where can i find a more in depth discussion of Diversification of location
Moderator: Global Moderator
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tooearly
where can i find a more in depth discussion of Diversification of location
of assets? I see it as a recommendation , but a search turned up no in depth discussion. THanks!
Re: where can i find a more in depth discussion of Diversification of location
Do you mean geographic location?
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tooearly
Re: where can i find a more in depth discussion of Diversification of location
yes , as in international holding, not investing
Re: where can i find a more in depth discussion of Diversification of location
Maybe you can get the ball rolling. What are your thoughts on the subject? Do you have any specific questions or concerns?
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tooearly
Re: where can i find a more in depth discussion of Diversification of location
was wondering about rule #13
which jurisdictions are people most familiar with: what are the pros and cons; how to stay within the law?
which jurisdictions are people most familiar with: what are the pros and cons; how to stay within the law?
Re: where can i find a more in depth discussion of Diversification of location
While geographic diversification is a fantastic way to diversify, the US government has made it incredibly difficult in recent years. I believe you can find the discussion/resources you're looking for on the sovereignman.com blog. But the author's advice seems very shady to me. Since the laws are constantly changing, it's a pretty dangerous subject if you don't have a tax lawyer advising you.
Last edited by Gumby on Mon Oct 03, 2011 10:25 am, edited 1 time in total.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Re: where can i find a more in depth discussion of Diversification of location
Personally, I've limited my "geographic diversification" to with financial institutions (most of my wealth) vs in my house (some cash and eventually gold bullion).
I simply can't imagine many situations where I CAN'T access my wealth in my home and at financial institutions, but I can fly to Switzerland and be ok, or at least have them mail me the gold their holding for me.
It's something I've thought about, but not read much about. I think "institutional diversification" is much more important. Institutional diversification deals with fraud or failure of individual institutions, which is entirely possible. Geographic diversification implies, to me, that our government is confiscating wealth to a severe degree (beyond taxation), but that somewhere else will be stable. I just don't see this as something that can be easily hedged against. It's like hedging against the government coming to your door and killing you. Even if it's possible/probable, what are you going to do to effectively prepare for it?
I simply can't imagine many situations where I CAN'T access my wealth in my home and at financial institutions, but I can fly to Switzerland and be ok, or at least have them mail me the gold their holding for me.
It's something I've thought about, but not read much about. I think "institutional diversification" is much more important. Institutional diversification deals with fraud or failure of individual institutions, which is entirely possible. Geographic diversification implies, to me, that our government is confiscating wealth to a severe degree (beyond taxation), but that somewhere else will be stable. I just don't see this as something that can be easily hedged against. It's like hedging against the government coming to your door and killing you. Even if it's possible/probable, what are you going to do to effectively prepare for it?
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
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tooearly
Re: where can i find a more in depth discussion of Diversification of location
well, if this is the view of this board, and not just the views of 2 posters, why have rule #13?
any moderators around to comment?
any moderators around to comment?
Re: where can i find a more in depth discussion of Diversification of location
Yes there are options, but the past year or two many of them have been closed down to Americans (especially Swiss options). The new FATCA rules are now making even more banks not want to deal with Americans. Right now the situation is in enough flux that I can't offer easy answers other than things like Perth Mint or some Canadian Gold Trusts. New Swiss options are opening up but I need to research them. While just five years ago Swiss banks would gladly open an account for you, today they just don't want your business for the most part.tooearly wrote: well, if this is the view of this board, and not just the views of 2 posters, why have rule #13?
any moderators around to comment?
Rule #13 is actually becoming more important because the US tax authorities are implementing capital controls for US citizens without overtly coming out and just passing a law to do it. How? They are layering on so much tax compliance and reporting red tape that they are making it almost impossible for foreign banks to want to participate. This is quite possibly by design to avoid raising any red flags. While at the same time they can claim that they are doing it to go after tax cheats for publicity reasons. This is a bogus excuse for a variety of reasons, but it probably goes over well with the general public.
FATCA is another dumb Obama policy that will have far reaching implications:
http://www.forbes.com/sites/beltway/201 ... ss-growth/
I hope to have something together to discuss these options in much more detail in the near future.
Last edited by craigr on Mon Oct 10, 2011 2:08 am, edited 1 time in total.
Re: where can i find a more in depth discussion of Diversification of location
craigr, perhaps it is a cock up by design? The USA is actually trying to devalue the USD in competition with other countries also trying to also devalue. That means that they actually want to keep capital flows away from the USA. Everything is turned on its head. Capital is seen as something to guard against rather than something to attract. I guess the global economy has a huge glut of money (thanks to all the deficit spending over the decades) and governments are desperately trying to keep it at bay.
"Good judgment comes from experience. Experience comes from bad judgment." - Mulla Nasrudin
Re: where can i find a more in depth discussion of Diversification of location
Craig,
I'm shocked you believe FACTA isn't about tax cheats. What's next? Patriot Act isn't about catching terrorists? Customs searching laptops for all data at the border isn't about protecting kids? Turning off cell phone towers in San Francisco isn't about keeping us safe from dangerous anti-government protesters? Extending unemployment, just one last time, to 499 weeks won't be good for the economy?
I'm shocked you believe FACTA isn't about tax cheats. What's next? Patriot Act isn't about catching terrorists? Customs searching laptops for all data at the border isn't about protecting kids? Turning off cell phone towers in San Francisco isn't about keeping us safe from dangerous anti-government protesters? Extending unemployment, just one last time, to 499 weeks won't be good for the economy?
Re: where can i find a more in depth discussion of Diversification of location
It is true that Rule #13 is much more difficult to implement than it used to be, but that doesn't mean you have no lawful privacy options.
Although you may not be comfortable with the private depositories, like BullionVault and GoldMoney, they do offer overseas storage. Even if you report these to the US Treasury as required every year, you still have some of the additional protections of physically having assets offshore. Although I think a US Government 1930's-style gold ban is very unlikely, for a variety of legal and enforcement reasons I could envision a confiscation or purchase ban program aimed at US citizens applying only to assets held inside the United States, or a ban on additional purchases outside the US. Requiring you to repatriate assets already legally held overseas would be tricky. In any case, if your primary fear is US government action then I can see almost no downside to having some of your current gold holdings deposited in a safe location outside the US. The absolute worst that could happen would be an order to sell or repatriate it and you would very likely have some time then to explore all your legal options (and share in much of the gold price appreciation such an action would likely cause, although this conceivably could be taxed away). Having your metals physically stored offshore also makes them available to you anywhere in the world since you can easily sell them online and have the funds wired anywhere.
I personally believe a more realistic danger concerning owning any kind of stored or securitized gold is something like a "dirty bomb" device going off in New York, Chicago or London (where much of the world's gold is warehoused). Through several of the options (physical storage, ETFs, closed-end funds, etc.) available, you can choose to have it stored in other cities around the world.
Lastly, at the end of the chapter on Rule #13 are some suggestions for other lawful ways to keep wealth private. Obviously their application depends on your personal circumstances, but you probably have some alternatives.
For most people, it probably makes sense to keep a substantial portion of their gold in coin form in a safe deposit box, with the rest in one or more of the alternative (ETFs, closed-end funds, private depositories offshore, stored in a safe place, etc.) ways discussed on this forum or in HB's books. No one way is perfect, but with diversification you can come close.
Although you may not be comfortable with the private depositories, like BullionVault and GoldMoney, they do offer overseas storage. Even if you report these to the US Treasury as required every year, you still have some of the additional protections of physically having assets offshore. Although I think a US Government 1930's-style gold ban is very unlikely, for a variety of legal and enforcement reasons I could envision a confiscation or purchase ban program aimed at US citizens applying only to assets held inside the United States, or a ban on additional purchases outside the US. Requiring you to repatriate assets already legally held overseas would be tricky. In any case, if your primary fear is US government action then I can see almost no downside to having some of your current gold holdings deposited in a safe location outside the US. The absolute worst that could happen would be an order to sell or repatriate it and you would very likely have some time then to explore all your legal options (and share in much of the gold price appreciation such an action would likely cause, although this conceivably could be taxed away). Having your metals physically stored offshore also makes them available to you anywhere in the world since you can easily sell them online and have the funds wired anywhere.
I personally believe a more realistic danger concerning owning any kind of stored or securitized gold is something like a "dirty bomb" device going off in New York, Chicago or London (where much of the world's gold is warehoused). Through several of the options (physical storage, ETFs, closed-end funds, etc.) available, you can choose to have it stored in other cities around the world.
Lastly, at the end of the chapter on Rule #13 are some suggestions for other lawful ways to keep wealth private. Obviously their application depends on your personal circumstances, but you probably have some alternatives.
For most people, it probably makes sense to keep a substantial portion of their gold in coin form in a safe deposit box, with the rest in one or more of the alternative (ETFs, closed-end funds, private depositories offshore, stored in a safe place, etc.) ways discussed on this forum or in HB's books. No one way is perfect, but with diversification you can come close.
Last edited by HB Reader on Mon Oct 10, 2011 12:05 pm, edited 1 time in total.
Re: where can i find a more in depth discussion of Diversification of location
I think institutional diversification is pretty important. I find that most people with a sizeable 401(k) with a different institution and funds than their personal accounts is a pretty good default, with cash & gold held physically as a couple other good options.
I feel like it'd be more difficult for the government to find out about and freeze $50k in cash & gold you have in your home in today's environment thant $50k you have in Switzerland.
I tend to try to think to myself, "if I were a grabby government, how would I steal from people," and you get pretty far down the line before, in my estimation, the gov't is going to invade your homes or ask you to disclose how much matress cash and gold bullion you have. The easiest ways are higher taxes and inflation, from which none of your wealth is necessarily safe. The government seems to have a much more substantial framework around disclosing foreign assets than disclosing personally-held assets. Further, the gov't would have to physically invade your home to discover what you have in terms of cash/gold. Maybe back in 1985 this was about as likely as successful foreign account identification, but in today's world of 1's and 0's, it seems to me "physical" is the new form of geographic diversification, at least in terms of relative safety from confiscation.
I really can't imagine a world where our government is getting extremely invasive into peoples' personal space, but hasn't already done a lot of really shady stuff with assets held in accounts. It's political suicide for a movement to invade peoples' privacy in ways that makes them actually feel like their privacy is being invaded, and yields not much real wealth.
"The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."
This statement always comes back to me. When pol's see trillions in assets held by financial institutions vs millions of wealth held in peoples' personal safes and under their mattress in their homes, is there any reason to believe that they'd go after the latter until they've completely exhaused their efforts in the former? There seems to be little meat on that bone.
I feel like it'd be more difficult for the government to find out about and freeze $50k in cash & gold you have in your home in today's environment thant $50k you have in Switzerland.
I tend to try to think to myself, "if I were a grabby government, how would I steal from people," and you get pretty far down the line before, in my estimation, the gov't is going to invade your homes or ask you to disclose how much matress cash and gold bullion you have. The easiest ways are higher taxes and inflation, from which none of your wealth is necessarily safe. The government seems to have a much more substantial framework around disclosing foreign assets than disclosing personally-held assets. Further, the gov't would have to physically invade your home to discover what you have in terms of cash/gold. Maybe back in 1985 this was about as likely as successful foreign account identification, but in today's world of 1's and 0's, it seems to me "physical" is the new form of geographic diversification, at least in terms of relative safety from confiscation.
I really can't imagine a world where our government is getting extremely invasive into peoples' personal space, but hasn't already done a lot of really shady stuff with assets held in accounts. It's political suicide for a movement to invade peoples' privacy in ways that makes them actually feel like their privacy is being invaded, and yields not much real wealth.
"The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."
This statement always comes back to me. When pol's see trillions in assets held by financial institutions vs millions of wealth held in peoples' personal safes and under their mattress in their homes, is there any reason to believe that they'd go after the latter until they've completely exhaused their efforts in the former? There seems to be little meat on that bone.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
-
murphy_p_t
- Executive Member
- Posts: 1675
- Joined: Fri Jul 02, 2010 3:44 pm
Re: where can i find a more in depth discussion of Diversification of location
moda,
in your quote about plucking geese, i think you're assuming that gov't is acting efficiently, transparently and in the interests of fairness & equal treatment.
i'm not sure this is accurate. for example, the gov't seems to favor certain entities...for instance GE paying no taxes & labor unions getting waivers from obamacare.
just as the weight of gov't promotes the interests of some, it attacks the freedom (resources) of others
in your quote about plucking geese, i think you're assuming that gov't is acting efficiently, transparently and in the interests of fairness & equal treatment.
i'm not sure this is accurate. for example, the gov't seems to favor certain entities...for instance GE paying no taxes & labor unions getting waivers from obamacare.
just as the weight of gov't promotes the interests of some, it attacks the freedom (resources) of others
Re: where can i find a more in depth discussion of Diversification of location
I am not sure if it is by design or sheer incompetence. But I suspect that buried deep in a govt. office there are very devious people that think about these things and ensure their ideas find their ways buried into bills to be signed when opportunity permits.stone wrote: craigr, perhaps it is a cock up by design? The USA is actually trying to devalue the USD in competition with other countries also trying to also devalue. That means that they actually want to keep capital flows away from the USA. Everything is turned on its head. Capital is seen as something to guard against rather than something to attract. I guess the global economy has a huge glut of money (thanks to all the deficit spending over the decades) and governments are desperately trying to keep it at bay.
Re: where can i find a more in depth discussion of Diversification of location
Does this mean you'll have another podcast for us soon?craigr wrote: Rule #13 is actually becoming more important because the US tax authorities are implementing capital controls for US citizens without overtly coming out and just passing a law to do it. How? They are layering on so much tax compliance and reporting red tape that they are making it almost impossible for foreign banks to want to participate. This is quite possibly by design to avoid raising any red flags. While at the same time they can claim that they are doing it to go after tax cheats for publicity reasons. This is a bogus excuse for a variety of reasons, but it probably goes over well with the general public.
(snip)
I hope to have something together to discuss these options in much more detail in the near future.
