By Jamie Douglas
Before getting to this week’s question, I have a request of all my readers everywhere: Those expats who have health insurance, please be kind to your fellow expats, and share some of the information with us. Of all the subjects my readers are addressing in the questions section, this seems to be the major item of interest. We are also dutifully looking into the topic, so look for it in an upcoming Q&A segment. Thanks!
Now for this week’s questions:
Dear Jamie,
I have 3 questions based on the law that says:
"This obstacle comes in the amended Hiring Incentives to Restore Employment (HIRE) Act that came into effect on Jan. 1, 2011. Stated in the new act are laws affecting the holding of foreign assets. And foreign banks that fail to comply with these laws face huge penalties." Based on that law, how are my questions below impacted? Thank you so much for all your research and insight.
If a couple or a single person decide to move out of the USA, but at some point they will travel back forth between the states and their other country, what is a good way to balance your money? Keep what percent of their money in each location?
This question has many answers, all of which depend on your adopted country of residence. Generally speaking, it would be wise to feel out your new home’s banking system before making any large financial commitments, such as moving a large sum of money to a local bank. There are very few nations that protect the consumer from losses to their accounts, as the FDIC does in the United States. Presently, it would be advisable to put your money into a currency such as the Norwegian Kroner or the Swiss Franc, which, after having an explosive growth in value, has been stabilized at 20% less against the US dollar, at 90 cents US to the Franc from its previous high a few weeks ago of 75 cents. How you go about accomplishing that I will leave up to you, as I do not want to give out detailed financial advice.
And do you think it is better to keep the majority of your money in the states and transfer money when you need it?
Again, this is a difficult subject to give a clear answer to, as with the possible demise of the Greek economy, there are so many unknowns. For the moment at least, I would suggest to leave the funds where they are, until we see how the world and US economic situation unfolds. There may yet be some surprises in the offing, what with the possibility of Italy, Spain and Portugal defaulting.
Do you think there is a chance that FDIC banking institutions might not be able to guarantee people's money when the owners of the money go to take it out, no matter what condition the USA's economy is in? Meaning does the concept of FDIC guarantee that you will get your money no matter what?
Happy Travels.......
There is always the chance that the FDIC may run out of money, but the US economy depends on American’s misplaced faith in their rotten banking system, so it stands to reason that the Treasury will take a bunch of worthless paper and imprint it with the necessary inks to give the illusion that you have a valuable banknote in your possession. As long as that illusion is maintained, and merchants accept that paper at face value, you are OK. If you are a person of means, surely you know not to keep more than 100K in any one account. You can spread your wealth out over multiple accounts at many different banks. Once the FDIC is toast, so is the US financial system.
Best of luck!
Jamie Douglas
San Rafael, Mendoza
Where we don’t trust any banks ever again! Malbec or no Malbec.
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