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Re: swiss-list: Swiss mutual funds not sold to US residents?

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Re: swiss-list: Swiss mutual funds not sold to US residents?

From: Axel G.Merk <click for textversion of email address >
Date: Wed, 7 Jan 2004 07:10:43 -0800
X-Mailer: Apple Mail (2.609)

It is perfectly legal to buy gold and gold bars in the US. Indeed, the
first radio ads have appeared to buy gold (rather than just coins) in
local shops. History has episodes where governments have banned the
public from holding gold. That was typically when governments had a
gold standard and they tried to manage a crisis. From 1934 to 1964, it
was illegal in the US to hold gold certificates. Since 1971, the US no
longer adheres to a gold standard, and it seems unlikely that a similar
ban will be introduced again. Still, depending on the reason why you
may want to hold physical gold, why not buy and hold them in
Switzerland, where there's no such history. Indeed, there's relatively
little reason to bring gold into the US, quite agreed.

Your second point: I couldn't agree more - if you have expenses in one
currency, you should try to generate enough income in the same currency
to cover your expenses. The most often discussed example is whether to
finance a mortgage in a foreign currency that has lower interest rates.
The superficial benefit is dwarfed the potential risks if the currency
goes against you, especially with the leverage typically involved with
real estate. My previous email was to the general question of how to
protect a fall against the dollar, posted by an individual who intends
to move back to Europe at some point. Whether, how much and how to
engage in any "protection" against a fall in the dollar depends on many
factors and needs to be looked at with every individual. A weak
currency has both advantages and disadvantages, an analysis would go
beyond the scope of this posting.

Having said that, I'm sufficiently concerned about the US Dollar that I
have personally held a negative Dollar and positive Euro/Swiss
franc/gold balance for many months now. Warren Buffett also invests in
foreign currency the first time in his life; Bill Gates, good a friend
of Buffett, is one of the largest shareholders in a prominent silver
Currency markets are notoriously difficult to forecast, and no one has
a crystal ball. However, just as you position and diversify your
investment portfolio to take into account expected scenarios, we deem
it prudent to prepare for scenarios that favor a further weakening of
the dollar.



Axel Merk
Merk Investments
CH (877)270 6999
US 0 800 883 300

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Received on Wed Jan 07 2004 - 09:33:34 PST

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