Introduction: Terry Coxon is the author of Keep What You Earn and was for many years a close collaborator with and editor for the late Harry Browne. He currently is a regular contributor to The Casey Report. Mr. Coxon has a distinguished history as an architect of innovative financial planning arrangements, including the Permanent Portfolio Fund, the United States Gold Trust (the first gold ETF), the Passport Financial Offshore Trust and the Open Opportunity IRA.
Anthony Wile: It's been a while. Let's start with a question we ask almost everyone. Is the US really recovering from recession – or isn't it?
Terry Coxon: The short answer is, yes, the U.S. recovery is still underway. Inflating the money supply by 90% almost guarantees a revival. But more interesting to me is that five-and-a-half years after the near panic in 2008 everyone is still asking the question and, by now, almost everyone has been called upon to give an answer. What a waste of time and mental energy!
Anthony Wile: What would be a better way?
Terry Coxon: The attention so many of us spend on sorting out the consequences of the government's trifling with the currency and interfering in the capital markets could be spent on something more productive – if it weren't a matter of necessity for us to figure out how to protect ourselves from the government's bad habits.
Anthony Wile: But is "Yes, there's a recovery" the end of the story?
Terry Coxon: No. It's the beginning of the story, or of the current chapter of the story. The recovery has been slow because of the memory so many people have of the near-death experience of 2008-2009 and because of the U.S. government's recent above-average rate of growth in deficit spending and regulatory interference.
Anthony Wile: But US officials insist the recovery is ongoing.
Terry Coxon: With so much excess cash in the system, the recovery will gradually speed up as 2008-2009 recedes into the past. Then comes something that will look like a boom, and then come accelerating rates of price inflation and hard times again.
Anthony Wile: So we can give the Obama administration high marks for initially digging the nation out of the Great Recession?
Terry Coxon: Are you kidding? Rapidly growing government debt. Higher tax rates. Financial schizophrenia imposed on the medical industry. Slow suffocation of the coal industry by never-ending tightening of emission control standards. Mocking the public's confidence in the rule of law by giving a pass to thugs at polling places, by using the IRS to attack organizations that are politically unfriendly and by selective adherence to statutes (e.g., proceeding with whatever provisions of the Affordable Care Act seem convenient from day to day). Demonstrated dishonesty on a grand scale ("You can keep your doctor"). Programmed dithering about mega-ticket projects such as the Keystone pipeline. Some would give President Obama an "A" in economic sabotage.
Anthony Wile: Is the damage to the economy somehow intentional?
Terry Coxon: No. It's not intentional; it's unacknowledgeable. Mr. Obama's way of understanding things, backed up by government power don't just produce results, they control reality. It's a nearly magical way of thinking, like believing in genies. Economic logic doesn't matter.
Anthony Wile: What about our new central bankers? Does Janet Yellen believe in genies?
Terry Coxon: No. It's worse than that. She believes that the right coterie of highly intelligent individuals who have spent their careers moving between big-name educational institutions and big-name government agencies can see what markets cannot. She's running a Gosplan for money.
Anthony Wile: Why did gold move down hard last year?
Terry Coxon: The run-up in gold that began in 2009 was fueled by demand from (a) the investors who saw clearly that rapid money printing would eventually damage the purchasing power of paper money and (b) trend followers. When group (a), which is only a small minority of investors, had finished buying, the trend slowed, so group (b) started selling. The next big leg up for gold may not come until price inflation becomes obvious to the general public – the 90% of the population for whom economic logic is just someone's opinion.
Anthony Wile: With the US in particular seeming to make moving money abroad more difficult, what should people do?
Terry Coxon: Most US investors still need to learn to do some important things that they've never done before. Buying a little gold is just the first step toward freeing yourself from complete dependence on economic, political and legal conditions at home.
Anthony Wile: Can the current tensions over Ukraine trigger additional economic difficulties in the West?
Terry Coxon: There is a danger of trouble far beyond "economic difficulties." The general direction of the Obama administration is toward what libertarians have always advocated – much less involvement by the U.S. government in the adventures, quarrels, atrocities and stupidities of other governments.
Anthony Wile: But seeing correctly where you should be is much easier than seeing how to get there safely.
Terry Coxon: You've put your finger on the problem. Having spent the last 60 years trying to make the world operate according to Washington's vision, the U.S. can't simply stop without unleashing a host of long-suppressed conflicts and bloody aspirations. The specific consequences would be hard to foresee, but they would amount to a death fair with booths in every part of the world.
Anthony Wile: So obviously, politics doesn't hold the answers.
Terry Coxon: The Obama administration is clueless about how to let the world decompress from too much U.S. involvement. You've seen the symptoms – for and against all factions in Egypt, the disappearing red line in Syria and the current do-nothing, say-everything treatment of Putin's real estate project in Ukraine. We can't know where it will lead, but I'm afraid we won't like going there.
If that sounds worrisome, try this idea. The U.S. government's bewilderment about how to wind down its over-involvement in the international power game is the bombs-and-bullets analog of the Federal Reserve's bewilderment about how to wind down Quantitative Easing. Janet is trying to taper and is hoping to get it right. So is Barack. Twin disasters may be waiting.
Anthony Wile: So what we can do? Modern presidents don't seem very helpful – and central banking seems downright destructive.
Terry Coxon: Focus on what you control, and don't get distracted by a political process you can't control. Protect yourself and your assets. Doing that means looking beyond the borders of your home country.
An excellent, practical encyclopedia for internationalization is a report called Going Global. Or if you're ready for the 100-proof stuff, get the International Trust Guidebook that I prepared for Casey Research. You can find information on both of them at CaseyResearch.com.
Anthony Wile: Okay. Tell us a little bit about the International Trust Guidebook.
Terry Coxon: Start with lawsuits. As I point out in various materials supporting the book, "The ACE Group (specialists in insurance for high-net-worth individuals) recently noted that 'America's wealthiest families increasingly worry that their wealth alone makes them a target for a high-stakes liability lawsuit.' Lawyers in the US especially are becoming ever more aggressive. If you have above-average wealth, you may attract above-average interest.
Remember, filing a big lawsuit doesn't cost any more than filing a small one. Yet for you, the extra sums tacked on can literally break your estate.
Anthony Wile: So can an International Trust help?
Terry Coxon: It can put your assets beyond the reach of predatory lawsuits. Nothing else will give you the same level of protection. Even the structure itself is discouraging to lawsuits because it makes it so difficult for an attacker to collect anything if he wins in court.
Anthony Wile: That's the main reason for an International Trust?
Terry Coxon: There's much more to it – a laundry list of advantages, including protection from seizures. More and more agencies, especially in the US, are seizing assets for whatever reason. Some of the seizures may be legal but others are questionable or illegal. The trouble is that once your assets are seized, you are the one who has to fight to get them back.
Throughout the West, but especially in the US, a single government employee can start the ball rolling. Your cash, your investments – all gone with the push of a button. For many people, once their assets are frozen, funding a legal challenge becomes impossible."
Anthony Wile: What gives an International Trust its power?
Terry Coxon: It has protective power because it conforms to the laws of the jurisdiction you've chosen, not the laws of your residence. Also, an International Trust can be perpetual, making it a great vehicle for estate planning. Doug Casey, chairman of Casey Research, has advised: "I cannot stress strongly enough that anyone who hopes to survive financially needs to internationalize." I couldn't agree more. As I've pointed out: Without the protection of an International Trust, you could lose so much – maybe everything – to an aggressive lawsuit, a willful judge, or a debt-ridden government agency.
An International Trust assures your freedom to invest anywhere, no matter what investment restrictions the US might adopt. Currency controls in the US? They can't touch your International Trust – it's not in the US. Limitations on capital leaving the country? Your capital already left, and it's being safeguarded in the jurisdiction you chose. From there it can be redeployed anywhere in the world. There are alternative strategies for protecting your assets, but they are far less powerful and far less reliable.
Anthony Wile: Is it complex to initiate or maintain?
Terry Coxon: It's not so complex as it is unfamiliar. But I hope readers will take time to investigate it, for their own individual benefit and for the safety of future generations. It's the only permanent solution.
Anthony Wile: Many of our readers may want to learn more. Thanks for the perspective.
Terry Coxon: A pleasure, as always.
The idea of an international trust is probably a good one. The US in particular is in the grasp of increasingly radical government officials who see every individual's assets as US property.
What is just as worrisome is that this situation needn't have arisen. The Bush administration's military and political gambits helped push the dollar over the edge. The Obama administration has continued these destructive policies.
Of course, monopoly fiat money printing itself is ultimately destabilizing. Couple that with the aggressive actions of a military-industrial complex and you end up with wholesale currency destabilization.
What many people do not seem to realize is that the current US troubles are seemingly not coincidental. They did not just arise, in other words. And if this view is clearly internalized, then the conclusion is as unfortunate as it is obvious: Current trends are going to expand and worsen.
One certainly should try to gain capital within current windows of opportunity, as we have argued, but one should also be aware that eventually these windows are going to slam shut.
On the other hand, the trends toward capital confiscation and travel impediments will continue.
If you have the wherewithal to protect yourself, do so. Again, destructive trends show no signs of diminishing. Protect yourself as best you can.
This is the proverbial bottom line for Mr. Coxon. And it is a sensible one.
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