| Posted November 10, 2008 and updated
# 1: Don’t listen to the Demon of
Diversification. Today is the time to put savings in a LIMITED amount
of instruments and to watch the instruments closely. Diversification will
only make it harder to follow up and adjust your savings.
Rule # 2:
Beware of modern colonialism.
Today's share certificates and even money have become
‘electronic-computer’ bits. Physical certificates have become obsolete and
have in many countries even become illegal. Using excuses as Terrorism and
Money laundering, EU authorities are also ruling out financial
transactions in cash larger than € 10,000 and try to add Swiss and
Luxemburg banks to the blacklist listing Andorra, Monaco and
Liechtenstein. Hong Kong and Singapore are also standing in the shooting
As Switzerland holds
40% of the world’s private wealth, we hope this will take more time and
lobbying. We may even come to a point where Switzerland may not allow
foreigners to open up new bank accounts. Having said this, the world is a
huge financial planet and there are still many spots out of reach and even
unknown by the majority of investors.
Rule # 3: NEVER invest
in an instrument you don’t fully understand. Not even if it is
guaranteed by a Government.
Because of low
interest rates, people have been investing more and more in Hedge funds,
Common Investment funds, structured products, ETF’s and derivatives. In 25
years’ time, these investment instruments have proliferated as weed. The
financial sector has through lobbying strengthened its position. Ever
since a legal and controlled status is requested, many Financial Advisors
have disappeared. Other financial institutions (stock market brokers) have
been forced into a Bank status and are controlled by the authorities.
legislated all marketing by non-state and non-EU/USA bank institutions.
Only month’s age Swiss bankers have been arrested by their arrival in the
US. Many EU countries have a legislation forbidding any financial entity
to advice on foreign banks.
Since competition and
many ‘second opinions’ have disappeared, Banks had a free hand in
marketing their investment instruments. The investors had a blind
confidence in the products.
The Credit Crunch
however, changed it all. As the Real Estate and Bank shares crashed and
banks even disappeared, Fortunes were lost by those you followed blindly
the advice of the Banks. Because the authorities were able to stop a ‘Run
of the Banks’ , many (especially those not affected) believe the danger is
gone and live in the conviction that because we have electronic
certificates, their savings can be transferred by a simple click on the
Enter of their computer. The least one can say, is that this is an
extremely dangerous game.
Rule # 4:
Precautionary investment has to be organized TODAY.
Residents of Iceland and Zimbabwe have experienced this life. Better be
early and not be caught by the stampede.
Once things get really
bad, it will be too late to act. Authorities will become extremely
protective as the geopolitical situation worsens. Remember bank accounts
cannot be opened overnight and transfers also can be halted by pulling out
a plug. Gold and Silver could be difficult to find. We could see Bank
Holidays and a reorganization of Treasuries (moratorium).
|History shows over
and over again Authorities simply are NOT to be trusted. The 2008
months are a life example that Bankers are not to be trusted.
Today, more than ever, one has to make his own home work and
trustworthy advice is only to be found with experienced and independent
Put your eggs in a
couple of baskets and watch them closely.
Make sure you own
physical Gold and Silver coins and have them out of reach of the
authorities/banks and hold at least 5% to 10% of it as an insurance
policy. In case of doubt, ask your Grand Mother.
Invest into LOCG
(low order consumer goods) and disinvest in HOCG (high order capital
goods). Examples of LOCG are: crude oil and oil products,
agricultural/food products, agricultural land and farms, basic life
necessities (soap, coffee). A school example of HOCG is real estate
incl. commercial real estate.
Only invest in Real
Assets which have been fully paid for.
Don’t invest into
Bonds and especially into Government Bonds.
Don’t store your
wealth into FIAT PAPER money or on electronic bank accounts. If you do,
don’t exceed the maximum insured limit and use only safe banks (ISI 1
Most shares are REAL
ASSETS. Use your cash to buy certain sectors and shares as markets offer
Only invest in Real
Estate if you find real opportunities (a price equal or below 100 times
the real or hypothetical rental income). If you do, be prepared for more
taxation and be aware you can be stuck with the property for some time
if things get bad.
Stay away from
certain currencies and from ALL FIAT PAPER MONEY. Examples are Iceland Krona, South African Rand,
Zimdollar, Eastern European currencies, Venezuelan Peso, most central
and South-American currencies.
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Goldonomic, Florida, USA -