Dateline: Las Vegas, United States
“This Time is Different”.
That’s the name of the book published five years ago by two Harvard economists Carmen Reinhart and Kenneth Rogoff describing centuries of government folly in the economic sphere, and why The Land of the Free is ultimately doomed.
Now, the same economists are predicting the United States will be the first developed nation to roll out “third world policies” to prop themselves up during a dollar collapse.
We frequently discuss the idea that Americans believe more than almost anyone else that their country is coated in magic pixie dust that will prevent any of the “bad stuff” from happening on their shores.
Even as the European Union forced the hand of Cyprus and caused depositors there to lose untold millions of dollars, others in the western world put their hands over their eyes and proclaimed “it can’t happen here”.
I’ve never understood this mindset.
After all, bad things did happen “here”. It’s not theory; it’s history.
The history of gold confiscation: past and present
Most notably, FDR undertook the most famous gold confiscation in modern history. Later, the US government decided its status as Numero Uno would live on forever and that it didn’t need gold to back its currency, sending the dollar into a long-term tailspin.
The list goes on.
I was in the airport lounge earlier waiting for my flight to Las Vegas, where I’m hosting our first ever Passport to Freedom conference with Peter Schiff this upcoming weekend.
While there, I read a story in the Asian press about the growing number of Indians – and those selling to Indians – smuggling gold into the country from China.
The Indian government’s desire to prop up their own failed economic policies by cracking down on gold hasn’t gone over well in one of the world’s biggest gold bug markets. Just go to Little India in Singapore and watch people line up anytime something happens in the gold market.
Inherently, Indians understand that the true store of wealth gold offers is a lot better than the oh-so-benevolent democratic government’s fiat currency that needs propping up to fight off bad deficit issues.
They’re so desperate to get their hands on real, tangible wealth that they’re flying to China and smuggling the stuff in through the small nation of Nepal to their north.
Don’t believe “it won’t happen here”
The silver lining in all of this is that it shows how people in places like India don’t trust their government with their wealth. They know a bad deal when they see one, and the Indian government is demonizing wealth for its own good.
Indian officials are even demanding that gold merchants turn over a list of customers in order to aid in law enforcement against smuggling. Yet people continue to try and protect their wealth.
The bad news is that these wealthy Indians feel they have to go to great measures to get gold back into the very country that wants to ban the stuff from being owned privately.
One topic we discuss here is the idea of offshore gold storage. Gold, as a physical commodity, has to be stored somewhere, unlike Bitcoins or other crypto currencies that exist online.
While it seems natural to store the stuff as close to you as possible, that isn’t always the case. When the government is going so crazy that people are spray painting gold and wearing it as jewelry in order to smuggle it across the border, storing your precious metals in the country you live in isn’t the best idea.
Just because gold has be stored somewhere doesn’t mean it has to be stored – or even purchased – in your home country. In the twenty-first century, you can go where you and your gold are treated best.
You never know just how far a bunch of bankrupt bureaucrats will go to keep their power, and confiscate your gold. That’s why I recommend solutions such as storing your gold in Singapore.
Where to move your gold to avoid confiscation
Singapore is a jurisdiction we’ve spoken about before, and it’s fast becoming the go-to hub for private banking and gold storage in the world.
I’ve seen firsthand how some of the wealthiest people in the world are shipping their assets – everything from gold to fine art to vintage cars – in the country’s vaults.
Even if you don’t have a lot of gold, you can get your gold out of Dodge for as little as a few hundred dollars a year in shipping and storage fees. Some vaults even give you free storage.
Or, you can buy gold from vendors in Singapore who store it for you.
Alternatively, you can use a service in your home country to help you ship gold you already own overseas. This is far better than packing it in your attache case and heading for the ticket counter.
Or, if you’re an Indian looking for a place to store your gold without having your name pop up anywhere, Das Safe in Austria is a frequently mentioned place to get anonymous gold storage for about $1,000 per year.
Of course, when “this time is different” becomes reality, and your government gets serious about taking your gold, it may be too late to diversify overseas.
Under the guise of the “War on Cash”, countries are beginning to clamp down on wire transfers and other international money movement. Of course, taking cash in or out of most countries – save places like Hong Kong and Switzerland – has always been laden with reporting requirements.
That’s why getting your gold out of Dodge now is always the best idea. I realize some people want to keep their gold buried in the backyard, and I’m not saying you shouldn’t do a little of that, too. The more of any asset you have, the more you need to diversify.
That said, I see gold and silver more as an investment betting against the entrenched insolvency of bad government more than something to barter with when a nuclear holocaust hits. For that, I’d rather my bets against the government be as far away from said government as possible.
If gold confiscation never comes to pass where you live, you’ll have your assets in a jurisdiction of your choosing. Most vaults allow you to visit your gold or take it with you any time you want, even if you purchased it from the company storing it.
If gold confiscate does come to pass, as looks like in an increasingly number of places, you’ll be glad you got your gold of out Dodge and into what I call the “new safe havens”.