For those interested in this topic:
I now have a savings account opened for only $100 ($3 monthly fee if under $500 balance) with CATHAY BANK (http://www.cathaybank.com)
This gives me access to the following product, should I ever need it –
Foreign currency time deposit:
Take advantage of the interest rates and any favorable fluctuations in currency exchange rates. Choose among seven different currencies — Euro, UK pound, NZ dollar, Hong Kong dollar, Japanese yen, AU dollar, Canadian dollar — to hold your money in. Terms are 1 month to 12 month (or anywhere inbetween), no transaction or commission fee, and FDIC insured.
This is like investing in a CD that’s denominated in non-US currency. You choose the currency. This could be a useful hedge given a rapid US dollar decline, since the corporate bailouts are beyond $8 trillion now and are expected to continue to rise, further diluting the US dollar. Prior to the bailouts, US debt was at $11 trillion. Not counting Medicare and Social Security shortfalls in the next several years which are expected to be in the neighborhood of $50+ trillion.
There are a scattered few other banks in the US that offer similar products for US citizens, but this is the least expensive and the most convenient product I have found. And there is a CATHAY branch in the International District.
Cathay Bank is based in China, is a long-standing reputable bank, and does not invest in questionable debt (unlike most of the US big banks that are now bankrupt — see Jim Rogers on this topic at http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA5CO20081211 )
Also, if your company has a Roth 401(k) option I recommend you check it out (same goes for simply opening or contributing to a Roth IRA), as state and federal tax rates are expected to be much higher (due to high levels of US debt) by the time many people reading this retire. Amounts you withdraw from your IRA are fully or partially taxable in the year you withdraw them after 59 1/2 years of age. Withdrawals made prior to age 59 1/2 may be subject to a 10% additional tax.
Also, Congress is discussing (just discussing at this point — don't be alarmed unnecessarily please) creating something called a GRA (Guaranteed Retirement Account). This might involve the government taking 401(k) and IRA assets more than a certain amount ($250K maybe?) and withholding it by putting it into a pool of money that gives less fortunate retirees access to this money. The likelihood of this happening is remote, but Congress is discussing it or some form of it right now. This is because the average baby boomer will not have enough to retire on, sparking a crisis. It will be even harder for later generations to retire at current standards of living because health care, cost of living and taxes will be continually rising. More info at —
Democratic leaders in the U.S. House discuss confiscating 401(k)s, IRAs
http://www.carolinajournal.com/exclusives/dems-target-private-retirement-accounts.html
Investment Industry’s Suicidal Self-Interest
http://toddweber.wordpress.com/2008/05/20/investment-industrys-suicidal-self-interest/
Guaranteed Retirement Accounts (GRAs)
http://www.sharedprosperity.org/bp204/bp204.pdf (PDF document)
Toward retirement income security (GRAs)
http://www.sharedprosperity.org/bp204.html
So if you like the idea of a Roth, realize that you can't use your earnings on that money before 59 1/2 without penalties. Withdrawing Roth contributions can be done at any time without penalties. And if the GRAs or something like it comes into being, if you have a substantial amount in your retirement accounts, you may want to take an early withdrawal and penalty on some of it to avoid government confiscation (pray this doesn't happen).
I hope you find this useful. If not interested, please simply ignore.
Anonymous (24.19.24.x) 06 Oct 2008 05:13
