Offshore Gold Storage: How to avoid gold confiscation
You’ve got your gold–now where do you put it?
If you have coins squirreled away in your mother-in-law’s basement, or your in your parents’ attic, or under a loose floorboard in your living room–it’s time to rethink your gold storage strategy.
Aside from getting roped into an extended coffee session every time you need to access your gold, there’s another downside–your gold isn’t as safe as it could be.
Your hard assets can inoculate you against fiat currency and bank crises, but only when you store it properly.
Are You Making This Mistake? (A Quick Gold History Lesson…)
Currency in the US was backed by gold until as recently as the early 1970s. Forty years prior to that, FDR made gold ownership illegal for a period of time, forcing US citizens to sell all their gold in exchange for government-issued paper currency. Then he turned around and started selling this gold at something like a 50% increase over the government’s purchase price.
In the 21st century, as the US government digs further into debt, many investors wisely turn to gold as a way to protect themselves against the unpredictability of fiat currency–but if history has a chance of repeating itself, storing gold in the US won’t offer the protection you’re looking for (no doubt gold owners in the 1930s didn’t see that government gold grab coming).
But, investing in gold is a great idea because it offers several benefits that paper money cannot:
- Security (with proper storage, which we discuss in detail–keep reading)
- Hard Assets
- Value determined by the free market
The last point is especially important–the price of gold isn’t controlled by the federal reserve or central banks. The free market has all the power, here.
Gold has been used as currency for thousands of years. Less than fifty years ago, the US was still using the gold standard–it’s easy to forget how recent fiat currency is.
Now some governments are waging wars on cash, making the future of fiat currencies ‘round the globe a little less certain.
There’s plenty to say on the subject of gold and why it’s such a strong investment option.
But this article isn’t here to convince you that investing in gold, silver, platinum, or other precious metals are a good idea–this article is for those who are already sold on the benefits of investing in these real assets.
To guarantee you reap the full benefits of investing in precious metals, you need to answer an important question: Where should you store your hard assets?
Where Should You Store Gold?
Simple. Store gold in an old Folgers can in your backyard. That’s about all there is to it.
Just kidding, that’s not your best solution.
One, as a nomad capitalist, you might not have a backyard. And two, that’s hardly scalable.
No–backyards, basements, and loose floorboards won’t cut it for most of us.
For the savvy gold owners, offshore gold storage is the answer.
But “offshore” doesn’t narrow down your options too much, and not all gold storage facilities are created equal.
Should you pursue gold storage in Switzerland? The Cayman Islands? What about growing wealth hubs in the east–is Singapore gold storage the answer?
We’ve spent time talking about our take on the best country to store gold. But the answer really depends on what you’re most interested in, and what will work best for you.
Say your singular concern is the security of your real assets. The best option for you, the safest country to store gold, will be different from someone who is primarily concerned with having quick access to their gold. Maybe you’re just looking for the easiest way to store physical gold and silver offshore.
The criteria changes the answer, but there are some global wealth hubs with gold storage facilities that outperform the rest of the world–we’ll talk more about those in a bit.
Even as we advocate storing your gold and silver offshore, there’s something to be said for having a few gold coins on hand.
If you have a house, you could keep a few there. If you’re a nomad, you could keep a few in your suitcase–but you need to be careful as you’re crossing borders.
Can You Safely Travel with Your Gold in Your Backpack?
If you’re traveling with some of your gold, pay careful attention to what countries you’re flying through and what their attitudes toward gold are.
Many countries see gold as a cash equivalent. If you’re carrying gold valued over a country’s declarable amount, you’ll be asked a lot of questions. The declarable amount can change from country to country, which can quickly become an annoying obstacle if you’re never landing in the same place twice.
Avoiding questions from airport personnel is far from the only reason why you should store your hard assets offshore.
Why Do People Store Their Gold Offshore?
If you’re familiar with offshore bank accounts, the motivations behind storing gold offshore won’t surprise you.
There are three main advantages that gold and silver (and platinum, palladium, etc.) owners seek when they go offshore with their gold storage:
- Security (especially from governments and banks)
Let’s start with security, because it’s a big reason to get into gold.
Store Gold Safely–Can Offshore Gold and Silver Storage Protect My Assets?
Store gold in safe jurisdictions with the right private vault companies, and your hard assets become much safer–not just from banks and governments, but from floods, theft, nuclear war and other daily threat issues.
Using private vault storage is key. For full protection, you’ll need to keep your gold out of banks.
Why Should You Keep Your Gold Out of Banks?
If you’re a US citizen and your gold and silver stores aren’t in a banking system, but instead are in private vault storage, you might not have to report it to the IRS (always check with your counsel).
If you store your gold offshore but with a bank, even if it’s in a safety deposit box, you have to report those hard assets to the government.
Banks don’t afford you the same privacy, sure, but the security isn’t there either.
What if your bank closes when you need your gold? What if there’s a bank holiday? Banks can protect against weather and theft. But they leave your hard assets open to bank-based and government-based control.
A third party, non-government, non-banking institution is a more secure place to store gold, it’s as simple as that.
Plus, private vault companies aren’t going to loan money against your gold stores. They won’t keep a small percentage of stored gold on hand (like banks do with your fiat currency wealth). Instead, you will always have complete control over your full precious metal supply.
And when your gold is in your control, offshore, and out of the banking systems, it’s much harder for anyone to reach.
Protecting Your Real Assets from Greedy Hands
With your hard assets secured in private vault storage, your gold and silver stores become harder to freeze and harder to seize, putting your mind at ease.
Cheesy rhymes aside, this is the main reason you’re investing in gold in the first place–it’s the antidote to volatile fiat currencies.
But that doesn’t mean your government can’t make moves for it.
Did US citizens in the 1930s see FDR’s gold-grab coming? Probably not. If your western government did reach for your gold, do you really want your assets sitting under their nose?
They can’t just push a button and take all your gold if it’s held in private, discreet, offshore gold storage facilities.
Now, the last United States gold confiscation is largely misunderstood today. As a result, there are hucksters out there preying on people who buy into the “doom and gloom” side of the coin.
These hucksters and their overpriced “non-confiscatable” products aren’t going to keep the government from your locally stored hard assets. Don’t be fooled by these people.
How Private are Gold Storage Facilities?
In many cases, small gold transactions don’t need to be declared. But shipping your gold to a storage facility can be a hassle.
We usually recommend buying gold where you’re going to store it (BullionStar is a great online purchasing option offering Singapore gold storage).
Offshore gold purchases and storage can make your transactions even more private.
For example: Since 1984, Das Safe in Austria has offered anonymous gold storage at their facility (how’s that for private vault storage?).
Austria is famous for its love of privacy. At the time of this article, Das Safe is only offering non-anonymous safes.
In a world that’s going a little crazy, extra privacy with your assets can’t hurt. People, banks, and governments can’t go after your wealth if it’s secure with private vault companies (and they don’t know where it is).
What are the Modern Day Wealth Hubs?
Switzerland spent a long time as the premier gold vault hub. There are still some old school guys who will advocate for storing gold in Switzerland. In some cases, moderate gold storage in Switzerland might make sense.
But there’s an important wealth trend changing offshore gold and silver storage: The wealth is moving to the east.
Think about it:
Singapore has low taxes. The government is solvent. There’s no net debt. They have a sovereign wealth fund. They’re a tiny country that’s doing well, but they still need to attract wealth–and in that, they’ve been successful.
Compare that to London, New York, or Salt Lake City. People still store gold in these gold vaults–and a little bit might be fine…but neither the UK nor the US is the best country to store gold.
Let’s look at the US the same way we looked at Singapore: They have really high tax rates. They tax their citizens no matter where they live. The US is bankrupt. The government is going nuts. It’s showing signs of becoming a police state.
Between the US and Singapore, which one sounds better for safely storing assets? Singapore, hands down.
Do you really want to bank in the United States? In moderation, it can be ok. But it’s also nice to bank overseas because there are a lot more benefits.
The United States has a weird relationship with gold. But in the east, they have a different relationship with it. China loves gold. Singapore knows more about gold than the US does. As a result, these countries are starting to offer ways to leverage your gold for loans–more on that in a bit.
Places like US, London, and Switzerland are the old guard of wealth hubs. The marketing hasn’t worn off yet…but the modern trend shows a lot of wealth storage, especially gold and silver storage, shifting to the east.
Many of you are entrepreneurs, and entrepreneurs are all about outsourcing, aren’t we? We outsource everything from Facebook ads to accounting.
So why not outsource the headaches of offshore gold storage to companies that:
- Make it easy to store gold offshore
- Increase privacy
- Increase security
And more, for a relatively low storage fee?
There are private vault companies with opportunities no matter your investment size.
Solutions for Buying and Storing Gold Offshore
There are some services, like Bullionstar, that will let you get started with gold for as little as $20. You can buy the gold online, and they will store it for you.
There are other services like this, but be careful–make sure that, when you purchase gold, you’re actually purchasing the gold.
Some companies will take your money and put it against gold, but don’t have enough gold to back all these claims. When everyone goes to cash in, you’ll realize that 100 of you had put money down on the same “bar” of gold. At that point, you’ll be out of luck (and your investment).
If you’re ready to invest $50,000 or more, it’s worth having a private vault company with a full-service offering:
- Private account manager
- Better pricing (for that scale)
- Lower storage fees
When you’re storing even more substantial amounts (in the $250k-$1 million range), you’ll probably want a portfolio of vaults.
Diversifying your gold and silver storage across 2 or 3 vaults (minimum) just makes more sense. Even though it won’t be as convenient as having it all in one place, it increases your privacy and asset security–a worthwhile sacrifice.
A Variety of Vaults–What’s the Difference?
Gold storage vaults can range from James Bond-caliber security facilities to a simple (but secure) storefront with secure safe boxes in the back room.
Le Freeport in Singapore is an example of a super high security vault–the state of the art security makes it seem like you’re a fresh recruit on the MI6 team.
Then there are smaller vaults, where companies like BullionStar rent old bank buildings and set up shop.
And there’s also storefronts with secure boxes in the back–Das Safe in Austria is a good example.
How to leverage gold?
As we mentioned earlier, some offshore gold storage providers will let you leverage your gold for a loan.
You could borrow money against your gold at a 1, 2, or 3% rate, for something like 50-80% of your gold.
For US citizens, there are similar solutions, but the rates aren’t nearly as good. This goes back to providers in places like China and Singapore having a different relationship and understanding of gold–and it makes gold even more attractive.
Crypto Coins or Precious Metal Coins?
There’s no doubt that cryptocurrency is hot right now. They might turn out to be a great addition to a diversified portfolio. They’re outside the banking system. They’re convenient.
But they’re not private, and their value is spiking and dropping while everyone figures out the viability of this new potential currency.
For now, you can use bitcoin to buy gold. This could be a good way to diversify outside of your crypto currency holdings, or to cash out if you’re looking for a more stable investment.
The Best Country to Store Gold?
Ultimately, where to store your gold comes down to going where you’re treated best. It’s a concept we consistently return to here at the nomad capitalist.
Go where your business is treated best. Go where your assets, privacy, and peace of mind are valued. Go where the private vault companies are innovating and finding new ways to bring value to their clients.
For now, it looks like “that way” is east.
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