As I’ve frequently stated, the problem with conventional asset protection is that it frequently focuses on preserving the numbers in your offshore bank account. What I mean by this, is that if you have a million dollars, your traditional asset protection lawyer will seek to protect it against unjust lawsuits, greedy ex-spouses, and government seizure – maybe even taxation!

That’s fine as far as it goes… but it completely ignores what is perhaps the most important risk – currency devaluation, specifically devaluation of the dollar. No matter what complicated and convoluted theories economists might come up with, it doesn’t take a genius to figure out that if you print a lot more dollars, each one will be worth less. Every time Bernanke fires up the printing presses, he is devaluing the dollar. If you want to see statistics to back this up, see my earlier post: USA Bankrupt? Here’s the Evidence.

So if you have a million dollars in any of the best offshore banks at the beginning of 2010, and a million dollars plus today’s measly interest in your account at the end of 2010, you will really have made a big loss. So much for asset protection!

The solution, of course, is diversification. You’ve heard the story about the eggs and the basket. Physical gold bullion is one excellent hedge, and has the advantage of being non-reportable on the FBAR form (for US taxpayers) since it’s a physical thing, not a financial account. If you are interested in finding out more about How to Buy and Store Physical Gold Bullion Offshore, click here.

Another good solution is holding a multi-currency bank account. This is a financial service that is simple to use and understand, yet essential for protection against the devaluing dollar. A multi currency account, as its name suggests, is simply one bank account in which you can hold a variety of foreign currencies.

For example, you will log in to your internet banking and see you have X amount of US dollars, Y amount of Swiss Francs, Z amount of Aussie Dollars, etc.If you wire in an amount in a certain currency, the bank will simply hold it in that currency. Of course if you want to switch part or all of your balance to another currency within the account, you can do so with a few clicks of the mouse or a simple phone call.

Multi currency accounts are standard in some of the best offshore banking countries where I typically assist clients in opening their accounts. Despite the government’s propoganda, it is completely legal for most nationalities to hold offshore bank accounts – for the moment!

A question I am often asked is “is it possible to open a multi currency account in the USA?” Unfortunately, the answer is no. There are a few US banks that open foreign currency accounts, the pioneer being EverBank. Even EverBank, however, does not open multi-currency accounts – they simply open separate accounts for each currency you want to hold. This is not bad, but is less convenient.

Another problem with Everbank is this statement on their application form: Please note: Date of Birth, employment information and Social Security Number will be required from all account holders, including trustees and signers on the account. So no accounts for non-US residents, either.

To me, opening a multi-currency bank account in the USA seems like an oxymoron anyway. The whole idea is to diversify out of not just the US dollar, but the US banking system in general. According to bankimplode.com, 208 banks have ‘imploded’ since the beginning of the financial crisis – most of them in the USA.

That is why I have always recommended clients seeking multi-currency accounts to go offshore. For added security and privacy, it’s also wise to use an offshore entity like a Panama Foundation or Corporation to serve as the owner of your bank account. (If you haven’t read our free report yet on the advantages and disadvantages of Panama as an offshore centre, visit our Panama Foundations, Corporations and Offshore Banking page)

So how best do you go about opening a multi currency bank account? Which are the best offshore banks and the best offshore banking countries? Switzerland, Austria, or elsewhere? Where were the best places to open such accounts in 2009, and what will be the best offshore accounts in 2010?

For that information I suggest you download our Practical Offshore Banking Guide which is free for our paid-up members. If you are not a paid-up member yet, you can either subscribe online right now (it only costs $87 and takes a few minutes), or you can test our services with no obligation with our Free Five Part introductory course on Offshore Banking, Asset Protection and Wealth Creation that we would be delighted to send you starting today. Simply enter your e-mail address in the box above to receive yours.

Prefer a personal meeting? Then why not come along and meet me and the team in Cancun, Mexico in March 2010? Details from events@qwealthreport.com

Asset protection strategies and products offered by international banks in the various offshore tax havens around the globe don’t differ that much in substance. However, there are some interesting and powerful products you might come across in the offshore banking arena that are very different from what your domestic bank offers.

Here are five privacy-oriented offshore banking services that you might be able to achieve to further your freedom, wealth and privacy!
1. Offshore Safe Deposit Boxes

A safe deposit box is a locked box reserved for you in the vault of your bank. In your safe deposit box you might keep documents such as physical stocks or bonds, or for small, high value goods that they want to keep safe… like valuable coins, jewelry or maybe even a stash of federal reserve notes! You might keep these items for pure investment purposes – say gold bullion or uncut rough diamonds – or for more sentimental reasons (your great-grandmother’s wedding ring).

Increasingly, non-bank safe deposit facilities are becoming available. These are good because they are not reportable financial accounts – you don’t have to tell the tax man about them. Our contact in Panama reports a new safe deposit facility opening there, for example. Others, for example in Austria and in the Caribbean, are identified and reviewed in our free (to registered members) report How to Buy and Hide Gold Bullion Offshore.
2. Multi-Currency Accounts vs. Multiple Currency Accounts

Multi-currency accounts are quite common in offshore banks. These are very flexible since they permit you to keep many different currencies under the same account number. When you log in to the internet banking interface of your offshore bank account,  you will see different balances… X amount of US dollars, Y amount of Euros, Z of Yen etc.

Other banks also allow you to hold balances in different currencies, but allocate you a different account number for each currency. The end result is basically the same, but you will have a series of account numbers and you must take care not to confuse them. For example, if you send Yen to the Canadian dollar account number, the bank will assume you want to convert that balance to CAD and will do so automatically.

3. Precious Metals Storage

Some offshore banks offer a basic service where you can buy gold and simply store it in your safe deposit box. This certainly works, but may not be the most practical way of handling it. Why? Because each time you want to buy or sell, you have to visit the bank personally. Only you have access to your box.

There are various other practical ways of buying gold such as Perth Mint Certificates or Exchange Traded Funds, but the security of such investments in the current financial climate is debatable (see our article on Offshore Precious Metals Investments).

But in terms of offshore banking products (and this is especially common in Swiss banks) it’s important to understand the difference between allocated storage, and unallocated – also known as pooled storage. Both these systems are used by private offshore banks. If you would like to read more about them, read our free (to members) Gold Report for a detailed explanation.

4. Numbered Accounts

We’ve all seen James Bond movies, but what might surprise you is that many European private banks still offer numbered accounts today, simply for the asking. Numbered accounts (or pseudonymous accounts, which are the same but are known by code words instead of numbers) work just like any other offshore bank account.  The  difference is the the link between the code number or pseudonym and the actual customer is known only to a few senior managers within the bank. Of course, KYC regulations mean that a final beneficiary must always be identified. But at least this system protects your information from the hands of low level bank staff.

Typically the way numbered accounts work these days is that you will have a numbered account and a regular account in the same bank. Numbered accounts cannot normally be used for regular transactions such as wire transfers. So when you want to make a deposit or withdrawal, your private banker will personally carry out a cash transaction at the counter between the two accounts. In the accounting records, the transaction will appear on your personal account as a cash deposit or withdrawal, so there will be no direct link to your numbered account.
5.  Offshore Credit and Debit Cards

Almost all offshore banks will offer you the option of linking some kind of plastic payment card to your account. This may be anything from an unbranded hole-in-the-wall cash card through to a premium travel and entertainment card like the Platinum American Express or Diners Club cards. The most common brands, of course, are Visa and MasterCard… but there are far more variations on these cards than there are banks in the world! You offshore private banker will be happy to explain the range of cards available.

What your banker will not explain, however, is that you may well be able to enhance your privacy by obtaining a card from a completely different bank. For that information, you need to download and read our free (to registered members) Practical Offshore Banking Guide. There you will find specific information on prepaid credit cards and anonymous cash cards available from offshore banks.

Want to read more about these five services, plus other offshore banking services you might never have even heard of? Then you need to be a member of Q Wealth Report. The first step is to sign up now for our free five part course, Secrets of the Super Rich. Module one of the course, entitled Offshore Banking Made Simple, could be in your inbox shortly!

Germany has always been something of a cash economy. Even as North America and the rest of Europe were ganging up against anyone with a wad of cash a decade ago, German auto dealers would accept nothing but cash for that new Mercedes or BMW, while travelers in Germany were amazed that hotels and train stations would not accept credit cards either. Things are changing, but the ‘Bundesrepublik Deutschland’ is certainly the largest ‘cash economy’ in Europe.

Perhaps it’s not surprising, therefore, that Frankfurt Airport in Germany is the testing ground for a sophisticated new type of vending machine that sells gold bullion for investment purposes. As regards the typical trade-off between money laundering regulations and privacy, a camera monitors the machine. Presumably anyone hogging the machine to purchase large quantities will be regarded as suspicious.

Operator TG Gold-Super-Markt plans to roll out 500 of the machines in airports and railway stations across Europe, including Germany, Austria, Switzerland and the UK. They are also offering worldwide franchise licenses. The sophisticated machines sell everything from small bars intended as gifts, such as a 1 gram bar for about €30, to larger ingots aimed more at investors – a 10 gram bar costs about €245 – or gold coins such as the Maple Leaf  or Kangaroo.

Demand for retail gold bullion (in other words, physical gold that you can hold and touch, rather than paper gold such as certificates and ETFs)  has of course shot up in the past year. An article in Britain’s Daily Telegraph states that demand reached an estimated 108 tonnes in 2008, up from 36 tonnes in 2007 and 28 tonnes in 2006.

Thomas Geissler, who owns TG Gold-Super-Markt, said: “German investors have always preferred to hold a lot of personal wealth in gold, for historical reasons. They have twice lost everything. Gold is a good thing to have in your pocket in uncertain times.”

Unfortunately, however, buying physical gold in these vending machines comes at quite a premium. Geissler claims that the premium over spot is less than charged by most banks, which may be true. But then ‘most banks’ are not specialists in gold. Those who are more serious about investing in gold bullion know which banks to go to to buy at substantially lower premiums. For example, nearly all banks in Vienna, Austria are now stocked up with gold coins that are available for cash purchasers at a much lower premium.

So, in summary, it’s a cute idea and next time we fly through Frankfurt Airport we will likely test it out ourselves. It’s ideal for encouraging impulse savings (that’s the opposite of impulse purchases!) But if it gets too successful – in other words if investors are treating this seriously rather than as a gimmick – we may well see some resistance from governments. After all, little more than ten years ago Austria had anonymous bank accounts (ATM Sparbuchs) that could be operated through similarly innovative technology. Five years ago you could buy prepaid Travel Cards and Mobile phone SIM chips anonymously for cash in Switzerland. But no longer…

If you want to know more about discreet ways to buy gold bullion offshore while protecting your privacy, you’ll want to check out Peter Macfarlane’s article about Precious Metal Investments: How to Buy and Hold Gold Bullion Offshore. We expect Gold to go through the roof (at least in dollar terms) quite soon. Very soon we expect it to break through the $1000 mark again. So don’t delay and miss out on these opportunities. Members of Q Wealth have full access to Gold Intelligence – in the form of the Gold Report and regular updates in each issue of The Q Wealth Report -  from Peter Macfarlane.