Letter Re: Opening a Non-Dollar Denominated Offshore Bank Account

Mr. Rawles,
My wife and I have a Certificate of Deposit (CD) at 5.25% of $425,000 that will be maturing in December. She is all fired-up to travel to Canada in September, and with an interest-only withdrawal using $20, 000 to open bank account using converted US Dollars [(USDs) to another currency] as a hedge against the falling value of the USD.

I have a bad feeling about this.

From reading your site for several months, I suspect that you would suggest buying tangibles but, I fear that my wife will not agree to spending that kind of money on tangibles.

What are your comments regarding direct investment in foreign currency?

JWR Replies: Since you have that much money to shelter, an offshore account has some merit. Just make sure the grand total that you are carrying is less than $10,000 each and wearing or carrying no jewelry (aside from wedding bands) or other items such as optics, collectibles, gemstones, or flash memory cards that could be deemed “liquid/cash equivalent” assets. (The $10,000 reporting limit for Currency Transaction Reports (CTRs), I’ve been told, is practically sacrosanct, and the IRS has no sense of humor.) Also, be advised that multiple trips abroad carrying cash might be deemed to be “structuring.”

Try to find a bank that will open accounts denominated in a variety of foreign currencies. In my opinion, in the long run Swiss Francs will beat Euros and Canadian dollars by a huge margin.

If you can’t convince your wife to buy practical tangibles (guns, tools, etc.) then at least try to get her to see the wisdom of buying either A.) Productive farm land, at a distressed price, or B.) Gold during a dip in what is an otherwise a secular bull market.

I must admit that the intricacies of this subject go far beyond my own expertise. For details on the wide variety of offshore accounts available, refer to the Sovereign Society’s Offshore A-Letter.