parhaps you're right
it doesn't change much on the fact that gold is a very bad way how to store value for an average person
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Where should one keep their wealth to avoid future potential sanctions?
- Thread starter Martin Everson
- Start date
it doesn't change much on the fact that gold is a very bad way how to store value for an average person
It depends on your definition of "the average person." The average person in many countries, including the U.S., has very little savings and lives from paycheck to paycheck. Gold is very good insurance and a great store of value for those who have some level of wealth, especially in an inflationary environment. Typically, those people should place about ten percent of their investible wealth into gold as a hedge.
ok, "average investor" that has some wealth to preserve
let's agree to disagree on whether it's a good investment for these times
but as you pointed out you don't put 20 or 50% to gold - 5-10% doesn't change much - you have to do something with the rest...
Sometimes even cash is the best form of wealth, e.g., you expect a recession or a market meltdown and you wish to buy things when their prices hit rock bottom. It all depends on the stage of the economic cycle.
sure, personally I'm loaded with cash and ready
however this thread is about preservation of wealth and cash in the bank account is kind of "weak" in many aspects
Any wealth outside of the financial system is weakness and strength alike.
However, the weak point is overwhelming: How to ever use these assets (if governments ban or restrict trading them)?
It might be possible to trade Gold bars against Silver, or silver against Platinum - things which can be done within e.g. SilverBullion/BullionStar. The difficulty will be to "cash out".
The best way to preserve wealth is to get used to ever changing regulation, adapt accordingly and find legal ways ... . Flag theory, hiding and offshore banking are outdated - they do not work anymore in todays' globalised world.
Irony of thoughts: Russians who kept their money in Russia still have full access - Russian who kept it in supposingly save offshore accounts can not use their funds anymore.
True, but that is because of external pressure under fairly unique circumstances. Typically, you will be trying to protect your wealth against internal threats in your home country (e.g., creditors, lawsuits, ex-spouses, government overreach, inflation, etc.).
I vehemently disagree that flag theory is outdated. Diversification amongst banks, vaults, exchanges, countries, and even continents is the best way to preserve wealth.
Easy. Just look what they managed to pull of since 2020
Restricting Gold is a walk in the park since only a tiny minority has interest in it anyway.
Easy. Just look what they managed to pull of since 2020
Restricting Gold is a walk in the park since only a tiny minority has interest in it anyway.
I agree I feel they can pull this restriction off. Right now its only gold transactions involving Russian central bank and certain Russian entities etc but read the text below.
This makes processing payments involving physical gold that much harder for financial institutions globally now. What bank anywhere will want to accept funds from gold transactions with this threat from US
.For me going near gold is not a good idea outside of buying a few coins.
https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1029
------ start quote
In addition, gold-related transactions involving Russia or the Russian Federation may be prohibited under E.O. 14024 or other Russia-related sanctions authorities. For example:
- U.S. persons, including gold dealers, distributors, wholesalers, buyers, individual traders, refineries, and financial institutions, are generally prohibited from engaging in or facilitating prohibited transactions, including gold-related transactions in which blocked persons have an interest.
- U.S. persons are prohibited from engaging in any transaction — including gold-related transactions — involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, pursuant to Directive 4 under E.O. 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation (Russia-related Sovereign Transactions Directive). Please see FAQ 998.
- U.S. financial institutions are also generally prohibited from processing transactions, including gold-related transactions, involving foreign financial institutions that are determined to be subject to the prohibitions of Directive 2 under Executive Order 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (Russia-related CAPTA Directive). Please see FAQ 967 and FAQ 969.
- Non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to violate U.S. sanctions, as well as engaging in conduct that evades or avoids a violation of OFAC sanctions.
Violations of OFAC regulations may result in criminal or civil penalties. OFAC is closely monitoring any efforts to circumvent or violate Russia-related sanctions, including through the use of gold or other precious metals, and is committed to using its authorities to act against sanctions evaders, and promote compliance.
------ end quote
Gold is carried to friendly nations that have gold mines too, re-certified as if extracted there and fly towards friendly banks, mainly Dubai. OFAC have no power against this kind of traffic.I agree I feel they can pull this restriction off. Right now its only gold transactions involving Russian central bank and certain Russian entities etc but read the text below.
This makes processing payments involving physical gold that much harder for financial institutions globally now. What bank anywhere will want to accept funds from gold transactions with this threat from US
For me going near gold is not a good idea outside of buying a few coins.
https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1029
------ start quote
In addition, gold-related transactions involving Russia or the Russian Federation may be prohibited under E.O. 14024 or other Russia-related sanctions authorities. For example:
Sanctioned Russian persons are known to employ a wide variety of measures in their efforts to evade U.S. and international sanctions. As such, U.S. persons, wherever located, including persons that process or facilitate gold-related transactions, must be vigilant against attempts to circumvent OFAC regulations and must take risk-based steps to ensure they do not engage in prohibited transactions.
- U.S. persons, including gold dealers, distributors, wholesalers, buyers, individual traders, refineries, and financial institutions, are generally prohibited from engaging in or facilitating prohibited transactions, including gold-related transactions in which blocked persons have an interest.
- U.S. persons are prohibited from engaging in any transaction — including gold-related transactions — involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, pursuant to Directive 4 under E.O. 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation (Russia-related Sovereign Transactions Directive). Please see FAQ 998.
- U.S. financial institutions are also generally prohibited from processing transactions, including gold-related transactions, involving foreign financial institutions that are determined to be subject to the prohibitions of Directive 2 under Executive Order 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (Russia-related CAPTA Directive). Please see FAQ 967 and FAQ 969.
- Non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to violate U.S. sanctions, as well as engaging in conduct that evades or avoids a violation of OFAC sanctions.
Violations of OFAC regulations may result in criminal or civil penalties. OFAC is closely monitoring any efforts to circumvent or violate Russia-related sanctions, including through the use of gold or other precious metals, and is committed to using its authorities to act against sanctions evaders, and promote compliance.
------ end quote
https://www.icij.org/investigations/pandora-papers/oligarchs-jets-yachts-luxury/
Interesting structure to try to obfuscate and protect the assets.
Some names will be familiar to regular forum posters.
Interesting structure to try to obfuscate and protect the assets.
Some names will be familiar to regular forum posters.
The US warning is clear - even for people that facilitate Russia evading sanctions. I highly doubt anyone would take the risk to try their luck for a quick margin on a gold trade. Having a country, business or yourself put on a US sanction blacklist (effectively global blacklist) is not good
. We seen what US is capable off with i.e Loyal Bank to test compliance...lol. I imagine they will happily pose as undercover Russian intermediaries looking to launder gold and will see who falls for the bate.
Cleaned the thread up a bit. I don't understand why some of you can't just stick to the topic and keep any political debates where they belong.
This thread is about financial sanctions and how they impact affected people's business and day-to-day finances. It's not about whose flag you're waving.
This thread is about financial sanctions and how they impact affected people's business and day-to-day finances. It's not about whose flag you're waving.
Well the only thing that can be done in case of possible expropriations done by governments in behalf of "national interests" is having your own private army for defending your own interests against the government ones.
That's what landowners in banana republics did for centuries(and works).
Well probably in a few years living in one of these "banana republics" as one of these rich landowners is a good idea compared to living in a undemocratic totalitarian western world....
Today's wealthy have their own private armies called lobbyists.
This may actually be true. We live in a world today where people get rich by doing nothing productive other than sitting on appreciating land or in a appreciating home. I hope the concept of Lord and Serf does not return.
I think the way sanctions have unfolded has shown you got to hold assets in a way that there is no connection back to yourself. I know that islands like Bahamas can be just one scandal away from being blacklisted
.How were things between October 2018 and December 2020 when Bahamas was on the FATF monitoring list? Any issues sending/receiving foreign currencies?I know that islands like Bahamas can be just one scandal away from being blacklisted
No issues for me personally as I bank totally outside the Bahamas. I can't speak for anyone sending money into or out of Bahamas. But I know transfers are still clunky at best of times and high fees. But at least EU and FATF have finally gave us breathing room as of January 2022. EU follows US like a lost puppy naturally.
https://www.internationalinvestment.net/news/4043173/bahamas-delisted-eu-aml-blacklist
That's why the issue of asset protection against any future blacklisting or sanction is so important to me. People living in a western EU country or US take it for granted that they will be able to transact and will never see restrictions or funds blocked. Those living in developing countries, Eastern Europe or even Cyprus or Malta to an extent are aware of gray or blacklisting. Your always one scandal or crisis away from trouble with your banking system
.
Well, Mr Everson, that was such an accurate reply but I was thinking more in actually an armed group of people assuming the power that the official government of a banana republic doesn't have there.
Well, actually in today's world, specially in the European Union, governments(the lords) treat their "citizens" like their serf and it's like an updated version of feudalism where instead of working in the lord's fields, people have to pay a massive amount of taxes and need a license from the lord to being able to start a business.This may actually be true. We live in a world today where people get rich by doing nothing productive other than sitting on appreciating land or in a appreciating home. I hope the concept of Lord and Serf does not return.
I think the way sanctions have unfolded has shown you got to hold assets in a way that there is no connection back to yourself. I know that islands like Bahamas can be just one scandal away from being blacklisted
Exactly, you have to hold assets in a way that there is no connection back to yourself and keep yourself a low profile to stand under the radar.
That's why living in a banana republic could be actually a great strategy, since corruption is a great tool for reaching your goals and getting the freedom that you wouldn't have in a western country
A proposed law would prohibit Russian non-residents from buying real estate in EU nations. Yet another reason to have a second citizenship or, at a minimum, a second residency.
https://www.bloomberg.com/news/arti...ock-russians-from-buying-european-real-estate
I hope its a miscommunication otherwise it is a very dangerous precedent. Collective punishment assumes every Russia passport holder agrees with Putin. To say a Russian i.e living in Germany or France because of their Russian passport can't buy a property in the country they have resided in for decades is worrying. Sounds like a flawed proposal or misinterpretation of what is proposed.
---- quote start
The European Commission’s proposal would halt property deals with Russian citizens, residents and entities -- prohibiting the sale or transfer, directly or indirectly, of “ownership rights in immovable property located within the territory of the Union or units in collective investment undertakings providing exposure to such immovable property,” according to the legal text seen by Bloomberg News.
----- quote end
Anyway lets keep to topic please. The subject is:
"Where should one keep their wealth to avoid future potential sanctions?"
Right now it seems like EU is no place to keep wealth if your passport is not strong. I always thought banana republics in South America confiscate wealth. I never thought I would see the day EU countries confiscate assets with no due process and the public cheer it on like clapping seals at a water park
. I will see how this all plays but right now I will sideline EU for a while after having unloaded my EU government bonds already.
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