Taking advantage of a US dollar hyperinflation

S

Silverperch

New Member
Just a thought experiment at the moment, and need feedback if it could work.

The purpose of the following is to allow a way for Aussies to procure gold & silver effectively for free (but only when a US hyperinflation happens).

A loan for $10000 is taken out in US dollars with a US banking institution over a period of 5 years, with the expectation of US hyperinflation in 1 or 2 years.

1% of the loan (ie $100USD) is used to purchase gold within the US. This gold will be used to pay down the loan once US dollar hyperinflates.

The other 99% of the loan (ie. $9900USD) is wired to an Australian bank for the purpose of purchasing gold and silver bullion within Australia.

For this to work would require an Aussie with dual citizenship, and also assuming there is a sufficient time delay for the inflationary effects to impact Australia.
 
swifteagle said:
hiho said:
you cant be a dual citizen american
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I think this is not longer the case and The USA does allow for dual citizenship now days..
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Swift eagle I think you are partially right, but from the linked info http://travel.state.gov/travel/cis_pa_tw/cis/cis_1753.html it appears you must be born into or be given the dual nationality. I was using my minds example, Rupert Murdoch who renounced his Australian Citizen ship so he could become an American Citizen. So apologies to the OP, this is possible after all
 
Why would any gold need to be kept in the US? Just sell the coin in AU & wire the money to pay off the loan. I fully intend to use some more 2% transaction fee, -0- interest credit card loans to buy some more gold later this year. I just want to refinance my mortgage first and the interest rates are about right.
 
So you are going to use 1/20 oz of gold to pay down a loan of $10000 USD within 2 years? Sorry for seeming sceptical, but I am. If it reaches that stage you'd be better off owning some remote acreage, a bomb shelter and a self sufficient farm.

I don't think any bank would give you a loan as long as you earn money in AUD, regardless of low interest rates, basically they are taking a punt on AUD/USD a lot more than your ability to pay off the loan.
A lot can change in a year, suddenly your $10,000 loan ends up being nearly $20,000 just from currency movements alone.
This is why people don't simply borrow from US lenders to buy Australian houses.

5y

Source:
 
dccpa said:
Why would any gold need to be kept in the US? Just sell the coin in AU & wire the money to pay off the loan. I fully intend to use some more 2% transaction fee, -0- interest credit card loans to buy some more gold later this year. I just want to refinance my mortgage first and the interest rates are about right.
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which card?
 
You forget the IRS.

You'll pay a very punitive tax on your Australian investments basically negating the whole thing.

http://www.sovereignman.com/

"Um compliance for what?"

After a few uncomfortable phone calls, they find out that they're obliged to file 10+ years' worth of 1040s, 5471s, and FBARs, as well as pay steep tax bills with penalties and interest.

I have no doubt that a great many of these dual nationals are going to march down to the US embassy to renounce their citizenship. Unfortunately for them, they won't even be 'allowed' to do so until they become tax compliant.

It's amazing many of these folks have never lived in the US, have never earned a penny of US-source income, and have never even heard of an FBAR yet literally by accident of birth, they are now obligated under penalty of imprisonment to pay a huge portion of their assets to another government despite never having been made aware of such obligations.

What's more, they can't get out of it. They can't even renounce this obligation without first paying off the debts that they never signed up for.
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The above plan assumes hyperinflation.. and once that becomes likely, then it will already be too late to execute it, as gold would have shot up in anticipation of the hyperinflation...

There are many people controlling many billions with faster access to information than we have, that will be able to take advantage of any inflation arbitrage before we can, therefore erasing the potential arb before we can put money on it.

Trust me, not every banker is ignorant of whats going down...
 
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