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Why Geo Politics is the New Focus of Risk Management

History shows, that once governments reach a tipping point of Debt to GDP ratio, their financial woes grow very quickly. The United States and most of Europe have been steadily marching toward that tipping point for several decades.

Just like when a person on $50,000 per year income has $100,000 worth of credit card debt for example, the interest repayment burden on him is so great, that he simply can’t get his head above water.

Sooner or later he has to start borrowing money just to pay the interest on his existing debt. It is not long before the interest repayments eat him alive.

Well, exactly the same thing happens with governments. Right now the US government spends roughly one third of its tax revenue just to pay interest on its debts. The problem is however that its other costs consume all of the tax revenue by itself, and then some.

As a result, the US is borrowing every cent it can to pay interest. The tipping point has already been reached in my opinion but the market has not yet figured it out. And this huge problem exists with interest rates at record lows. If interest rates move up just a few points, it will mean the US will rapidly accelerate towards total insolvency.

And much of Europe is in exactly the same predicament.

History show us that as governments approach this point of bankruptcy, they don’t just lie down quietly and let the people recover. Nope. Sadly governments take everything off of the citizens first. Like a drowning man clutching at everything around him and taking down whatever he can grasp…

They will do whatever it takes, whether its: (1) printing money to pay off the massive debts and causing high inflation which will destroy your savings through inflation that you took a life time to accumulate, or (3) stealing money directly from bank deposits and retirement funds in the dead of night, like what just recently occurred in Cyprus. Sadly US officials have already admitted they may “be required to do the same thing” if the US continues to fall further into crisis.

Some governments have already begun to dip into retirement accounts. Another subtle trick they sometimes use is forcing retirement accounts to hold a certain amount government treasuries that will soon be worthless. These are all schemes that governments regularly engage in as their debt spirals out of control.

There is also something else that they do. Capital controls. As soon as people realize what is going on, they try to take their wealth and protect it. But governments will typically refuse to let that wealth leave the country. Bank wires are quickly banned.

The first signs of that are already showing up when Chase (one of Americas largest banks) sent a letter to millions of their customers informing them that they are not allowed to wire money internationally anymore.

Also surprise limits can be placed on withdrawals of cash, gold and silver. This means that you wouldn’t even be able to get onto a plane with your wealth. And these “laws” come into play very quickly and usually without warning.

Sadly, citizens are forced to keep their wealth in the country until the government has consumed it all.

Many say that in the next few years, we will see exactly this sort of thing in America and Europe. Perhaps you agree with that and perhaps you don’t, but it certainly is a possibility given the rapidly rising national debt and given what we’ve already seen happen in progressive countries like Cyprus.

For this reason, it is downright imperative that you keep a portion of your assets outside of the country and outside of the reach of your government. Taking this important action really is the ultimate piece of mind for you and your family. Knowing that no matter what happens, even if something as devastating as a total currency collapse or war were to occur, you could escape with nothing more than the shirt on your back and still be completely OK.

In this kind of a crisis the value of assets located offshore would sky rocket and protect any losses you may suffer at home.

So when it comes to emergency preparedness, do what you can to safely store some of your assets outside of your country of residence. Doing this could be one of the most important actions you can take.