Our focus here at Q Wealth is on protecting your personal and financial freedom, wealth and privacy. Naturally offshore asset protection is an important component of that. A balanced portfolio would include both offensive (or should I say proactive) and defensive strategies.
The key thing to realize is that it’s not enough just to make money. In the current environment, your dollar, pound or euro balance could be going up – but you are still losing money… due to the ongoing devaluation of fiat currency! If that’s something you have a hard time getting your head around (and who could blame you, since the mainstream media don’t report on this) then you need to read more Q Wealth articles. I would start with this page: Offshore Gold Bullion vs Fiat Money
There you’ll find a good explanation of the value of gold in relation to fiat currency like the dollar, which is backed by nothing but the declining faith and credit of the US government! Although written a few months ago, it’s particularly relevant today as gold has just burst through the $1,050 mark.
You might have heard of ‘forex trading’ – a way you can make or lose lots of money very quickly. Big banks make big money on forex. But most individual investors I know of who try it end up losing their shirts. And more than a few of the forex trading sites out there that promise you huge returns are forex trading scams. Bottom line, it’s not for average investors like you and me who have other things to do besides trade.
But there is a little-known variation on forex trading that is known as the ‘currency sandwich’ or ‘arbitrage loan.’ This is still speculative, but is something you can leave on its own and just monitor in say ten minutes, once a week.
Some European private banks like Jyske Bank and Finansbanken (Bank of Copenhagen) have been offering this for years, but the vast majority of investors have never heard of it.
The key thing here is that you can get a 100% offshore loan, available to anyone, regardless of credit history. You can borrow money from an offshore bank at say 2% interest with no scheduled repayment date, then turn right around and invest it simultaneously for 10% – 30% a year return. In other words it’s a classic way to make money using other people’s money…!
How does this work? Is it a good idea?
Once you’ve established a relationship at the right bank, they will arrange for you to borrow money in currencies like Swiss Francs, Yen or Dollars where the interest rate is very low. Then you invest the proceeds of the loan in buying fixed income products in currencies like New Zealand Dollars, South African Rand or Hungarian Forint.
Let’s say you agree a five times leverage with the bank. If the initial deposit is $100,000, you get a loan of $500,000 making a total of $600,000. This can then be invested in a pre-defined diversified portfolio of instruments like bonds or CDs.
There are two ways you can gain – or lose. There’s the exchange rate factor: raising a loan in one currency and investing in another can lead to huge exchange rate gains as wells as losses. For example if you believe the US dollar will go down relative to the Aussie dollar, you might borrow in USD and then invest in AUD, looking for ‘capital gains’ on the currency.
Then there’s the interest rate factor: Investments are made in bonds – often government bonds – which pay a much higher rate of return than what you are paying in interest on the loan, leaving a profit there.
Given the right market conditions, this deal gives you the possibility of making extraordinary profits. The more volatile the markets – the more your profits can be.
The downside, obviously, is that sometimes such deals go against you – basically if you get the market wrong. However you don’t generally get completely wiped out, because it’s very rare for these currencies to devalue overnight.
The next question of course is which banks offer this type of loan? I named a few above, but those are not necessarily the most confidential and if you happen to be a US citizen, you may find the reporting requirements an unwarranted intrusion on your privacy. As I said, there are a number of lesser-known European private banks that will offer this kind of deal – even to USA citizens provided the accounts are are established via offshore vehicles (for example Panama Corporations or Private Interest Foundations ). A cheap Panama corp will suffice here since the goal is not tax planning but simply asset protection and opening up new opportunities.
But you must know who to ask, and how to ask (discreetly). I wouldn’t go so far as to say these deals are only available to insiders, but they are not available to people who walk in off the street – or the internet. That’s the reason I’m not going to name banks here. Then these high level private bankers would be flooded with e-mails from wannabees and tire kickers who don’t really understand the deal.
If you are interested in finding out more about these deals, first you must be a member of Q Wealth. If you are not already, you can sign up online right now for a mere $87. Then I will be happy to name such banks to you in an individual e-mail, as part of the free consultation that all members are entitled to. So, what are you waiting for? This is a great way not just to protect yourself against declining currencies like the US dollar, but actually to prosper and create wealth… out of the US government’s poor management of the economy. Now doesn’t that sound like the way things should be?