When it comes to protecting your assets and wealth against devaluation, we’ve been saying for a long time that no major fiat currency is safe. The only long term solution is gold bullion.

Just about ten days ago I wrote in What They Don’t Want You to Know About the Euro Crisis that the real crisis is with the US dollar. Things, I wrote, don’t get hyped this much by accident. The powers that be are keen for the dollar, the euro, and the yen to go down in unison. I suggest you read that article first if you haven’t already.

As I expected, the Euro bounced back slightly once the furor over ‘PIGS’ had passed, rather than collapsing further as some expected. In purchasing power parity the dollar and the euro are about one to one: my general rule is that something that costs a dollar in the Americas costs a Euro in Europe. So there is no doubt the Euro is overvalued in that sense. But the dollar is equally overvalued.

What’s interesting now, is that – exactly on cue – the media are hyping down the Yen. Now, according to the BBC, Japan’s new Prime Minister has announced that the country is at risk of collapse.

What can we learn from all this from an asset protection standpoint?

We’ve never recommended forex speculation. Most people I know who try their hand at forex trading lose money. By forex trading I mean highly geared speculation on ‘pips’ that move by the second.

On the other hand, having easy access to foreign currency exposure is not only less risky, but is completely prudent. A multi-currency bank account allows you to do this.

For those not familiar with multi currency accounts, this is basically one bank account, with one bank account number, in which you can hold many currencies. When you log in via your internet banking to check your balance, you will see not just one balance, but several: you might have for example a US dollar balance, a euro balance, a yen balance and a Singapore dollar balance.

By default, incoming wires or cheques you deposit are retained in their original currency. If you want to change currencies, a few click of the mouse are all that is needed.

Where can you open a multi currency bank account? This is not so easy. In some countries, notably the USA, it’s hard to open a foreign currency account in the first place. They are simply not set up for customers who don’t want to be in dollars.

One notable exception in the US is EverBank. I have previously written a review of EverBank – basically these guys are good at what they do, but our focus here at Q Wealth is specifically offshore investing. As EverBank tend not to accept as account holders international clients who do not have US social security numbers, nor foreign corporations, they are not really on our radar. We also think to achieve international diversification, an account at a foreign bank is better. I just mention them here because some US readers may be interested, especially if the amounts are smaller and they don’t want the hassles involved with Foreign Bank Account Reporting.

In other countries, like UK and Australia, it’s quite easy to open a foreign currency account, but each currency requires a separate account. Sure you can place buy and sell orders but there are fees, minimum balances to consider etc. In other words, you don’t have the simplicity and freedom of one account that can hold numerous currencies.

The same problem exists in offshore and private banking centers like Panama. In Panamanian banks, if you want to switch from say Euros to Yen, you have to give 72 hours notice! And the range of currencies is typically limited to 4 or 5.

That said, we deal with offshore banks in the best offshore banking jurisdictions in Europe, as well as Singapore, that offer much more attractive multi-currency account facilities. Switching currencies is instant, there are no requirements for minimum balance, and best of all you can access a range of more than thirty (30) currencies within one account, from the dollar and euro through to the yuan and the real.

If you are interested in opening such an account, remember that Q Wealth readers are entitled to a free referral to one of our recommended best private banks. Full details, including the application form for this service, are included in our Best Offshore Banking Guide.

by Peter Macfarlane for The Q Wealth Report

A number of readers have recently been asking me recently about the ‘Perpetual Traveler’ or ‘Permanent Tourist’ theories. The idea behind these theories is that smart, freedom-seeking individuals should not be bound in their allegiances to just one government. But do these theories have a practical application in real life?  In other words, do they work?

There also seems to be some confusion about the number of flags: The ‘Three Flags Theory’ of Harry Schultz, the ‘Five Flags Theory’ of the W.G. Hill series, publicized last year by Neil Strauss in his bestselling book Emergency… or the ‘Six Flags Theory’ of Bye Bye Big Brother?

What useful purpose does a government serve? Most people accept the institution of government because it has always been there; they have always assumed it was essential. People do not question its existence, much less its right to exist.

The various flags theories are all about achieving freedom by not having one single government controlling you. Most countries treat foreigners far better than their own citizens. So the idea is to be a foreigner wherever you go – hence the ‘Permanent Tourist’ tag. You also achieve privacy, because no government will have access to the full picture of you.

In general ‘PTs’ can, by moving between countries on a regular basis, legally reduce or eliminate their tax burden. Many, however, adopt this lifestyle primarily for self-ownership or freedom reasons – checking out of “The System”.

Either goal is achieved by simply using different governments, or flags, for different parts of your life. At its simplest, the theory works well with three flags:

• Have your citizenship somewhere that does not tax income earned outside the country.

• Have your businesses and speculations in stable, low or no tax countries – your business havens.

• Live as a tourist in countries where what you esteem is valued, not outlawed. These countries are known as Playgrounds.

Back in the 1980s, author Dr W.G. Hill and the Scope International publishing house produced a series of books such as The Passport Report, PT1, PT2 and Banking in Silence in which the original three flags were increased to five flags, by adding an additional ‘asset haven’ – a money management or offshore banking center, independent of the business flag – and a ‘residence’ flag in a tax haven where you have official residence.

Note that this is a paper or ‘official’ residence and is not necessarily where you physically spend your time. I wrote recently about residence and citizenship in the Dominican Republic for example – it’s ideal for this purpose, since you are allowed to be gone for up to a year at a time and still qualify as a resident.

Finally, in 2005, an anonymous author under the name of Grandpa wrote a new three volume update named Bye Bye Big Brother. In this, he added the sixth flag of cyberspace – a kind of virtual country which binds the other five flags together.

If your interested, check out our Critique of the PT Five Flags Theory which explains this in more depth. There’s also more information on the Survival Podcast forum.

Anyhow, having cleared up the confusion about the number of flags, the big question is, does it actually work?

It certainly does. Not only do I live this lifestyle myself, but I know plenty of other people who do too. However, I don’t know anyone who follows the rules absolutely. I think this was a set of rules made up for people who don’t like rules! Most people tend to interpret it in their own ways, picking and choosing the bits they like best.

When people first hear of the PT theory, they think it sounds difficult, complicated or expensive. It’s not.

Most people don’t decide to become PTs overnight. Think of it as a gradual process – little by little, you might open a bank account offshore (asset haven), buy real estate or spend time overseas (the playground) and expand your business by diversifying internationally (business haven.) Apply for a residence in a tax haven that can lead to a second passport, use the internet (sixth flag – cyberspace) and before you know it you are a fully fledged PT.

So this is certainly an interesting theory to bear in mind. If you would like to learn more about it, browse the Q Wealth website, and why not sign up for our free five part course ‘Secrets of the Super Rich’ which covers these ideas in more depth? There is no obligation, no spam, and you a free to unsubscribe at any time…