Deposit box in Austria/Switzerland

[craigr]

The US is very stable compared to many places in the world. It is a huge mistake to think that geographic diversification has limited utility for many people on the planet.

Again, if a place is so stable that you'd prefer to keep your wealth there, why don't you live there?  I realize it's hard to just up and go like that, but I interact every day with people from all corners of the globe who left those places behind.

I'm going with history on this one that geographic diversification is a good idea. Many countries are stable, right up until the point when you can't get your money out for whatever reason. I remember reading a review on Amazon.com about Fail-Safe investing years ago. Here was my favorite part:

I first read Browne's advice a couple of decades ago when I was living overseas and had just had the fun of going through a coup against the government that involved three days of firefights between govt troops and rebels *inside* the bank where every dime I owned was kept. Mr. Browne is right. Nobody knows what will happen next. If you have money you can't afford to lose, you have to be ready for anything, and Harry Browne gives you the tools to do so.

So things happen all the time we can't predict. I worked in Internet security for many years. This work included doing security audits and writing network attack tools. I can tell you that no bank or investment house is totally secure. Trust me. You're better off spreading the money around. If for no other reason than if there is a problem with your account it can take some time to get it cleared up and you don't want to be totally locked out of your life savings in that event. Or, if there was a major disaster in the financial center and the hot sites do not work as they planned, you can still have some money outside the affected region to get some breathing room.

A safe deposit box in Switzerland may not be possible as it once was (a warning in and of itself??). But this still doesn't mean people should not look for some of the other market solutions today that can provide geographic diversification for you. The point of the geographic diversification is not so much for banking privacy as it is to give you a way to flexibly respond to extraordinary events happening where you live.

[pplooker]

Lifestyle can solve the "temporarily locked out" phenomenon however.  I carry no debt, amass extra supplies, etc.  As long as prickly pear cacti keep growing around here, I won't starve.

Here's some other problems:

- First, I think we agree on the point that you won't know when it's time to get out of your own country until it's too late.
- Second, it takes a certain concentration of wealth to make it worthwhile to move money out of the country.  I don't even have enough money to meet my goals within the country and quite frankly probably never will as my goals simply advance with whatever level of accomplishment I reach.
- Third, the economic and political fates of each nation on earth, while something I suck at predicting myself, are inextricably intertwined nonetheless.  There's no guarantee if one nation goes down that it won't send the others into a crisis just as there's no guarantee that it will.  Imagine what could happen if one day the U.S. woke up and suddenly China was gone, just as mental exercise.

I'm not saying this isn't a worthwhile thing to do.  It's just you have to be a very wealthy person before it will become viable or easy, and it would take some years to learn many competing sets of foreign rules.  I can barely run GAAP and IFRS in my head alongside each other, never mind trying to figure out how financial products work in India, Russia, The Ivory Coast, France, California and other foreign nations.  I myself have looked into banks in both Austria and Ireland.  But upon much consideration, I opted not to bother for many reasons I've already outlined.

[Wonk]

I think much of this debate centers on personal assessments of risk and portfolio size.  I agree with craig and MT in that most historical precedents where gold was needed did not coincide with armageddon.  Rather, a slow, grinding constriction of capital controls were progressively enforced which made life more difficult in one's home country and necessitated a hiatus somewhere more palatable.

For those with $100K or less, storing gold overseas may not make sense.  For others who want more peace of mind, perhaps a token amount of $10K held outside one's home country will provide a better sense of security.  Where each individual draws the line on diversification is obviously up for debate and largely a personal decision.

From what history tells us, nation states are constantly in political flux and can't be thought of as starkly "safe" or "unsafe."  It's more a label of "safer" or "less safe."  I tend to think spreading geographical risk may be close in importance to asset class diversification once one accumulates considerable means.  Consider that in times of turmoil, those with considerable means are often the first target of wealth extraction to satisfy political agendas.

[Pres]

Lifestyle can solve the "temporarily locked out" phenomenon however.  I carry no debt, amass extra supplies, etc.  As long as prickly pear cacti keep growing around here, I won't starve.

If I remember well, Harry Browne also advised to keep some wealth in a foreign country for other than economic reasons.
You could for example be persecuted (like the jews in Nazi Germany) and have to flee from your country, leaving your belongings behind. Such a sitation doesn't seem likely, but I think we all agree that improbable doesn't equal impossible.

I hesitate. Switzerland is a 6 or 7 hour drive from my country. But I don't know anything about Swiss banks and this time around even Switzerland has problems. (they loaned a lot of money to countries who may be unable to pay it back)
Also, if you keep gold in a bank safe, if it gets stolen you won't be able to prove it was there in the first place, nor who did it. I wouldn't want to concentrate too much metal in one place.

[MediumTex]

I hesitate. Switzerland is a 6 or 7 hour drive from my country.

I wonder how long of a drive it is from Texas.