I promised yesterday that I would write a post to discuss the usefulness of purchasing tangible assets in order to structure one’s finances and to keep one’s business out of the banks. Here are some of the ideas I had:
- Real estate
- Precious metals
If one is wealthy it is likely that the first two of these would be the most helpful. Real estate is harder to steal. Real estate however is propped up by the banking system and is therefore in a likely bubble in Canada.
One must find a safe place for precious metals. But precious metals, unlike real estate, is actually being oversold by the banking system through the paper markets in which large holders of gold like the US treasury and the Federal Reserve bank lease their gold to the bullion banks, who in turn sell it in the gold market to keep the prices artificially low. This means that while the fundamentals for precious metals remains strong, the price continues to remain obstinately low.
Not many people have a much food on hand. In the event of an economic collapse, having foods stuffs on hand will increase one’s resilience in times of crisis–precious metals, especially gold and silver bars and coins, will serve as currency in case of monetary failure, which becomes more likely every day. Apparently, retail outlets for food do not keep vast quantities of food in storehouses, but ship directly. So if ever there is an interruption of the supply lines, once people empty the grocery stores, that’s it until things return to normal. I would recommend having several months of food on hand in the form of dried, canned or frozen food.
The thing to remember is that the central banks are now defrauding savers by keeping interest rates at artificial levels. They are also using quantitative easing to buy up the toxic assets of the banks. The Federal Reserve Bank of the United States is buying around $40 billion in toxic assets per month, so that its balance sheet keeps growing. The central bank makes the money to buy these assets out of nothing, and it goes into the hands of the banksters who then use this freshly created fiat money to hand themselves generous bonuses, to prop up their own failing bank sheet or to create asset bubbles in the various sectors including the stock markets and real estate. The Federal Reserve money base chart shows the current amount of newly created fiat money since 1985:
Please note that the actual amount of money in circulation has increased more than 400% since the crisis of 2008 when the Federal Reserve began to buy up the bank’s toxic assets. In addition, the Federal Reserve has become the top holder of US treasury debt, propping up the profligate spending of the US government by create new money ex nihilo. When you consider the manner in which the bullion banks are suppressing the price of precious metals, this looks like a bubble ready to burst, with the dollar plummeting in value and precious metals skyrocketing. It is not a question of if but of when, in my opinion.
Now, gold seemed to be keeping up with the Federal Reserve money base but then has dropped off in the last two years and not kept up the pace:
Some believe this is a buying opportunity for gold. My belief is that gold has had strong fundamentals during this whole period, and that the recent weakness in price is not a correction but a suppression. One thing is clear: Russia, India, China and many other countries are beginning to reject the US dollar for the rotten currency that it is and are buying gold at a massive rate. I personally want to have some of the tangible assets that the countries with the most money still want. The final advantage is that for US citizens abroad, precious metals not held in an FFI is not a reportable asset under FATCA.
Disclaimer: These are my thoughts. I am not a financial adviser but an ordinary lay person. Any action you take is at your own risk. Structuring is a likely crime with regard to US law, but I advise not to break any local laws in your country of residence.