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Guest Post: Hedging Against Capital Controls: Opening An Account Overseas

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Submitted by Charles Hugh Smith from Of Two Minds

Hedging Against Capital Controls: Opening an Account Overseas 

As financial insecurity and instability rise, hedging becomes increasingly important as a means of capital preservation. One potential hedge is diversifying one's liquid capital by holding some cash in a "safe haven" foreign bank account.

Two signs that fear and instability have reached critical mass are capital flight and capital controls. Capital flight is people and enterprises moving their capital (cash and liquid assets) to an overseas "safe haven" to avoid devaluation of the currency or confiscation of their capital/assets. (Devaluation can be seen as one method of confiscation; high taxes are another.)

Capital controls are the Central State's way of stemming the flood of cash leaving the country. Why do they want to stop money leaving? If we think of each Central State as a neofeudal fiefdom, we understand the motivation: citizens are in effect serfs who serve the State and its financial nobility. If the serfs move their capital out of the fiefdom, it is no longer available as collateral for the banks and a source of revenue for the State.

Once capital has drained away, borrowing and lending shrink, cutting off the revenue source of the banks (financial nobility). Since financial activity also declines as cash is withdrawn from the system, the State's "skim"--transaction fees, sales taxes, VAT taxes, income taxes, wealth taxes, etc.--also declines. Both the State and its financial nobility are at increasing risk of decline and eventual implosion as capital flees the fiefdom.

The Central State imposes capital controls as a means of Elite self-preservation. Sudden devaluations are a way of impoverishing the citizens that also happen to enrich those who transferred their wealth into another currency, a mechanism described here three years ago in The Royal Scam (August 3, 2009).

Those in the know transfer their wealth into another currency before it's illegal, and once the devaluation makes everything in the country much cheaper, they transfer their wealth back into the new currency and buy up all the assets on the cheap.

History shows that the State will "change the rules" overnight to protect itself and its Elites. Capital controls include such measures as limiting the amount of funds that can be transferred out of the country; limiting the amount of gold that can be taken out of the country; barring all transfers of funds overseas; limiting all IRA, 401K and retirement funds to owning government Treasury bonds, and so on.

The U.S. banned private ownership of gold above a few ounces in 1933 as a form of capital control, forcing citizens to keep their capital in cash that could circulate and (supposedly) boost economic activity. (Did it work? Obviously not.)

Central State bureaucracies and Elites can become very creative at expropriating citizens' cash and assets once they feel threatened by a loss of faith in their legitimacy and competence, i.e. capital flight.

For many decades, a Swiss bank account was the standard way that the wealthy hedged the risks of capital controls. As a result of the Federal government's efforts to catch tax cheaters and money laundering, Swiss bank accounts are no longer easily available to Americans.

The most basic hedges against capital controls and devaluation are owning physical gold/silver and diversified holdings of other currencies held in overseas "safe havens." We can see these hedges against instability and insecurity in action around the globe: wealthy Chinese are transferring capital overseas at a furious pace and buying gold, and Spanish citizens have been flying to London to open bank accounts so they can transfer their money out of Spain and Spanish banks. Should Spain leave the euro, the transfer into their traditional currency would amount to a forced devaluation of their cash.

The massive flight of capital out of Spain has been widely reported in the financial media, and it raises an important question for anyone with cash to safeguard: what happens if capital controls become possibilities in the U.S. or Canada?

The idea that the amount of money that could be withdrawn or transferred from your private accounts might be strictly limited may seem farfetched at the moment, but if history teaches us anything about financial crises, it is that the rules are changed overnight to protect the Central State and vested interests.

We cannot control economic, financial and political instability; all we can do is hedge the risks by diversifying our assets and taking control of what we can control.

Readers of my book An Unconventional Guide to Investing in Troubled Times(print edition) (Kindle version) know that I consider hedging and local control to be essential strategies going forward, and I invite you to check out the book if you want to read more about hedging strategies.

I have explained why I think that What Will Be Scarce: Liquidity and Reliable Income Streams (August 30, 2012). Having capital that is liquid (easily converted into legal tender or moved to safety) and income streams that are reliable, i.e. that are not speculative or dependent on the Central State and are under your own control, are key assets that cannot be replaced.

Over the course of the past few months, New Zealand correspondent Michael Reps and I have been discussing the issue of foreign bank accounts providing a hedge against capital controls, and he has established a way for Americans to open an account in New Zealand with Westpac, a bank with a verifiable history and reputation. (The service is not free to set up, but very little of financial value is free.)

In the spirit of discussing possible hedges that are available to “the rest of us,” i.e. the bottom 99.5%, I have asked Michael to explain the service in a Q&A format. As is my policy, I receive no commission from Michael’s service or any other service mentioned on the site except a no-cost-to-you commission on Amazon purchases and BullionVault investments made via links in the sidebar.

I present this discussion not as a recommendation to take any particular action, but as an invitation to pursue your own research into overseas accounts and hedging in general.

As with any financial decision or transaction, do your own due diligence. This means understanding all the risks and all the potential benefits. Read financial statements, obtain regulatory filings, ask questions, verify what you are told, and so on. Each nation's banking laws and legal system are different. Assume nothing.

There is no perfect hedge. Every hedge has risks. Physical gold can be stolen, expropriated at the border, etc. Any currency can be devalued. Property held overseas can be expropriated by a "new" government. The list is endless.

A hedge is not the same as a speculation, though each has risk. All hedges are imperfect, and so diversification is a key strategy in hedging. The purpose of a hedge is to preserve capital, not score gains as in speculation. An overseas account is a utility, not a means of wealth creation.

I am not an expert in international banking or tax laws, but it is common knowledge that U.S. citizens are required to disclose foreign accounts and report all income regardless of its origin, i.e. all income earned anywhere on the planet must be reported to the IRS. The purpose of an overseas account is not tax evasion, it is capital preservation/hedging, and so having accounts in nations that have tax treaties with the U.S., transparent reporting and rule of law is a definite plus in terms of compliance.

Holding cash in an overseas account in another currency exposes you to the risks of foreign exchange (FX) fluctuations. It is possible to hold other currencies in the U.S., and U.S. dollars in a foreign account. (I use "overseas" and "foreign" interchangably, but obviously an account opened in North America may be foreign but not overseas.) The point is that having a foreign account offers a different sort of hedge than owning a foreign currency.

Here are my questions and Michael's answers:

Thank you Charles, I'd like to say that as we have discussed this service over the past several months I have noticed that very few financial pundits even consider the topic of moving away from troubled banks or economies, but usually regress into discussions about how central planners are currently in the engine room coming up with a solution of sorts.

 

It' s probably best if I start with the motivation behind this service. I help Americans relocate to New Zealand and typically I make sure all of my clients who visit me in New Zealand, leave the country with a new bank account, even if they want to fund it with a minimal amount so as to limit taxable income. That way, they have the option to quickly transfer funds in the event of any concerns over the US monetary system.

 

This is one of those services that you would prefer wasn't ever needed. But as we are seeing in Greece and Spain, it is becoming all too commonplace. The purpose of the account has nothing to do with total return and more to do with having a lifeboat. The bank we us is Wespac Bank and they are among the safest banks in the world at present.

 

The challenge to opening up a foreign bank account is two-fold. The first challenge is proof of ID. Most banks require that you be physically present to open the account. I have been able to work around this through a few extra steps but in the end, there is no need for air travel to New Zealand provided you meet certain criteria.

 

The second is compliance via Foreign Bank and Financial Accounts Registration (FBAR) as well as compliance issues under the Foreign Account and Tax Compliance Act (FATCA). These two entities leave one with the impression of complexity and risk, but in the end, once you file these documents, (which is what we assist with in our service) there is little else required from you. You just have to let the U.S. Government know you have an account if the value exceeds an aggregate of $10,000 USD during the tax year, and if the value is over $50,000.00 you must file an additional form. We send you all of the info and have a follow-up service to remind you as well.

 

How does the account work? (Is it like a U.S. checking account?)

 

It is a regular bank account as if you walked into a local branch within the US. You are provided with an account manager who discusses the banking services on offer. As a disclaimer, we have no involvement in this area nor do we offer financial advice or deal with funds transfers. We simply get your account set up and let the bank do the rest. The banks offer checking, savings and investment accounts, and you can access U.S. ATMs for your funds.

 

How do I transfer money back and forth between U.S. and N.Z. accounts?

 

This is usually handled via the SWIFT System via your bank and Wespac. The banks are reluctant to take funds outside of this method as they are attempting to provide full transparency to both the US and NZ Governments.

 

What currency is the account held in?

 

Initially any funds transferred in will convert to New Zealand Dollars which are currenty trade at .80 to the US this is up from .40 ten years ago. You can however elect to hold funds in multiple currencies to include USD and I believe the bank is moving toward Chinese Renmimbi Accounts also.

 

How much will it cost to transfer money / exchange currencies?

 

While this is not an area I handle, they typically charge between $25.00 to $35.00 for funds transfers. You can negotiate with the bank though for reduced fees if you plan to hold a large balance.

 

Does the bank issue the required IRS tax documents at year-end?

 

The US and NZ have a tax treaty between the countries so that you are not double taxed. A year end statement of income earned is provided to you by the bank and it is your responsibility to include this on your US Tax form, much as you would from other financial institutions you deal with. We ensure your account is set up as a non-resident for tax purposes.

 

I understand being concerned about safety, but why not just buy gold held overseas via BullionVault?

 

I am very bullish on gold and would hold a larger balance with BullionVault than in a bank account. I also believe gold will likely out perform most paper currencies. Having said that, this account should not be viewed in the same category. It is a lifeboat more than a speed boat, and represents a contingency to a changing financial landscape that still involves banks at the end of the day.

 

What if you need to buy a plane ticket to get out of town? What about smaller items like food or a hotel room?

 

What is the fee for your service and how do you justify it?

 

The fee is $149.00 which is about an hour's time with an accountant and we provide a 30-day money back guarantee. The value is in the convenience more than anything. You dont have to fly 12,000 miles down under and a system has been established to keep you compliant. Additional value comes into play if there are any capital controls or devaluations you anticipate. This is a perfectly compliant approach to avoiding capital restrictions and this window may not be open forever.

 

Does the IRS look down on this type of offshoring of ones assets?

 

To be fair, the IRS is not interested in your assets, they are interested in the interest income and capital gains on those assets. This is a 100% transparent account so the IRS understands you are not using this account as a form of sheltering or secrecy, much as you see with other countries.

 

How long does it take to get an account established?

 

If you have a passport, between 3-7 days without a passport it takes longer.

 

Where can I get more information about this?

 

You can visit my website yieldqwest.co.nz or go directly to expatyourwallet.com.

Thank you, Michael. One purpose of this weblog is to alert readers to the structural and systemic instability of the global financial system (and of the political systems that are dependent on financial stability and faith in that stability). Since no one knows what will happen, our only option is to research potential hedges and select those which work for us and our household.

 


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Mon, 09/10/2012 - 11:35 | Link to Comment malikai
malikai's picture

I hedge against capital controls - by losing gold everytime I go for a swim.

Mon, 09/10/2012 - 11:39 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

.....and it's gone.

 

Mon, 09/10/2012 - 11:44 | Link to Comment SilverNoob
SilverNoob's picture

LOL! +1

 

Best South Park episode ever!

Mon, 09/10/2012 - 11:58 | Link to Comment Pladizow
Pladizow's picture

If you are a US citizen or resident dont move your money to a country with treaty agreements with the US.

If you are not a US citizen or resident dont place your funds with any institution that has US branches!

For the Spanish and other EU nationalities that are fleeing domestic bank to open accounts in other europian countries that are still within the EU, I must assume they are using their passports for account ID. What will stop these British or German banks in the future from freezing these accounts and saying, "Sorry becuse you hold a Spanish passport and your country has devalued their new currency, that is what you still have in your account with us."

Mon, 09/10/2012 - 12:15 | Link to Comment etresoi
etresoi's picture

your assumption is faulty.  There are many ways to open accounts, sans passports.  And in may EU countries, your account identity can not be shared.  you have been living in a totalitarian state so long that you thionk it is normal.

Mon, 09/10/2012 - 12:20 | Link to Comment TheMadNumismatist
TheMadNumismatist's picture

Marc Faber touched upon this at King World News last week, and the bottom line quote is this:

“And you can’t hide because the US government will knock on the door of the stupid Europeans, the bureaucrats in Brussels, that completely messed up the eurozone, and these bureaucrats in Brussels, they also don’t own any gold.  So they’ll be happy to take it away from the minority that owns it.

Then they’ll knock on the door of the Swiss.  The Swiss, they have no backbone.  They open the books to any politician in the US and say, ‘Please take it.’  And so they’ll take the gold away as well.  Then the Americans will come to Asia.  That’s where I think the Asians will not open the books.  But who knows?”

The things is, the US has been planning this raid for some time and anybody thinks the Aussies or Kiwis will not roil over for a good fisting are mistaken. When the time come they will take everything and anything they want; regardless of sovereignty.

Mon, 09/10/2012 - 12:36 | Link to Comment Ace Ventura
Ace Ventura's picture

"The things is, the GLOBAL BANKSTER ELITES have been planning this raid for some time and anybody thinks the Aussies or Kiwis will not roil over for a good fisting are mistaken. When the time come they will take everything and anything they want; regardless of sovereignty."

There, fixed it for ya. This ain't a U.S. only plan. Don't forget we're now also owned by the same ancient nosferatu money that historically owns Europe and essentially the rest of the planet.

Mon, 09/10/2012 - 14:28 | Link to Comment TheMadNumismatist
TheMadNumismatist's picture

Nice on, you are right. The thing is, being based in London, I just hope we can maintain the undead here rather than Paris. If London did not have “The City”, we would not have anything and just be another failed state on the periphery of Europe.

Mon, 09/10/2012 - 20:28 | Link to Comment New World Chaos
New World Chaos's picture

Westpac is a Rothschild operation.  They will gladly hand over customer funds to their American subsidiary when the time comes.  Hence this advertising push.  It's a trap!

Kiwibank is the best of the majors but it's still not ideal, because it's government owned and John Key used to work for Wall St.  His proposed looting of NZ infrastructure assets will be managed and skimmed by... the Squid. 

You could get yourself allocated metals stored at New Zealand Gold Merchants.  Or just plan a nice vacation.  You will have many options involving bank and credit union accounts, locally bought PMs, non-bank safe deposit boxes, and boating accidents.  Non-bullion coins (like gold eagles) are taxable if you try to import them but if you can get them past the TSA you are probably home free.  NZ will x-ray your bags but as of two years ago incoming travellers didn't have to go through a metal detector.

Mon, 09/10/2012 - 14:33 | Link to Comment TheMadNumismatist
TheMadNumismatist's picture

I have to disagree, as good as it is, and the best South Park ever is Cartman’s cash for gold scam. Fantastic and being a coin dealer this is exactly how the gold market works. The sound track is just awesome.

http://www.youtube.com/watch?v=A6f6P5Ceuc4&feature=fvwrel

Mon, 09/10/2012 - 12:05 | Link to Comment Grinder74
Grinder74's picture

What does pissing in the pool have to do with this?

Mon, 09/10/2012 - 16:47 | Link to Comment smiler03
smiler03's picture

That's a different South Park episode. /joke

Mon, 09/10/2012 - 12:47 | Link to Comment moonman
moonman's picture

I have similiar problems when I go skeet shooting while boogie boarding.

Lost all my rifles and ammunition. Damn!

Mon, 09/10/2012 - 14:54 | Link to Comment defencev
defencev's picture

The best way to hedge against capital controls is to vote for Romney. Romney will not introduce capital controls under ANY CIRCUMSTANCES.

Mon, 09/10/2012 - 11:40 | Link to Comment otto skorzeny
otto skorzeny's picture

after seeing what the FBI goon squad got the NZ police goon squad to do to Kim Dotcomm I would be hesitant to move my $ to NZ-better under your mattress.

Mon, 09/10/2012 - 11:46 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I lost my (PM stuffed) mattress in a boating accident.

A shame really. Haven't had a good nights sleep since then.

Mon, 09/10/2012 - 12:12 | Link to Comment GeezerGeek
GeezerGeek's picture

Didn't stuffing PMs into your mattress make it uncomfortable for sleeping? Reminds me of the fable of the princess and the pea.

Mon, 09/10/2012 - 12:25 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Mrs Cog is the princess and I sleep slept soundly knowing where my PMs are were.

Now........not so much. :)

Mon, 09/10/2012 - 11:49 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

New Zealand? 

lol

The writing is on the wall, and it is in Cantonese (Mandarin, too).

 

Mon, 09/10/2012 - 11:51 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Right, because putting your "wealth" in another central bank even further away from your physical location will make access to your money more secure.  -  FAIL.  Get physical, sleep well, that is all.

Mon, 09/10/2012 - 11:52 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Don't the Chinese have a saying about putting all of one's eggs in one basket?

Mon, 09/10/2012 - 11:57 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I regularly sink my eggs in tragic boating accidents in several different baskets of water. :)

Mon, 09/10/2012 - 12:05 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

So, when someone puts a gun to your wife's head and tells you to, "get the gold," you will have multiple dives to make, all in secluded locations, but none too far from your home? 

Mon, 09/10/2012 - 12:07 | Link to Comment LawsofPhysics
LawsofPhysics's picture

This the same women who sleeps with a .45 under her pillow?  good luck with that.

Mon, 09/10/2012 - 12:13 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

This could never happen where you live, right?

 

You got to know when to hold 'em
Know when to fold 'em
Know when to walk away
Know when to run.

Mon, 09/10/2012 - 12:18 | Link to Comment LawsofPhysics
LawsofPhysics's picture

In case you missed it HH, I am former ARMY AMEDD and still very much a part of the Veteran's community.

Life is hard, dangerous, and no one, but maybe yourself and your associates can guarantee your survival.

Suck it up, stop crying about how hard and dangerous life is and go get something accomplished.

Did you forget what website your were on?  While chance may favor the prepared, on a long enough timeline...

very disappionting post, coming from you.

Mon, 09/10/2012 - 12:47 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

My crystal ball is a novelty, only.  Its uselessness is my way of reminding myself that I have no idea what the future holds, and neither do you.

Ex-mil generally understand contingency planning pretty well, but if you want to stick with Plan Alpha until the end, God bless you. Some may think otherwise, and therefore want a Plan Bravo...,
Plan Charlie...,
and a Plan Delta.

Sorry to dissappoint you.  I'll try to harden up and get something accomplished.

Crying?  WTF?

Mon, 09/10/2012 - 13:17 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Your post is coming across like this-->  Oh no!  the police state is here, we are all going to die!

Stop it.  A non-productive effort.  I am with Einstein on this "Only two things are infinite, the universe and human stupidity and I am not sure about the former."

Tue, 09/11/2012 - 00:06 | Link to Comment LMAOLORI
LMAOLORI's picture

 

What you have to know is don't give up your weapons!

Innocents Betrayed - Gun Control History - Genocide Disarming Populations
Mon, 09/10/2012 - 12:07 | Link to Comment Grinder74
Grinder74's picture

No, I'll zap him with Force lightning.  Duh.

Mon, 09/10/2012 - 12:29 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

What Gold?

I only have Silver bro. Here.........take it all. Want my wedding ring as well?

Seriously......if "they" (the police state) have a gun to my head they're going to kill me anyway regardless of what I do or do not give them.

Mon, 09/10/2012 - 12:43 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

...if "they" (the police state) have a gun to my head they're going to kill me anyway regardless of what I do or do not give them.

Exactly.  A police state is just the type of scenario where one might be thankful he had the foresight to stash a little wealth in another country.

Mon, 09/10/2012 - 12:54 | Link to Comment LawsofPhysics
LawsofPhysics's picture

I would argue that getting into another country would be the issue.  Better to have some portable PMs and friends to get you there, maybe one to stay with once you arrive.

Mon, 09/10/2012 - 12:54 | Link to Comment Ace Ventura
Ace Ventura's picture

Bingo. If things have gotten to the point where the state is literally holding guns to your family's heads............

Mon, 09/10/2012 - 11:44 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

If we think of each Central State as is a neofeudal fiefdom (so) we understand the motivation: citizens are in effect serfs who serve the State and its financial nobility.

No sense pussy footing around Charles. Let's call it for what it is.

Mon, 09/10/2012 - 12:16 | Link to Comment GeezerGeek
GeezerGeek's picture

Wasn't it just last week, during the Democratic convention, that I heard someone claim that the one thing we all belong to is the government?

Mon, 09/10/2012 - 12:50 | Link to Comment A Nanny Moose
A Nanny Moose's picture

belong to....as in owned by.

Mon, 09/10/2012 - 19:49 | Link to Comment Inibo E. Exibo
Inibo E. Exibo's picture

Pharaoh he sits in his tower of steel

Around his feet the princes kneel

Far beneath I shoulder the wheel

We're all working for the Pharaoh

Mon, 09/10/2012 - 11:45 | Link to Comment ebworthen
ebworthen's picture

The markets are being reflated with public debt to encourage "investment" in equities.

They need more cash in the casino so that they can then capture, sequester, subsume, and outright confiscate it.

The next step will be the elimination of paper and coin currency to a digital only monetary system with swipe cards and mobile devices.

Then, all transactions can be taxed mercilessly, and of course access to your money turned off in the blink of an eye.

Someone holding physical legal tender can run with it or do as they please, whereas digital currency can much more easily be stolen by the taxman, the politician, the courts, the corporation (the Kleptoligarchy).

Precious Metals transactions will be outlawed and currency eliminated in the name of safety, security, and patriotism of some stripe (and of course "for the children").

Mon, 09/10/2012 - 11:45 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

Banks in the world are getting pretty hostile to opening accounts for Americans because of harassment from the US regime

In Switzerland some banks name 3 countries whose citizens are not welcome to open accounts

Nigeria

North Korea

United States

 

Mon, 09/10/2012 - 11:52 | Link to Comment Terminus C
Terminus C's picture

This.

I have a friend who is a US citicen that lives and works in Canada.  The IRS watches and taxes income and changes in her accounts.  They also watch her husband's accounts (Canadian citizen). 

The US government has claimed the right to examine every banking system that has dealings with US institutions (basically all of them).  Electronic banking means your money is their money as long as it is in a bank.  Physical is your only hedge agains capital controls, but it carries its own risks.

Mon, 09/10/2012 - 12:08 | Link to Comment i-dog
i-dog's picture

 

"but it carries its own risks"

Indeed ... you could drop it on your foot ... or it could punch a hole in your canoe ...

Mon, 09/10/2012 - 12:09 | Link to Comment etresoi
etresoi's picture

The big question is... why does your foolish friend retain her usa citizenship?

Mon, 09/10/2012 - 12:08 | Link to Comment etresoi
etresoi's picture

Exactly true, which is why one must be a fool to remain a usa slave.

Mon, 09/10/2012 - 11:49 | Link to Comment ZeroHedgeFan
ZeroHedgeFan's picture

Valid point. Paper money will only get devalued overtime. Yes I prefer PM over fiet. However NZ or any countries that are good friends with the US will do what US wants. If the US declares capital control, you can bet that NZ banks will comply and restrict money movement of US account holders. I would rather put money in China or other countries that aren't do whatever US government says.

Mon, 09/10/2012 - 11:58 | Link to Comment dwdollar
dwdollar's picture

Anyone who advocates foreign accounts doesn't realize how the banking system works. With the exception of a few rogue nations, the banking system is one big interconnected global syndicate.

Mon, 09/10/2012 - 12:06 | Link to Comment etresoi
etresoi's picture

you need to research some facts before making such absurd comments

Mon, 09/10/2012 - 12:09 | Link to Comment Grinder74
Grinder74's picture

You need to make some absurd comments before researching facts.

Mon, 09/10/2012 - 12:11 | Link to Comment dwdollar
dwdollar's picture

Oh really? Please do tell how you think money "moves" electronically.

Mon, 09/10/2012 - 13:11 | Link to Comment A Nanny Moose
A Nanny Moose's picture

Via FTP or SCP, usually over a point-point fractional T-1 link, of course!

This clearing "magic" is so simple, and unglamourous, it brings to mind Henry Ford's quote on money creation.

 

Mon, 09/10/2012 - 11:57 | Link to Comment Terminus C
Terminus C's picture

New Zealand is firmly entrenched in the Anglo-American Empire.  You will not hide your money there if there is financial regulation limiting movement of your money from another member of the Anglo-American Empire (read USA and protectorates, and Britain and Commonwealth countries).

Trusting China or Russia with your money... not likely to turn out well.

Mon, 09/10/2012 - 11:58 | Link to Comment Intoxicologist
Intoxicologist's picture

I get it if you're a high net worth individual; however, if I am not comfortable with my money in the bank that's 10 miles away, I doubt I'd sleep more soundly having it half a world away where I can't easily get my hands on it.

Mattress and Boxspring Bank.  Branches worldwide!

Mon, 09/10/2012 - 12:04 | Link to Comment etresoi
etresoi's picture

Nonesense!  Charles, you live in Hawaii because it is as close to living outside the usa, as can be, while staying within it.

Take the big plunge and get your sorry ass out of the usa, completely.  Get an additional citizenship or two (it is quite easy), renounce the good for nothing usa citizennship, live in a second country and keep your money in a third and fourth country.

All countries, except the usa, tax you only on income earned within that country.  The tax slaves of the usa pay taxes to usa no matter where it is earned or where a citizen resides.

Writing from personal experience, lifie is better outside the usa; it is safer and more comfortable.

Mon, 09/10/2012 - 12:21 | Link to Comment lesterbegood
lesterbegood's picture

Hawaii might be a good place to be in the future. I hear that the Kingdom of Hawaii is being re-inhabited and re-established.

http://www.kingdomhawaii.org/

Mon, 09/10/2012 - 12:24 | Link to Comment Oldrepublic
Oldrepublic's picture

http://www.bocusa.com/portal/Info?id=649&lang=1&

 

Bank of China has two offices in New York City. US citizens can easily and legally open Chinese Yuan accounts either by going in person or by mail.

http://online.wsj.com/article/SB1000142405274870430740457608022281207688...

Mon, 09/10/2012 - 12:16 | Link to Comment bob_dabolina
bob_dabolina's picture

The best way to protect yourself is to just move to New Zealand.

At first blush it seems over the top but when you think of it, why not?

Huge benefit is the exchange rate. As an example if you have $10,000,000 U.S you instantly get a bonus of around 2,000,000 NZD, just for moving there.

Lower UE rate, lower crime, and absolutely beautiful.

Mon, 09/10/2012 - 12:37 | Link to Comment Escrava Isaura
Escrava Isaura's picture

B_D, please explain the chart below and this link:

http://en.wikipedia.org/wiki/International_taxation#Individuals

Because it doesn't seen that low to me. Thanks.

 

Mon, 09/10/2012 - 13:24 | Link to Comment I only kill chi...
I only kill chickens and wheat's picture

Yeah, with basically no weapons. long guns allowed, but licensed. Must be kept in a gov approved safe at your residence, and I believe they actually stop by and check once a year.

Mon, 09/10/2012 - 14:34 | Link to Comment USKiwi
USKiwi's picture

Hardly over top.  We left American 3 years ago for NZ and it was the best decision we ever made.  Insteading of suffering the continued slow decline in the US, we have absolutely prospered.  It is not as hard as most people think and you don't have the "elite" or rich to do it.  We were just average middle-class folks that decided we wanted to have something better for our lives.  We found it.

Mon, 09/10/2012 - 17:04 | Link to Comment smiler03
smiler03's picture

I think the weather in NZ is similar(ish) to the UK. People often leave the UK to escape our shitty weather, so why go to NZ?

Here's an interesting forum discussion on it. http://www.enz.org/forum/showthread.php?t=3354

Mon, 09/10/2012 - 12:21 | Link to Comment PKF
PKF's picture

What about doing as Rmoney does and have accounts in the Caymans or Bermuda?  Are they under the World Wide Financial Control of the US? 

Wouldn't the best place to put one's money is a country w/o a Central Bank...I know there are only a handful left.  The only one that comes to mind is Iran.  And that certainly won't work.  I'll google and see what I can find. 

Come to think of it, maybe we'd all be better off buying lots of food and water.

 

Mon, 09/10/2012 - 12:22 | Link to Comment Dubaibanker
Dubaibanker's picture

Accounts can be opened abroad, however, thanks to Iranian sanctions, US tax evasion in Switzerland, anti money laundering policies etc, it has become tough (er) to open accounts internationally whether in Dubai, Switzerland or in Singapore. The issue with NZ, or for that matter anywhere internationally, is that unless you have a solid second reason to travel to that country, it will be challenging to maintain that account over a period of time as products will vary, service standards will vary as staff do keep changing and personal visits will be extremely limited and just like with anything personal visits are mandatory ever so often. Rules of wills and estate planning need to be followed and regulatory changes are harder to keep abreast of. And banks are closing and merging more than you would believe and things have a habit of being 'lost in translation', especially where it concerns money. Swiss account holders found it the hard way, that Swiss Govt gave in to the demands of US Govt to release client names and they had no inclination that it would ever happen, and then it was simply too late. Bankers were of course not allowed to tip their clients.

Dubai used to allow opening non-resident accounts, however, for the last 6-9 months it has become extremely difficult to do so for anyone who does not reside in Dubai to open an account due to evolving regulations.

US citizens can open accounts in any currency, but, only basic chequing accounts or deposit accounts, investments are not allowed. Real estate can be purchased though. Singapore and HK are ok, as a safer jurisdiction, however, US citizens mostly will not be allowed to deal in any sort of investments but just basic banking or deposits. NZ is a great jurisdiction but time difference and all, is not easy for many and they do not have many local options in terms of stocks and I am not sure that US nationals are allowed to invest. Real estate is thriving just in Auckland, Wellington and Christchurch is bad news, sadly, due to earthquakes over the last few years.

More here with my post of Nov 2009 which is still quite pertinent. Could be of help, from this part of the world, if anyone needs more specific information. It really will be free! Lol!

http://dubaibanker.blogspot.com/2009/11/guide-to-banking-services-in-dub...

Mon, 09/10/2012 - 12:30 | Link to Comment lesterbegood
lesterbegood's picture

I have found this to be a good place to protect your wealth from confiscation by parasites.

http://global-settlement.org/

Mon, 09/10/2012 - 12:37 | Link to Comment swamp
swamp's picture

Capital controls are already in place in the USA. Stringent controls. At every turn.

Mon, 09/10/2012 - 12:42 | Link to Comment JR
JR's picture

Great post, Hugh-Smith. And here is why Americans are in an asset-preservation dilemma and why America is in national bankruptcy. It is, as James Mann explained it in 1992 in The Economic Rape of America, because of the “inexorable transfer of wealth to the bankers.” Here, in part, is how the private bankers who own the Federal Reserve work their debt Ponzi:

“The only way new currency goes into circulation in America under this wicked system is when someone borrows it from a banker. When people are confident of success, they borrow more currency, which increases the currency supply, and all seem to prosper for a while. Then, as they pay off their loans, the available currency supply shrinks and currency becomes ‘scarce.’ Borrowers must always take more currency out of circulation when they repay their loans, than they put in circulation when they receive their loans. Interest and charges make the repayment total larger than the loan. This means that only more people borrowing still more can keep the medium of exchange available to the nation.

“This example may aid understanding. When a citizen goes to a banker to borrow $100,000 to purchase a home or a farm, and the loan is granted, the banker gives the borrower a check for $100,000 or credits the borrower's account with $100,000. The borrower, in turn, writes the necessary checks to the builder, seller, subcontractors, etc. (who, in turn, write more checks), thereby putting $100,000 of ‘checkbook currency’ into circulation. However, on a 30-year mortgage with 10% interest, the banker wants $828 per month, or a total of $316,080. The buyer must take that $316,080 out of circulation, reducing the overall amount in circulation by $216,080.

“The banker has not really produced anything of value, except the slip of paper called a check or deposit slip. Yet the banker ends up having $216,080 more than he had before, minus a few hundred dollars of clerical and office costs. But the people, as a whole, have $216,080 less…

“Since currency requirements increase with expanding population, industry, and commerce, and paying off any loan decreases the available currency supply, it is clear that we would quickly run out of currency, unless more and more people borrow more and more currency to keep currency in circulation!

“Multiply the above example by hundreds of millions of times since 1913, and you can see why America has fallen from a prosperous debt-free nation to the most debt-ridden country in the world. Practically every home, farm, and business is heavily mortgaged to the bankers. Practically all our cars, furniture, and clothes are purchased with borrowed currency. The interest to the bankers on personal, state, and federal debt totals more than 25% of the combined earnings of the working population!

Says Mann:The bankers risk nothing (at least, the Federal Reserve bankers) in the game; they just collect their percentage and ‘win it all…’

“In recent years bankers have added more ‘cards’ to their game,” says Mann. “‘Credit’ cards are promoted as a convenience and a great boon to trade. Actually, they are ingenious devices by which bankers collect 2% to 5% of every retail sale from the seller and 18% or more interest from buyers. A real stacked deck!”

http://www.buildfreedom.com/tl/rape3.shtml

 

Mon, 09/10/2012 - 12:52 | Link to Comment My Days Are Get...
My Days Are Getting Fewer's picture

This is an article about "hedging against capital controls".

Charles, I can assure you that if the U.S. Treasury establishes capital controls, those controls will not only apply

to money leaving the US

but also to money trying to return to the US.

Sure, you might be allowed to repatriate your cash after you pay a big fee (tax) to do so.

Ok, if you need money to live overseas, then send money overseas.

But, if you need money to live in the USA, then keep it here or convert it to physical metal or tradeable goods, like gasoline and diesel fuel.

Mon, 09/10/2012 - 13:06 | Link to Comment Winston Churchill
Winston Churchill's picture

Not my experience during the period of capital controls in the UK.

Getting money out was a bitch,subject to a tax called 'the dollar premium'

for any ammount over pocket money.Money in was no questions asked

at the  phoney tourist rate.Just a backdoor devaluation in reality to fund

a balance of trade deficit.The devaluation required for the dollar will be of

a completely different magnitude,so all bets are off on those terms.

Mon, 09/10/2012 - 13:29 | Link to Comment pazmaker
pazmaker's picture

Some really good conversations going on here.  Thanks CogDis Law of P and Hedgeless.

 

If I can add my two cents, there aint no way I'm going to put money in another crony run banking institution in another country.  If I have any weath it will be invested in my family my land and my neighbors.   If I have any PM's they will be where I can get to them.

 

I will protect my family and friends as best I can with my other investments in arms and supplies(I am also ex military)   I will not cower in fear and if that means losing my life then so be it.  I'm an eternal being so this walk here is only temporal.

Mon, 09/10/2012 - 14:10 | Link to Comment Pseudolus
Pseudolus's picture

Parturient montes, nascetur ridiculuc mus...

CHS is channeling Simon Black now? 

Only the boating jokes redeemed this post. TD please put the authors name on the masthead link so I dont have to come across this guys piffle again

 

Mon, 09/10/2012 - 14:12 | Link to Comment NoTTD
NoTTD's picture

FYI.  Despite the obfuscation and unnecessary complications outlined by the guy in this article who makes money setting these up, I opened two accounts at Westpac in AUS in 2010 totally over ther phone and interent, without professional advice.  The CD (called "term deposit" there) I opened for 60 months is paying 6%.  The regular savings account opened for transfer of funds and to catch the interest earns around 2% currenly.  Easy, peasy.

Mon, 09/10/2012 - 14:31 | Link to Comment USKiwi
USKiwi's picture

I am an American expat in NZ.  Most of the comments on here regarding NZ have no idea what they are talking about.  For a US citizen to open a NZ bank account you do not have to provide any documentation regarding your nationality.  I used my NZ driver's license.  My bank has no idea where I am from.

Mon, 09/10/2012 - 14:50 | Link to Comment proLiberty
proLiberty's picture

As far as I know, Swissquote.com owned by a SWX-listed bank still accepts accounts from US Persons.

 

http://www.swissquote.ch/sqweb/index.jsp?l=e

 

Goldmoney.com stores allocated physlical PMs.  You can choose which repository.

 

Mon, 09/10/2012 - 15:03 | Link to Comment ebworthen
ebworthen's picture

Went there, got this popup for U.S. Citizens:

"Swissquote Bank Ltd ("Swissquote") is a bank licensed in Switzerland under the supervision of the Swiss Financial Market Supervisory Authority (FINMA). Swissquote is not authorized as a bank or broker by any US authority (such as the CFTC or SEC) neither is it authorized to disseminate offering and solicitation materials for offshore sales of securities and investment services, to make financial promotion or conduct investment or banking activity in the USA whatsoever.

This website may however contain information about services and products that may be considered by US authorities as an invitation or inducement to engage in investment activity having an effect in the USA.

By clicking "Continue", you confirm that you have read and understood this legal information and that you access the website on your own initiative and without any solicitation from Swissquote."

So does that mean you can bank with them or that they will divulge your accounts and information to the I.R.S.?

Mon, 09/10/2012 - 15:02 | Link to Comment texas goldfinger
texas goldfinger's picture

This guy and Sovereign Man are a joke.  Foreign accounts are no hedge because the government can outlaw them with a stroke of the pen, and then everyone who owns one is a criminal unless the funds are repatriated.  Since the IRS already requires disclosure of all foreign accounts, the government knows exactly where to find you when those accounts are made illegal.  Duh!

Mon, 09/10/2012 - 15:05 | Link to Comment ebworthen
ebworthen's picture

Well, not if you renouce your U.S. Citizenship.

Otherwise I think you are right; the long arm of the I.R.S. will find your monies!

Mon, 09/10/2012 - 17:12 | Link to Comment Tinky
Tinky's picture

The problem with these simplistic arguments, including the great concern over possible gold confiscation, is that that vast majority of funds held in overseas banks (or in the form of gold) are held by the very same people who run and own the Government. Now, how likely is it that politicians, "with the stroke of a pen", are going to bite the very same hand that feeds them?

 

Mon, 09/10/2012 - 18:11 | Link to Comment texas goldfinger
texas goldfinger's picture

@tinky, in case you haven't noticed, the people who run and own the government play by a different set of rules than us commoners.

Mon, 09/10/2012 - 15:48 | Link to Comment AlamoJack
AlamoJack's picture

What about Uruguay?  Are they in the banking cabal?

Mon, 09/10/2012 - 15:48 | Link to Comment AlamoJack
AlamoJack's picture

What about Uruguay?  Are they in the banking cabal?

Tue, 09/11/2012 - 14:21 | Link to Comment boogey_bank
boogey_bank's picture

What do Tyler (and his herd) thinks about this offshore possible solutions? (no adv intended)

1. hsbc hong kong

2. europac bank

3. goldsilver.com

Do NOT follow this link or you will be banned from the site!