where to store value?

[void]

I am against democracy for the record.

so happy to hear that

 

[OTR365]

Cash could do for the short term, 1-3 years, but for me not beyond that. Fiat money does not hold its value well, as Western central banks grow their money base by 5-10% per annum. Non-Western countries inflate even more.

Over a long timeframe, gold wins over cash, as gold reserves grow only about 1.5-2% per annum. By owning physical gold, you theoretically lose that much purchasing power each year, but gain independence from the financial system. It is not a bad idea to keep at least a portion of one's wealth out of banks, brokerage houses and government fiat money. Since 2008 financial crisis, all kinds of perverted stuff has been going on, especially in Europe: Bailouts, zero/negative interest rates, haircut for Cyprus depositors, talk about cashless society etc. If another financial crisis were to happen, ECB could push negative interest rates on to private depositors, start delivering haircuts across the eurozone, or enact other desperate, disastrous measures.

Gold can be bought anonymously by cash, or online by e.g. bitcoin. It can be stored outside one's own jurisdiction, e.g. in Singapore or Switzerland. It does need a safe storage, but doesn't take much space. Seven figures can be stored in a shoebox, although that'll be one damn heavy shoebox.

Silver, platinum and palladium have lower stock-to-flow ratio than gold. In other words, they are not stored in vaults as much as gold, but used more for industrial purposes, which limits their upside. Right now platinum is very cheap vs. gold. If one had a very long investment horizon, one could just keep switching between these two, while maintaining wealth out of the financial system with good privacy.

Long-term, bitcoin has even lower inflation than gold, as the mining reward 'halvens' every four years or so. So, theoretically, it bitcoin wasn't so volatile, it would be even better store of value than gold. My issue with bitcoin is not the technology itself, but the relative lack of privacy-maintaining gateways to/from the financial system. If you want to move sizable money in/out of bitcoin, be prepared for a lot of KYC/AML at the exchanges and at your bank. Right now, gold is easier in this regard, at least in Europe.

 

[Martin Everson]

Gold can be bought anonymously by cash, or online by e.g. bitcoin. It can be stored outside one's own jurisdiction, e.g. in Singapore or Switzerland. It does need a safe storage, but doesn't take much space. Seven figures can be stored in a shoebox, although that'll be one damn heavy shoebox.

You raise some good points .

However you know the above will not work in practice. If the EU decides to clamp down it will be as part of a raft of new EU directives. They will require all gold transactions involving EU residents over a threshold to have to be reported by FI's, small gold dealers (wherever they are located in the world) etc and will likely be part of an extension of the OECD CRS to enforce it. There are plenty of places right now you can buy gold with bitcoin but when it comes to later producing source of funds if you want to sell in future good luck. Also the EU has a habit of making offshore jurisdictions comply with its daft laws i.e most of Caribbean and I think i.e Singapore, Switzerland and their Freezone vaults and bullion business etc will be no different.

Best step is get the hell out of EU while you can .

 

[void]

Gold can be bought anonymously by cash, or online by e.g. bitcoin. It can be stored outside one's own jurisdiction, e.g. in Singapore or Switzerland. It does need a safe storage, but doesn't take much space. Seven figures can be stored in a shoebox, although that'll be one damn heavy shoebox.

while this is probably one of the most efficient ways to store value it doesn't sound that straightforward to me
1) technically speaking almost every EU country has a limit for "legal" cash transactions (nowadays typically around 10k) - so considering the sanctions involved for a company selling gold it seems rather difficult to me
2) buying online is a lottery with trust - how can you choose from hundreds of websites on the market? do you believe that buying sound gold means that they buy it and store it physically for you (ready to send it to you for reasonable fee across the globe)? I don't
3) doing this all on your own sound like the only acceptable option - however it's time consuming (easy to be justified though), involves traveling with huge amount of cash (problem), involves traveling with gold (big problem) or you just have do it locally (not good for risk management)
4) exit from gold can be difficult in future easily (as Martin Everson pointed out above)

I agree that with BTC (or crypto in general) it's very similar - something is easier (like transport ) and something is much more difficult

anyway, thanks for your effort and post with value

 

[Old Spice]

I agree with OTR365.

I think everyone with a little extra cash to spare should place some of it in gold and store it somewhere but not in a bank.
It's a liquid asset and has no boarders. Easy to transport and in a crisis might be the only thing that will survive a crash.
Besides, who cares where you got the gold from in a crisis.

 

[KJK]

Over a long timeframe, gold wins over cash, as gold reserves grow only about 1.5-2% per annum. By owning physical gold, you theoretically lose that much purchasing power each year, but gain independence from the financial system. It is not a bad idea to keep at least a portion of one's wealth out of banks, brokerage houses and government fiat money. Since 2008 financial crisis, all kinds of perverted stuff has been going on, especially in Europe: Bailouts, zero/negative interest rates, haircut for Cyprus depositors, talk about cashless society etc. If another financial crisis were to happen, ECB could push negative interest rates on to private depositors, start delivering haircuts across the eurozone, or enact other desperate, disastrous measures.

I really don't know where this is going, seems like ECB is oblivious to what is happening and what can happen - in countries like Italy and Greece; UK has its own currency but the concept of exiting the EU is enough fun by itself.

So I feel a bit paralyzed. Buying stocks at peak levels doesn't sound smart. Holding cash is maybe survivable but not very helpful and boring.

I don't think buying gold is a solution, maybe it makes sense to have a small gold bar (safely stored at home, not in a bank) in case you'd expect total apocalypse, that's what allowed many Jews to save their lives at the beginning of WWII by the way. Maybe gold makes sense in countries like India where many families trust it more than the banks. In (relatively) normal situations gold seems useless to me.

As was already mentioned, officially you should report carrying valuable stuff (or cash) over €10k when entering/exiting country. Cash transactions are even more limited.

You can avoid these restrictions but even then with all things considered (time spent buying gold, spreads between buy/sell, shipping or travel cost) you are better off just holding cash or investing into what you have deep knowledge in.

 

[Martin Everson]

It's a liquid asset and has no boarders. Easy to transport and in a crisis might be the only thing that will survive a crash.

This is true.

Besides, who cares where you got the gold from in a crisis.

The government does unfortunately . They will look for any reason for seizure like they do large amounts of cash if you can't tell them the source. You are guilty until proven innocent with gold just like crypto

 

[Old Spice]

In an age where the source of assets can be documented I suspect this is the least of our problems. I agree a government could ban the use of gold since it would undermine any currency supported by a government. Something the the USA did in 1933 when they could by law seize gold in private ownership. Ouch!

 

[OTR365]

However you know the above will not work in practice. If the EU decides to clamp down it will be as part of a raft of new EU directives. They will require all gold transactions involving EU residents over a threshold to have to be reported by FI's, small gold dealers (wherever they are located in the world) etc and will likely be part of an extension of the OECD CRS to enforce it.

While the kind of European FATCA you described could become a reality, it is far from probable and even then could take 10-20 years. There will be plenty of time to close the gold account. Also, even if privacy is lost, it does not automatically lead to a big trouble.

There are plenty of places right now you can buy gold with bitcoin but when it comes to later producing source of funds if you want to sell in future good luck.

You are assuming the source of funds is dirty, which was not my assumption. Many, if not most, banks need just a proof that the gold is yours, e.g. the funds come from an account owned by you. They don't dig deeper unless you are subject to a criminal / tax evasion investigation. And if compliance were to become very difficult, you could convert your gold back to bitcoin and be back to ground zero.

Best step is get the hell out of EU while you can .

It can be the best step for some, but not for everyone.

For an EU citizen who does not have huge skeletons in his closet, the easiest way is to get a residency in a tax friendly country within the EU (such as Cyprus), do everyhting by the book and live tax free or very lightly taxed, legally.

 

[OTR365]

You can avoid these restrictions but even then with all things considered (time spent buying gold, spreads between buy/sell, shipping or travel cost) you are better off just holding cash or investing into what you have deep knowledge in.

True, but there is a wide scale of factors in play here; where one lives (tax residency), the amounts to be invested, time horizon, the source of funds, willingness to travel, the amount of privacy needed etc. For someone with a long time horizon, lots of extra money and a need for privacy, physical gold - undeclared and stored in a safe location - could still make a lot of sense.

By no means gold or bitcoin are the only options. It is just that I don't trust the current fiat moneys to survive the next financial crisis without losing their purchasing power in a big way. You wanted to store value, after all. I very much agree about investing into what one has a deep knowledge in. For example, for someone with knowledge about agriculture & young in years, it could make sense - financial and otherwise - to set up an orchard with suitable selection of trees. There is a business with several income streams one could build around that. Playing to one's strengths, like you implied, makes sense.

 

[Martin Everson]

There will be plenty of time to close the gold account.

Closing a gold account won't help as records don't get deleted if you close an account - the digital paper trail remains.

Many, if not most, banks need just a proof that the gold is yours, e.g. the funds come from an account owned by you. They don't dig deeper unless you are subject to a criminal / tax evasion investigation.

That's not totally true. Banks all work differently and while some may require just basic info some do not and they dig deep. I know this firsthand from personal experience having sold large quantities of gold I acquired. A bank statement showing wire transfer from my account to gold dealer was not enough they wanted to know source of funds.

For an EU citizen who does not have huge skeletons in his closet, the easiest way is to get a residency in a tax friendly country within the EU (such as Cyprus), do everyhting by the book and live tax free or very lightly taxed, legally.

That's always an option. It's down to your personal comfort zone. However if you have enough assets and don't want to end up paying some exit tax when leaving the EU in future think ahead now. ATAD which is in force already will only get worse and exit taxation will filter down to affluent people all over the EU as it has done in Poland today. You could move to Cyprus and end up paying an exit tax if you try and get out...lol.

Exit tax in Personal Income Tax is to come into force

Be warned the EU will become the biggest open air prison in the world.

 

[void]

Be warned the EU will become the biggest open air prison in the world.

what you're pointing out here isn't it the world-wide trend? can you name three countries you would consider as a mid-term solution?

 

[Martin Everson]

what you're pointing out here isn't it the world-wide trend?

It is a global trend among developed countries. EU citizens are just being prepared and marinated like chickens by the EU for the end game . The elite are fleeing and ATAD is real. The working class who cant feel put in yellow vests .

Britain's richest man - and Brexit supporter - is moving to Monaco

Wealth tax forces 12,000 millionaires A YEAR out of France | Daily Mail Online

can you name three countries you would consider as a mid-term solution?

That depends on your personal situation and needs. If you have the money then Monaco, Andorra, Dubai, Cayman Islands etc etc.

 

[void]

This is surely matter of personal preference and depends on many aspects like age, family and state of mind in general... I always recall Novak Djokovic going by bike for his match on a tournament in Monako to demonstrate he is "living" there. Sorry but Monaco or Andorra are a solution for a very limited number of people, however it might work as a base if you spend most of the time traveling around the world. And I also hope that the situation is not that bad yet to be considering voluntarily moving to any hole with sharia law and other bulls**t.
Tough topic indeed.

 

[Martin Everson]

That's why me suggesting different countries does not work. As I mentioned it depends on your personal situation and needs. A poor person can't move to Monaco nor can a rich person with criminal record - its not always about money .

The EU are not too far away from nonsense like this happening with tax (see link). I am telling people staying in EU or opening company in lowest tax EU country while resident will make little different to the end game.

France hopes for EU corporate tax deal by mid 2019

Mark my words the EU will harmonize personal taxes also and will abolish all EU territorial tax systems also. The EU project is logical and methodical in abolishing individuality of EU member states, borders etc. Eventually national passports will be replaced with an EU ID card. Karl Marx was 100% right in his analysis of capitalism.

The end goal is taxes will be levied by EU across entire EU and taxes will be paid directly to the EU who will decide how much tax revenue is allocated to each member country and how it is spent. National central banks will be abolished along with physical cash also. You will have no way of fighting back or escaping the EU at this stage. As everything will be done by chip and pin in some type of blockchain perhaps. So I would say laugh at this statement now in public and later scream in silence as you try to escape down the line. Big businesses control government, government does not control big businesses.

EU = (Capitalism + Authoritarianism) * Bureaucracy

p.s Germany will bring order to Europe...this objective has never changed just the means.Wake up people.

 

[void]

I share your concerns (probably in more general way) however it's too early to make assumptions like this because there would be a wide consensus necessary across EU (for example Ireland, countries of V4, Finland, etc. wouldn't go this way under current circumstances - no chance) - however this will quickly change after a social crisis that's coming and then your scenario may become real. Btw France can be hardly called a functioning country, the signs are everywhere and it's also not a country of the French anymore (just visit Paris a its suburbia). There is also a very big chance that Germany will not survive their experiment with migration which would slow down the tendencies you're talking about.
We both have to use a very different definition of "capitalism" - there are no signs of that in the EU. Socialism is what you should put to your equation to make it correct. Replace Marx by Mises and the Austrian School is a school of economic...

 

[Martin Everson]

The EU is about creating a level playing field that will favor core EU members. I'm sorry but Ireland matters nothing to EU. This is a country that was bailed out by the EU and a country that it's taxation of Apple was deemed illegal by the EU. Yes the EU interfered directly in their internal domestic tax affairs . It is just the beginning and even Italy new leadership realizes you cannot fight back against EU bureaucracy and have turned down the rhetoric.

Ireland collects more than €14bn in taxes and interest from Apple

The EU project is not about socialism. The EU is about big business it is run by big business that lobby to get laws that favor their interests. Socialism in EU has always been a guise that allows the elite to continue to run amok, plunder, entrap and make subservient ordinary people. Socialism teaches you to be happy you have a job, be able to go to the pub after work and have a netflix account and a healthy dog. The big banks just love the bail-in rules don't they They get to steal your money if anything goes wrong and non of them will ever go to jail. Socialism is a way to indoctrinate people to never ask for more out of life - ever, or ask for freedoms. It teaches you the greater good of the masses is more important than your own individual needs . If someone offers you something for free under socialism then who is on the other end making money from that?....the elite.

Only a billionaire Mark Zuckerberg and the very wealthy get the chance to testify before EU Parliament about practices. Andrzej the local Polish programmer would be thrown in jail in a minute and his business shutdown. He would not be in front of EU Parliament to argue his case. Socialism works with small populations but not large as its unsustainable and corrupt wherever you find it in the world.

Good debate but I think I have gone well off topic

 

[KJK]

Sorry but Monaco or Andorra are a solution for a very limited number of people, however it might work as a base if you spend most of the time traveling around the world. And I also hope that the situation is not that bad yet to be considering voluntarily moving to any hole with sharia law and other bulls**t.

Sounds like you want to eat the cake and have it too. Either such solutions are relevant to you or not.

If you think countries like Ireland, V4 (CZ,SK,PL,HU) will play any role in the big picture and decision making, you're wrong.
Just wait a while and no longer a consensus will be necessary, just a majority vote will be enough, maybe just opinion of Germany and France will matter.

So Martin's advice to get out is spot on, especially if you have no strong ties to your home country. I'd have some recommendations so feel free to PM me.

 

[void]

Sounds like you want to eat the cake and have it too.

Yes, that's me all over :-D

If you think countries like Ireland, V4 (CZ,SK,PL,HU) will play any role in the big picture and decision making, you're wrong.
Just wait a while and no longer a consensus will be necessary, just a majority vote will be enough, maybe just opinion of Germany and France will matter.

I'm no expert in politics of these days, neither have any ambitions to understand it deeper since it on principle leads nowhere and it's a just a temporary game. I just don't see it that easy for DE and FR to do what they want - Frau Merkel almost gone and Macron in tough position (France is obviously very fragile). Frankly I'm worried about their successors being even worse socialists...

So Martin's advice to get out is spot on, especially if you have no strong ties to your home country

without considerable ties I'd be gone for years hard to say if one should see it as a good thing or bad one

 

[Martin Everson]

I just don't see it that easy for DE and FR to do what they want - Frau Merkel almost gone and Macron in tough position (France is obviously very fragile).

They are just faces and the public gets to pick the one they like most at election time but the EU goal does not change . Sadly neither of those front persons decide the policy of their countries they are not qualified to do so.

KJK is right if you need evidence read this article about switch to QMV .

[Opinion] Why majority voting on EU taxation is a bad idea


-----extract

"An initiative kicked off on 20 December called for "more efficient EU law-making procedures," and was followed up by an official communication in January, entitled 'Towards a more efficient and democratic decision making in EU tax policy'.

The latter was coupled with an analysis explaining how the 'passerelle clause' from the Lisbon treaty could be used to introduce QMV in "areas such as common foreign and security policy, taxation or social policy."

It is merely the latest attempt by EU institutions to gradually abolish any need of unanimity in the council on tax issues."

--------end extract