The bailout of General Motors is another nail in the coffin of the US dollar. But still, most people haven’t even noticed the real ’stealth’ devaluation being imposed by the United States government. And yet all of us, Americans or not, are affected by this in a big way, due to the dollar’s status as a reserve currency (and also due to China’s effective control of the dollar, that I have previously touched on…)

Is the dollar “collapsing” or merely “declining”? I believe it is collapsing, but some people might misunderstand this. The dollar is not just going to crash one day, or even one week. It’s an ongoing thing, that started many years ago but has substantially speeded up in the last five years or so (yes, even during the times when the US economy was supposedly booming, that too was based on scams by the financial services sector)

Geithner, Bernanke, Obama and the whole crew are involved in a constant battle to patch over the dollar collapse.  Yet in spite of their attempts, the cracks have widened. The greenback continues its inexorable march downward. This week’s events at G.M. have accelerated the collapse a little more. And I believe that the collapse of the dollar will continue to accelerate with time. What will happen when it hits the bottom is anybody’s guess, but I certainly want to be well prepared when it happens. You should be too. And the Q Wealth website is about helping you do just that – protecting your assets from this stealth devaluation.

The US is not going to crash like Mexico did in 1995, or like Argentina and Brazil have done since with overnight currency devaluations. Neither will go bankrupt in one day like Iceland. The US government still has way too much influence and political power for that to happen. It’s a stealth devaluation because your portfolio will appear to be going higher. You will have more dollars. The stock market will be up. But in real terms, you are losing money faster than ever before. This is what some people have a hard time getting their head around – but it’s very important. The government will try to persuade you that things are going well, when really they are not. Bottom line? It’s a scam being perpetrated on you by government. If you care about protecting your assets and creating new wealth, you have to understand this.

So where can you actually put your money to protect against the stealth devaluation and collapse of the dollar? What about other currencies? Well, necessity dictates that we need to use currencies like dollars, euros and pounds to carry on business. And common investing sense dictates that you should diversify assets, so at least having a proportion of euros is better than having all dollars. It’s a start.

But unfortunately none of these currencies look good. Every other major central bank is participating in the very same scam, meaning that their currencies are equally doomed. So it would not be safe to assume that buying, say, euros, will give you any serious protection against the loss of your assets.

My number one mantra to clients is diversification, diversification and diversification. If you have a portfolio above six figures, it should be in different currencies, in different banks, on different continents. Opening overseas personal accounts, while having no tax consequences, can certainly help asset protection…the geographic diversification protects against the threat called government, while the mere fact that the assets are offshore significantly reduces the risk of you being sued in the first place, especially if you live in a litigious place like the USA or increasingly the UK.

Generally, private international banks are also a whole lot more flexible and service minded too. They offer Swiss-style wealth management banking facilities. For example, I noticed the other day that one of my European private offshore banks (not in Switzerland in this case) had quietly added gold ounces to the list of currencies I could hold in my multi-currency checking account. I guess that means I can even write cheques denominated in gold ounces, though I haven’t tried that yet. I see some of the larger European clearing banks like RAIFFEISEN ZENTRALBANK OESTERREICH AG in Austria are now maintaining gold correspondent accounts for their institutional clients. Interesting, huh?

Which are the best offshore banks for this kind of wealth management? For the answer to that question you need to be a member of The Q Wealth Report. Download the Practical Offshore Banking Guide (available instantly as soon as your payment is approved) and you will find ten of them for starters, with impartial comments on each… together with the form for a free e-mail consultation if you would like to discuss your individual circumstances with me directly.

Gold, probably is number one on my list of recommendations as a hedge against dollar decline. There are ways you should buy gold, and ways you shouldn’t. One way you should not invest in gold is by following typical mainstream advice and investing in ETFs, the most famous of which is GLD the SPDR Gold ETF. Ther are significant concerns about whether you could really get your gold out, or even your money back in dollars (which is not what you would want anyway at that stage) in the case of an economic meltdown.

For example, what do you think of this quote directly from the GLD prospectus?

The Trust’s gold may be subject to loss, damage, theft or restriction on access.

There is a risk that part or all of the Trust’s gold could be lost, damaged or stolen. Access to the Trust’s gold could also be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust and, consequently, an investment in the Shares.

The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered.

If you would like to know about better ways to invest in Gold offshore, you need my Gold Report – How to Buy and Hide Gold Bullion Offshore which is likewise available free of charge for immediate download to our paid up members.

Not a member yet? Sign up to Q Wealth Report here.

A guest post by the Editors of BIG GOLD for The Q Wealth Report

(NB: we understand that many of our readers are not US persons and so this article may not be directly relevant to them, but there are other similar options for Individual Savings and Retirement Type accounts in other countries, so maybe this could apply to you too. If you are American – this is for you. If you’re already offshore, you don’t need this…)

In a recent article Gold in IRAs – a Safe Haven Nest Egg for Americans? at petermacfarlane.net we considered the pros and cons of putting gold bullion into a self-directed IRA and detailed how to do it. But the arrangements we covered were entirely domestic.

What about having your IRA hold gold offshore? It can be done, but before you go to the trouble, ask why. Your IRA would still be subject to U.S. law, and your IRA custodian would still be in the U.S., regardless of where the assets are.

One possible reason is protection from future creditors, especially of the lawsuit variety. If your IRA exceeds a million dollars, or if you live in the wrong state, or if you inherited the IRA, it may be available to anyone who successfully sues you. There are some rather complex arrangements that can move IRA assets (gold or anything else) offshore and make them far more difficult for a creditor to reach. But if that’s your motive, we’d think twice about the loss of control that such programs involve.

An entirely different reason would be to sidestep some future legal interference with gold ownership – if, for example, you think President Obama may become FDR Redux and embrace draconian measures, such as prohibition of ownership, penalty taxes, confiscation, or forced sale at an official price, as in 1933. No preparation for these possibilities can be completely reassuring, since we can’t anticipate exactly what the new rules might be. But something as simple as wrapping the gold in an IRA and storing the metal in a different jurisdiction could allow you to be one of the few remaining Americans who lawfully owns gold.

One easy way to go about this is for your IRA to hold the metal in the form of a Perth Mint certificate. Not all IRA custodians will do this, but some will.

The more sophisticated approach is to use an offshore limited liability company (LLC). Your IRA would own all of the LLC, while you would be the company’s manager and have direct control over its affairs. The LLC, having but one owner, would be eligible for establishment as a “disregarded entity,” so that its assets are treated, for income tax purposes only, as being owned by the IRA. As manager of the LLC, you would file such an election with the IRS, then open an account for the LLC with a suitable foreign institution, and use the account to buy gold.

Is that worth doing? If you want to have gold in an IRA, perhaps because your IRA dominates your financial picture, or if you’re worried about the possibility of gold confiscation, it may be. The costs are the homework you’ll need to do, and annual expenses of $2,000 or so, depending on how good you are at shopping.

To start, you’ll need an IRA custodian (which will be a U.S. institution — it’s your company that’s offshore, not the custodianship), one that specializes in such arrangements. We’ve identified some possibilities, and while we don’t know any of them well enough to give our wholehearted endorsement, you can begin by looking into Sovereign International Pension Services in Palm Harbor, Florida (www.sovereignpensionservices.com) or the Entrust Group in Paoli, Pennsylvania (www.theentrustgroup.com).

The custodian will get the offshore LLC formed for your IRA. Then you can convert all or a portion of your IRA assets to cash and transfer the money to the new custodian, who will invest it as a capital contribution to the LLC. From there on, you, as manager of the LLC, will run the show. You can buy Perth Mint certificates for the LLC or you can have the company purchase bullion from Kitco, Asset Strategies, GoldMoney, or any other seller of your choice. They will then help arrange storage with a vaulting company such as Via Mat International in Zurich, one of the oldest and most reputable.

Probably not many investors will want to go this route. But if you’re one of the few for whom it makes sense, these are the steps to follow.

***

In light of the demise of fiat currencies and the general stock market, more and more investors are flocking to gold as a safe-haven investment. And no one knows more about the hows, wheres, and whys of buying and owning physical gold than the editors of BIG GOLD, Casey Research’s monthly newsletter for the prudent investor.

One caveat: gold is certainly a safe haven and much preferable to some of the unstable investments around, but the fact is, it’s a non-interest-bearing investment. But there’s a strategy that smart investors – like Steven Lehman, the Federated Investors fund manager who beat 99% of his peers last year – are following now… and you can too. If you want to know how to squeeze up to four times more gains out of gold, click here to learn more.

Some investors are so worried about the prospect of economic collapse that they are buying gold and having it delivered to them, rather than holding the precious metal in the form of futures contracts or other securities. That’s the conclusion of a recent article in the Wall Street Journal.

Perhaps more interesting, however, was the informed discussion that followed on the WSJ’s site, in the “Comments” section.

“Why place your trust in paper that is printed by the government?” asks reader Linda Hawkins. “Gold has been serving as money much longer than governments have been printing fiat currency. The risk is that the government may print so much of it, that we end up like Germany in the 1930s, or Zimbabwe right now.”

Gold, as commenter Avery Goodman went on to explain, “is not bought for “end of the world” planning. It is bought for preserving wealth when the financial system is working incorrectly … People are buying gold to have a thing of value that has no counter-parties, and, in that manner, protect themselves from a collapsing financial system, and a probable depression and/or hyperinflation.”

I particularly liked that point about gold having no counter-parties. That is, of course, assuming we are talking about real physical gold bullion, not about paper or virtual gold like ETFs. I have blogged over on my personal site before about the dangers of investing in GLD ETF, and – for that matter – other commodity ETFs. Journal reader Alex Vasilyevich points out: “I personally believe that the gold short trades on COMEX are not backed by any physical delivery capability. If there is a sudden spike in the deliveries demanded by buyers, the game will be exposed, just like what happened with Madoff and Stanford.”

Of course, regular Q Wealth readers will see nothing new in this discussion, but sometimes it is reassuring to know that even the mainstream financial press reports and respects our views, and that onshore Gold dealers in places like London and New York City are doing a roaring trade. It follows on from the article in January in London’s Daily Telegraph about Why the Rich are Running to Gold Bullion.

We do take matters one step further, however, by suggesting international diversification for your gold bullion holdings. Why? For example, there have been many rumors that the US might once again prohibit private ownership of gold, and confiscate – or, purchase at an artificial exchange rate – existing gold bullion held by individuals onshore. The same applies to many European governments, some of which only legalized private gold ownership in the last decade or two.

There’s also the important matter of how to buy gold bullion. Most gold sales go through a cartel of international bankers and precious metal traders. It is however, possible to go direct to the source and buy pure gold direct from the producers.

All these aspects of buying gold offshore and more are covered – together with step-by-step practical instructions and contact details – in the new Gold Report – otherwise known as How to Buy and Hide Gold Bullion Offshore. Of course we must stress what we are suggesting is a perfectly legal form of offshore asset protection. Unlike bank accounts, or ETFs held through brokerage accounts, real gold bullion is not subject to reporting requirements. If you want to keep it secret you can – legally. That personal and financial privacy aspect is just one more reason why we are so bullish on gold bullion right now. It is a secure, private store of wealth management with a view not just to asset protection but to really creating wealth in a secure, offshore environment. And that is what The Q Wealth Report is all about.

Would you like to obtain your copy of The Gold Report while the unique information in it is fresh and bang up to date? Well the good news is – it’s FREE. It’s available for download right now in our Members’ Area. The bad news, of course, is that you have to be a member to access it. But a membership still costs just $87 per year and brings numerous other benefits. What are you waiting for? Join Q Wealth today!

by Peter Macfarlane for The Q Wealth Report

I’ve written a lot about the difficulties these days in buying physical gold, and why I recommend buying real physical gold as opposed to paper certificates etc. Very soon we’ll be releasing here news of my “Gold Report” which will be available for download to Q Wealth members.

But today I want to tell you about something I noticed during the past year that very few people have commented on, but that lots of people I have talked to have noticed. They have noticed it but have not thought fully about the consequences. It is the opposite problem – people don’t want US dollars any more!

Have you tried to exchange US dollars for local currency in a foreign country recently? Or to deposit US cash in a foreign bank? Then you probably know what I’m talking about. Various petty restrictions. $50 or $100 bills with certain serial numbers are not accepted in many countries. In others if you want to spend a $50 or $100 bill a supervisor in the store has to approve it and record your passport number.

Today, for the first time in my life, I actually saw a money exchange business that simply won’t accept US dollars cash any more. This was in Cancun, Mexico. They were welcoming Canadian dollars, Euros, Swiss Francs etc… but saying “no thanks” to the greenback. I asked why, and they said they will still exchange USD for clients who are registered (ID, utility bills etc) but not for tourists. (So they didn’t exactly answer my question, but I think the cashier was one of those people who don’t always think about ‘why’)

So, tourists get sent to the bank around the corner. They will still exchange USD cash, but not more than $500 for non-clients.

The superficial reason for these restrictions is the paranoia surrounding money laundering and fake bills. Most Latin American countries have far more dollars coming in than flowing out (at least in cash) – some of this may be due to drug money, but the vast majority is completely legitimate money related to travel, tourism, remittances by emigrant workers and so on. So casas de cambio (money exchange houses) have to dispose of their excess dollar cash by somehow depositing it into the banking system, which has become nigh on impossible because of pressure from correspondent banks in the USA.

But the pendulum has certainly swung too far. If an American tourist in Cancun has to spend an hour in different lines and be limited to spending $500 per day, then surely this is no different from the pre-Thatcher era in the UK for example when exchange controls were in place? Other places with exchange controls today, like South Africa or Venezuela, also have official daily limits in place on spending by their nationals traveling overseas.

Yes, my friends, the USA has well and truly already succeeded in introducing exchange controls by the back door. The consequences of this, given the USD’s status as a global reserve currency, are simply incredible. It’s amazing that so few people have noticed or commented on this yet!

In case you are thinking this only applies to cash, remember there are ATM daily limits of various sorts (imposed by both card-issuing banks and by local ATM networks around the world such as in Brazil or Argentina) and banks from US, UK and elsewhere have a habit of just blocking accounts for “potential fraud” if anyone spends more than a few hundred dollars outside their home country. Then the cardholder has to make a lengthy international call pressing buttons, listening to music and finally convincing a bank officer that their card has not been compromised before he can start spending his own money again.

Yes, sure, there are ways around all this. Of course you can travel with 10 different ATM cards or you can acquire offshore debit cards and offshore credit cards with much higher daily limits, even in USD. You can buy foreign currency before you leave the US. You can use travelers checks. You can spend a day of your vacation visiting 10 different banks and exchanging a small amount in each. That is not the point. The point is that for the average good-citizen American tourist or business traveler, let’s say the man on the bus in Cancun, it is going to be difficult to spend more than a few hundred dollars a day of their own money overseas. That is why I say “exchange controls are already in place.”

Many of you will already have heard the rumors about the Amero, or about supposed plans to have different colored dollars for internal and external use. Personally, I don’t buy such rumors. They are conspiracy theories. There is a lot of merit in the ideas behind them, but if as the evidence above proves, for all practical purposes exchange controls are already in place, why would the Federal Reserve risk the political backlash of explicitly imposing exchange controls?

What will happen in 2009? How much worse can this get? And how can you protect yourself and your family from the global consequences of USD exchange controls – whether or not you are American? These are questions we answer in depth in each quarterly issue of The Q Wealth Report. If you are not yet a subscriber, you should be! We will show you how to build wealth and take advantage of real money-making opportunities presented by the drastic changes taking place in the global financial system. Subscribe today!