April 10, 2013
A few days ago, Italian authorities stopped a man who was making his way across the border into Switzerland with his wife and three children.
They searched his car and found, literally, a ton of gold bars hidden in a floorboard storage compartment.
Needless to say, the gold was confiscated, the car was impounded, and the man was arrested, despite the fact that it’s perfectly legal to own and transport gold.
Now, the European Union does require that ‘cash’ in excess of 10,000 euros be declared when crossing borders.
Yet article II of EC regulation 1889/2005 states that “cash” for the purposes of declaration includes legal tender currency plus monetary instruments in bearer form– travelers cheques, promissory notes, bearer bonds, and stock certificates. Not gold. And certainly not gold bars.
So the man was actually well within his legal rights. But it didn’t matter. They nabbed him on ‘suspicion of money laundering.’
As one of the most bankrupt European Union member states, Italy is going down a very dangerous road indeed. They’ve already imposed bank withdrawal restrictions, raised taxes, and openly flirted with bank nationalization.
No doubt, after watching what happened in Cyprus, Italians are scared. And they’re not the only ones.
Candidly, everyone living under a bankrupt, insolvent government should consider the very strong possibility that their savings will be plundered, their retirement accounts seized, and capital controls imposed.
These ideas aren’t alarmist or sensational; even the most cursory look back on history shows that desperate politicians almost always fall back on the same old playbook of confiscating their citizens’ wealth.
Are the chances of this happening 100%? No. But the likelihood is certainly greater than zero. It would be dangerously foolhardy to adopt a strategy of blissful ignorance and merely assume that “it won’t happen here.”
Consequently, rational, thinking people ought to consider prudent options to move a portion of their assets, savings, income, and even lifestyle overseas to safe, stable jurisdictions.
This doesn’t necessary require a radical change to the way you live your life. It’s merely having an insurance policy.
If the worst happens and governments follow the historical pattern of confiscatory rampages, you’ll be in an excellent position.
But if nothing happens, you won’t be worse off for having moved some precious metals to Singapore, or having transferred some savings to a Hong Kong bank account, or having purchased productive agricultural property in South America.
This isn’t about tax evasion, terrorist financing, or criminal money laundering. It’s about putting your family before your politicians… and preserving what you’ve worked your entire life to build.
Just make sure these steps are executed rationally, and prudently.
For example, I’ve been advising our premium members for quite some time to NOT move precious metals abroad themselves. Leave that to established companies like Viamat and Malca Amit which specialize in global secure logistics.
And be mindful of the jurisdiction that you choose; it’s imperative to select a place that has a tradition of respecting privacy and strong economic fundamentals.
This effectively eliminates most of Europe and North America, though some options in Switzerland, Andorra, Liechtenstein, and Austria may make sense.
Asia, particularly Singapore and Hong Kong, are much healthier and present better options for precious metals storage.