Be Aware of the American Empire Risk to Your Wealth & Liberties

Be Aware of the American Empire Risk to Your Wealth & Liberties

"The civil wars in the 1st century B.C. put an end to the Republic...then, Caesar crossed the Rubicon and it was a new era in Rome, an era of Empire." - Bill Bonner, Editor of The Daily Reckoning e-mail financial newsletter.

There are the usual reasons American investors should diversify a portion of their wealth offshore. These typical benefits include:

The relative out performance of international equities to US stocks.

Currency fluctuations on foreign stock returns expressed in US dollars, or in other words, the potential for currency gains.

The reduction of portfolio risk and volatility from a globally diversified portfolio.

Substantial asset protection benefits from a portfolio in a jurisdiction outside the United States.

You can read about all of the benefits in many books and financial websites, so I will not repeat the global diversification benefits here. The main topic I want to discuss is a new threat to your wealth, arising from the cause and effect actions of a new world empire, the Washington Empire. It is not just a problem of big government, nor some secret cabal or conspiracy. My problem with empires throughout history is the threat their policies create for the wealth and liberty of their own citizens. Thus, the foreign policy/empire risk today is creating a new reason for global diversification with benefits far exceeding the traditional ones listed above.

America's Fall from Republic to Empire

In America today, both our politicians and the legal system have become the major plunderers of our wealth. A study of history clearly shows that government theft is nothing new. The problem facing productive, wealthy Americans is that we no longer have a constitutional republic form of government with limited federal powers in which state governments and individuals are sovereign. This lack of political checks and balances in Washington is why the federal government is out of control.

The United States has evolved from an isolationist republic with a balanced foreign policy and a government with limited powers at home, into a world empire with troops and dominion over a large portion of the world like the former British Empire. Even though we may have good intentions (like the earlier British Empire), the negative effects on personal liberty and wealth will, in the long run, be identical to all earlier empires. The structure of empires makes stealing wealth and power for government almost inherent. They are also characterized by producing profits for favored industries and the business establishment, while the consequences for the individual citizen is often negative both in prosperity, tax rates, and on investment markets and retained liberties.

Let's consider for a moment the Washington foreign policy threat to your liberty, wealth and investment portfolio. Although there is some debate as to whether we are an empire or not, many non-Americans around the world certainly consider us an empire. History has shown that empires have additional risks and this is further increased by the terrorist threat facing our nation. -- Cover detail from American Empire, by Andrew Bacevich

Contrary to foreign and leftist propaganda, the United States certainly is not a purely evil empire but, with military bases and troops in over 100 countries around the globe, America often appears heavy handed at best to most Europeans and Middle Eastern peoples. More importantly, 9/11 has shown how we are in a world terrorist environment where those who hate us have the opportunity to take out their frustrations on our foreign and diplomatic policies with relative ease, and we have little real defense against these actions.

We have come a long way from the time of George Washington, when he said, "The great rule of conduct for us, in regard to foreign nations is, in extending our commercial relations we have with them as little political connections as possible. It is our true policy to steer clear of permanent alliances, with any portion of the foreign world."

Can the United States today still follow the advice of George Washington? Apparently we can not, although for decades, countries like Switzerland, Austria, Ireland, and Sweden have followed this wise counsel to the benefit of their economies and financial markets.

History shows that empires have political and military risks. Former empires like Germany, France, Russia, and even the United Kingdom have paid the price and discovered the real cost of global empires and constant warfare. Today the American Empire is at extreme risk because, although we are the major economic and military power on the earth, our Achilles heel is the extreme risk of our financial infrastructure and investment markets to future terrorist attack.

The history of world empires, including their rise, their overreach, and their subsequent falls is one of the best indicators that major diversification outside U.S. investment markets and the dollar is necessary. Histories of previous empires also explain why it is especially appropriate for American investors to build a wealth preservation plan and investment portfolio specifically designed to reduce this foreign policy or empire risk.

"Just look at history. You know, I teach college classes here in New York. My students sometimes ask me what they should study if they want to be successful. I tell them to read history and philosophy. They say, 'shouldn't we be studying accounting or business...?' I say, 'No, you've got to study history because that is all we have...a record of all we've learned or should have learned.'" --Jimmy Rogers His URL is http://www.jimrogers.com

Empires Are Subject To Risks Other Nations Are Not

The problem since 9/11 is that the weakness of our financial structure has been exposed. Whether it is Bin Laden, or another foreign or domestic terrorist entity, America really has little or no defense against another terrorist attack by extremists on a target like New York City and our financial system.

I believe this is the real unstated reason why the new Bush doctrine of "Preemptive Military Action" has been instituted. Since the American military can not hope to successfully defend against the many terrorist attacks or threats to our still relatively open society, our new policy is to take preemptive military action against all potential nations and terrorist organizations that might threaten us with weapons of mass destruction.

Only time will tell if this new preemptive strategy will successfully defend our nation or whether it will only create more terrorist recruits and lead to more attacks against the United States. Still, if you closely follow our foreign policy regarding Iraq, Syria, Iran, North Korea, and other nations since 9/11, you can only come to one conclusion. Our leaders have made this dramatic shift in foreign policy because they fear a future attack with a weapon of mass destruction on our nation.

The old Mutually Assured Destruction (MAD) military philosophy worked well against the Soviet Union because they had everything to lose in an exchange of weapons of mass destruction. This policy also works well against China because they are taking the long view of what they want in Asia, and thus they have too much to lose in a military exchange with the United States.

But against Islamic extremists who hate their own governments allied with Washington almost as much as Israel and the U.S., a major attack and an American response is the best of both worlds for them. If there is a WMD attack against Wall Street, it matters not to our enemies if we move against Iran, Syria, or any other existing Arab government because war would likely bring down existing moderate Arab governments in Jordan, Egypt, and Saudi Arabia. This is the ultimate goal of the Islamic fundamentalists. This is why Wall Street and your wealth are the real future terrorist targetsbecause our economic system runs so counter to the beliefs and views of the Islamic fundamentalists. What other reason explains why Islamic terrorists have targeted New York City and the World Trade Center twice in the last ten years?

This is a major concern and risk you should factor into your decision as to whether to go offshore with your investments. Unlike conventional investment diversification reasons for asset protection - more investment opportunity and risk reduction - the terrorist threat could lead to a total financial catastrophe to every U.S. stock market portfolio if it occurs. This is, of course your decision, but I am factoring the potential terrorist threat into my personal investment planning, as well as for my clients.

"The government should plan how it could restrict civil liberties and enforce a sort of martial law in the aftermath of a nuclear attack" - Fred Ikle, a former Defense Department official in the Reagan administration who authored a book last year urging attack preparation, "Annihilation from Within,"

The Terrorist Risk Of A Weapon of Mass Destruction Attack Is Only Against the USA

"The fact is that the threat to the United States now of a 9/11 occurring with a group of terrorists armed not with airline tickets and box cutters, but with a nuclear weapon in the middle of one of our own cities is the greatest threat we face," he said. "It's a very real threat. It's something that we have to worry about and defeat every single day." from April 23, 2007, WND article titled "Big Nuke Terror Drill on Tap in US Today". - VP Dick Cheney ( note although Cheney may be right on this, his Neocon support of the Iraq War has probably been the worst foreign policy mistake for the United States in the last 100 years - Ron Holland)

There is almost zero risk to Vienna, Zurich, Paris, Berlin, Dublin, Tokyo, Hong Kong, or other major international cities around the globe. I feel that almost all of the risk of future terrorist attack falls on the United States and our financial infrastructure mainly because, in the eyes of the terrorists, we are their enemy.

Only the U.S. and Great Britain have major troop concentrations in the Middle East and are siding with Israel and the so-called moderate Arab states. All the Arab governments, even our friends, promote this extreme point of view. Remember-- most nations in the Middle East, except for Iran and Egypt, are basically just lines drawn on a map by the British following the Treaty of Versailles. The national boundaries of these nations have no relation to religious differences in Islam, ethnic demography, the geographic territory of tribes, national landmarks, or geographical differences.

When you have individual nations that are not grounded on similar beliefs, values, goals, ethnic origin, or culture, which binds most real nation states together, you end up with a hodgepodge of competing groups, like much of the former Soviet Union and the vast majority of countries in Africa and the Middle East. European outsiders created each of these nations and national boundaries and the only way for politicians and governments to remain in power in this artificial situation is usually by creating a police state which exists to one degree or another in all these. In Africa, the common enemy is the legacy of white rule and in the Middle East it is the nation of Israel.

Therefore, you must add this empire risk to the traditional benefits of global investment diversification and offshore jurisdictions when deciding how much of your wealth and investment portfolios should be outside of U.S. investment markets.

Consider International Diversification to Reduce Foreign Policy Investment Risk

The problems and risks to U.S. markets and the dollar should encourage you to consider more portfolio weight be placed in international investments outside the United States. When this benefit is added to the additional costs, possible lost liberties and terrorist risk in the United States, it should suggest that prudent investors should move more of their funds out of U.S. stock market investments, the dollar and even the jurisdiction of the U.S.

While we hope and pray Washington's present occupation of Iraq and Afghanistan and any future military moves in the Middle East do not result in an expensive, long-term wider occupation of the region or additional terrorist attacks, the risks are still real. Will terrorist groups use a weapon of mass destruction against the U.S. and specifically against our financial infrastructure? Some may still consider this risk farfetched but then again, few would have thought Islamic terrorists could have pulled off the horrendous attack of 9/11. One consideration for sure is that once the dogs of war are unleashed in the region, few can guess where it will end.

A look at the history of wars of empires far from their home base, regardless of the reasons given for the action, does not bode well for the United States or our economy. The list of dead empires is endless - the Soviet Union, Nazi Germany, the Empire of Japan, earlier empires in Europe like the British Empire, the Austrian-Hungarian Empire, and others dating back to Rome. History shows that the long-term economic and military costs of empires tend to destroy liberty and the economy at home, while other nations not burdened with these costs tend to prosper and move ahead.

This is what we see in Europe where both countries and politicians just might have finally learned the expensive price of empires, through their long history of numerous wars, economic dislocation, and conflicts. Europe seems to have learned a lesson, which is another reason for diversification in European equities rather than American equities.

Here is a short history lesson to think about regarding American involvement in the Middle East.

Question: What do all of these peoples have in common? The Greeks, the Romans, the European Crusaders, the Knights Templars, the Ottoman Empire, the Italians, the French, and the British?

Answer: All have invaded the Middle East, and none are still there today. All of these former empires are now just faded glories and memories one reads about in history books.

Why should the long-term outcome of a Washington invasion and possible occupation of the Middle East be any different from all earlier empires?

Answer the question and invest according to your perception of the threat to U.S. investment markets and remaining personal freedoms.

Ron Holland is the author this article and it is from the online book, The Swiss Preserve Solution at http://www.swissconfederationinstitute.org/swisspreserve1.htm This is a politically incorrect guide to defending your wealth & liberty from internal and external 21st Century threats.

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