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I just put more money in Canada; you probably should, too

Posted by John Reed on

I talked to my Canadian banker yesterday because I sent her some more money to put into my Canadian dollar savings account. The danger today is our debt-to-GDP ratio is too high, almost at the record level it hit after World War II. Plus, Trump wants to spend much more on the military and infrastructure and enact big tax cuts. That is likely to worsen the debt-to-GDP ratio which I regard as the main indicator of hyperinflation probability. He hopes growth will prevent the deficit from widening. I hope so too, but in the spirit of Praise the Lord and pass the ammunition, I hope for growth and put money in Canada, Australia, New Zealand, Swiss francs, and Danish and Swedish krona in case we get hyperinflation instead of growth.

What percent of your net worth in foreign currency?

A reader asked what percent of your net worth should be in foreign currency as I recommended in my book How To Protect Your Life Savings From Hyperinflation & Depression, 2nd edition.…/how-to-protect-your-life-savings…

I told him it’s not a percentage. It’s about $200,000—enough to live for the six to 18 months it will take for the American people to demand repeal of the five bad laws governments always pass when hyperinflation occurs. Those five laws empty store shelves and force you to buy necessities from the black market guys who previously only sold illegal drugs. Those five bad laws are a prominent part of my Unelected President novel.

In the style to which you have become accustomed

But there is another aspect I have recently discovered. The more affluent you get, the more money you should put abroad so your quality of life abroad during a U.S. hyperinflation is not significantly below what you have in the U.S. So let me modify my rule: Put abroad the amount you need to live outside the U.S. in the style to which you have become accustomed for the six to 18 months it will likely take for the U.S. government to stop trying to force worthless USD down your throat.

Call my banker

My banker in Canada is Tannaz Alesafar | Financial Services Manager | Park Royal Branch
BMO Bank of Montreal | 913 Park Royal South | West Vancouver, BC, V7T 1A1
(T) 604-903-2943 | (F) 604-903-2955

Ms. Alesafar is great. Extremely efficient and pro-active. She fixes what needs to be fixed and the other things she sees that need to be fixed even thought you did not complain about them. You have to go to Canada in person to initially open the account but you need not ever go again.

Just open a savings account like here

Opening a savings account there is almost identical to here. You walk in, fill out the form with your personal info, show them your passport, maybe an electric or property tax bill to prove your resident, and choose which type of account you want. Take a blank check and fill it in there to make your initial deposit. If you fill it out in the US and it is more than $10,000 you have to declare it at the border.

Foreign currency is THE hedge against inflation, NOT gold. I have read multiple books about past hyperinflations including the recent one in Argentina. No one gives a damn about gold in a hyperinflated country. But they desperately try to get foreign currency every day.
In the US, the federal government ordered all owners of bullion gold to sell it to the Fed within about 60 days in 1933.…/60940227-disadvantages-of-gold-as-an…

Leave the country temporarily

My solution is to tell you to leave the hyperinflated country for the six to 18 months. You need foreign currency to live abroad during that period because if the USD is hyperinflated, the country to which you go will not want USD. Indeed, you probably will need to prove to the border guards of the country you go to that you have foreign currency that is not hyperinflated to support yourself in order to get into the foreign country at all.

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  • My rule is that if you criticize one of my recommended foreign currencies, you must name the superior, according to you, foreign currency that should replace it.
    You did not do that yet. Anyone can find fault with almost anything. Much harder to name he who is without fault. I recommend 7 foreign currencies. You would reduce it to 6 which is less diversification. I insist on 7.

    John T Reed on
  • I hope you have changed your mind about Canada being a safe haven for your wealth. Canada is He’s on the brink of a worst housing crisis than the United States suffered in 2007 2008 etc. Canadas real estate is built on five-year adjustable-rate mortgages. There’s no 30 year fixed in Canada. If the ARM rules forced mortgage rates of 1%, 45% of Canadians would have to list and sell their homes. Canada is on the brink of a disaster worse than United States suffered several years ago.

    Gil Fleming on

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