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SOVEREIGN MAN

Tell me what’s holding you back

I generally don’t spend very much time in the US.

I think there are more desirable places out there… and to me, the US is just like any other country in decline like Italy or Spain– I really enjoy it as a tourist, I just don’t care enough for the politics or media to stay for long periods of time.

That’s one of the benefits of being a permanent traveler with no fixed home: I have the luxury of not being constantly force-fed propaganda that spreads fear and ignorance.

When I come back to the states, though, I feel like there’s a political agenda being thrown in my face everywhere I look. One of the most pervasive, from my outlook, is this notion that the economy is rosy, and that the government has everything under control.

I think this is absolutely ludicrous. The government doesn’t have anything under control, including themselves. Instead of putting the country on sound financial footing, they’re doing the exact opposite– spending without limit, borrowing without regard, and furthering a culture of entitlement.

Congressman Ron Paul was on CNBC yesterday talking about these same issues. He criticized the administration and Congress for their reckless spending, and he railed against the Federal Reserve for inflating away the currency and bailing out select banks.

For whatever reason, his ideas don’t seem to resonate with the public. Becky Quick even chided the Congressman for his bullishness on gold as a more effective store of value than paper dollars.

In fact, a bit of basic math shows us that, since the dollar became a worthless piece of paper in 1971 when Nixon left the gold standard, gold has generated a 9.2% annualized return in dollar terms, while stocks have only returned an annualized 6.6% and bonds about 8%.

Now, I’m not a gold bug, but I’d rather take my chances on this ‘barbarous relic’ than on a worthless piece of paper controlled by bureaucrats.

(Actually I prefer ammunition as a store of value, but I’ll save that for another time…)

Think about it– the entire modern financial system is based on a very small group of people having the power to create money out of thin air. It’s obvious that this is corrupt and unsustainable.

So is borrowing trillions of dollars each year.

They (the government) think that we can simply grow our way out of debt… that if the economy has a big boost, the size of its debt won’t matter very much in relation to the size of our economy and consequent tax revenue.

This is also completely ludicrous. If every single person in the US were to pay 100% of his/her salary for the next year to the federal government in taxes, it still wouldn’t be enough to pay off the debt– the US would still be a few trillion in the hole.

That’s just a pipe dream anyhow. The government is going to give the largest voting blocs even more tax cuts and entitlement programs, then stick the bill to (1) future generations; (2) those who are unprepared to deal with inflation; (3) productive citizens who generate wealth and create jobs.

We can see this already happening around the world.

In Portugal, their government has even gone so far as to introduce a special ‘crisis tax’ to bring down that country’s deficit… punishing the entire population for decades of politicians’ mismanagement.

In Australia, that government is singling out the resource industry and charging them with a special tax to redistribute mining profits across the rest of the economy.

Sure, that sounds like a great idea, mate. Penalize your most profitable industry that provides ample jobs and wealth, then choke off the profits that they need to reinvest in exploration and extraction technology. That ought to be good for long-term growth.

Unfortunately, this is only the beginning. You can expect even more Draconian measures in the countries with the most desperate balance sheets– that’s the PIIGS, the US, and Japan.

Here’s the good news: As an expat, all of these measures are largely meaningless. When you’re a ‘permanent tourist’, governments compete for you rather than try to bleed you dry. They want you to spend your time and money in their country, and they’ll do whatever it takes to attract you.

I think there’s going to be a massive wave of expatriation over the next few years, and it’s already begun. Everyone has a breaking point, and a lot of people are going to be reaching theirs very soon.

The solutions are already out there– offshore bank accounts, foreign property, tax residency, second citizenship, etc. It’s simply a question of will and mental attitude.

Are you seriously considering expatriating or at least planting flags internationally? What’s your single biggest question about it? If not, what’s holding you back?

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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  • Tom Armistead

    Over the last seven years, my husband and I have found ourselves to be unintentional (at first) ex-pats in a country no one mentions, Guatemala. We were first invited to visit a friend living at Lake Atitlan in the highlands, stayed six weeks and fell in love its natural beauty and the native people. We met a long-time ex-pat there who was also a builder, and since 2003 have purchased land, learned Spanish and had built for us a walled house on a couple of acres.
    Guatemala is certainly not for everyone, especially the capital, parts of which are crime-ridden and the city is quite polluted. However, we are just ordinary folks, moderately physically fit, and in the seven trips we have made down there, have never had anything worse happen than having a couple of tools disappear in the village where we live. We live with the Maya and have found the majority of them to be extremely hard-working and family-oriented people.
    Guatemala is the one of the poorest countries in Central America, they say there is corruption in the government (unlike the U.S.?!) but cost of living is much lower and even as far as we are from the nearest big city, we’ve been able to find most everything we’ve needed or wanted, including solar, water purifiers, excellent produce and imported products from all over the world. The growing season is phenomenal. Probably the greatest thing about Lake Atitlan is its climate. At 5000 ft above sea level, the weather is near-perfect year round running between 50 and 80F, although a couple of tropical storms have done damage and there is an active volcano 120 miles to the south of us.
    We are currently obtaining residency visas (about $2000 apiece.) We retired last year and plan to spend at least half of each year down there.
    As Simon has said, connections are the key to a positive ex-pat experience. We’d be happy to share more information with anyone who’s interested.
    Dru and Tom Armistead

    • kyletrotta

      Hey Tom, could you send me your email address? I would love to chat!

  • Paul

    I have already started planting flags in Panama by purchasing two preconstruction properties (1st delivered in 2008 and rents bringing in nice return and 2nd to be delivered in 2011), opened bank account and have started residency/visa process.

    I am in process of moving prior IRA into Open Opportunity IRa, yet, I am stuck now in which country to use the funds for property. It would be perfect that this same location allows for residency/citizenship as well ! So, where do you recommend ?

    Lastly, to become truly free, the biggest hold back is having income which is steady produced from mobile locations.

  • Lanierb2b

    Dear Simon: I truly enjoy your daily letters. I sometimes feel overwhelmed with the possibilities. Right now I am a stay at home mother/associate producer for a new TV series. My husband works 8-6 in an office. We have a 17 yr old HS Grad and a 3yr old. Our yrly income is less than $70k. We always seem to be tapped out at the end of the month. An extra $200 for a passport has been elusive, never mind trying to get a vacation or second passport. I so badly would love to start moving in a different direction. America does not seem to be for the people or by the people. We the people don’t matter anymore. What is your suggestion for beginning steps?

    • john

      Dave Ramsey is a good start, sounds like you have unnecessary debts and monthly reoccurring bills. When you get paid take 20-30% of take home pay put in in a sock drawer that day and forget about it. Now make do with the rest. This is an easy way to live within your means. If you earned 120K you would still be broke just with a larger TV and larger car payment.

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    Was it a contest, a promotion by Blizzard, or a hacking scare? If you don’t have an authenticator yet, what’s holding you back?

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  • El Dorado

    What is holding me back is the fact that I know if I expose myself to have any connection with an offshore service provider that I will have to get a banker’s letter, which I know in today’s world will make that banker contact some government agency which will in turn put me on some “freeze account” order, to have large amounts of my assets illegally witheld from me, forcing me to go to court to loose even more of it. So the plan is slowly move out cash by hand over a long period of time. Have no idea how this will work after selling the house though, don’t know how much can be wired offshore. Plus I trust no one offshore, how could I sell my home which has all my life savings in it and then trust some offshore bank where I have no residency and legal rights? So in the end I don’t trust banks and government here, NOR do I trust offshore centeres as I fear they can easily confiscate or steal all my money and never be heard of again.

    Also if you leave most countries for a period of time you put yourself in a legal nightmare forcing you to spend large sums of money to travel back and forth to your country to deal with BS red tape which is needed to deal with lawyers to have them deal with evil bankers and evil government agencies who are illegally freezing your accounts and or illegally taxing you for “expat” tax bs.

    I realized after many years researching how to get out that almost no one is going to be able to do it, since no one is going to risk their life savings to an offshore provider, and at the same time risk exposing themselves as “suspicious” in this post 911 nazi world police state where they can confiscate aka freeze all your assets without any legal court decision whatsoever. Most people are just going to accept the bs and stay in their countries as it is too hard and too much risk to put all their assets at risk today because of how powerless we have become at the hands of bank managers and digital wire tracking, etc.

    • Steve3

      I hear you. I also get annoyed at some writers that advise to ship your
      gold and silver overseas to a foreign establishment, to me thats just setting your self up for a potential loss. Practical methods that are currently legal that work are what people need

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