Tax & Financial Consulting Services
by Larry Edelson
In many other countries, you can choose to hold your savings account in a foreign currency.
For example, in Switzerland, you could call your banker and ask to convert your Swiss franc account to euros, yen, or even a basket of different currencies, if you want. In fact, foreigners do that all the time.
Unfortunately, in America, we don't really have that choice. If you, as an American, want to hold your cash in another currency, generally you have to open up a foreign bank account and convert the dollars into pounds, Aussie dollars, etc. Or you'd have to bank with a highly specialized U.S. bank like EverBank.
Other than EverBank in Florida, I don't know of anyone else who has really had the pioneering spirit to offer savings accounts in foreign currencies.
I have a friend right now who's switching her cash in foreign savings account out of euros and into the Japanese yen. She's doing this through her foreign bank account.
However, wouldn't it be nice if you could do the same thing at your boring U.S. bank and not "have" to use the ailing U.S. buck? I think so...and evidently Ron Paul thinks so too.
Ron Paul Takes Action for Americans!
In December of 2007, he drew up a bill that he submitted to Congress on this issue. Here's an excerpt below from Ron's proposed bill:
Due to nearly a century of inflationary monetary policy on the part of the Federal Reserve, the US dollar stands at historically low levels. Investors around the world are shunning the dollar, and millions of Americans see their salaries, savings accounts and pensions eroded away by rising inflation.
As a proponent of competition in currencies, I believe that the American people should be free to choose the type of currency they prefer to use. The ability of consumers to adopt alternative currencies can help to keep the government and the Federal Reserve honest, as the threat that further inflation will cause more and more people to opt out of using the dollar may restrain the government from debasing the currency."
A bill like this could give Americans the flexibility that Europeans and others have had for quite some time now. This concept is not new...it's just new to America.
The Empowerment Americans Need to Boost Returns
If this bill passes, it could give Americans many different options. Could you imagine if your savings grew by 14% just because you had your savings in euros this past year instead of dollars? Then that paltry 2% that you earned in interest might not be so bad if your euros appreciated against the greenback. That would have been a 16% return in a savings account.
What if you could have had a euro-based CD where you could have earned 4%+ on your money instead of 2% in the savings account? See how much more control it gives you over your "financial destiny?" That way, you wouldn't just have to "happen" to live in just the right spot in order to benefit.
If this happened, it's possible the buck would fall further due to so many Americans dropping their dollars for stronger currencies. However, the U.S. dollar wouldn't have to be the main "medium of exchange" anymore either.
In fact, it seems it's already happening. It's not just American rappers and models sporting euros these days. Hyundai evidently is shunning payments in U.S. dollars. set up an "exchange" that trades oil in Iranian rials, instead of the U.S. dollar. Shops in New York City are starting to accept euros and pounds.
Whatever America Loses Goes Directly to China
Who would have thought we'd see things like this in our lifetime? Yet it is happening. America is repeating the path of the United Kingdom. The U.S. dollar will eventually lose its top spot as "superpower of the world" and will also lose its "world's reserve currency" status as well. It's only a matter of time.
Who will take America's spot? More than likely...China. They have the fastest growing military in the world and their yuan is growing steadily right now. Both of those will only continue.
In this "transition period" for the buck, it would be good if we could have some choices so that inflation and the falling buck don't erode away our IRAs, 401ks, savings accounts and our purchasing power.
Fed Up with Your Pathetic Dollars? Trade Them in for Stronger Currencies…Like China Does
It’s estimated that China will have US$1.6 TRILLION in foreign exchange reserves by 2008. And roughly 80% of those reserves are dominated in dollars.
But they only need about half that much to protect their currency.
So of course, they’re planning to diversify their massive foreign exchange reserves into stronger long-term currencies – like the euro and yen.
Tax & Financial Consultant, RFC
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"Those who do not learn the lessons of history indeed are condemned to relive them."
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