You have been watching the sickening slide of the dollar with growing apprehension. You have not been fooled by Carter's mumbo-jumbo explanations and temporary "cures." Due to inflation, every dollar you own and every dollar-denominated asset you hold is rapidly losing the value you worked years to accumulate. What will you do?
The stock market? Real estate? Every new lurch of our overtaxed, overregulated economy could leave you holding worthless paper. And any new zoning regulation or rent control might make you a landowner in name only.
Only precious metals and currencies firmly backed by precious metal seem to constitute the calm eye of the inflationary hurricane. And yet, as a wage-earner or small-business person you lack sufficient accumulated capital to take advantage of these investments with buying large lots, paying exorbitant premiums, or making large initial deposits. Also, in the case of foreign bank accounts, US reporting requirements and bank telegraph records leave an easily traced audit trail you may wish to avoid.
But there is a safe, effective, and affordable alternative for the average American—Swiss franc travelers checks. American Express travelers checks can be purchased in packets as small as 50 francs, an investment well within the means of even the most modest investor. (And Swiss Bankers Travellers Cheques can be purchased individually.)
If you regularly buy SFTCs (Swiss franc travelers checks) you will be creating your own "payroll savings plan." The benefits of doing so are many. SFTCs that are destroyed, lost, or stolen can easily be replaced. Their purchase and ownership is known only by you and is not a matter of public record. They are immune to bank "holidays" and are easily and safely stored, mailed, and negotiated, domestically and internationally.
And because of their negotiability and fitness as a means of saving and accumulating capital, SFTCs function as an excellent entree into economical precious metal purchases and foreign bank accounts. Once you have saved sufficient funds in the form of SFTCs you will have the options of opening Swiss bank (or other) currency and precious metal commodity accounts. Transfer of the necessary funds is no more difficult than endorsing SFTCs to your Swiss bank account and sending them off via ordinary mail. (Remember, they will be replaced if lost.)
Similarly, with sufficient funds accumulated through the purchase of SFTCs, you can buy precious metal bullion or coins domestically in quantities large enough to take advantage of bulk purchase discounts without suffering the ravages of inflation during the time you are accumulating funds.
All of this can be accomplished without reconversion to dollars and the attendant cost of arbitrage. In the case of Swiss banks, they would prefer deposits denominated in Swiss francs. In the same manner, many precious metal dealers in the United States maintain Swiss franc accounts. By paying in SFTCs you save the dealer the cost of exchange. This alone should be worth something in negotiating your purchase price. Don't take no for an answer; if a dealer won't take SFTCs call around until you find one who will. There are plenty who will jump at the opportunity.
To start your own SFTC inflation survival program you must locate an outlet for Swiss franc-denominated travelers checks. If there is a Swiss bank branch, such as Swiss Bank Corporation, Credit Suisse, Union Bank of Switzerland, Swiss Volksbank, or Bank Leu, Ltd., in your city, you have a significant advantage. All Swiss banks offer Swiss Bankers Travellers Cheques, which are known and accepted around the world. Also, even American Swiss bankers mind their own business and are prompt and efficient in satisfying your needs. Ultimately, your local Swiss bank can be of assistance to you if you decide to have business dealings or to do banking abroad.
Deak and Co., an international currency and investment service, also is an excellent source for foreign currency travelers checks (their own) as well as foreign currencies, various precious metal investments, and assorted financial services. They have offices in major cities throughout North America and the world, and they are unsurpassed in the confidential execution of their clients' transactions.
If neither a Swiss bank branch nor a Deak office is handy, your regular bank, savings and loan, or travel agency may be willing to get you American Express or other travelers checks issued in Swiss francs. Generally, the institution in which you keep your regular accounts will, as a customer service, waive the usual one percent surcharge. But remember, even with the surcharge and the costs of the currency conversion, SFTCs are still the cheapest insurance you can get to protect against the loss, destruction, or theft (or theft by devaluation) of your savings.
There are some caveats. The investor should take account of the fact that travelers checks are not interest-bearing. Diversification is still important. And the buyer should consider whether the dollar is apt to go up or down. Recent moves by Carter to "bolster the dollar" have temporarily caused the dollar to gain ground vis-à-vis gold and the Swiss franc.
Do not be fooled. Selling Fort Knox gold and borrowing Swiss francs, Deutschmarks, etc., to prop up the dollar today guarantee its swifter, more total, ultimate destruction. While you have the chance, take advantage of bargain-basement prices for gold and Swiss francs. Reality cannot be held at bay much longer.
Sandy Sandfort has been admitted to the bar in Missouri and Arizona. He currently lives in San Francisco, where he is writing, teaching, and working with libertarian groups.
This article originally appeared in print under the headline "The Poor Man's Swiss Bank Account".