Category Archives: Capital Controls

Casey Research Articles About Gold Coins For Storing Wealth Offshore

Continuing on the subject of gold and storing it offshore, I’d like to bring up two articles I recently read on the Casey Research website. Casey Research was founded by Doug Casey, an American author, publisher, and investor, who also serves as chairman of the Delray Beach, Florida-based investment research firm. Regular readers know I’ve mentioned Casey before on this blog.

Back on May 18, 2017, an article entitled “Doug Casey’s Two Top Ways to Store Wealth Abroad” appeared on CaseyResearch.com. In it, International Man Senior Editor Nick Giambruno (who I’ve also mentioned in the past) asked Casey, “What forms of savings are good candidates to take abroad?” He replied:

Everybody should own gold coins because they are money in its most basic form-something that a lot of people have forgotten. Gold is the only financial asset that’s not simultaneously somebody else’s liability. And if your gold is outside the US, it gives you another degree of insulation should the United States decide that you shouldn’t own it.

(Editor’s note: Bold added for emphasis)

“It gives you another degree of insulation should the United States decide that you shouldn’t own it.”

I would add “domestically” to the end of that statement.

More recently, a piece entitled “The Ultimate 4-Step ‘Freedom Insurance’ Plan” appeared on the Casey Research website. In the interview of Nick Giambruno by Chris Lowe, editor of Bonner & Partners’ Inner Circle, gold coins were mentioned again as “the easiest way to lessen the political risk to your savings.” From the October 3 exchange:

LOWE: What form of gold are we talking about- bullion, gold coins, ETFs?
GIAMBRUNO: Physical gold is your best option. Then you don’t have any counterparty risk. Having some gold in your possession in your home country is good. But having another stash in a foreign country is even better. You can either store it at a foreign property. Or you can store it in a non-bank safe deposit box.
LOWE: Why not a safe deposit box in a bank?
GIAMBRUNO: When President Roosevelt criminalized the possession of gold in 1933, federal agents went through bank safe deposit boxes searching for undeclared gold. Today, bank safe deposit boxes fall under the regulations and jurisdictions of banks. If there’s a bank holiday, like the one in Greece… or a bail-in like the one in Cyprus… or any event that shuts down or otherwise affects the banking industry, your bank safe deposit box is at risk. That’s not the case with non-bank vaulting and storage companies.

(Editor’s note: Bold added for emphasis)

The subject of transporting gold coins out of the United States came up in the interview. From the exchange:

LOWE: What about gold coins? Can you just hop on a plane to Colombia or Argentina with gold coins in your pocket?
GIAMBRUNO: Well, it’s a gray area. And because it’s a gray area, I wouldn’t recommend taking more than a couple of gold coins with you when traveling abroad. The average TSA agent has probably never seen a gold coin in his life. He probably wouldn’t know what it was if he found one. But, if he thought it was something suspicious, he would confiscate it and let the courts sort it out. And that’s no fun. You’d have to go to court to get your metal back, and that would involve costly legal fees. I’ve taken gold coins across numerous borders, and I haven’t had a problem. But I’ve heard horror stories. And from personal experience, I can tell you that gold coins set off the X-ray machine. So there’s a decent chance the TSA folks- or their foreign counterparts- will find them. And remember, if you take more than $10,000 of “cash” in or out of the US, you need to file a “Report of International Transportation of Currency and Monetary Instruments” with FinCEN, a branch of the Treasury Department that deals with financial “crimes.”

Giambruno ultimately concluded:

You’re better off buying coins when you’re already in your destination country. Taking gold coins with you is just too risky.

(Editor’s note: Bold added for emphasis)

Back on March 20, 2014, I blogged about transporting precious metals out of the United States to place in an overseas safe deposit box. In that post, I pointed out offshore expert Mark Nestmann discussed the process in-depth on the Financial Sense website in September 2012. His thoughts on the matter?

While it’s perfectly legal to move precious metals in or out of the United States, you must understand the reporting rules before you begin. Otherwise, your risk confiscation of your metals along with possible civil and criminal sanctions. You’re much better off paying an armored security service such as Brinks or ViaMat to transport the metals for you.

(Editor’s note: Bold added for emphasis)

You can read the two articles on the Casey Research site here and here, respectively.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: The mention of a particular individual/business should not be construed as confirmation of services claimed to be provided or any sort of recommendation. A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

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James Rickards Reports Gold Still Moving From Banks To Swiss Private Vaults

Late last week I was reading the Daily Reckoning website when I came across a November 28 article by the American lawyer, economist, investment banker, and best-selling author James (Jim) Rickards. The editor of Jim Rickards’ Strategic Intelligence mentioned the following in his discussion about potential triggers for the next financial crisis:

I was in Switzerland not long ago, and I met with one of the big four “secure logistics” firms in the world. These are the people that handle the actual physical metal.

They’re building vaults as fast as they can. They’ve been negotiating with the Swiss Army. Over the years, the army’s hollowed out some of these mountains in the Alps to build these extensive warehouses and storage facilities and tunnels that will withstand nuclear attack.

So these vault contractors have been in negotiation to lease the mountains — these nuclear bomb-proof mountains — from the army. My source told me, “We’re building vault space as fast as we can. But we’re running out of capacity.”

I asked, “Where’s the gold coming from?”

He said, “UBS and Deutsche Bank and Credit Suisse, and customers are taking it out of the banks and giving it to us.”

(Editor’s note: Bold added for emphasis)

The above might ring a bell for regular readers of Offshore Safe Deposit Boxes. Back in the spring I blogged about a March interview of Rickards by London-based Tip TV Finance show in which viewers were warned:

Keep away from the paper contracts. Get physical gold. Put it in a safe place. Don’t put it in the bank. I spent a lot of time in Switzerland. I visited… when I go to Switzerland I don’t spend much time with the banks, I spend it with secure logistics operators, vault operators, refineries- the people that actually handle the physical gold. They see gold coming out of Deutsche Bank, Credit Suisse, UBS, and others, going into Loomis and the private vault operators. That does not change the total supply of gold, but it changes the floating supply. Once you take it out of the banks there’s less available to prop up this paper gold market. The banks will probably be closed, at least temporarily. You won’t be able to get your gold

(Editor’s note: Bold added for emphasis)

“Get physical gold. Put it in a safe place. Don’t put it in the bank.”

So what qualifies as a “safe place” for Rickards?

Late last year, the author of the USA Today and Wall Street Journal business best-seller The New Case for Gold told The Capital Network’s Lelde Smits at Custodian Vaults, a private, non-bank safe deposit facility in Sydney, Australia:

Well you know, Lelde, we’re in a private vault. And I recommend private, non-bank storage. Now this is a vault. It’s very secure. You see we have some gold right here obviously and there is a lot more in these boxes. But this is not a bank. This is private. And that’s what I recommend.

You don’t want to put your gold in the bank because banks are controlled by the government. When you most want your gold, that’s when the banks will be closed. You won’t be able to get it. So, I recommend again, a place like the one we’re in, which is a private, non-bank, secure storage

(Editor’s note: Bold added for emphasis)


“Jim Rickards: How to make a fortune before 2018”
YouTube Video

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: The mention of a particular organization should not be construed as confirmation of services claimed to be provided or any sort of recommendation. A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

Source:

Rickards, Jim. “Waiting for the Avalanche.” Daily Reckoning. 28 Nov. 2017. (https://dailyreckoning.com/waiting-for-the-avalanche/). 3 Dec. 2017.

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No More Than 4 Years Left To Implement Effective Asset Protection Plans?

Last week I brought up a recent article by Mark Nestmann entitled “‘Asset Protection’ Isn’t A Scam” in which the offshore expert made some solid arguments in defense of Americans’ legal use of asset protection, which includes offshoring.

Since that time, I’ve come across a related piece by Olivier Garret on Forbes.com. Who is Garret? From his Forbes Contributor bio:

I am founding Partner and CEO of Mauldin Economics and Garret/Galland Research, leading publishers of financial research geared to individual investors and institutions. In 2012, I launched the Hard Assets Alliance, a revolutionary trading platform for precious metal investors. In addition, I’m managing partner of three hedge funds invested in the resource sector. Between 2007 and 2015, I was CEO and Partner of Casey Research, a publisher of financial research focused on the resource sector. The company was successfully sold to Stansberry & Associates in May of 2015…

Back on August 2, Garret penned an article entitled “Every Investor Is One Misstep Away From Losing Everything — And It Has Nothing To Do With Crashes” which should give Americans with even modest wealth pause for thought. Garret warned of increasing threats to personal assets posed by the legal system and desperate politicians hunting money in an era of growing class warfare and attraction to socialism in the United States. He wrote:

Whether or not we like President Trump, his election may have handed us a short-term reprieve from the collectivist movement in the US. Long term, though, I believe the US is on an inevitable path toward more socialism.

To fill its empty coffers, state and federal governments must take assets from savers, entrepreneurs, and hard-working professionals.

Why?

Because the U.S. lacks the political will to reduce its debt burden and make meaningful cuts to programs or benefits.

Anyone who has accumulated a bit of wealth has a very short window—probably no more than four years—to implement well-structured asset protection and estate plans.

(Editor’s note: Bold added for emphasis)

A thought-provoking piece by Olivier Garret, which you can read here on the Forbes website.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: The mention of a particular business should not be construed as confirmation of services claimed to be provided or any sort of recommendation. A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

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Martin Armstrong Predicts U.S. Government Will Confiscate Gold If Traveling With It Domestically, Overseas

Continuing on the subject of geographical diversification of assets, Martin Armstrong, economist at Armstrong Economics and the subject of the 2014 documentary The Forecaster, recently discussed the topic of gold confiscation. He blogged on his company’s website last Thursday:

I do not believe they will confiscate gold for there is no intention to return to a gold standard as Roosevelt did in 1934. He confiscated the gold FIRST to profit from the dollar devaluation in 1934. He also wanted to stop people from hoarding cash outside the banks, which is the same problem we have today that they are addressing by moving electronic and cancelling high denominations. However, what they will do is confiscate gold if you tried to leave the country with it or you travel with it domestically using the civil asset forfeiture laws. That would be the same as if it were cash…

However, keep in mind that the government may declare any transaction in gold or silver to be illegal and they then get to confiscate all assets involved. They can easily just pass a law and declare anyone dealing in some off-currency exchange to be “money laundering” to hide from taxes. These people will do whatever they can to retain power…

So in a nutshell, while an “official” gold confiscation program might not be announced/implemented, Armstrong predicts the federal government will slap restrictions on traveling at home/abroad with gold and may go so far as to make precious metals transactions in the U.S. illegal, opening the door to confiscation.

Under this scenario, geographical diversification of one’s legally-obtained and owned gold in an offshore safe deposit box could prove to be a wise financial decision.

You can read Armstrong’s entire post on his company’s website here.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on information found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

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The U.S. Private Vault Boom Of The Early 1980s, Part 4

Today I’m going to wrap up that four-post series on the U.S. private vault boom of the early 1980s. To recap, in part one I blogged about the rapid growth of the non-bank vault industry in the United States at that time, where the number of safe deposit box facilities reportedly went from zero in the autumn of 1980 to approximately 170 vaults just a few years later. And back down to just 3 by 2010. I ended part one asking:

So how did the boom fizzle out? And why such explosive growth in the first place?

In part 2, I examined the “boom” phase more closely. Various news outlets at the time reported elevated demand for safe deposit boxes due to:

• Rising gold and silver prices
• Growing interest in collecting antiques, artwork, coins, stamps, etcetera
• Corresponding increase in crime. U.S. property crime rates increased year-over-year from 1977 to 1981, according to Federal Bureau of Investigation uniform crime reporting statistics.
• “Economic survivalists”
• Businesses requiring offsite, secured data storage

Meanwhile, banks didn’t have enough safe deposit boxes- particularly large-sized ones- to satisfy demand. Hence the three- to five-year “wait lists” being reported. And the arrival of more private vaults.

In part three, I looked at the “bust” phase in more detail. I suggested changes to those factors that helped spur demand for safe deposit boxes in the early eighties may have contributed to the “bust” for the next quarter century. Those developments included:

• Gold and silver prices falling significantly from their January 1980 highs
• Collector interest (and prices) peaking in baseball cards, coins, comic books, and stamps by the late eighties/early nineties
• U.S. property crime rates decreasing year-over-year from 1981 to 1984 and again from 1991 until 2010 (save 2001), according to FBI uniform crime reporting statistics
• Fears of the “economic survivalists” never materializing. Or at least, their concerns never going mainstream.

In the meantime, the media reported the supply of safe deposit boxes grew (including the larger-sized containers) via financial institutions and the new non-bank vaults coming online.

The “bust” of the U.S. private vault industry was on.

Today, I’ll end the series with a talk about the tail-end of that bust and the relevance of the whole phenomenon for the U.S. and offshore non-bank vault industry here at the start of 2016.

But first, I’d like to go back to part one where I talked about a Colorado Vault & Safe Deposit Box Co. blog post from August 2015. The Centennial, Colorado-based facility pointed out:

In 2010, when Colorado Vault & Safe Deposit Box Co, opened there were only 3 private vaults in the United States…

“Only 3 private vaults in the United States”

At the tail-end of the bust (lasting until 2010 or so), I suspect the U.S. private vault industry found themselves to a certain extent in the same boat as their banking system counterparts. Deirdre Fernandes reported on The Boston Globe website on March 8, 2014:

The safe deposit box, once a staple of any bank branch, has itself become an antique. Banks are reporting that safe deposit box use is on the decline, with occupancy rates dropping quickly as customers buy home safes, digitize and store documents electronically, and, in this era of conspicuous consumption, prefer to display their valuables rather than stash them away for special occasions.

Jerry Pluard, the owner of Safe Deposit Box Insurance Coverage LLC, an Illinois company that insures the contents of the boxes, estimates that nearly half — 45 percent — of safe deposit boxes in the country are empty today. Boston-based Santander Bank says demand has slipped so much that it won’t even include safe deposit boxes when it builds new branches…

Younger customers, however, mostly find it a hassle. Already using branches less for all services, they don’t want to make a special trip just to get access to their belongings, said Bob Hedges, a managing director at Alix Partners, a global consulting firm based in New York City. Only 6 percent of bank customers rent a safe deposit box, and one third of those customers are over 65, according to recent survey by the firm.

Safe deposit boxes now rank along coin-counters as lowest-used bank service, Hedges said…

(Editor’s note: Bold added for emphasis)


“Banking trends making safety deposit boxes obsolete”
USA Today Video

The private vault industry also (undeservedly) received a “black eye” as word got out about Britain’s “Operation Rize,” a June 2008 police raid where thousands of non-bank safe deposit boxes in London were confiscated over suspicion of criminal activity- yet only 30 people were ever convicted of wrongdoing out of 6,717 box renters last I heard.

But fortunes were changing for both bank and non-bank safe deposit box facilities. Eric Zorn reported on the Chicago Tribune website on April 24, 2014:

It’s [SDBIC’s Jerry] Pluard’s best guess, however, that the decline has leveled off and that reports of the demise of the safe-deposit box — “On the way to oblivion,” said a Crain’s New York Business headline last year; “A relic,” wrote The Boston Globe in March; “Obsolete,” added USA Today this month — are overblown.

“It’s mostly bigger banks where I’ve seen the falloff,” Pluard said. “They open new branches that don’t offer safe-deposit box services. But business is still good at smaller, community banks, and demand is still high for the biggest boxes.” He added that he’s “noticed a growth in private-vault companies that aren’t affiliated with banks,” which might explain the perception that the safe-deposit box is a “dodo bird,” as the New York Daily News wrote last year.

These private companies are analogous to self-storage locker businesses.

Those have boomed in recent decades, suggesting that we’re still interested in keeping our stuff safe, but that our stuff has just gotten larger…

(Editor’s note: Bold added for emphasis)

“These private companies are analogous to self-storage locker businesses”

Highly-secured, self-storage locker businesses, a prospective/current customer would hope.

This decade, a resurgence in private, non-bank safe deposit box facilities opening their doors is underway in the United States and overseas. Megan V. Winslow reported on the Los Altos Town Crier website on April 1, 2015:

Mark Paul, director of U.S. Private Vaults Inc., of Beverly Hills, said he is aware of 15 private vault companies in the country

“This may seem unusual in the U.S., but it’s very common in Asia and it’s fairly common in Europe,” Paul said…

(Editor’s note: Bold added for emphasis)

And from that Colorado Vault & Safe Deposit Box Co. blog post:

Do you know how many privates vaults are in the United States?

If you guessed over 10 then you were correct. The private vault industry is on the rise in America as well as around the world. In 2010, when Colorado Vault & Safe Deposit Box Co, opened there were only 3 private vaults in the United States; Dallas, Las Vegas, and the San Francisco Bay area. Now, private vaults are all across the U.S. from over 3 in California to the newest facility in the Washington D.C. area. Furthermore, as of June 2015 there were over 130 private vaults worldwide

(Editor’s note: Bold added for emphasis)

I’m familiar with two private vaults in this state (Illinois) alone, with one located just a short drive from me. And glancing at this blog’s sister site- Offshore Private Vaults- I now count just over 200 overseas, non-bank facilities that are either open or will be soon. And I come across new ones on a regular basis as part of my research.

So that was the tail-end of the bust (and start of the next boom). As for the relevance of the whole phenomenon for the U.S. and offshore non-bank vault industry here at the start of 2016? Well, it appears some of the same factors that powered the early 1980s U.S. private vault boom are back again, such as:

• Higher gold and silver prices compared to levels at the beginning of the millennium
• Increased property crime. While the statistics may not confirm this (anyone else suspicious of “official” numbers besides me?), the perception exists for many. And often that’s what drives people to act.
• Financial upheaval that’s spawned a new generation of “economic survivalists.” The global economic crisis that reared its ugly head in the autumn of 2008, the subsequent central bank “papering-up,” and tepid recovery boasting plenty of low-paying jobs have made “hard assets” alluring again to the smart money and new breed of “preppers” who have a pretty good idea of where this is all heading.

As supply is concerned, safe deposit boxes of all sizes seem to be readily available (for the most part) in the United States through financial institutions. In other parts of the world, banks are no longer offering this service and ditching these secured containers (blogged about as recent as November). That being the case, I won’t be surprised if the ongoing private vault “boom” is more pronounced overseas than here in the U.S.

Three catalysts most likely having a significant positive impact on continued industry growth going forward will be:

1. Higher precious metal prices
2. More property crime (I recently read a report out of Ireland that burglars are bringing metal detectors along with them on the “job”)
3. Increased capital controls/wealth confiscation activity by governments and banking systems around the world (catalogued on sister site here starting at paragraph number four).

Regarding that last point, if such desperation by politicians and bankers becomes commonplace enough that Americans are fully-aware of it, storing one’s valuables in a bank safe deposit box may be considered an act of insanity. At which point, I suspect more safe deposit box facilities outside the banking system may open their doors from higher demand/lower supply (bank boxes being pretty much out of the equation under such circumstances).

I don’t know how long this current “boom” in the private, non-bank vault industry will last, but at the present time it looks to be on solid foundations and I believe it’s very possible all three of those catalysts mentioned above will play out down the road.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on information found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

Sources:

Fernandes, Deirdre. “The disappearing allure of the safe deposit box.” The Boston Globe. 8 Mar. 2014. (https://www.bostonglobe.com/business/2014/03/08/the-disappearing-allure-safe-deposit-box/HvwkPkvAUtoo8329bZrKsM/story.html). 21 Jan. 2016.

Zorn, Eric. “Safe-deposit boxes are in decline at banks.” Chicago Tribune. 24 Apr. 2014. (http://articles.chicagotribune.com/2014-04-24/opinion/ct-banking-safe-deposit-boxes-decline-oped-zorn-04-20140424_1_safe-deposit-decline-bigger-banks). 21 Jan. 2016.

Winslow, Megan V. “First Street’s ‘Fort Knox’ up for sale.” Los Altos Town Crier. 1 Apr. 2015. (http://www.losaltosonline.com/news/sections/business/183-business-features/49867-first-street-s-fort-knox-up-for-sale). 21 Jan. 2016.

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