Author Topic: Effects of out of control government spending  (Read 683 times)

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Offline 5412

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Effects of out of control government spending
« on: May 28, 2009, 10:11:07 PM »

I get a once a month newsletter from Switzerland which I enjoy because it is written by a non-American with no political ax to grind.  Well, much to my surprise, they issed a newsletter today a week after they issued their newsletter.  Following in an excerpt of what they say about the growing US debt.


Into The Deflation End-Zone

Total US debt is now over USD 11.5 trillion and rising as we write. Have a look at the US debt clock at the following link: It is an excellent visualization of a household balance sheet out of control. Officially, based on the plans of the current US Administration, US debt will continue to rise another USD 2.3 trillion over 2009 and 2010.

Government, the issuer of sovereign debt, does not produce anything. It creates nothing. Government is a cost to the economy and people of a country. It is funded via taxation. Losing that resource is what governments fear most. Governments have one form of collaterality, and one only: their taxpayers. Over the past year, annualized tax revenues in the US have decreased by more than 35%!


If anything should be clear from history, then it is that governments, in times of crisis, ultimately strive to please the masses. They will not make the hard choices required to fix the true problems. They will not go into a mode of self-reflective discovery and repentence, and will not accept the blame. Nor will they take any responsibility. They will find scapegoats. They will fight for the status quo with whatever it takes. That is generally the point when governments put themselves above the law.

Irregardless of where you live, when you recognize the typical BIG BROTHER pattern of arbitrary legislation, growing tax burdens, and regulations that become increasingly restrictive with regard to personal rights of liberty and property, you know that it is high time for JURISDICTIONAL DIVERSIFICATION in your wealth management planning. You need to put part of your assets in another jurisdiction, preferably one where the RULE OF LAW still exists.

Most investors are familiar with the term of INTERNATIONAL DIVERSIFICATION. That term, however, is generally used in the context of creating an investment portfolio with internationally diversified assets and currencies. To be clear, that is NOT what we are referring to here. Jurisdictional diversification means that you place part of your wealth outside of the jurisdiction you live in.