Protecting Your Wealth From Inflation And A Currency Reset

This article is not personal financial advice, it is general in nature only.

The Financial System

In this article, we aim to equip you with the necessary strategies to protect your wealth amidst the potential threats of a currency reset, inflation, and the introduction of Central Bank Digital Currencies (CBDCs). We will delve into the origins of money and focus on actionable solutions you can implement.

The Inflation We Were Never Taught About At School.

During our school years we were taught about cost push inflation (cost increases in inputs to the production process) and demand pull inflation (prices rising due to increased demand). However, we were never taught about how money comes into creation! Whether intentionally or unintentionally. The mechanics of money creation and how increases in the money supply effects the purchasing power of each dollar you hold, were never taught properly!

The Largest Cartel You Were Never Taught About

When we think of cartels, we often envision Mexican drug cartels or the oil cartel OPEC. Whilst energy is the most traded commodity in the world, and cocaine arguably would be in the top four by dollar value. These cartels pale in comparison to the control exerted by the Central Banking & Banking Cartel! It is also the cartel that enables all the other cartels to operate!

The Central Banking & Banking Cartel

The Central Banking & Banking Cartel, and they are a cartel is the most powerful! As the most powerful cartel, they hold the power to make or break governments and monarchies alike. Money is a commodity like everything else. It is created, sold, traded, and has a cost (interest) to acquire it. It comes in various forms, and is primarily sold as debt and is used in every transaction worldwide! Those who control this system effectively control everything and everyone else!

Money Created From Thin Air

It is essential to understand that the money we use today is not backed by any tangible asset. Its value lies in its status as legal tender and the trust placed in it by the people who use it to remain stable. Most countries employ a fiat monetary system, meaning their currency is not backed by gold or any other physical commodity.

This system however, poses an inherent problem: as money is created digitally from thin air by central banks, and then sold, with interest being charged on it, the value of each dollar diminishes! This results in a hidden tax / theft that occurs against each person holding the existing currency. Moreover, this process leads to significant systemic issues over time.

The seriousness of all this, occurs when you understand that interest (a cost) is being charged on something (money) that never existed in the first place! The only group able to do this in the world, is the Central Banking and Banking Cartels!

This is why I stay up a night, thinking of ways our clients can protect themselves, who can't create money from thin air!

A Currency Reset

Since the Global Financial Crisis central banks have printed trillions of dollars, devaluing each dollar you hold, simultaneously advancements in digital money have provided governments with more control than ever before. From the Bank of International Settlements in Switzerland to the Fed, Central Bank Digital Currencies (CBDCs) are the leading currency alternative governments are looking at!

When a banking system creates excessive fiat money, cracks eventually begin to appear. Governments burdened with increasing debt must pay higher interest while simultaneously dealing with budget deficits, often necessitating further borrowing (typically through central banks purchasing more government debt). This cycle leads to inflation and the erosion of each dollar's purchasing power. At some point, a reset becomes inevitable!

CBDCs and or a currency reset, happen to be one of the largest threats to your sovereign financial future!

Financial Currency Collapse

As with all currency collapses, there are three major risks that present themselves, especially when a new currency comes in and when CBDCs are involved.

1. Currency Conversion Loss

The first is the conversion rate between the old and the new currency. The whole point of switching currencies, is to reduce the number of circulating units of currency, in addition to other benefits (such as defaulting on one’s debts if you’re a country). Ultimately for this process to occur, it means that the conversion from the old currency to the new one, will not be one to one. So some loss has to be realised in the old currency and by you!

This necessitates that you store your wealth in an alternative assets, outside of the departing currency and their systems (we will cover this in the next section)!

2. Threats of CBDCs

CBDCs aren’t just digital money, it is money that can be programmed!

Which directly conflicts with your rights to determine how, when and where your money is spent!

The issue is that without adequate laws to protect your human rights regarding digital money, governments will have the ability to abuse power! They will be able to determine where you can spend your money, who with and even put an expiry date on it!

CBDCs also allow governments to create different classes of digital money, with different rights for different groups! Already they are talking about wholesale CBDCs and retail CBDCs! Your money and my money will no longer be equal!

Paradoxically, the very strength of CBDCs (their ability to be programmed) is also their biggest Achilles heel!

3. Capital Controls

We do not know what dictatorial rules will be enforced during a currency collapse, so that new one can be put into circulation. Will they ban crypto? Will they confiscate precious metals? Will they implement capital controls? The reality is that during such times, all things that we think are unlikely to occur, are in fact possible!

In this respect, we prepare for the worst but expect the best.

How A CBDC System Could Be Implemented!

For a CBDC to be implemented, it is likely that an economic or financial crisis would have to occur, forcing people to adopt the new currency. Currently, the excessive printing of money (Quantitative Easing), especially in the West is devaluing currencies and causing inflation. High inflation and debt are not reason enough to cause a switch, but hyperinflation, a banking / credit crisis, economic crisis or war could be used to necessitate a financial currency reset!

At the same time a national digital ID could also be required for a CBDC system to work. This only worsens, when blended with a social credit score system that monitors all aspects of human interactions (spending habits, carbon footprint, political leanings etc).

Essentially the issue with all this, besides your privacy not existing, is that your rights to determine how you spend your money will ultimately be determined by the political agendas of those in power.

Drove your car to far this week, sorry you can’t get more petrol.

Spent money on too much beef this week, sorry you can’t buy from the butchers.

You don’t belong to the right “level of society”, sorry your money expires sooner.

Whilst all this sounds crazy, it is essentially what a CBDC system allows a government to do, and any democracy must have checks and balances, so power is not abused!

Wealth Protection Strategies During Currency Instability

Ultimately to protect ones wealth during time of instability, multiple layers of protection are required. We have broken up just a few strategies that people have used in past, to help you safeguard your wealth!

Alternative Asset Investment

In the past, individuals have employed various strategies to protect their wealth during times of currency instability / reset or extreme government control. Most of these assets were held previously to bypass confiscation by government. Some of these assets include:

1. Investing in physical gold and silver bullion (not CFDs or shares etc).
2. Diamonds.
3. Private collectible cars that aren’t registered.
4. Private scotch and wine collections.
5. Artwork and watches (you now have watches worth $500k to $5M)
6. Foreign currencies, held in offshore banks or safes.
7. Ownership of key resources and supplies that are non-perishable that consumers require.
8. Cryptocurrency (subject to where and how exchanges and wallets are held)

Private Equity In Critical Infrastructure

During times of instability, and irrational government behaviour, governments still require the services of private businesses with key industry knowledge. As such investments in the below are warranted. Our key concern with these types of investments, is that governments have the ability to take over industries and make them state owned in a worst case scenario!

1. Food production and supply
2. Critical minerals (think rare earths and tech based)
3. Energy production, supply and distribution
4. Government housing
5. Critical infrastructure (civil works, telecommunications, road infrastructure).
6. Défense industries

Property Development and Property Investments

Property has typically been one of the safest ways to safeguard your wealth. It increases value with time and serves real practical use. It counters the effect of inflation! It is also one of the safest investments that you can own! Dare I say under certain situations it is safer than a government bond!

During times of instability however and a currency reset, the problem is governments can act irrationally. Governments can confiscate your property! Governments can also tax your property to a greater degree! The other issue with property, is that if it has debt on it, in a rising interest rate environment , with falling market prices, and failure by you to keep up with repayments, your equity can get eroded and a bank can take over the asset!

Taking the above into consideration, our investment preference is multi focused.

1. Property development of residential assets only if there is a shortage of property where you are(do not hold, develop and exit).
2. Property development of industrial assets (develop, exit or hold).
3. Property purchases of industrial and specialised assets with high yield.

Our genuine thinking, is that if a store front business, can be put online, then that is not necessarily a high conviction retail asset worth holding.

Contingency Planning for Cryptocurrencies

Cryptocurrencies offer potential financial solutions but face resistance from governments due to a lack of oversight and taxing difficulties. Governments have the ability to block websites and ban exchanges from operating in their jurisdictions.

Already banks are limiting the amount of dollars you can put into crypto exchanges!

In response, individuals and groups are developing contingency plans, and you should be aware of these.

One approach involves using decentralised finance (DeFi) platforms for trading cryptocurrencies, which provide anonymity and secure transactions, subject to their base of operations.

Decentralised virtual private networks (dVPNs) are also being explored to conceal online activities, providing an extra layer of privacy and security. Efforts are being made to develop user-friendly, secure, and private wallets for cryptocurrencies, using cutting-edge cryptographic techniques and innovative hardware solutions.

Capital Controls and Contingency Planning

Throughout history, individuals have devised various strategies to protect their wealth in the face of capital controls. One such approach involves setting up import and export businesses or selling goods overseas. By engaging in international trade, people can access foreign currencies, move goods / wealth cross border, and thus mitigate for the risks associated with domestic economic instability or currency controls.

Investment and jurisdiction diversification

In today's globalised economy, new contingency plans have emerged to safeguard financial freedom amidst government opposition. One method involves diversifying investments across multiple jurisdictions and asset classes. By spreading investments, individuals can reduce the impact of local economic fluctuations and maintain access to their wealth in case of adverse government policies in one nation.

Offshore accounts

Another strategy entails establishing offshore bank accounts or trusts in foreign jurisdictions. These accounts offer increased financial privacy and reduced vulnerability to domestic capital controls, providing individuals with greater control over their wealth.

Why CBDCs Might Fail.

Currency Stability

The success of an economy, is based on the ability of capital to flow from one party to the next, with relative ease. In order for financial transactions to occur between parties, three important elements must exist.

1. The currency being used must be of relatively stable value.
2. Parties involved in the transaction must be confident that the currency will be widely accepted by other parties (whether domestic or offshore).
3. Thirdly that the currency is legal tender.

Ray Dalio has his own principles regarding this, and you can read about them here.

Digital Money Failure

The very strength of CBDCs is that that they allow governments to program digital money to have certain rules. They also allow governments to create different classes of currency for various institutions or groups of people.

The very strengths of CBDCs, in fact hinder free market mechanisms and currency flow. The more easily currency can flow, the more prosperous a nation. In reality programmable money, goes against free market mechanisms, putting aside the human rights violations. It hinders trust about the very thing required for economic prosperity.

If party A, does not have confidence in the currency that they receive from Party B will be easily transferred or accepted by other groups, then it destroys the whole machine. Especially when dealing with overseas entities or with different “ classes” of people with different rules applied to them.

Therefore, CBDC by virtue of their own innate capabilities when abused by government actually stand to destroy free market capitalist mechanisms. Thus eroding economic prosperity, and the ability of nations to prosper. Which in turn, would cause their own demise as a function of time, but this doesn't mean governments won't try to implement them!