by Jeff Clark, Senior Analyst GoldSilver.com; Advisory Board Member SWP
I loved watching dominos fall as a kid. Setting up different arrangements was fun, but watching them fall was, of course, the most entertaining part.
Once when setting them up, I accidentally bumped a domino—and down they all went. After this happened a couple times I realized that once they started it was darn hard to stop them. I tried grabbing a domino ahead of the cascade and held it up so they’d stop there. Sometimes that worked, but usually I’d bump the one beside it and start the cascade again.
What does this have to do with gold and SWP? Everything…
The Dominos Are in Position
What do you view as the greatest threat to your wealth… inflation? A stock market crash? A world war?
While all of these could greatly impact an investment portfolio, the one thing that would hurt it most is if you couldn’t get to it. Regardless of the reason, if you can’t access some portion of your wealth, it’s essentially worthless to you. This is the core rationale behind internationalizing one’s assets.
Unfortunately, the risks to assets getting “caged” domestically are growing. During periods of recession or crisis, governments grow increasingly desperate for revenue. It’s so common it’s predictable. And the worse the crisis, the more heavy-handed their “solutions” can become. In fact, as we’ve seen throughout history…
There have been numerous instances of confiscations, nationalizations, capital controls, bailouts, bail-ins, government rule changes, and individual seizures.
The problem today is that when the next recession or crisis surfaces, governments will find they are too deep in debt to deal with it effectively. Further, the primary tools used during economic upheavals are very limited and will be used up very quickly. Keep in mind that Fed Chairman Powell has already admitted zero interest rates and more QE are inevitable.
If the tools of central bankers are too feeble, other aggressive measures will need to be taken. It won’t take much for US politicians to begin looking for revenue in every conceivable corner, particularly as the pressure grows to meet the financial obligations of social security, Medicare/Medicaid, defense, interest on the national debt, infrastructure, etc. The same is true of other developed countries.
This setup is not unlike a line of dominos, standing in position, ready for the first one to tip over and start a cascade.
The Dominos Are Starting to Fall
While it may not “feel” like wealth held domestically is trapped, your assets stand at the end of a line of financial dominos that once tipped, could make them increasingly appealing to desperate government officials. The more you have, the more likely you’ll be a target. The worse the crisis, the more you’ll be a target.
Unfortunately, those dominos are already starting to tip over—and you and your wealth are standing right in their path.
Government debt is mathematically unpayable… all currencies are fiat for the first time in history and thus can be printed at will… and the interest rate tool loved by all central bankers is deficient. In other words, the government’s methods are too weak to work.
So where will they look to meet their revenue shortfall? Many places—one of which could be your personal wealth.
And just like in real dominos, once they start to fall the cascade happens very quickly, and will reach you and your wealth suddenly. There will be little time to react.
There’s Only One Solution to Falling Dominos
Just as I learned as a kid that you can’t stop the dominos once they start falling, so is it with our financial conditions today.
Since you can’t stop the dominos from falling, there’s only one solution: GET OUT OF THE WAY
You can’t pretend the dominos aren’t there. You can’t assume you’ll be able to sidestep the cascade or outrun it. You can’t look at others who make no preparations and conclude it’s not important. And if your wealth does get trapped you’ll have no recourse.
There’s only one wise move. Remove assets out of its path.
This means that at a minimum, move at least some of your assets away from potential harm.
This is one reason SWP was created. To provide an inexpensive yet highly secure option for international diversification, with one of mankind’s most trusted assets: gold. Storing some bullion in Cayman gives you layers, and time, should you ever need them.
I hope you’ll consider the risks to your domestic wealth, before the dominos in your country reach them.