Reason #1 - Dilute Your Political Risk
Doug Casey has said over and over
that the biggest risk you face today is not market or financial
risk - as big as those risks are - but rather the risk from your own
government.
There's no doubt this kind of risk
is rising in most parts of the West. Governments are hopelessly
sinking deeper into insolvency. They're turning to the same
desperate measures they always have throughout history, and it's
a big threat to your savings.
It's only prudent to expect more
bail-ins, as we've seen in,
...bank deposit taxes, as we've
seen in,
...retirement savings nationalizations, as we've
seen in,
-
Poland
-
Hungary
-
Portugal
-
Argentina,
...and capital
controls, as we've seen in,
...among other
destructive actions.
And these are just a few recent examples. If you think these kinds of things
can't happen in your country, think again.
According to Judge Andrew
Napolitano:
"People who have more than $100,000 in the bank
are
targets for any government that's looking for money
to shore up its own inability to manage its finances."
A big part of any strategy to reduce
your political risk is to place some of your savings outside the
immediate reach of the thieving bureaucrats in your home
country.
Obtaining an offshore bank account is a convenient way
to do just that.
That way your savings cannot be
easily confiscated, frozen, or devalued at the drop of a hat or
with a couple of taps on the keyboard. In the event capital
controls are imposed, an offshore bank account will help ensure
that you have access to your money when you need it the most.
In short, your savings in an
offshore bank will largely be safe from any madness in your home
country.
Reason #2 - Sounder Banking Systems and
Banks
Almost all of the banking systems in
Western countries are fundamentally unsound - leveraged to the
hilt and backed by the promises of insolvent governments.
Worse,
most of these banks only keep a tiny fraction of cash on hand to
meet customer withdrawal requests. This means that in the event
of a financial shock like another Lehman-style event, you could
have trouble accessing your money.
If you look to bank in a
jurisdiction with low debt and a history of a stability, you can
find banks that don't gamble with customer deposits (i.e., your
money), are much better capitalized, keep more cash on hand, and
are otherwise much more conservatively run than those in the US.
Offshore banks are almost always
more responsible custodians of your hard earned-savings.
Reason #3 - Asset Protection
Maybe you think it's just other
people who live on the lawsuit firing line… and you live
somewhere else. Think again.
The Legal Resource Network reports
that 15 million lawsuits are filed in the US every year.
That works out to a new lawsuit for
one out of every 12 adults each year… year after year. Unless
you're exceptionally lucky, sooner or later your turn will come.
You're not going to like it.
It's no fluke that 80% of the
world's lawyers - over 1.2 million of them - work in the US. That's
where the action is. Your money is the trophy they're competing
for.
While there is no such thing as 100%
protection, an offshore bank account can help make you a hard
target.
An offshore bank account also
protects you from being paralyzed by a lightning seizure by any
government agency armed with a summary power to freeze your
assets, since such summary powers can't reach beyond the US.
If
you ever find yourself in a wrestling match with a government
agency or with a frivolous lawsuit, you'll have resources you
can count on.
Reason #4 - Currency Diversification
Holding foreign currencies is a
great way to diversify the risk in your portfolio, protect your
purchasing power, and internationalize some of your savings.
Chances are though, that your
domestic bank offers few - if any - options to hold foreign
currencies.
Offshore banks, on the other hand,
commonly offer convenient online platforms for you to hold
foreign currencies.
Reason #5 - Higher Interest Rates for Your
Deposits
In what amounts to a war on savers,
the European Central Bank and the Fed have manipulated interest
rates to near historical lows.
These artificially low interest
rates amount to a wealth transfer from savers - who would
otherwise enjoy higher returns on their deposits - to borrowers.
In fact, if you live in the West, there's a good chance that the
interest you're earning on your savings isn't even keeping pace
with the real rate of inflation.
If you look abroad, though, you can
find banks that pay interest rates significantly higher than
what you'd find at home.
Reason #6 - Ensure Access to Medical Care
Abroad
In the case you're denied or delayed
treatment in your home country - an increasing possibility with
the disastrous Obamacare - you may want to seek medical care
abroad.
In a dramatic scenario, this could
be the difference between life and death. Suppose that for
whatever reason, you cannot get the medical care you need in
your home country and have to go abroad. That means you'll have
to transfer money abroad to pay for it.
But if capital controls
are imposed, it could be difficult or impossible to transfer
funds abroad to pay for the medical care you need.
This is where having an offshore
bank account - which isn't held hostage to capital controls in
your home country - can help ensure that you always have access to
medical care abroad.
Reason #7 - The Ability to Act Quickly
When it comes to international
diversification, it's always better to be a year early than a
minute too late. Once a government has imposed capital controls
or levied bank accounts, it will be too late to take protective
action.
If you don't already have one, you
should open an offshore bank account now - even if it's a small
one. Just having one available - regardless of how much money you
initially put in it - gives you meaningful benefits.
Namely the
option to act quickly and transfer more money abroad in the
future, should the situation warrant it.
Reason #8 - Maintain Limited Privacy
Americans who have an aggregate of
$10,000 or more in foreign financial accounts at any time during
the year must file an
FBAR (FinCEN Form 114).
However, if the aggregate total of
your foreign financial accounts remains under $10,000 for the
year, and they are not held in a trust, LLC, or other structure,
you can legally maintain your privacy.
Reason #9 - Peace of Mind
An offshore bank account is like an
insurance policy.
It helps protect you from unsound banks and
banking systems and the destructive actions of a bankrupt
government. It also makes you a hard target for frivolous
lawsuits and allows you to pay for medical care abroad.
Knowing that you have taken a strong
measure to protect yourself from these things should give you a
degree of mental comfort.
Reason #10 - Maximize Your Personal
Freedom
Having an offshore bank account
gives you more options. More options means more freedom. It's a
crucial step in freeing yourself from absolute dependence on any
one country.
Achieve that freedom, and it becomes
very difficult for any government to control your destiny.
