Where should one keep their wealth to avoid future potential sanctions?

[countryfree]

But if your country is hit with sanctions then this will not help. Your sanctioned country will cause problems with banks continuing the relationship.

Very true, so it's important not to keep too much money with banks, and to manage all your accounts online, so you can quickly move your money if you hear something bad coming.

Alternatively, I do own 20 Austrian philarmonics (silver). Some days, I think I should buy more.

 

[Golden Fleece]

You have a good point. I should invest in agriculture. No one sanctions food import or exports as its a basic human need .

+1. You stumbled into the truth. In the U.S., agriculture produces a steady 10%+ return over many time horizons (10 years, 20 years, 30 years, etc.), with very low volatility. Agricultural land produces an income that beats every other investment over those time horizons, including the stock markets.

Plus people always need food, so there is an extremely low risk of any type of sanctions on food. Even if sanctions apply one day, so what? The locals will eat your food. Exports are simply a bonus.

Like I said, agriculture produces a steady ten percent return in the U.S. But if you build a farm in Latin America, where agricultural land costs 50% to 70% less and labor costs 80% less than in the U.S. -- well, I will let you do the math. Farms are a dynamic cash cow with low volatility. But there is a big learning curve to do it right.

 

[backpacker]

Back to topic, the only good way to preserve wealth is keep crypto in my opinion

Can you elaborate a bit further: Why do you think that crypto is the only good way to preserve wealth?

Currently crypto does not look very convincing as a way to preserve wealth.
It seems to have a significant correlation with the stock market, therefore being a pure "risk-on" asset ....

 

[Golden Fleece]

Can you elaborate a bit further: Why do you think that crypto is the only good way to preserve wealth?

Currently crypto does not look very convincing as a way to preserve wealth.
It seems to have a significant correlation with the stock market, therefore being a pure "risk-on" asset ....

Yes, if there was any doubt that crypto is NOT digital gold during a worldwide financial panic, the Ukraine crisis definitively proved it. Crypto has been significantly correlated to equities during every significant panic. It is clear that investors do not see it as a safe haven asset during a crisis.

 

[JackAlabama]

Yes, if there was any doubt that crypto is NOT digital gold during a worldwide financial panic, the Ukraine crisis definitively proved it. Crypto has been significantly correlated to equities during every significant panic. It is clear that investors do not see it as a safe haven asset during a crisis.

You cannot just arbitrarily pick a short timeframe and claim its correlation be true for longer periods as well. On top, you only look at it thru the usd lense, for which as you stated correctly that correlation is true at the moment.
If you look at it thru a Russian Rouble lense, Bitcoin is at an all time high as is the case looking at it thru an UAH lense and the Venezuelan Bolivar lense.

However, USD formation looks very vulnerable at the moment and it can happen there as well.

 

[backpacker]

You cannot just arbitrarily pick a short timeframe and claim its correlation be true for longer periods as well. On top, you only look at it thru the usd lense, for which as you stated correctly that correlation is true at the moment.
If you look at it thru a Russian Rouble lense, Bitcoin is at an all time high as is the case looking at it thru an UAH lense and the Venezuelan Bolivar lense.

However, USD formation looks very vulnerable at the moment and it can happen there as well.

I think when talking about wealth preservation we can only look through the USD lense. Precious metals are also measured in USD and that is the benchmark when discussing safe-haven assets.

Nevertheless, only 10 days of war have past and the West has already fired all of its sanctions ammunition. The Russian economy is destroyed, the war raging and -most likely- close to its peak. Considering all this I am surprised that gold is still below its ATH.
May be we should start positioning for a time after the war and look into "risk-on" assets ...

 

[EuroKiss]

The Russian economy is destroyed,

what I see destroyed is the eu economy. After covid and green craziness, the war has been against the europoide resilence, and this war is way f**king lost.
Stay under USD or RMB, EUR will slowly loose relevance in the global context.
Eu will need new food providers, at any price, so land and agriculture will be more important than ever. Crypto could - finally - become a payment system and not a simple value storage, so having some money in it can be a smart move. Real estate outside USD colonies also is a good investment, and remote working will need houses with an extra room or decentralized coworking offices.

 

[JackAlabama]

I think when talking about wealth preservation we can only look through the USD lense. Precious metals are also measured in USD and that is the benchmark when discussing safe-haven assets.

Nevertheless, only 10 days of war have past and the West has already fired all of its sanctions ammunition. The Russian economy is destroyed, the war raging and -most likely- close to its peak. Considering all this I am surprised that gold is still below its ATH.
May be we should start positioning for a time after the war and look into "risk-on" assets ...

That makes sense up until now for people with access to modern banking at least. But not in a multipolar world with an emerging powerless USA which will lose the reserve currency status within this decade. With this power gone, you ought to look at it thru your local currency or even better thru hard assets.

what I see destroyed is the eu economy. After covid and green craziness, the war has been against the europoide resilence, and this war is way f**king lost.
Stay under USD or RMB, EUR will slowly loose relevance in the global context.
Eu will need new food providers, at any price, so land and agriculture will be more important than ever. Crypto could - finally - become a payment system and not a simple value storage, so having some money in it can be a smart move. Real estate outside USD colonies also is a good investment, and remote working will need houses with an extra room or decentralized coworking offices.

Maybe EU turns to North Africa (Morocco, Algeria etc) for this...

 

[backpacker]

Stay under USD or RMB, EUR will slowly loose relevance in the global context.

Definitely true. Euro is doomed - ECB policy is idiotic and always was. I never understood why somebody from outside the Euro area would want to save money in that dumb hybrid "currency".

Eu will need new food providers, at any price, so land and agriculture will be more important than ever.

This is indeed true. Russia knows about the precarious situation of the EU with regards to food security.
If Russia controls Ukraine the EU will loose it's cheap access agricultural products and Russia eliminated one of its competitors on the international agri-market (think wheat production, fertilizer etc.)

Crypto could - finally - become a payment system and not a simple value storage, so having some money in it can be a smart move.

Most likely - Yes!
The signs for that happening are already written on the wall: Smaller countries are turning it into legal tender. Ukraine is collecting war-donations in crypto. Russia did not ban it, well knowing that they will need alternatives to tightly controlled fiat.

Maybe EU turns to North Africa (Morocco, Algeria etc) for this...

This is not a viable option. These countries do not produce enough of anything to fill the gap left by Russia/Ukraine.
Most of North Africa is desert and the few fertile grounds they have are hardly comparable to the "black earth" of Ukraine.

But not in a multipolar world with an emerging powerless USA which will lose the reserve currency status within this decade.

People say that for many years already. Nothing has happened so far. Government s will only accept another fiat currency to become reserve currency. No crypto, no gold ... - not for governments. And in the fiat universe there is nothing viable to function as reserve currency: CHF/AUD/CAD are not liquid because they are too small. EUR is a dysfunctional catastrophe in itself. RMB is tightly controlled hence on an international stage not useful (might change in the future).

 

[EuroKiss]

That makes sense up until now for people with access to modern banking at least. But not in a multipolar world with an emerging powerless USA which will lose the reserve currency status within this decade. With this power gone, you ought to look at it thru your local currency or even better thru hard assets.


Maybe EU turns to North Africa (Morocco, Algeria etc) for this...

Egypt is more than 100 millions of people, I have no data but I bet North Africa is net importer of food. Btw the Italian and Spain olive oil in made from Tunis olive plants! Also, Algeria is an ally of Russia, and they are in a very tense situation with Morocco. Libya has been occupied by Russia and Turkey.

 

[boomy]

Once the invasion with Putin has subsided, issues such as the above will be irrelevant, one could hide in the Maldives, Mexico and, if necessary, in Brazil or Somalia.

 

[troubled soul]

Once the invasion with Putin has subsided, issues such as the above will be irrelevant, one could hide in the Maldives, Mexico and, if necessary, in Brazil or Somalia.

True
Russian Oligarchs’ Yachts Head for Maldives as Sanctions Levied

Russian Oligarchs’ Yachts Head for Maldives as Sanctions Levied

A growing number of superyachts belonging to Russian tycoons have made their way to the Indian Ocean, cruising around the Maldives and Seychelles just as sanctions are imposed on their homeland following Vladimir Putin’s invasion of Ukraine.

www.bloomberg.com

 

[EuroKiss]

Definitely true. Euro is doomed - ECB policy is idiotic and always was. I never understood why somebody from outside the Euro area would want to save money in that dumb hybrid "currency".

I guess a lot of countries tried to stay “neutral” and EUSSR gave them this false idea (more or less like they buy the French Rafale to stay neutral between USA and Russian military equipment).
Firing all the sanctions including the so called “nuke option” opened the eyes to a lot of countries. Have a look at what they are talking in India right now:
India about SWIFT sanctions

This is indeed true. Russia knows about the precarious situation of the EU with regards to food security.
If Russia controls Ukraine the EU will loose it's cheap access agricultural products and Russia eliminated one of its competitors on the international agri-market (think wheat production, fertilizer etc.)

Belarus is the producer of 40% of ammonia and fertilizers used in eu (some sources say in the world). Just the sanctions against Lukashenka skyrocketed food price, guess what will happen soon with Russian and Ukrainian production out of eu market!

Most likely - Yes!
The signs for that happening are already written on the wall: Smaller countries are turning it into legal tender. Ukraine is collecting war-donations in crypto. Russia did not ban it, well knowing that they will need alternatives to tightly controlled fiat.

Even that, I see more CBDC than crypto adoption tbh, so I say some money, but not a lot!

This is not a viable option. These countries do not produce enough of anything to fill the gap left by Russia/Ukraine.
Most of North Africa is desert and the few fertile grounds they have are hardly comparable to the "black earth" of Ukraine.

Correct

People say that for many years already. Nothing has happened so far. Government s will only accept another fiat currency to become reserve currency. No crypto, no gold ... - not for governments. And in the fiat universe there is nothing viable to function as reserve currency: CHF/AUD/CAD are not liquid because they are too small. EUR is a dysfunctional catastrophe in itself. RMB is tightly controlled hence on an international stage not useful (might change in the future).

China CBCD is done for international mass adoption. Mozambique already use it as a national currency. Almost all the smartphones shipped to Africa got a Yuan wallet already installed. China already said that the African Franc will be substituted by the RMB. Soon RMB will become the reserve currency in all Africa. They are a bit slow, but you know Chinese are patient people…
Btw Russia eliminated any tax over gold buying!

 

[backpacker]

Egypt is more than 100 millions of people, I have no data but I bet North Africa is net importer of food.

Yes, overall North-African countries are net importers
With regards to Egypt: It is the world's largest importer of wheat. That is the case since the early 1970's and has not changed much since that time. Even though the country was able to increase its self-sufficiency. There is however no potential for any exports.

Just the sanctions against Lukashenka skyrocketed food price, guess what will happen soon with Russian and Ukrainian production out of eu market!

It will be interesting to watch if this food-crisis will be an opportunity for non-aligned developing nations such as Egypt, Africa and some Asian nations: Russia and Ukraine (even in case the latter being under control of Russia) will continue to produce ample food. This stuff needs to go somewhere. Until recently, Western nations were able to pay higher prices which meant they bought what they wanted. Only what they did not buy went to developing countries. However, Westerners have kicked themself out of the Russian market. Will these agricultural products now find its way to the developing world, with friendly price tag to open new markets/gain sympathy/find new friends?
With this "weapon" Russia could once again try what the Soviet Union did quite successful: Split the world and effectively win over sympathies in many of the poorer nations on Planet Earth.

 

[EuroKiss]

With this "weapon" Russia could once again try what the Soviet Union did quite successful: Split the world and effectively win over sympathies in many of the poorer nations on Planet Earth.

Where present in Africa, Russians are welcomed. This time, if well played, they team up with China, and can be an unstoppable force.

 

[369]

There's a reason Russians and Chinese were #1 group in Citizenship by Investments- they know that their own government can take what they have so the rich (=corrupt) ones have always prepared a way out. The top ones have already secured passports (whether by investment or by "descent") with accounts over the world.

Agree,but many changed from previous assumption and save countries

UBO registry for real estate, and are so archaic that they will not report it in the near future- think Eastern Europe. So you could place your money in a relatively safe (from confiscation and from inflation) and get yield. Of course this brings you other risks (regulation risk, changes in tax on rents etc) but overall it seems it's one of the only things that is still not reportable if structured right. Some even allow buying using cash.

Here i disagree.In europe there is no country where you won't lose big chunk of money which are invested in RE.You are making the mistake like all pro real estates guys calling it an inflation instead of stagflation.Big mistake .
Also you miss the risk which happened in history already many times that your RE will be used to take forced mortage so governments can pay for the needs of its citizen.

Where present in Africa, Russians are welcomed. This time, if well played, they team up with China, and can be an unstoppable force.

Its not about china.Its about germany.US fears Russia getting with China together as this is the only constalation which could threat US.Thats why EU will split and create the 3 sea intitative to make sure they will never join forces.Remember the people of germany are pro russian and many of them even lived before in russia.

 

[Silvio]

Here i disagree.In europe there is no country where you won't lose big chunk of money which are invested in RE.You are making the mistake like all pro real estates guys calling it an inflation instead of stagflation.Big mistake .
Also you miss the risk which happened in history already many times that your RE will be used to take forced mortage so governments can pay for the needs of its citizen.

What the hell are you talking about ... when were real estate investors ever "forced to take mortgage" in Europe?
There is no country in Europe where you won't lose big chunk of money? But a few days ago you wanted to buy apartments in Russia?

Seriously dude, you should seek professional help. Your posts are delusional

Euro is doomed - ECB policy is idiotic and always was. I never understood why somebody from outside the Euro area would want to save money in that dumb hybrid "currency".

Been hearing that for at least 10 years, so far everybody that said that was wrong.
Every week in this forum people talk about how wires in USD are scrutinized\blocked and how everybody needs to avoid USD to keep their BK accounts alive (with some banks not even giving a USD IBAN at all), all these people end up using EUR instead. So I don't see EUR being "doomed" any time soon.

 

[JackAlabama]

What the hell are you talking about ... when were real estate investors ever "forced to take mortgage" in Europe?
There is no country in Europe where you won't lose big chunk of money? But a few days ago you wanted to buy apartments in Russia?

Seriously dude, you should seek professional help. Your posts are delusional


Been hearing that for at least 10 years, so far everybody that said that was wrong.
Every week in this forum people talk about how wires in USD are scrutinized\blocked and how everybody needs to avoid USD to keep their BK accounts alive, all these people end up using EUR instead. So I don't see EUR being "doomed" any time soon.

"
Lastenausgleich was the post World War II program and laws to recompense Germans and ethnic Germans who fled their homelands for their lost properties. This was a very complicated law that transferred enormous wealth to the immigrants over a period of decades. It may well have provided a strong basis for the Wirtschaftswunder or German "economic miracle" in the post-war era. Economic analysis of this activity could influence modern tax laws for understanding how transfer of wealth through higher minimum wage laws and direct transfers can influence a modern economy.

The value of "lost" property during the war was paid at a rate of 50% of its value quarterly over as much as 30 years. By 1982 over 115 billion DM (about $70 billion US dollars as of 1999, when Germany adopted Euros as its currency) has been spent. This outweighs hugely the value of something more than $1 billion Germany received through the Marshall Plan.
"
Lastenausgleich - Wikipedia

Interesting to note that country also just recently amended respective laws.

 

[369]

What the hell are you talking about ... when were real estate investors ever "forced to take mortgage" in Europe?
There is no country in Europe where you won't lose big chunk of money? But a few days ago you wanted to buy apartments in Russia?

Seriously dude, you should seek professional help. Your posts are delusional


Been hearing that for at least 10 years, so far everybody that said that was wrong.
Every week in this forum people talk about how wires in USD are scrutinized\blocked and how everybody needs to avoid USD to keep their BK accounts alive (with some banks not even giving a USD IBAN at all), all these people end up using EUR instead. So I don't see EUR being "doomed" any time soon.

there are a lot of laws in the past in europe just research it yourself.The new ones are hidden in social laws to pay for the damages on vaccinated.
Secondly poland is currently working on a new law which says RE which are currently not being used (even if you are on a business travel for a month) will be taken for the immigrants.
So much to your personal property and your rights to it.

Also you missed the stagflation part.You think you will be able to get higher rents to neutral the inflation in a stagflation where people don't make more money and their living costs are exploding?
You think there will be enough buyers with spiking interest rates and way lower ppp ?

What you think how many RE will be foreclosed because of people not being able to pay their mortage or the price diffrence between their mortage amount and the value of RE ?
2009-2011 says hello to you

And you are fully correct i'm still interrested at these cheap prices to buy RE in russia and would love to invest in their ADR's at these peanuts prices

 

[Martin Everson]

China CBCD is done for international mass adoption. Mozambique already use it as a national currency. Almost all the smartphones shipped to Africa got a Yuan wallet already installed. China already said that the African Franc will be substituted by the RMB. Soon RMB will become the reserve currency in all Africa. They are a bit slow, but you know Chinese are patient people…

Yup the dollar will eventually be toast and RMB will dominate. You want to sell oil and goods to China then guess what China is not gonna want to pay you in USD at some point. People are not seeing the big picture of what China is actually doing in developing countries with its RMB currency swap lines. Even with the Chinese CIPS payment network. Even Russia entered into a currency swap agreement with RMB which will cushion the sanctions. And when RMB is pegged to USD for now who needs USD and risk of arbitrary sanctions.


--- quote start

"Argentina has also realized China’s importance when it comes to finance. Thirteen years ago, Argentina agreed to a currency swap deal with China worth just over $10 billion at the time. Argentina was not alone – 22 others including Malaysia and Indonesia also did so around the same time, and since then Nigeria and Sri Lanka have also negotiated swaps. Argentina and China renewed their swap in 2014 and 2017, and this year, in 2022, Argentina secured an increase – making the entire swap now worth $23.7 billion.

The swap entails an agreement between both countries’ central banks, where each country has a local-based account in the other’s currency, enabling the banks to draw funds from the accounts for needs and to repay with interest, including for trade settlement. For China, the swap is helpful in interacting internationally without relying too much on the dollar. For Argentina and others, the swap is similarly helpful for trade but also offers alternative options to International Monetary Fund (IMF) lending and eases foreign reserves. Argentina has experienced several fiscal crises over the years and is due to repay about $3-4 billion to the IMF in the first quarter of 2022, including interest and principal payments. So the recent increase of the China swap helps, and seems likely to continue to grow."

---- quote end

We are going to eventually have two separate financial systems. One future thinking and dominated by China and CIPS and the other legacy and failing that will be dominated by US and USD.

Everyone should read the below article fully.

China’s Relationship With Argentina Goes Far Beyond the Falklands/Malvinas Dispute

The focus on China’s support for Argentina in the territorial dispute overshadows more important parts of the relationship, especially in trade and finance.

thediplomat.com

Renminbi Internationalization: The Prospects of China’s Yuan as the Next Global Currency | Thought Leadership Briefs | Publications | HKUST Institute for Emerging Market Studies

Thought Leadership on Emerging Markets

iems.ust.hk