Gyroscopic Investing

Confusing, edited.

What domestic US investments are most immune from being targeted for higher taxes, forced exchange, or other government grabs?  Consider illiquid as well as liquid investments.

.22LR and .223?

A second passport.

Libertarian666 wrote: A second passport.

+1

Standard checking and savings accounts. These are the most common financial accounts that the broad base of people own and use, and as such they are untouchable. Not only will the government not confiscate money stored in these accounts, they will continually increase FDIC protections to ever higher and more improbable levels in response to perceived bank default risks.

Pointedstick wrote: Standard checking and savings accounts. These are the most common financial accounts that the broad base of people own and use, and as such they are untouchable. Not only will the government not confiscate money stored in these accounts, they will continually increase FDIC protections to ever higher and more improbable levels in response to perceived bank default risks.

I suppose this is sarcasm...?

MangoMan wrote:

Pointedstick wrote: Standard checking and savings accounts. These are the most common financial accounts that the broad base of people own and use, and as such they are untouchable. Not only will the government not confiscate money stored in these accounts, they will continually increase FDIC protections to ever higher and more improbable levels in response to perceived bank default risks.

I would venture to say that based on 2008 and the lack of changes since then, default risks are anything but perceived, and the levels are far from improbable. Anyone here with a 4x25 portfolio over 1M already would exceed the current $250k insurance cap if they were using FDIC banks rather than T-bills [which is why you should use T-bills, or at least spread the funds among several banks].

Or use Fidelity or another brokerage company that spreads cash balances out to prevent going over the FDIC limit.

All risk is relative. When it comes to government confiscation, the government can't piss off too many people. If things are bad enough that they're taking people's assets, who do you think they're going to go for? The assets that are owned by 5% of the adult population? Or the assets that are owned by 90% of the adult population? The 5% who own gold may have disproportionate political power, but I'm willing to bet it doesn't hold a candle to the political power of the 90% of adults who have bank accounts.

(warning: percentages made up on the spot and are probably not accurate even though the illustrate the argument)

Pointedstick wrote: Standard checking and savings accounts. These are the most common financial accounts that the broad base of people own and use, and as such they are untouchable.

I respectfully disagree, PS. Deliberately (or desperately) inflating the currency, thereby sharply depreciating the value of cash already held, is the government's most likely response when the light bulb finally goes on with regard to our approaching national bankruptcy.

When this happens (and I have no idea when it will occur), I don't think Prof. Krugman will shed any tears for savers after they are ruined. Yet another reason to hold that most despised of all assets: gold.

I should have tried to edit my first version instead of dumping it for the simplified question above.

Confiscation risks are:
High taxes
Forced conversion into government bonds etc
Bank bail-in like Cyprus
Gold as in 1933-34
Worst case: Marxist appropriation of private property

If you were trying to "insure" against domestic US confiscation risks, and still keep your investments inside the US, what would you invest in?

What is the path of least resistance to government grabs?
What is more resistant?

I would think retirement funds carry some risk of forced conversion.  It's happened in other countries, it has been mentioned in the US.

Gold, it's happened before.

How about farmland or timber?  It strikes me that they are politically favored, illiquid, and maybe more immune to confiscation than liquid assets.

Just thinking out loud.  And probably not making much sense.

goodasgold wrote:

Pointedstick wrote: Standard checking and savings accounts. These are the most common financial accounts that the broad base of people own and use, and as such they are untouchable.

I respectfully disagree, PS. Deliberately (or desperately) inflating the currency, thereby sharply depreciating the value of cash already held, is the government's most likely response when the light bulb finally goes on with regard to our approaching national bankruptcy.

When this happens (and I have no idea when it will occur), I don't think Prof. Krugman will shed any tears for savers after they are ruined. Yet another reason to hold that most despised of all assets: gold.

Inflation is not confiscation. If we do throw it under that umbrella, then I would generally agree that cash and bank accounts are not safe either. But I think inflation is a separate risk from confiscation.

For the original question, safety is an illusion. Everything can be confiscated, inflated, destroyed, altered, etc. I don't think there is any good way to completely protect yourself from these risks, and it seems self-defeating to try. If the government converts 401s to T-bills, why not also tax Roth IRAs? Why not impose an asset tax on stocks ownership? Maybe ban cash and impose a negative interest rate. Anything's possible. These are risks we cannot practically avoid at the individual level, and as libertarian-minded people I think we focus too much on the issue from that angle. We'd need to fight them collectively, by generating and exerting political power.

I was looking at it as diversifying my confiscation risks.

Gold was confiscated in 1933 only because it was a form of money imposing socially disrupting austerity back then.  Now it is just another real asset with more or less unique cultural baggage.  It would serve no useful economic or political purpose to confiscate it again.  Just asset tax it to death instead.

Anyway, whole life insurance seems to be what what you're looking for.

MachineGhost wrote: Gold was confiscated in 1933 only because it was a form of money imposing socially disrupting austerity back then.  Now it is just another real asset with more or less unique cultural baggage.  It would serve no useful economic or political purpose to confiscate it again.  Just asset tax it to death instead.

Anyway, whole life insurance seems to be what what you're looking for.

Whole life insurance is a terrible investment, if it can even be considered an investment at all.

If there were stable money, I might very well have a different opinion, but in a fiat paper money scheme, whole life is probably the absolute worst thing to put your money in, due to its very long duration. You pay a much higher premium than for a term policy up front, where the money is more valuable, and then decades later the cash value may show a "gain", but it is actually a loss after inflation.

And I do know something about life insurance, having trained as an actuary in my youth and still being interested in the topic.

Libertarian666 wrote: Whole life insurance is a terrible investment, if it can even be considered an investment at all.

If there were stable money, I might very well have a different opinion, but in a fiat paper money scheme, whole life is probably the absolute worst thing to put your money in, due to its very long duration. You pay a much higher premium than for a term policy up front, where the money is more valuable, and then decades later the cash value may show a "gain", but it is actually a loss after inflation.

And I do know something about life insurance, having trained as an actuary in my youth and still being interested in the topic.

I should have been more specific, but the point was using it as an investment substitute for deep cash (or a combo of deep cash and equity if you want to be nit picky).  Of course it is a terrible way to acquire insurance.  Only slicksters and hucksters push it on people that way.  Nothing beats term.

And it is a fantastic inflation hedge if you get it from a mutual insurance company and not the self-imploding Wall Street dreck.  It was a legally widespread and effective tax avoidance scheme back in the high inflation 1970's.  Gee, I wonder why?

Money has never been stable and never will be, so that's besides the point and shouldn't color all your investment decisions or you will never ever invest in anything that isn't a real asset and thus you will never have enough portfolio growth to reach your targets.  Don't you get tired of sounding like a broken record?  I'm sounding like mathjak there!

Part of my family fled Latvia during the 2nd Soviet invasion in 1945.  The family farm (with some family members who chose to remain behind) was eventually soviet-ized, so obviously I'd cast a vote against farmland, as far as avoiding confiscation.

One investment that isn't easily confiscated, is education.  If you have to flee a country with minimum notice, your skills and knowledge in your head come with you.  This has been the main defense against confiscation by many diaspora groups throughout history..

Spectre wrote: Part of my family fled Latvia during the 2nd Soviet invasion in 1945.

Hey, my relatives too!

Best wishes!

Spectre wrote: Part of my family fled Latvia during the 2nd Soviet invasion in 1945.  The family farm (with some family members who chose to remain behind) was eventually soviet-ized, so obviously I'd cast a vote against farmland, as far as avoiding confiscation.

One investment that isn't easily confiscated, is education.  If you have to flee a country with minimum notice, your skills and knowledge in your head come with you.  This has been the main defense against confiscation by many diaspora groups throughout history..

Spectre, I completely agree with you in this regard. IMHO, education and skills are what we use to acquire our wealth in the first place, and even if the government confiscated everything we owned (as has been done in the past throughout the world), we could still start over again with nothing but the clothes on our backs.

Here's to hoping it never comes to that in the good ole USA....