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It's Not Enough to Own Gold and Silver

By Simon Black, founder, Sovereign Man
Friday, August 26, 2011

Every day, more and more people are waking up to the idea that they must own gold to protect their assets from out-of-control government spending, borrowing, taxing, and confiscation.
And owning gold is a great first step, but history shows responsible people should do more before it's too late...
For example, Rome was the world's most prosperous republic for centuries. Around the time of Julius Caesar (49 B.C.), that changed. Caesar assumed the powers of a dictator, but was soon assassinated. Once warring consuls Antony, Lepidus, and Octavian were finished duking it out with each other in 31 B.C., any semblance of the original Roman republic was gone forever.
In the following years, Romans watched their leadership and country get worse and worse. Nero, to name just one, not only managed to burn down his city, but he was also the first emperor to debase the value of Rome's currency.
All along the way, there were people that figured, "This has GOT to be the bottom, it can only get better from here." Their patriotism was rewarded with reduced civil liberties, higher taxes, insane despots, and a diluted currency.
If you're reading this, you're probably aware the U.S. is on a destructive financial path, just as Rome was. And you probably own gold and silver to protect yourself from inflation, political turmoil, and default... things I call "sovereign risk."
But it's not enough to simply buy gold.
Let's say you're from the U.S. If you live, work, bank, invest, register your business, own your property, store your gold, etc. within the U.S., and one little thing goes wrong, all those assets and interests are at risk. Any judge or bureaucrat could make them all disappear with a few mouse-clicks.
That's why I'm an advocate of an unusual line of thinking. I'm an advocate of internationalization – diversifying your sovereign risk around the globe so no single government has total control over your livelihood. Let me explain...
Some of the world's largest governments are going broke, and these politicians will take any steps necessary in order to maintain the status quo: They will lie, they will steal, they will declare wars, they will bankrupt their people with hyperinflation... whatever it takes.
In fact, the Wall Street Journal just ran an article entitled "Federal Asset Seizures Rise, Netting Innocent With Guilty." You don't even need to be doing anything wrong. The government can (and routinely does) confiscate the private property of law-abiding citizens.
Also, think about how litigious society is these days. You can be sued for anything. Your neighbor's kid falls in your swimming pool... A subordinate at work thinks he was wrongfully terminated. There are infinite possibilities, infinite risks.
When you internationalize, you diversify your assets around the globe and protect them from bankrupt governments and greedy citizens alike. Open a bank account in Hong Kong. Register your company in Singapore. Set up a brokerage account in the Cayman Islands. Buy a second residence in New Zealand. Store your gold in Switzerland.
Earlier this week, one of the world's best investors, Marc Faber underscored this point on CNBC when he said, "I prefer if investors hold physical gold in a safe deposit box, ideally outside the U.S." Another brilliant investor, Jim Rogers, has moved to Singapore.
Faber and Rogers understand that, with so much uncertainty in the world, people need to diversify their sovereign risk.
I've personally taken action on this idea. I have official residency in one country, bank in another, have multiple citizenships in others, set up my company in another, and so on. I've made it my profession to know the best ways to diversify sovereign risk.
For example, here in Austria, where I'm writing this letter, there is a fantastic secure storage facility in Vienna appropriately called "Das Safe." It's been in business for nearly 30 years, and it has one of the most secure facilities in the industry, far better than most banks.
At Das Safe, you can rent a safety deposit box in complete anonymity. You don't need to provide any ID or even tell them your name. Moreover, your box is automatically insured for $50,000, and you can purchase supplemental insurance without having to disclose the contents.
If you want to get started, you can reach them at [email protected] The manager, Emil, speaks English and German fluently and can answer any questions you have.
Most Americans believe using this sort of facility is "shady." But it's a simple, reasonable... and 100% legal thing to do. It is financial privacy at its best, and a great example of internationalizing to diversify your sovereign risk. Even if there's just a tiny risk that things go terribly wrong in the U.S., it's worth having this type of wealth insurance.
Taking some simple steps like this will give you extraordinary peace of mind. You'll know that, without doubt, you have some savings socked away that nobody can touch. You'll know that you have a solid emergency backup plan. You'll know that everything you've worked for won't vanish in an instant... at the whim of a bureaucrat.
Most people believe things couldn't possibly "get bad" in America. But most people didn't believe a world war was possible in 1910. Most people didn't believe a severe financial crisis could occur in 2008. They didn't believe General Motors... or Fannie Mae... or AIG... or Lehman Brothers could go bankrupt. They didn't believe a city like London could be put to the torch by its citizens.
We're living in a time where things you don't believe could happen are starting to happen every day. That's why it's more important than ever to consider "internationalizing" yourself immediately.
Simon Black

Market Notes


As the brilliant Steve Jobs leaves his CEO post at Apple, we must agree with the stock market and say, "Well done, Steve."
Few days go by without one of the White House's lawyers, lobbyists, and college professors going on television to vilify "rich" Americans. What those folks don't realize is that the great majority of rich people got where they are not through the political way of favor peddling, pandering, and making hollow speeches. The great majority of America's rich got where they are the way Steve Jobs did…
A college dropout, Jobs started Apple in his parents' garage... without anyone in the government telling him how to build a computer or an iPhone. Jobs worked hard, learned his market, and helped create a tremendous amount of value for society.
As you can see today, the market rewards this kind of behavior. Apple shares traded for around $7.25 during the March 2003 market low. They now trade for $374 per share... a 5,000%-plus gain. The White House would do well to note this chart, note how hard-working entrepreneurs make America great... and then get the hell out of their way.

Well done, Steve!

In The Daily Crux

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