Escape from America
As you’re probably well aware already, the last decade has seen an alarming trend in which the U.S. government has slowly but surely snatched up the freedoms of its citizens.
Passport restrictions…investment restrictions…a full-scale war on financial centers…
With all these newfound wealth restrictions, is it really any wonder that hard-working Americans are clamoring to get outside the U.S. and take their assets abroad?
In fact, as I write this, nearly 300 of your fellow readers are in Los Cabos for The Sovereign Society’s third annual Offshore Advantage Academy to learn how to do just that. All these attendees are scribbling notes about second passports, global investing, tax management, asset strategies and the like.
I applaud their efforts. There’s never been a better time to absorb information on how to move and invest abroad.
But today, I want to talk to those of you who may be concerned about the state of affairs here in the U.S., but perhaps aren’t ready to make the leap to banking or investing outside the United States.
If so, you can still take your assets outside the United States, to capitalize on the stronger markets abroad. It’s as easy as investing outside the U.S. dollar.
Sounds Too Simple Right?
Let me explain…
For the moment, the U.S. government has at global monopoly on the world’s cash, by holding the world’s reserve currency. That means Uncle Sam can use the dollar to pay for any number of economic initiatives. That includes social security, Medicare, healthcare reform, any number of wars, trillion-dollar bailouts, etc.
All these initiatives cost money. And for the most part, the U.S. government can simply print more dollars to pay for those initiatives. The unfortunate byproduct of this system is it tends to depreciate the U.S. dollar.
(That’s why the dollar has lost more than 21% of its purchasing power since the year 2000 by the way.)
But any investment in a foreign currency not only takes your wealth outside the U.S. dollar, it also gives you the chance to capitalize on those stronger, better-performing nations worldwide.
It’s similar to taking your cash abroad…only you can do so from the comfort of your home…
5 Ways to Move Your Cash Offshore Now
Here are my top five ways to escape America with your cash…
1. Buy Gold on Any Dips: Yes, I’m well aware that gold hit another all-time high today. But the harsh truth is gold is the least manipulated “currency” on earth. It’s also one of the best long-term stores of value you’ll find. So if you want to take your cash “offshore,” I would start with buying the “international currency” gold on any dips.
2. Buy Foreign Stocks: Again, easy way out of the dollar. Any investment in a foreign stock is technically also an investment in the local currency, so you have the opportunity to profit twice – off stock appreciation and any currency appreciation against the U.S. dollar. Also, most major U.S. stock brokersstockbrokers handle foreign stocks on at least the London exchange.
3. Invest in Foreign Bonds: Most people don’t consider foreign bonds, but it’s a relatively easy way to buy foreign currencies. Just like buying Treasuries, a foreign sovereign bond is backed by a foreign government. You’re actually buying a foreign government’s debt, so they have an obligation to pay you back at a specific yield (should you hold your bond to maturity). However, keep in mind you only want to buy foreign bonds when the country is looking to hold rates steady, so avoid the countries that are hiking rates right now (ex: Australia, Norway, New Zealand soon).
4. Diversify into Several Currencies at Once with a CD: Just like dollar CDs, foreign currency CDs allow you to buy and hold foreign currencies over the long haul. Most foreign currency CDs are 3-month commitments, but then you can rollover the CD for as long as you want. On top of that, a foreign currency CD generally pays higher interest and gives you tax advantages.
5. Buy 25 Different Currencies, Through Your Stock Account: It doesn’t get much easier. Pick a foreign currency you’re interested in, and buy the ETF right on the NYSE through your regular stock account. Right now, there are over 25 ETFs to choose from (including several that invest in a couple currencies at once).
Again, there are countless ways to take your cash abroad. But the easiest way to start is to trade up your dollars for stronger foreign currencies.
Good Currency Investing,
Kat Von Rohr, Editor
FX University Daily
P.S. Interested in hearing what’s happening at the Offshore Advantage Seminar this week? My friends at The Sovereign Society are now offering the Audio files, PowerPoint slides, and more insider information from the seminar for FREE. Click here for the details…
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