you like the prospects of your children coming of drafting age just as the next world war may begin? We all know that war and Keynesian economics go so well together.

I personally would rather give my children more choices. In the worst case scenario, they may be part of the survivors, if we are lucky. In the best case scenario, they may have an order of magnitude of the opportunities than I have had and will be able to fully see themselves as citizens of Earth, rather than some single country which may at any time, turn against them. They may in fact be truly free.

Sun, 12/26/2010 - 17:38 | 830781 banksterhater
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The UK has been the best US military partner in crime, not a record to be proud of, continuing to this day. If there are bank runs, they will shut all access to accounts in other countries for Americans. I have a friend in Costa Rica, they impounded his account to pay US taxes, froze it last year, imagine if you're in any international bank, you are screwed, and the UK will be first to comply, Blair is just as guilty of War Crimes and the US, now he's fixing mideast peace LOL! fool asshole.

Sun, 12/26/2010 - 17:57 | 830808 malikai
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I doubt a run on treasuries would cause the US to seize foreign accounts held by overseas Americans. Such a task would be very expensive, large, and wouldn't yield very good results as there isn't that much American wealth overseas relative to the overall economy. This not to mention the fact that many of the elite themselves have put some of their own wealth overseas. If you can show me a multimillionaire who does not have a swiss or isle of man account, or gold holdings overseas, I'd eat my own tongue. Now, do you think the Rothschilds or Morgans or even Paris Hilton would quietly agree to surrendering their only remaining tangible wealth? I doubt it.

Sun, 12/26/2010 - 18:02 | 830815 dizzyfingers
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I think you're overlooking the fact that you'll be alone, without funds, with no one to turn to, no money for a lawyer if any local lawyer would take your case, and don't forget much of the world operates on the legal system that presumes guilt until the person proves innocence. How do you do that if you have fled your own country?

Sun, 12/26/2010 - 18:10 | 830825 malikai
malikai's picture

You have just described the US legal system to me.

Sun, 12/26/2010 - 17:12 | 830756 SF beatnik
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No one ever mentions Pugsley's Alpha Strategy. Buy rice and beans, now, while they're cheap. Hunker in your bunker, right here in the US.

Pugsley says every American should store 20,000 rounds of ammo. And he offered much advice regarding what items can be stored for future use. Walmart is still giving stuff away virtually for free. You won't need so much cash or gold if you have all the toothpaste, underwear and socks you'll ever need.

Three months ago I bought an '07 cargo van. I could live in it if I had to.

Some of you guys at Zero are rich. But many of us can't afford to just leave for Paris, much as we might like to.

Tip of the day: buy a storage freezer and fill it with food items you like that don't require refrigeration. (They'll keep you going for three months. If the grid goes down, it might stay down. Few survivors....)

And have a sense of adventure. This could fun.  More fun that sitting in  in some crappy corpo cubicle waiting for Saturday.


Sun, 12/26/2010 - 17:52 | 830792 dizzyfingers
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Nice reality check. I've checked around a bit, have been around a bit, and believe that the best plan is to stay here, do some of the things you mention (you didn't mention stockpiling water -- that's important) and either sitting tight or if located in a "problem" area (near big city/cities), perhaps retreating somewhere more rural, with worldly goods in tow or in van. South America, Asia, islands anywhere, Europe, Mexico, Canada? Nope; unless one has relatives, no one in any of those places gives a rat's ass about any of us and wouldn't care if we lived or died. That might be true some places in the US too so think carefully about your retreat, but at least here we are citizens together -- whatever that may come to mean -- and will not automatically be perceived as outsiders. Being locked out might not serve the purposes of those who find themselves out there needing to get back in.

Think Frances Marion and suchlike.

Sun, 12/26/2010 - 18:03 | 830816 huggy_in_london
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You people have been watching too many hollywood movies.....

Sun, 12/26/2010 - 19:23 | 830922 doolittlegeorge
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you can never watch too many Hollywood movies.  Wrong "lesson" from said movie could be a problemo as they say.  Still "just because you're paranoid doesn't mean they're not coming for you."  Which reminds of a movie script i've been working starts with this guy who....

Sun, 12/26/2010 - 17:17 | 830761 if
if's picture

Spending only a few days in each country helps him conclude that Cuba might be ideal for expats.  A country where the sovereign risk extends from your assets to your ass.  

Sun, 12/26/2010 - 17:30 | 830773 Fake Jim Quinn
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If the sh*t hits the fan the USA will default on foreign debt as the initial step. If USA defaults on foreign debt, anyone worry that those governments will seize private assets of US citizens? I believe they would, with relish. But I could be wrong

Sun, 12/26/2010 - 17:43 | 830785 banksterhater
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OF COURSE! Americans won't be safe anywhere, they are linking banks internationally, eventually Americans will have a target on our foreheads in any country anyway, it's almost that way already. That's what the oligarchy wants, serfs making asian wages deep in debt and agreements with countries like Canada not to harbor us.

Sun, 12/26/2010 - 17:51 | 830793 Quixotic_Not
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“Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience.” ~ John Locke

 "No free man shall ever be debarred the use of arms...The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." ~ Thomas Jefferson

"Those who give up essential liberties for temporary safety deserve neither liberty nor safety." - Benjamin Franklin

Sun, 12/26/2010 - 17:55 | 830799 dizzyfingers
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You're not wrong, and they might sieze US citizens and mistreat them in nasty ways too. Stay here; be one of the critical lovers of the USA.

Sun, 12/26/2010 - 18:04 | 830819 malikai
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I'd rather take my chances in the unknown than stand in the face of clear tyranny. The Jews that survived the holocaust did so because they either left Germany before it began or they were the last in line for the furnace. I'd rather be the type that left early.

Sun, 12/26/2010 - 19:20 | 830919 malikai
malikai's picture

You may be right. However, you could make it particularly hard for that to happen if you are smart with your asset placement. The point here is diversification. The idea being that if the US collapses, but Turkmenistan does not, then your wealth in Turkmenistan may still be there. Same vice-versa, or insert any other country or multiples of countries. The particular emphasis should be on a country /not/ closely tied with the US empire, which will likely weather the storm. There are many such countries on this wet rock.

Sun, 12/26/2010 - 20:40 | 831004 gwar5
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I think everybody would carve up the "old" USA like a bigger version of the old Soviet Union, but with some caveats. Mainly, everybody else is going to be broke, too. But we are still the world's gold superpower. So, maybe we should secure it to the West Point facility to get the gold away from creditors, and away from the FRBNY, by moving it from their basement vault.

Our government can confiscate property, but it will be "legal" in the form of new taxes, fees, and taking of private pensions, ala Argentina. They might also give up our natural resources to creditors, which is what I thought these recent aggressive Federal land grabs were for -- collateral.

Our government currently uses other country's banking systems as enforcement to collect for the US IRS.  Our creditors could just do the same thing to us, using our banksters. The Fed, not congress, controls the brand new "Consumer Protection Agency" and this little agency instantly tracts all digital transactions each individual makes.

China could buy the fucking dip after the US equity bloodbath and they'd control USA, inc., courtesy of the Bernank.  We're not allowed to use our own coal, but they could ship our coal and gas over there.  They've already sold us down the river, why not go all the way?

If I was China, or another large creditor with an army, I would tell other countries globally to keep hands off American assets. I would take those assets for myself, or, use "diplomacy" to extract desired resources in exchange for the assets. The manuevering is probably going on now. This week, it was announced China doubled up the speed of their aircraft carrier construction, which is an announcement that sends a pretty powerful signal.

The other thing to consider: if (when) the dollar collapses as the world's reserve currency, China would be positioned to get the world's resources anyway, on the cheap, due to our impotency. I think they just want resources for the next century. If their domestic market develops, export prices won't matter so much.

The North Koreans will still be eating dirt in ten years but we'll think of them as middle class by then and be asking them for recipes!



Mon, 12/27/2010 - 00:15 | 831188 trav7777
trav7777's picture

riiight...the mighty chinese navy.

China's growth opportunity is in exporting cancer and pollution.

Do you idiots REALLY believe it is so difficult to set up polluting factories with old technology in order to manufacture plastic shit?  I mean, SERIOUSLY?

Any 3rd world nation will suffice for this; China has nothing special.

Mon, 12/27/2010 - 14:13 | 831800 Bananamerican
Bananamerican's picture


Mon, 12/27/2010 - 06:20 | 831374 malikai
malikai's picture

The North Koreans will still be eating dirt in ten years but we'll think of them as middle class by then and be asking them for recipes!

Well, if you're interested. I have a wicked recipe for house cat and grass stew.

Mon, 12/27/2010 - 08:37 | 831429 Snidley Whipsnae
Snidley Whipsnae's picture


The concept of diversification went so well for American buy and hold stock investors that now we are told that we should buy into foreign securities/businesses when all fiat currencies are in extremis.

I think PMs and ride it out are the best options for the vast majority of least, those of us that cannot afford to do our own due diligence in the markets that we are being encouraged to invest in.

If it sounds too good to be true, it usually is.


Sun, 12/26/2010 - 18:03 | 830817 gwar5
gwar5's picture

We knew it already.....

"Just imagine how much lower the US stock market returns will be once Bernanke is forced to find his monetary manhood.  When that happens it is going to be a bloodbath in the US.”  --Michael Pento, Dec. 2010


Yikes! ... And when The Bernank finds his monetary manhood he'll no doubt Bang Dae-Ho.

Mon, 12/27/2010 - 14:15 | 831801 Bananamerican
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so Go Long Shalom Dong!

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