Doug: It’s different for different countries, and each individual should consult a tax specialist with the details of his or her own case, or proposed case. However, there is an exclusion for Americans who live abroad for a whole tax year – it was around $100,000 the last I looked. So there are very good tax reasons for Americans to live abroad. There are even better reasons for Canadians, Europeans, and almost everyone else to leave their native country – many can live 100% tax-free. I guess it’s just a sad testimony to the medieval-serf mentality that most people suffer from that few people take advantage of this. They’re born someplace, and they stay rooted there, like a plant. Oh well, everybody basically makes his own bed, reaps what he sows, and gets what he deserves…
However, as appealing as the “permanent tourist” idea is, I recommend international living first and foremost as a way to protect your assets. As we’ve discussed before, real estate in foreign countries cannot be repatriated or confiscated by the government that thinks of you as its milk cow. There is nothing illegal or nefarious about buying real estate abroad, and it could come in very handy if things get really chaotic back home, wherever that happens to be.
L: Okay… any investment implications to discuss?
Doug: Sure, but nothing new to our readers. Starving the state-beast is the right thing to do, ethically and practically, but I believe the state’s days are numbered anyway. The thing to be aware of is that the beast won’t go quietly, and in its death throes it can do a lot of harm. Still, like Nietzsche said, “That which is about to fall deserves to be pushed.”
In the meantime, much higher taxes are on the way. More and more currency controls are coming. You may have heard that the US is contemplating a law denying issue or canceling the passport of anyone accused of owing more than $50,000 in taxes. I expect the transformation of what was once America into a police state to continue, and I expect other “developed” nations – especially Europe, Canada, and Australia – to follow suit. And this will happen whether or not the global economy exits the eye of the storm as I expect it to.
So you want to rig for stormy weather and invest for continuing crisis. Own gold for prudence, speculate on related stocks and others that may benefit from government profligacy, and as we’ve just been saying, diversify your assets and personal living arrangements internationally.
The day is coming when your local government may stop seeing you as a milk cow and start seeing you as a beef cow, and you want to have options before that day.
L: The Casey mantra. Any chance you’re wrong?
Doug: Anything’s possible. But we just asked ourselves that question in our conversation on the illusion of recovery, and I just don’t see a way out for the old economic order.
L: Okay, Doug. I hope our readers don’t tune us out for sounding like a broken record – I believe it’s vital that they do take action, preparing for more volatility in the markets ahead. And hedging one’s bets against social chaos may sound a bit extreme, but as an option, it sure is something that can help one sleep better at night.
Doug: I didn’t formulate the rules for this crazy game; I’m just trying to play it competently.
L: Right then. Until next week.
Doug: Next time.
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