Banker X on Gold, Real Estate and Residency Diversification in Troubled Times
The Daily Bell is pleased to present this exclusive interview with Banker X.
Introduction: Banker X provides us with this interview anonymously so that he can speak frankly about the inner workings of the Swiss financial system. As someone who has held high posts in both the private and public banking fields throughout several decades, Banker X is in a great position to compare and contrast several kinds of Swiss banking models through several eras. We are certain our readership will find his comments enlightening and certainly food for thought. Additionally, some of the grammar and phraseology within the interview has been adjusted as English is not Banker X's primary language, though he speaks it well.
Daily Bell: It's nice to have you back.
Banker X: It is a pleasure to sit down with you again.
Daily Bell: What's going on in the world today, moneywise?
Banker X: As you've pointed out, we're probably on the cusp of a new era. The old system is breaking down but a new one has yet to be formed.
Daily Bell: Who will create the new money system?
Banker X: Good question. Obviously, certain governments would like to do so.
Daily Bell: What about those standing behind governments?
Banker X: The secret powers? Perhaps so. But the issue is not so much "who" as "what." As in what kind of system is being planned. There is no doubt that for many involved the preference is for a basket of currencies plus gold. The resultant "bancor" as Keynes called it, may be issued out of the IMF, though only if they can get power sharing worked out.
Daily Bell: Yes, right now the US has a veto and it's hard to see them giving it up.
Banker X: This is a big issue, and it is one that's standing in the way of what powerful people want accomplished. There's no obvious solution either, and one wonders how well this whole issue was thought through.
Daily Bell: You mean the issue of global economic crisis? We believe it may have been in a sense planned to create a global currency and deeper global governance.
Banker X: There is no doubt that central banking manifests itself in periodic crises. Those in power obviously know this and no doubt anticipated a crisis. As your paper has pointed out, those at the top of the EU were aware that a crisis was coming and hoped to further consolidate power as a result.
Daily Bell: We've suggested they miscalculated and that the Internet itself is making it a good deal more difficult for these plans to unfold.
Banker X: For whatever reason, they are having considerable difficulties. But whether the EU succeeds or fails, as it is now constituted, the impetus for something new will probably remain. The old system has been decimated and rising countries such as the BRICS don't trust the dollar anymore. Putin is furious about it and just denounced Bernanke. The question then becomes whether the BRICS and other countries, perhaps in the Middle East or Africa or even South America, will go off on their own and create something new or whether that kind of effort will remain circumscribed.
Daily Bell: You mean circumscribed by the current international agencies.
Banker X: These are the product of the Western powers-that-be and are generally resented abroad. But they are very powerful as well and have been in place a long time. I don't see anybody upsetting the World Bank or IMF, but I do see the possibility of other rising power structures.
Daily Bell: Sound like we're living through a chaotic time.
Banker X: That may be so. It's one reason my business and businesses like it are flourishing. We're seeing increased interest because of this financial turmoil and potential complications. We're not only speaking of classical banking either. There are other elements as well, other kinds of considerations.
Daily Bell: By that do you mean perhaps real estate or gold?
Banker X: I would say many of our clients are giving these assets a good deal of consideration. What's going on in Europe, Britain and America is increasingly questionable. From the point of view of a client who is fairly well off and has alternatives, the wider world is a consideration. Whether its Asia, Central & South America or even Africa, there are a growing number of people who are considering alternative residences. Also, there are a number of countries that are easing various restrictions to take advantage of this trend ... countries that offer low tax and no tax packages to immigrants seeking the safety of a hip-pocket residency. There are a number of ramifications to such decisions.
Daily Bell: Are people taking tangible assets out of the country?
Banker X: There are several points of view. If a country as powerful as the US decides to confiscate gold, then its reach will probably be long indeed. If it wants countries to freeze assets abroad, they probably will, some of them anyway. But the idea of third-party storage of assets – especially gold – is still a compelling because they are in fact OUT – they have migrated on their own, leaving their proprietor behind. And if one wishes to travel in times of crisis to their hip-pocket residence, the difficulties of taking their assets along has already been resolved. The assets (gold primarily) have already been removed and can be accessed at will. There is much to be said for keeping assets on hand – and that may be a better purpose for silver, at least domestically speaking – but also for having some assets distributed abroad. Simple enough.
Daily Bell: Right. Regional diversification, right. You can say that goes for real estate, investments or assets of all sorts.
Banker X: In this day and age, the old strategies don't apply. Gold itself has risen in purchasing power from US$350 to nearly US$1,600 an ounce. Silver has moved from US$4 an ounce to US$35 an ounce. Meanwhile, stock markets have not kept up, except in places like, say, China.
Daily Bell: We have doubts about China.
Banker X: Probably so. They have been trying to print their way to prosperity. Price inflation is surely going to follow the massive amount of monetary inflation they have embarked on - it is inevitable. They have fully imported the West's central banking fiat money system and, with the same arrogance exhibited by Western money powers, they believe they can centrally manage their money supply better than the invisible hand of the marketplace. China has created some seriously tough waters to have to navigate, or so it appears.
Daily Bell: We don't have so many doubts about the future of gold and silver.
Banker X: Traditionally in troubled times gold and silver have served as stores of value. Gold is especially good because the value is considerably higher making it a very portable way to relocate significant wealth and storage is not a problem – especialy here in Switzerland.
Daily Bell: What about gemstones and diamonds?
Banker X: Good as well, but they are not money and their value is very subjective. But gold and silver are universally liquid. There is no subjectivity involved in determining the market value of bullion – it is what its weight is, pure and simple. And gold has the advantage of compactness.
Daily Bell: The same approach might be taken to real estate – in terms of diversification anyway.
Banker X: Very true. There are plenty of people preparing for the worst, but they are doing so within the context of their own country and perhaps their own region. This does nothing to address the fundamental point regarding the issues that they are trying to prepare for.
Daily Bell: International diversification again.
Banker X: If you are concerned about the social fabric shredding, about civilization breaking down, the idea that you are building some sort of bunker ten miles or a hundred miles away from where you live seems to me to be not entirely effective.
Daily Bell: You may want to diversify out of the country?
Banker X: That would be the idea. And there are many affordable options in regions that offer great lifestyles. People just need to take off the blinders and open their eyes and they will quickly find there are wonderful options that would be far from painful, should one ever choose to actually move to the hip-pocket residence. But most people are too scared to think outside the box they grew up in. And that is exactly what the powers-that-be bank on, so to speak.
The key is to find a jurisdiction that is affordable for you, offers the kind of lifestyle you either have today or would like to have, and then to employ human action and put the plan in motion. And even if by some miracle Bernanke, Obama, et al. are able to steer the American economy away from the disastrous shores it seems destined to crash into, you still have a nice location to go and enjoy for family vacations, etc.
Daily Bell: What about banking? If you choose another country, should your banking be close by.
Banker X: In this era, with current and future technologies, I would think the two don't necessarily go together. You can bank anywhere in the world if you have the means. And you can live almost anywhere as well these days. However, it is usually prudent to have a local bank account in the country in which you seek to be a resident. Many countries will require it, as capital coming in to purchase the real estate may need to be verified for its "cleanliness" at the local level. No big deal, just part of today's overly cautious worldwide banking industry. Additionally, it makes paying for routine things much easier if you have some local banking established.
Having said that, many of the established Swiss private banks have affiliate banking relationships in many of the regions that are of greater interest to people seeking a second residence. This affords people the ability of maintaining the majority of your asserts in Switzerland, where there exists a much greater degree of comfort with respect to banking efficiency, while at the same time having a cohesive means of transferring "down" capital to the local account established in the country of residency.
Daily Bell: Why do people go offshore as regards banking – leaving aside potential social break down?
Banker X: There are a lot of reasons. The first is lawsuits. If a person is running a business or a professional, it may be highly unlikely they will be involved in a lawsuit, but it does happen. People do want to protect themselves so they place funds offshore – usually in a foundation or an offshore trust. It is still visible money, and these clients do have to pay taxes, but when it comes to lawsuits, a lawyer working privately or for a government will have a much harder time, if successful at all, at piercing the structure and getting at that money. This assumes the client has had the proper advice on setting up an asset-protection structure, of which there are several excellent provisioners of such services who work in a legally compliant manner so that the client is not breaking any domestic laws.
Another reason clients seek offshore banking services is to diversify and be able to buy efficiently whatever assets they want. They don't have the rules and regulations that you would find in Canada and the US, for example, which are designed to keep the domestic capital in domestic assets. Wall Street and Bay Street would like everyone to just keep on trusting in the establishment brokers and their domestic products. The world is a big place and there is much more opportunity for those that wish to look.
Offshore you can get anything you want. The waters are open, so to speak.
Another major reason people seek offshore services is because they are already doing business offshore and have foreign source income.
Daily Bell: Are there tax advantages?
Banker X: No, not especially. For example, Canadians may utilize Barbados for tax efficenct treatment of foreign earned business income – and many of Canada's largest corporations do, as there is a tax treaty between Barbados and Canada that greatly minimizes the tax burden to Canadians utilizing such a structure. But generally speaking, if you are an American citizen or Canadian resident then you need to declare your offshore holdings and, in most cases, there are no tax advantages to be had.
However, there are structures that do afford people the ability to lower their domestic tax burden, but like anything else, every person's situation is unique and the client really needs to get competent legal advice – both offshore and domestically. The plan should be above board, secure and efficient. There is no reason for someone to go through all the effort of structuring a lifestyle plan only to negligently ignore the domestic reporting requirements. Each person's offshore plan should be deisgned to help them sleep better at night, not worse.
Daily Bell: Privacy advantages?
Banker X: Yes, they are huge. In many offshore venues, it's a one to one situation, client to bank, and bank to client. That is how communication goes. We do not talk to anybody else, only the client.
Access is easy as well. Clients can wire transfer anywhere in the world. People can say, wire $50,000 to their account in Hong Kong bank, or broker, or to a place in Europe, or anywhere they like. Generally speaking, other than some provisions on daily or weekly withdrawl maximums (some banks, some jurisdictions), there are minimal restrictions.
Daily Bell: What's your position on the American IRS?
Banker X: Well they are doing their job. The United States is in desperate need of money, not that it can help their self-imposed fiat-money debt crisis at this point. But the IRS will still continue to villanize countries like Switzerland in an attempt to "scare" people into bringing their assets home. The problem only really exists, as mentioned above, for those who have planned to evade taxes rather than legally mitigate them. The former may indeed not be sleeping so well, but the latter group should be perfectly fine. There is no law against banking internationally. It just isn't encouraged. But as long as clients report their worldwide income, the IRS should be on no concern.
No bank endorses tax evasion, and we are not looking to have the IRS breathing down our necks because of neglience. So, if a corporate compliance department deems a client to have a questionable structure, the client may need to seek additonal legal counsel – domestically in their home country or internationally, or both. Banks today are taking a much more proactive approach to structure analyzation that in the past, they have no choice.
We have been talking a lot here about the IRS, but its important to note that the tax authorities all over the world – notably British, German, Italian and French – have all stepped up their efforts to put pressure on offshore banking jurisdictions. The same diligent approach to structuring tax and asset protection needs applies to all jurisdictions, not just the US.
Daily Bell: Is offshore banking associated with crime and tax evasion?
Banker X: Practically speaking, it used to be more than it is now – although that may not be the perception of many people. I know there is a lot of hoopla about tax evasion, drugs and crime being associated with offshore banking, but quality banks will not knowingly get involved in dealing with that type of business, at least not here in Liechtenstein or Switzerland. Good clean business is what we seek.
Daily Bell: What is the best place?
Banker X: For quality banking services, Switzerland. You just cannot beat these jurisdictions for experience and efficiency in banking. For corporate/trust structuring, well that depends on the client's individual situation. For many American's and Canadians the Bahamas and the Cook Islands are popular, also Belize, but there are several and each has its own advantages.
There are many good locations that work well depending on the client's needs. Most Swiss private banks can help direct clients to quality international tax and asset protection lawyers who, in turn, can put the client in contact with a quality domestic attorney in their home country who is familiar with international structures. It is much better, usually, if a client is working within a vertically integrated team that is familiar with each other. Otherwise the client may incure extremely high additional costs in putting together their plan because all parts of the knowledge chain require due diligence – not just on the client or his/her structure, but also on the advisors involved. If there is not an already existing vertical of relationships … well then the client has to bear the costs of what can be a long and arduous process. Better to work from one end of the structure or the other but to find proficient professionals who really know what they are talking about.
Daily Bell: Is it necessary to visit the bank physically?
Banker X: Not necessarily, although it is a good idea to do so. If you are coming into the bank via a recognized chain of relationships, whereby the bank has confidence in the introducing party, as mentioned above, then it may not necessary. However, the days of just picking up a phone, sending a copy of your passport and a utility bill and then wiring cash – without ever visiting the bank, are long gone. You must be properly structured and have the ability to clearly demonstrate the source of your funds. If it isn't clean money you will not get through the front door, at least not of any reputable bank that wants to stay in business.
Daily Bell: What are some other advantages to offshore banking?
Banker X: I mentioned earlier, bank secrecy is number one and it goes hand in hand with protection. So if you are a lawyer, an accountant, a professional engineer, an architect, a doctor, or a businessperson with deep pockets – easy to sue – then you should look for asset protection. And the best form of asset protection is a custom designed offshore structure and banking relationship(s). Global asset diversification and felxibility are other primary concerns for most people. Most of the larger Swiss private banks have international trading desks that cover all major and emerging markets. The whole world of possibilities opens up to clients once they step into the offshore world.
Daily Bell: Any disadvantages?
Banker X: In my opinion, the advantages offshore far outweigh the any disadvantages.
Daily Bell: Of course, Switzerland's banking system has been under attack.
Banker X: The Swiss have been at this for hundreds of years, and they've been attacked before and survived. The system is stronger for it and the nation's prosperity is bound up in banking secrecy. No matter what is announced publicly, private banking remains strong, in part because it administers the money of the elites. Without getting into details, I will say that many prominent banks may perform a variety of transactions, some far more secretive others. And often the private services are merely a smokescreen, a cover for the vast transactions taking place elsewhere. Switzerland has an international role to play and its been playing that role for a very long time now.
Daily Bell: You think it's all for show?
Banker X: The top elites are cracking down all over the world regarding money. You can see it if you look. So they had to make a show in Switzerland as well. But for the big private banks and for a number of money services nothing much has changed. Nothing can change. Switzerland is the capital of the money industry. It's where the elites hold their conferences like Davos. And where the Bank for International Settlements is located. Zurich is an international city and once Brussels falls it will become even more prominent. The Swiss did not do any of this. The country was chosen by Western elites for a number of reasons. And chosen long ago.
Daily Bell: Interesting points. How does one locate a person to help with offshore banking?
Banker X: The Internet is full of information on offshore banking. But be careful, do your due diligence and do not get lured into any of these one-size-fits-all programs. There is no "golden arch" under which all can fit.
Perhaps you can take a trip to one of the many asset protection-oriented conferences being held by professionals in this space. That is likely the best way to meet people who assist you without having to expend too much expense or effort.
There are also some very good offshore-related newsletters and publications that can help point you in the right direction. Once again, do you own due diligence.
Daily Bell: And how does one locate a person to help with locating suitable offshore jurisdication for residency?
Banker X: Same thing, check the 'Net and do your due diligence. I will say that one of the fastest growing regions for secondary residences is South America. Many of my clients find island living too restrictive. So countries like Chile, Colombia and Brazil and very attractive locations – to name just a few.
Daily Bell: Thank you for your time, most appreciated.
Banker X: Thank you, it's been a pleasure.
We are grateful as always for Banker X – in all his incarnations. The insights we share are widely known throughout the offshore world. It is a legal and important world, with growing resources. The worse it gets in the West, the more people look abroad. That's human nature.
There is no doubt that conditions are turning increasingly chaotic in the West insofar as money is concerned. Thus his points are well taken. Diversification is far more than what security is on which stock market. It has to do with the dispersal of assets generally and the securing of an affordable and suitable secondary residency option. It all comes down to not putting all your eggs "in one basket."
Obviously by this point one should have some hard money assets – and they should be dispersed. Some at home and perhaps some abroad. That way if you want to leave the country you don't have to drag your assets with you. And that brings up the point of where you are heading.
Just as one wants a diversified portfolio, it may be wise to have a diversified real estate portfolio as well – at least one other place to stay. This may simply be a vacation home, but in times of crisis it can also be a haven for yourself and your immediate family.
Certainly planning for all these eventualities is a somewhat grim and perhaps costly chore. But we started this newspaper to cover the fear-based promotions of the power elite and their outcomes. We have seen nothing to change out mind in terms of what's going on in the world.
In some ways, things are better – as we believe the elites are losing their grasp at least a little. But this brings up the issue of increased chaos as well. We have no doubt the power elite is trying to foment chaos through wars and economic collapse.
On the other hand, some of the upcoming chaos may simply be the result of elite over-reach. Either way, things are bound to get messier, in our opinion. The immediate antidote is diversification of all facets of one's economic life. That's what this interview reinforces. It seems to us a fairly reasonable approach.
Posted by Leonardo Pisano on 07/17/11 08:09 AM
Interesting interview. However, I think it is less simple than Banker X makes it look, especially for the not-so-rich among us.
"Clients can wire transfer anywhere in the world. People can say, wire $50,000 to their account in Hong Kong bank, or broker, or to a place in Europe, or anywhere they like. Generally speaking, other than some provisions on daily or weekly withdrawl maximums (some banks, some jurisdictions), there are minimal restrictions."
From an EU perspective, however, international wiring of money is discouraged by regulations, e.g., Directive 2005/60/EC (against money laundering and terrorist financing - indeed, the response to a fear-based promotion). It means reporting by a bank to government is required if the amount exceeds 15 KEUR. I am certain equivalents are in place in the USA, Canada, etc...
Reply from The Daily Bell
Yes, we are aware of the regulation to which you refer. However, Banker X was referring to legally compliant and fully declared structures which would not involve the need to be concerned about such regulatory-required disclosures.
People may wire money internationally, although these days, there is a much greater level of information required by both the sender and the receiver to document the transfer. Banker X was referring to fully transparent business.
Posted by newyorkerinlondon/rocknrollcook on 07/17/11 09:14 AM
Banker X said:
"If a country as powerful as the US decides to confiscate gold, then its reach will probably be long indeed. If it wants countries to freeze assets abroad, they probably will, some of them anyway."
Does this mean they will try to make American ex-Pats give up their gold overseas too? Are they that well-organized to implement such a plan? Do we have to oblige? Like the poster before me (Leonardo), I'm one of the-not-so-rich and will not quietly conform to confiscation of the small amount of PM's I have. PS: Thanks for your fine work.
Reply from The Daily Bell
If the US was to try and confiscate gold, which we are not stating will happen, only that it could, then Americans who have structured another legal residency outside of the United States (North America for that matter) will have a much greater degree of protection for their ability to avoid such circumstances should the government insist on the repatriation of foreign held gold - or assets in general for that matter.
Having your wealth transferred – or acquired and stored – in an offshore location, such as Switzerland, is only one step. To have a much greater ability to protect your wealth and lifestyle, Banker X is suggesting that an affordable "hip-pocket" residency can greatly increase your level of mobility and keep you and your wealth out of harms way, should you feel the need to "step away" for a while. Certainly, the US government, or any government for that matter, has a much greater degree of influence of those residing on its shores than those who are not.
Posted by dotti on 07/17/11 09:23 AM
Although I have nothing to hide in terms of any illegal income or terrorist ties, my preference is to remain invisible to the PTB.
I read the article with some degree of interest, but do not have the means to set up an offshore second residence. My investments are in heirloom seeds and a very modest dwelling in the mountains of Appalachia--with an eye toward a few chickens in the future. That's my plan for survival.
DB, I'm sure that many readers will value the information contained int he interview and benefit from it. I find myself firmly in the class mentioned by Leonardo: "the not-so-rich".
As always, thanks for your post, Leonardo, and thanks to the DB for the interview with Banker X.
Posted by David_Robertson on 07/17/11 09:42 AM
Once again this is a very interesting and helpful interview but mainly for the very wealthy.
I fully agree with the storage of gold and silver offshore and for the less wealthy a good option is Click to view link. They are located on Jersey which is within the EU but offshore to the UK and is the residence of many wealthy people. They offer storage in London, Zurich and Hong Kong, their fees are very reasonable, they offer delivery on request, you can have your holding in a number of currencies and they are wired into the banking system for funds transfer. The founder is James Turk who is a former banker.
This is a very interesting quote from the interview: "Zurich is an international city and once Brussels falls it will become even more prominent. The Swiss did not do any of this. The country was chosen by Western elites for a number of reasons. And chosen long ago. "
From this it would appear that Banker X anticipates either the dissolution of the EU or the movement of the capital of the EU to Zurich which would mean in turn that Switzerland had joined as a full member.
However you did indicate that the answers were somewhat edited so if the original speaker's first language is German perhaps he thought/said "wenn" which can mean either "if" or "when" as distinguished from "wann" which means "when" in the sense of a point in time.
Posted by terrang on 07/17/11 10:26 AM
Very informative observations. Obviously the U. S. government has a psychopathic intent of finding out where everyone has stashed money because it wants to get its hands on it.
And yet the elites in the shadow government who actually run everything, leaving the public spectacle political campaigns as eyewash, are as usual above the law and won't be touched.
Though elites can get too deceptive among their peers and fall from grace, as Conrad Black did.
All this frantic effort by the U S government to appropriate as much private wealth as it can and turn it over to the central banks, and yet I keep reading that a high percentage of government workers and bureaucrats do not pay taxes or under report income..... Meanwhile the U. S. Treasury has openly been declared a mere vassal of the global elites and placed in the offices of Goldman Sachs as a clear signal that everyone not in the loop can go to hell.
Posted by robert wheeless on 07/17/11 10:31 AM
For the fist time since starting to follow the Bell I am commenting on todays article before reading. How stupid on my part however, I pay little attention to statements or interviews given anomalously, they usually have a strong me-first quotient or subliminal message.
I read today's interview with supreme interest, hoping it's content allows me to refute the above statement in a later post.
Posted by Thomas Molitor on 07/17/11 11:03 AM
For high-yield accounts in alternative countries and currencies and broader global solutions, check out Everbank.
Click to view link
For a hard money strategy, check out James Turk.
Click to view link
Or Peter Schiff's Euro Pacific Asset Management for an internationalizing asset strategy.
Click to view link
I could go on and on but the point is, as always, do your own due diligence, diversify, and workout a plan that fits your tolerance for risk. It is not as hard as it seems. Of course, if you are afraid of it all then stuff every last penny in a Bank of America Jumbo CD which yields 0.55% APY. You can at least sleep soundly at night knowing where your money is, even though you are losing 7.5% purchasing power in price inflation alone.
Posted by fabien_hug on 07/17/11 11:24 AM
Advices in this article effectively apply to well off people. Swiss private banking is an expensive thing but, generally speaking, you get what you pay for in execution, global reach and discretion. For an average US citizen what I would recommend is to try his/her best to get a second passport. Check if you still have family abroad or family roots you can prove. Some countries are very generous with their long lost offsprings. Otherwise buy some real estate, even a one bedroom apartment, in a foreigner friendly country and start from there. What really upsets me with this new take over by those above us is that it's a direct attack against the middle class. During a 30-year career in private banking, I have never encountered a bank in Switzerland with an average wealth per client above CHF 1 mio. The huge majority of their clients belongs to the middle class. They are not jet setters. With today's engineered interest rates, CHF 1mio. doesn't make you a rich person. There lies the problem, they attack the core of the productive part of the society; these $ 250K/year "privileged" workers who are the target of Obama's greed. These people are not even rich but they'll be looted from their money to be distributed it to the lazies and unproductive. The very rich, the elite, don't have this problem. They can use the best voting machine; their feet. When I was working I was paying more in taxes than M. Schumacher a USD 90 millions per year German Formula 1 champion. I was disgusted.
Posted by Hanna M Jones on 07/17/11 11:36 AM
My preference is to move cash under the $10,000 limit on a fairly regular basis to my account outside my jurisdiction of residence and to NOT give any bank in my jusridiction of residence any information on the foreign bank. This applies also to moving bullion--small amounts with nothing said except to your executor. The less anyone knows of your business the better off you will be. Bullion is advantageous because it is off the books except when purchased.
I am currently in the process of obtaining immigration status in my hip pocket place of residence in the effort to ensure continued residence there, if necessary, and to not be subject to the whims of others who may trump up charges sufficient to ban such residence.
Living under the radar requires quite a bit of thought but in these days of rising faschisti around the world and nosy parkers everywhere the less anyone knows the better off you will be.
Posted by EyesToSeeEarsToHear on 07/17/11 11:40 AM
It seems to me that many expats, and even those who still maintain their legal residences in the US, are still confused about bank wires to financial entities out of the country and the physical transportation of currency, coins or other monetary instruments by those crossing the US borders.
Most of these elaborate schemes to evade financial detection by those who are attempting to "maintain their privacy" don't understand that it is far easier to simply follow the rules and hide in plain sight. For one thing, most of the restrictions (as Banker X said) are indeed minimal.
There are currently no laws that forbid the transfer of currency out of the US. There are, however, governmental agency requirements that a FinCEN Form 105 (Click to view link be filed with the Bureau of Customs and Border Protection when the amount of currency, coin or other monetary instruments exceeds US$10,000. "FinCEN", by the way, stands for Financial Crimes Enforcement Network (an Orwellian sounding title if there ever was one). The trick is to file the form directly with the Customs office located at your point of departure, so that when they count your currency (and gold/silver coins) they will do so in private rather in plain view of your fellow passengers at the airline departure gate.
Problems can arise, however, when you pass through the customs of the country of your destination. The same currency and coin that left the US with only the filing of a form may be taxed (or confiscated) in the next country. This means due diligence is needed ahead of time as to their requirements.
If you are attempting to transfer monies via bank wire in amounts exceeding $10,000, then you can count on your bank being required to file a report with the US Department of the Treasury. But if you are a longtime customer of that bank (or they are satisfied that your deposits come from legitimate sources) AND you keep your wire transfers under $9,500, chances are that no such report will be made. As DB points out, however, there may be a greater level of information required by the receiving bank to document the transfer. It's all about a universal "knowing your customer" compliance.
Once these financial assets are out of the US and placed in a foreign bank, it is still necessary to file the name and address of that bank with the US Treasury Department if such an account exceeds U$10,000. Thus, US$10,000 seems to be the magic cut-off number .... which should be a word to the wise!
Posted by Hanna M Jones on 07/17/11 11:54 AM
I believe you are correct in what you have said. That said, if it is reasonably possible to carry out your personal and legitimate cash/ bullion transactions without the use of an intervening bank or SWIFT transfer I believe that is preferable. This is not illegal and should not be considered as anything but a personal preference. We are approaching the days where money (gold) in the mattress may well be a saviour. It's too bad the greed of the banks in general along with Wall Street and colluding governments have made all this necessary or preferable.
Also cash on hand is a must. Whether or not cash on hand in a foreign jurisdiction is reportable (it probably is) that is a varying amount from time to time. The question then arises as to the amount as at the date of reporting. Is it the amount available when date the report is due or the amounts anytime in the year?
Posted by EyesToSeeEarsToHear on 07/17/11 12:16 PM
You must report via Treasury Department Form 90-22.1 (Click to view link accounts you hold in foreign banks and other financial institutions if your total balance across all your accounts is $10,000 or greater at any time during the year. This is true both of accounts for which you are the owner and accounts over which you are not the owner but have authority to conduct transactions on behalf of the account owner.
Posted by s1lver on 07/17/11 12:35 PM
What makes you believe that fleeing to a different country will be of benefit? If there is chaos here there will be chaos worldwide. If the US government is reigning down on its people, what makes you think that the ruling thugs in any of those South American countries will behave any better?
It's a Huck Finn, Tom Sawyer American dream to flee from civilization to remote utopias, where we will "live off the fat-o-the-land".........am I mixing up my literature? If it comes from a child or if it comes from someone with the brain of a child, it doesn't make much difference.
Please give us something to work with here, people! OK. Buy gold and Click to view link these prices? Get outta here! It is precisely the timing that could lead one to have their cash tied up in gold and silver for a long, long time. Say we by some miracle go to a gold standard, where will the price of gold go? Up? But if that happens, people will be so enthralled the economy will boom. Will holding gold be the answer, or will people be investing in what they do?
Another thing. Is gold a better investment that the stock market historically? I don't believe it is. Check it out. Is it true that gold and all other commodities and finances are more or less all the same market? They seem to move, if not in lock step, at least in the same direction of trend.
One last thing. Your guest, X, said that gold was not subjectively valued. Pahh! You yourselves (although I know X is you speaking) have said you believe in Mises' subjective theory of value. That things don't 'inherently' have value. It is only through exchange and the value (subjective) that traders put on them that they emerge with value. Here you have let this opportunity to object to X (yourselves) slip by. I don't know DB. I know you have a readership to rile up, but don't let your quest for consensus blur the facts.
Posted by fabien_hug on 07/17/11 12:52 PM
I think a gold standard is the worst thing that could happen to gold holders. Under what standard was gold confiscated by the US government? Under our fiat system, greedy governments simply print more money. Under a gold standard system, still greedy government (the monetary system doesn't change the character of governing bodies) will confiscate the gold. As to chaos, I also think that if the US collapses, it's not going to be better anywhere else. On one hand, chaos may be better managed in a small country like Switzerland but on the other hand you'll be a foreigner with no family, no friends and no network. Language and cultural difference will certainly aggravate the situation.
Posted by Bischoff on 07/17/11 01:00 PM
"The key is to find a jurisdiction that is affordable for you, offers the kind of lifestyle you either have today or would like to have, and then to employ human action and put the plan in motion."
The choice of jurisdiction with regard to "real estate investment" is crucial. The ideal jurisdiction taxes land values only. Such jurisdiction also will by its very nature offer the highest individual and property protection. Jurisdictions that subject capital improvements to heavy taxation should definitely be avoided.
Excellent work in evaluating jurisdictions in the United States in which to locate has been done by Dr. Jack Lessinger of the University of Washington. In his book "Penturbia", he outlines the attractiveness to provide a sustainable and suitable living style on a county by county bsis.
Posted by Leonardo Pisano on 07/17/11 01:01 PM
What you describe is in fact that your money is completely monitored, i.e., non-anonymous. It's not my understanding of liberty.... It's another argument to avoid banks as much as possible.
Thank you for your kind words! Your street-wise intelligence is high, yet the level of your kindness is even higher.
Re the European Directive 2005/60/EC: I write a tongue-in-cheek story (507 words) some time ago, called "Comply, please!" I am reluctant to use DB's platform for promoting my short stories, but for readers here that like fiction stories it may be a read worth their time:
Click to view link
[Readers that are interested in non-ficton only, please ignore the link]
Posted by rossbcan on 07/17/11 01:01 PM
Agreed, Bcuz this means to keep your choice options open, to provide maximal contingency options in a social / economic environment on a steep exponential trend to maximum chaos, conflict and unpredactibility where the only sure thing is that predators will not run out of rationalizations to prey on the productive, nor will they cease to do so because preying is their ONLY method of survival.
And choice (freedom) EQUALS survival:
Click to view link
But have to strongly disagree with Banker X's self-serving opinion. Lawyers, bankers and structuring may delay the inevitable for so long as international terroritorial integrity, laws and property rights are respected (they are NOT, now, only pretended to be). In the grand scheme of things, these "professions" are bandaids to problems they have themselves created. But, when push inevitably comes to shove betwen organized power, wielding our guns, against us, driven by insatiable greed (consume far more than they produce - nothing), there is only one thing that ever has, can, or, ever will stop predators.
They must come up against a stronger force than themselves and be taught the clear fact that: to proceed on present pugnaceous course is a personal survival threat: BACK OFF.
For this reason, I see no option but to stand our ground and fight for what is OURS.
BUT, being a member of a cowardly society, this ain't gonna happen very soon, if at all.
Luckily, the grim reaper of "Mathematics of Rule" (reality) IS on the ball administering REAL consequences to the insane choices to compromise with tyrants in short term, false hope of survival at the expense of the juggarnaut of total social / economic collapse, an INEVITABLE consequence of allowing "crime to pay".
These problems were ONCE SOLVED, by "rule of law", now rationalized away, by predators on the bench:
Click to view link
Posted by Dave Jr on 07/17/11 01:13 PM
I have no use of banker X's travel agency. I still love my country and will not flee. I have no love of those who have hijacked the economy and the government of this country. No one will make me run away. I am attached to this land, my community, my family and friends. I know how to make a life here and now. My PMs are brass and lead. I am willing to give them up in an orderly fashion in exchange for my right to exist.
Posted by Dave Jr on 07/17/11 01:16 PM
And I think there are about 70 million people in this county that think the same way I do.
Posted by MetaCynic on 07/17/11 01:33 PM
I see a problem in transferring wealth overseas by complying with all the reporting requirements of one's current country of residence. You have created a paper trail. The government now knows what you have overseas. As economic and civil liberty conditions deteriorate, your government may not allow you to emigrate to join your overseas wealth without first repatriating a big chunk of it to pay as an exit tax. Your government may even threaten to throw you in a gulag unless you give it ALL your overseas wealth! I wouldn't be surprised if Nazi Germany had such a policy with respect to German Jews seeking to emigrate.
So, the question arises, are those individuals making such aboveboard preparations alert enough to see the ominous signs and emigrate before a surprise government edict impoverishes them as a condition of being allowed to leave? As a country descends into welfare hell, the smart and productive will not be allowed to leave. They will be forced to continue to stay to lay golden eggs at home, not abroad.
Reply from The Daily Bell
It is not a zero-sum game. One is not more of a "man" if he stays with his family in a bad situation where totalitarianism is on the rise if he has the means to go somewhere else. The Art of War makes that point clearly ....