About this video

• Video Title: When The US Devalued Your Treasuries & Took Your Gold | What Happens When A Country Defaults
• Channel: Diamond NestEgg
• Speakers: [None explicitly named in the transcript]
• Duration: 16:46

Overview

This video discusses the potential implications of a US default on financial assets and savings. It identifies nine countries with AAA ratings as potential safe havens, explores historical precedents of sovereign defaults and their impact on citizens, and outlines strategies for diversifying assets to mitigate risk.

Key takeaways

• Safest Countries for Savings: Nine countries (Australia, Denmark, Germany, Luxembourg, Netherlands, Norway, Singapore, Sweden, Switzerland) hold AAA ratings from all three major agencies (S&P, Moody's, Fitch) and are considered potential safe havens.
• Historical Precedent of Default: The 1933 US actions, including abandoning the gold standard and restricting gold ownership, show that governments under pressure may take extreme measures impacting private assets.
• Impact of Sovereign Default: Argentina's 2001 default serves as an example of severe consequences for savers, including frozen bank accounts, forced currency exchange leading to loss of purchasing power, and nationalization of pension funds.
• Asset Diversification Strategies: Options include moving money out of the country to a AAA-rated nation, holding foreign assets within a US account (e.g., through ETFs or ADRs), or holding domestic real assets like real estate and precious metals.
• Considerations for Diversification: International diversification involves complexities such as tax obligations (worldwide income taxation for US citizens), reporting requirements, and potential reluctance from foreign institutions to open accounts for US persons.

The three fundamental options presented for holding assets under a US default scenario are:

1. Bring your money out of the country: This involves moving assets to a foreign country considered a safe haven.
2. Hold foreign assets in your domestic account: This means holding foreign assets within your existing US account, for example, through US mutual funds or ETFs with international exposure, or through ADRs (American depository receipts).
3. Hold domestic real assets: This involves investing in assets within the US that are considered tangible, such as real estate, gold, other precious metals, commodities, or shares in high-quality US companies with international diversification.