Tax & Financial Consulting Services
The Retirement Plan of 2021
How to Start Building Yours Right Now with Foreign Currencies
Karibu (Welcome) G&G Readers,
Ponder on this…the year is 2021. The U.S. dollar is more than just losing ground. The entire world has come to think of the dollar as an “afterthought” currency (similar to how we see the British pound).
After years of the U.S. government refusing to change our spending habits or make drastic changes to our entitlement programs, our currency has paid the price for our overwhelming debt.
As you probably guessed, the U.S. dollar is not the world’s reserve currency anymore.
What does a world look like when the dollar is no longer the reserve currency of the world? Well, it ain’t pretty, folks.
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A Day without the Reserve Currency
Without its reserve status, foreigners don’t use the dollar in international trade anymore. Foreign central banks don’t have to keep our Treasuries and dollars in their vaults to trade with their partners.
The dollar is no longer the pricing mechanism for commodities either. That means we can’t simply print more dollars to buy what we need. We have to actually trade our goods and services for others’ currencies to buy what we need as a country.
As a result, everything we buy now costs more. Think $9 gas. $7 bread. $4 eggs. $2 stamps. The “average” house now costs $400,000. (Those are just my humble estimates.) With these ballooning costs, the standard of living has fallen dramatically in the U.S.
We’re not in a position to bail anyone out anymore. Neither is Europe. Instead, China is the financier of the world. They hold all the cards, and we hold all the debt. In short, we’re not the world power we are today.
To really get a clear image of what a country looks like after they lose the world’s reserve currency, just look at England 20 years ago. I believe that’s where we’re headed. Now I sincerely hope I’m wrong, but the writing is on the wall and this seems to be where we’re going.
So how do you prepare for all this? Personally, I think it all begins with your retirement…and please don’t bet on the Government being your safety net.
Why 25% of Your Retirement Should Be in Foreign Currencies
If you’re like most Americans, a large portion of your investment funds reside in your retirement fund (stock market).
Well those retirement funds won’t help you if the dollar’s purchasing power shrinks that severely over the next 10 years. If you wait for those dollars in your retirement fund to drop in value, it will be too late!
The best thing you can do is start adding foreign currency plays to your long-term retirement, to provide a hedge as the U.S. dollar continues to fall.
Specifically, I would recommend putting 20% – 25% of your retirement fund in foreign currencies. Then I would recommend another 20% – 30% in precious metals. Should the dollar continue to lose purchasing power, you may want to increase the percentage of your retirement that you hold outside the dollar, in the years to come.
There are anti dollar plays in the G&G Investment Society Portfolio (GGIS) that will get you on track to help you get started. Some of these investments include long-term plays on the Norwegian kroner and Singapore Dollar — two of my favorite currencies for the long run. This currency section also includes one of the few ways you can invest in precious metals to fit anyone’s budget.
Can’t Retire on Foreign Currencies? This Will Help
Now I know everyone has a slightly different setup for retirement, and not all plans allow you full flexibility to invest in foreign currency plays. That’s why I would encourage you to setup a self-directed Individualized Retirement Account (IRA) so you can take advantage of all the currency plays in GGIS Portfolio.
Setting up an self-directed IRA is not as difficult as it sounds.
First of all, you need to decide what you want to use as your diversification tools. Will it be currency deposit accounts? Or will it be foreign stocks or bonds? You’ll need two different applications for both the accounts and the IRAs.
But it works the same for both. You simply call the bank or brokerage you want to use, and tell them you want to transfer your IRA to them. They will send you a very thick packet of information. Make sure you read it!!!
Besides the bank or brokerage application, there will be an application from the IRA Custodian. In addition, there will be a “Transfer form.” Here’s where you decide if you want to transfer all of your current IRA or a “partial amount.”
Once that’s set up, you should be ready to transfer your funds. But be sure to ask your bank if there is any further paperwork.
Remember, you’re setting up an IRA, so you can’t touch it for years. This will give you the patience to ride out the mini-dollar rallies we will see from time to time over the next 10 years.
In fact, a dollar rally is the best time to load up on foreign currencies and precious metals on the cheap. With QEII ending, it looks like we’re heading into one of these little mini rallies right now. It’s a great opportunity to start building your retirement outside the dollar.
Bottom line: Don’t wait another second to start planning for the future.
If you want to know how to implement this strategy and not already a GGIS Subscriber what are you waiting on? Sign up today!
As always…feel free to pass this information on to anyone you think is interested in increasing their tax & financial IQ.
If you need a one-on-one consultation to learn how to implement these investments or any other on the GGIS portfolio, feel free to contact me to setup an appointment.
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Metta (Wishing You the Best)
Asar Gary Gray
Tax & Financial Consultant, RFC
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LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.