How Fast Could a Crisis Wipe You Out? – Part II
[Featured Image: The Euro on the decline: should we really be surprised by the Swiss central bank policy change that rocked markets worldwide last month? This chart shows we had plenty of warning.]
The EUR/CHF currency shock was unexpected in its timing, but anyone could look at a currency chart and see the euro’s massive decline over the last 3½ years. Cyprus’ surprise seizure of its citizens’ bank deposits was preceded by a huge debt buildup, which was public knowledge to anyone who cared to know. Likewise, with the enormous debts of various beleaguered nations being public knowledge, should we really be surprised when these nations seize citizens’ funds in a desperate attempt to remain solvent?
The fact of the matter is, the writing was on the wall beforehand with regards to the various crises I’ve mentioned. When they happened, they generally happened very quickly, in a manner where those asleep at the wheel (i.e. almost everyone) had no time to save their wealth from destruction, theft, or forfeiture. However, anyone who takes the time to read the writing on the wall, so to speak, and then takes appropriate precautionary measures may very well save their financial future.
If you weren’t trading the Swiss franc when the January 15 announcement came out, your funds remained safe. If you were a Cypriote who kept no money in a Cyprus bank when the government froze and then seized bank funds, then your funds were not subject to confiscation. If you were an Argentine who took your retirement and other savings offshore before they were seized in 2009, then said savings remained yours.
Since 2008, America has seen its share of financial problems, but we haven’t seen the worst of it. As former U.S. comptroller general David Walker put it:
“The factors that contributed to our mortgage-based subprime crisis exist with regard to our federal government’s finances … The difference is that the magnitude of the federal government’s financial situation is at least 25 times greater.”
(Carolyn Lochhead, Concern grows over a fiscal crisis for U.S., Chronicle Washington Bureau, 7/17/2008.)
We are not as far along the path, yet, as the EU or many other debt-beleaguered nations. The writing was on the wall prior to the 2008 financial crisis, though few read it, and the writing is on the wall now.
Will you do nothing before your bank account or retirement funds are seized?
What about the aforementioned issues of divorce, bankruptcy, or lawsuits?
Will you be caught with your pants down when the unexpected happens?
Cases such as U.S. v. Arline Grant (2008), which I’ll discuss in my next article, show us that an offshore asset protection plan is both legal and effective against creditors, even if the creditor is the U.S. government avidly pursuing a multi-million dollar claim – just be sure to pay your taxes and file legally required disclosures. (United States of America v. Raymond Grant and Arline Grant, (S.D.Fla. 06/17/2005).)
Spending a few thousand dollars to place a nest egg (or more) offshore in a strong asset protection structure may very well save your skin when the proverbial crap hits the fan. A variety of safe options exist, such as storing precious metals in an insured vault in a stable country with strong asset protection laws. Or, you could hold funds in a variety of currencies with a private bank, where 100% of your deposit stays with the bank and is never loaned out or invested. Or, invest in foreign real estate, which may not be appropriate for the inexperienced investor, but may be a good fit for savvy people, especially those willing to live outside the U.S. It is also possible to move your IRA offshore, although doing so may not be economically viable for accounts smaller than $200,000. I’ve helped clients do all of the above hundreds of times since I began doing asset protection in 2003.
Above all else, remember: if you wait until the crisis occurs, it will probably be too late. Remain unprepared, and someday you too may be wiped out in only 3 minutes.
A graduate of Brigham Young University, Mr. Fowler has trained, mentored, or consulted for dozens of attorneys and other professionals nationwide in regards to wealth preservation matters.
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