Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19
Phase 1 of Stock Market Correction - 11th Mar 19
Long Awaited Stock Market Pullback has Finally Arrived - 11th Mar 19
US Presidential Cycle and the Stock Market - Video - 11th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - 11th Mar 19
Chinese Economic Data Shakes the Global Stock Markets - 11th Mar 19
The Fed Is Playing a Dangerous Game - 11th Mar 19
The Stock Market Has Called the Fed’s Bluff, What’s Next? - 11th Mar 19
Turkey Holiday Bazaar Extreme Jewelry Price Haggling - Fethiye Market - 11th Mar 19
Are You Ready for the Next Big Move in Gold? - 10th Mar 19
Taylor Wimpey Reports £811m in Profits boosted by Help-to-Buy - 10th Mar 19
SPX Big US Stocks Fundamentals - 10th Mar 19
Yield Curve Inversion and the Stock Market 2019 - Video - 9th Mar 19
Various Stock Market Indicators are Plunging. Run for the Hills! - 9th Mar 19
Unsecured Debt hits £15,400 per UK Household - 9th Mar 19
QE4EVER Stock Market 2019 - 8th Mar 19
The Real New Deal - 8th Mar 19
How High Cost Credit Affects Financially Unstable Families - 8th Mar 19
Gold and Silver Precious Metals Pot Pourri - 8th Mar 19
Stock Market Downward Reversal? Stocks Still Relatively Close to Their Recent Highs - 8th Mar 19
Gold and the Political Theater: Is The Tail Wagging the Dog? - 8th Mar 19
Is Recession Near? - 8th Mar 19
Consumer Behavior: What you need to know to read your Audience - 8th Mar 19
The Exponential Stocks Bull Market - 7th Mar 19
Millennial Home Buyers Not as Active as Boomers Were in US Property Market - 7th Mar 19
KIND Elevates Nut Butter Category with a Wholesome Recipe - 7th Mar 19
Brexit Does Not Stop Bitcoin’s Growth in the UK - 7th Mar 19
How Private Sector Debt Bubble Could Trigger the Next Financial Crisis - 7th Mar 19
What Commodities and Transportation Stocks Telling Us - Part2 - 7th Mar 19
What Comes After a Trillion in Student Debt? - 7th Mar 19
Dear Stocks Bull Market: Happy 10 Year Anniversary! - 7th Mar 19
The Importance of Financial Planning for Companies - 7th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Every Investor Is One Misstep Away From Losing Everything—And It Has Nothing To Do With Crashes

Portfolio / Financial Markets 2017 Aug 04, 2017 - 12:23 PM GMT

By: John_Mauldin

Portfolio

BY OLIVIER GARRET : The US has become a very unfriendly place for successful people.

Not just for the uber wealthy, but entrepreneurs, investors, and the family next door. Anyone with even a modest net worth is a potential target.

Our country has just 5% of the world’s population yet is home to 80% of its lawyers. The US spends 2.2% of its GDP on legal costs. That is an eight-fold jump per capita (inflation adjusted) since the 1950s.


In this environment, everyone’s hard-earned wealth is on the line. You are one serious lawsuit away from losing everything. Every single penny.

You think you are a good citizen and so nothing will happen to you? Wrong. That’s not how the modern legal system works. The risk of being sued is much much higher than you think, even if you play it safe.

Yet lawsuits and asset seizures are still one of the most overlooked risks among investors.

For the past decade, I’ve studied which legal methods successful Americans use to protect their wealth against excessive tax, asset seizures, and lawsuits.

Here’s what I learned.

There’s Nothing Civil About Being Sued

There are 15 million civil cases filed annually in the US.

Most of them are attempts to sue companies and individuals with assets. If you have accumulated assets and have not yet been sued, consider yourself lucky.

But it will take more than luck to keep what you’ve earned. Do not make the mistake of thinking that doing things right and being a good citizen will protect you. It won’t.

US courts generally award damages based on the defendant’s ability to pay and not on the actual cost to the plaintiff.

The US legal system is unique in another way. It allows attorneys to advertise and receive contingency fees for taking on cases. The original intent was to provide access to lawyers when the plaintiff had no means to pay for representation.

Unfortunately, large, successful class-action lawsuits and excessive punitive damages awarded by juries have attracted lawyers looking for their next payday. 

It is normal practice for “contingency lawyers” to target the deepest pockets rather than the most likely culprit. Some attorneys even launch frivolous lawsuits with the sole intent of negotiating a quick and fat settlement out of a wealthy defendant. Average defense costs now exceed $100,000 per case brought to court. No surprise that many defendants will settle to avoid legal fees, stress, and wasted time. 

In a world where financial privacy is dead, wealthy individuals, families, and enterprises are seen as easy targets.

The risk to our financial assets does not stop with aggressive lawyers that want a share of our wealth. The other common threat comes from our own government. 

Authority Without Limits: Civil Asset Forfeiture and Taxes

More and more federal or state agencies use asset seizures as a way to plug widening holes in their budgets.

Their power is alarmingly broad and they can often seize assets without warning. The target of such a seizure is deemed guilty until proven otherwise. They must take these agencies to court and prove their innocence to recover seized assets.

Unfortunately, many victims are unprepared or lack the means to recover what is rightfully theirs.

A far more stealth way of seizing assets is through higher taxation and various forms of government confiscation. Although many Americans scoff at the notion, confiscation has happened many times in the US. Here are just a few examples:

  • In 1933, during the Great Depression, President Roosevelt issued Executive Order 6102. It declared that the private ownership of gold was illegal. He forced small and large investors to surrender their gold holdings at a bank. They were paid at the then official rate of $20.67/oz. Non-compliance could result in a prison sentence of up to 10 years and a fine of up to $10,000 ($600,000 in today’s money). Less than a year later, the Gold Reserve Act changed the official value of gold to $35. The gold confiscation was thus a disguised tax of 69% on those who had owned gold bullion. It remained illegal to own gold in the US until 1974. 
  • The US government imposed capital controls during the Great Depression and again during the 1960s. Once wealth is trapped inside the US, it is pretty much at the mercy of the taxing authorities.
  • Between 1941 and 1976, the maximum death tax in the US reached 77%. From 1944 until 1963, the highest personal income tax bracket exceeded 90%.

Desperate governments often take desperate measures against their own citizens. That can include gold confiscation, exchange controls, aggressive taxation, exorbitant death taxes, or asset seizures. Such actions often happen during times of war, financial crisis, or economic hardship.

History shows that government money grabs are not new. They have happened with all-too-frequent regularity in countries around the globe. It’s a safe bet that politicians will again “legally” steal the assets of American citizens. And when this happens, hard-working people who have steadily accumulated wealth to support and protect their families will be the targets. 

When the going once again gets tough, voters will support taking from the “rich.” All it will take is a crisis serious enough for astute politicians to justify the grabbing.

How far are we from conditions that could warrant such extreme measures? It could be closer than any of us would like. The recent demonstrations and riots seen across the US are sad proof of that.  

There Are No Solutions, Only Losers, Don’t Be One of Them

Federal debt will hit $20 trillion very soon. Many states are quasi-bankrupt. Unfunded government liabilities (mostly pensions) are estimated to be more than $100 trillion. That is about 100% of the total value of our national assets.

To put that in perspective, federal debt and unfunded liabilities exceed $1 million per taxpayer.

The current demographic trend—too many seniors, too few workers—means we aren’t going to grow our way out of this mess. The only solution is to cut all benefits and pensions dramatically.

According to the US Census, 49% of our population received government benefits. The bureaucrats know that benefit cuts would be political suicide. 

Career politicians will opt to target and tax an unpopular minority—the so-called “rich.” There is no way they will take benefits away from half the population. We’ve clearly heard that type of rhetoric from several politicians lately, including former President Obama. Candidate Hillary Clinton began to sound increasingly like her socialist rival Bernie Sanders during the election campaign.

Whether or not we like President Trump, his election may have handed us a short-term reprieve from the collectivist movement in the US. Long term, though, I believe the US is on an inevitable path toward more socialism.

To fill its empty coffers, state and federal governments must take assets from savers, entrepreneurs, and hard-working professionals. 

Why?

Because the US lacks the political will to reduce its debt burden and make meaningful cuts to programs or benefits.

Anyone who has accumulated a bit of wealth has a very short window—probably no more than four years—to implement well-structured asset protection and estate plans.

There are many solutions that can be tailored to your needs; among them are foreign trusts, international life insurance policies, and variable annuities.

Download the Report Protect Your Estate Now: A Concise Guide to Family Wealth Protection

Learn how to protect your wealth from extreme market conditions, tax, and lawsuits. Click here to learn more.

John Mauldin Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules