Why South Dakota Is the Safest Place to Park Your Cash
Check out this recent headline from The Guardian regarding the recently released “Pandora Papers”…
Is this actually news?
The rich have always played by a different set of rules. That’s one of the advantages of being rich.
Don’t get me wrong. I’m not saying it’s right or just, nor am I suggesting that extreme wealth should afford only a small percentage of the world’s population free rein to lie, cheat, and steal.
After all, this is really the basis for arguing in support of economic justice — something few people can honestly oppose.
But the very fundamentals of economic justice are built upon the foundation of fairness and parity, which don’t actually exist. So this begs the question: Is economic justice little more than an illusion?
The answer is no, but to suggest that everyone starts on equal footing is absurd.
Some of us are born into wealth while others are born into middle-class comfort, and many are born into poverty.
It’s a roll of the dice, the luck of the draw.
But many have climbed out of the bowels of poverty and succeeded in creating great wealth and prosperity. They created their own economic justice.
So yes, economic justice can exist. But typically, such success stories are the result of hard work and ambition, not the result of government intervention, which so many so-called social justice warriors seem to be calling for these days.
They want overzealous government control and legalized theft, two things that are diametrically opposed to the creation of economic justice — which, by the way, is the only path toward social justice.
Social justice, to clarify, is essentially the idea that everyone deserves equal economic, political, and social rights and opportunities.
Who could oppose such things?
Only sociopaths and sadists.
But in order to facilitate this concept of social justice, one must embrace two fundamental truths: Social justice cannot exist without economic justice, and economic justice cannot exist if it is violently forced upon a nation’s citizens.
You needn’t look any further than the lack of both economic and social justice that was once quite ubiquitous in both previous and modern-day communist states such as the former DDR (also known as East Germany), Cuba, and, of course, North Korea.
Today, we see an awful lot of folks calling for more government intervention in an effort to control and distribute the assets of the world’s richest people because they believe this will instigate economic justice.
That was the early consensus in the DDR, Cuba, and North Korea too. And if you know anything about the leaders and former leaders of those nations, there’s always been quite a big disparity between the wealth of those leaders and the poverty of those countries' citizens.
Truth is, while economic justice is unlikely to ever exist on a global scale — at least in our lifetime — to reach such a lofty goal, one must reject the notion that only the government can make it happen. Because historically speaking, the exact opposite has happened when the government is successful in taking on the role of economic justice enforcer.
Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
Your Assets Are Safe in South Dakota
When the Pandora Papers were released earlier this week, they showed nearly 12 million documents identifying how rich people use tax havens to protect their money and assets.
The obvious people and places were identified, including authoritarian rulers and Swiss banks, but one location that caught a few folks off guard was South Dakota.
You see, South Dakota has no income tax, no inheritance tax, and no capital gains tax. In addition, the Coyote State ruled against an antiquated doctrine that limits the life span of a trust.
Typically, a trust is required to distribute its assets within a certain amount of time. But in South Dakota, it can last forever. Additionally, any court documents related to trusts in South Dakota are private, which makes it nearly impossible to know who established the trust or who benefits from its existence.
And the cherry on top?
Any person who grants a trust can also be its beneficiary, which results in the assets of that trust being protected from creditors.
Those who like to hate on the rich and really anything related to capitalism despise such practices. But the truth is if it’s your money, where would you rather put it? In a place that overtaxes and overregulates your assets or a place that provides low taxes and high levels of security?
This ain’t rocket science, and South Dakota shouldn’t be demonized for choosing to create a safe environment for folks to park their cash — which is exactly what it’s done with much success.
In 2010, trust companies in South Dakota held about $57 billion in assets. By the end of last year, that number reached in excess of $300 billion.
And it’s not just U.S. citizens protecting their assets in South Dakota. In fact, a couple years ago, I read about Sun Hongbin, a Chinese billionaire who moved $4.5 billion worth of shares in his real estate firm to a company in Sioux Falls, South Dakota.
At a time when plenty of politicians are talking about how the U.S. is not competitive anymore, South Dakota has found a flaw in that argument.
And while I certainly have my own hang-ups regarding South Dakota (e.g., a governor who long fought the legalization of cannabis and a state that celebrates Mount Rushmore as a national treasure when the reality is that it’s little more than vandalism on Lakota land), to deny that the state is one of the best places to protect your assets would be foolish... particularly because it’s on U.S. soil.
While the U.S. government can bully other nations into submission through general thuggery and bullying, if the Fed attempts to crack down on South Dakota, it will be met with a legal battle it's unlikely to ever win. And it certainly won't win the support of the good people of South Dakota who, generally speaking, don’t like D.C. bureaucrats telling them what to do or how to do business.
Now, I don’t know what the fallout will be from these Pandora Papers, but one thing I do know is that the quest for free people to protect their assets is not something that can be deterred by government intervention.
And that, dear reader, is a good thing.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.
Energy Demand will Increase 58% Over the Next 25 Years
After getting your report, you’ll begin receiving the Energy and Capital e-Letter, delivered to your inbox daily.