STAFF NEWS & ANALYSIS
100 billion reasons to have non-reportable assets
By Simon Black - November 25, 2017

Via Sovereignman.com 

In early March 1938 in a dusty corner of the Arabian desert, Max Steineke finally had the breakthrough he was hoping for.

Steineke was the chief geologist for the California Arabian Standard Oil Company (CASOC), a venture owned by what we know today as Chevron.

And he hadn’t had a lot of success despite years of effort.

Steinke was convinced that massive oil reserves were beneath the sands. He just couldn’t find any.

His prized oil well, what was called Dammam #7, had been riddled with mishaps, accidents, and delays, and it was costing the company a LOT of money.

Steinke was about to be shut down when, finally, on March 4, the well started gushing. And Saudi Arabia was never the same.

Today oil constitutes more than half of Saudi Arabia’s GDP and more than 90% of government revenue… and it is the reason why Saudi Arabia is one of the world’s richest nations as measured by per-capita GDP.

But all that success also comes with risk: what happens when the wells run dry? Or when the oil price falls?

That’s what they’re dealing with now.

Saudi Arabia has been in and out of recession over the past few years due to the steep decline in oil prices. And the government is desperate to raise revenue.

Last year the Saudi government announced “Vision 2030,” a long-term plan to diversify its economy and reduce dependence on oil revenue.

The plan includes developments like a new beach resort on the Red Sea where women will be allowed to wear bikinis. This is pretty forward thinking, folks.

The government also announced that it will sell a portion of the national oil company, Saudi Aramco, through an IPO on a major stock exchange– a move they believe will generate $100 billion for the government.

But none of these options fixes the short-term problem. Saudi Arabia needs cash. Now.

So over the past few weeks they’ve found their source: theft.

Under the guise of a ‘corruption crackdown’, the government of Saudi Arabia has arrested hundreds of its wealthiest, most prominent citizens, and frozen more than 1700 bank accounts.

The government claims that these men illegally acquired their wealth through graft and corruption.

Now, to be fair, it’s true that there’s an enormous amount of corruption in Saudi Arabia.

I lived in Riyadh years ago when I was a young intelligence officer, and the corruption was obvious from Day 1.

For example, I remember mid-level Saudi army officers explaining how they would accept bribes and kickbacks to award small contracts to local suppliers.

These were military commanders who were essentially stealing from their own units.

For us it was unthinkable. But for them it was normal. They discussed it openly with each other, as if they were trading tips on how to steal even more.

Saudi billionaire Prince al Waleed (one of the people who has been arrested) also used to speak quite candidly about how he made his initial fortune through bribes and kickbacks.

So it’s clear that a lot of people in Saudi Arabia have made money in illicit ways.

It does strike me as a farce, though, to see extremely corrupt bureaucrats and politicians arresting corrupt businessmen… and then confining them to the very swanky Ritz Carlton hotel in Riyadh.

The timing is also suspect– the Saudi government needs the money and cannot afford to wait for their long-term plans to generate income.

They’ve already started borrowing pretty heavily, issuing close to $40 billion of debt in a single year– that’s a big chunk for a country with a $650 billion GDP.

But they know they can’t keep borrowing forever… hence the ‘anti-corruption purge.’

They’re now telling their captives that they’ll be free to go if they ‘voluntarily donate’ 70% of their wealth to the government.

Estimates vary for the amount of money the government will bring in through this theft; the lowest amount I’ve seen is $100 billion (again, an enormous sum in Saudi Arabia).

The Wall Street Journal reported that the Saudi government is targeting as much as $800 billion… an amount that’s larger than the entire Saudi economy.

To put that number in context, it would be like the US government seizing $22+ trillion of Americans’ wealth– more than the value of every company listed on the New York Stock Exchange combined.

All of this, naturally, is taking place without any trial or due process. They’re just seizing and freezing assets.

If you’re thinking, “Thank goodness I live in a free country where that would never happen,” think again.

This is really no different than Civil Asset Forfeiture in the Land of the Free, the legal framework where countless federal, state, and local agencies have the authority to seize and freeze every asset you own without even so much as charging you with a crime.

(They can even take your kids away!)

I think there’s a pretty big lesson here: desperate governments almost invariably resort to stealing from their own citizens.

And that’s why one step in a Plan B is to have some non-reportable assets.

The government knows about every local bank account you’ve opened. They know what’s in your domestic brokerage account. Or what real estate you own.

And they can seize it all in a heartbeat.

So it’s a good idea to have a few assets that they don’t know about… assets that you’re not legally required to tell them about– like an offshore bank account.

This includes things like physical cash, precious metals, and yes, cryptocurrency.

You won’t be worse off for having some non-reportable assets– especially cash.

Think about it– it won’t make a difference if there’s $20,000 in your bank account or in your safe. It’s not like the banks pay interest anyhow.

But if the worst happens, this emergency savings could be a life-saver.

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  • lulu

    With foreign bank account reporting demanded of Americans abroad and foreign compliance with this demand if called upon, just which countries will store your $$ without obligation to report to Uncle Sam?

    • NobodysaysBOO

      Iceland

  • SnakePlissken

    The US gubmint is hip to this and is already asking you to report if you have a safe deposit box on your tax returns. They’ll give you an additional deduction if you report it. And now, you are legally obligated to file a form every year if you have over $10k in assets in any foreign country. I know a guy who owned some real estate overseas, and he was regularly audited until he sold it and brought the money back.

    • Bruce C.

      I believe all banks require box holders to sign a form that lists what things can NOT be stored in their box – guns, ammunition and cash in particular. Guns/ammo may not be surprising but cash is. At least my bank did this.

    • Ephraiyim

      I guess I misunderstood the article. My understanding was the writer was suggesting putting cash in your personal home or office safe not in a safe deposit box.
      The guvement can seize all safe deposit boxes at any time. If you have assets in a safe deposit box I would suggest you move them to a personal safe.
      I also wouldn’t tell anyone except your spouse or adult child if they can be trusted to keep it quiet. Besides not wanting potential thieves knowing the public thieves are also happy to drop by in their blue costumes and badges to take it.
      After all if you have several thousand in a personal safe you must be a criminal.

    • JMiller

      SnakePissAnt,

      The government does not require or ask you to report if you have a safe deposit box on your tax return. You have been telling this lie for over a year now. They also do not require you to file a form every year if you have $10,000 in assets overseas. It is only if you have an aggregate total of $10,000 in any financial accounts that is overseas. It does not include many other kinds of assets like precious metals, art, real estate etc…

      • paul

        You are correct JMiller.

  • Bruce C.

    I know governments stealing from their citizens is an age old theme, but now – and for the first time I believe – every currency on the planet is “fiat”, particularly the world’s reserve currency, so it would seem infinitely easier to simply create (i.e., “print”) as much as they need rather than steal it. In fact, that almost seems silly.

    Not that the value of the currency will eventually drop as it moves through the economy but that takes time. Besides, price inflation IS a form of theft, so the age old theme would continue just in a different way.

    • NobodysaysBOO

      social security COLA is a PRIME EXAMPLE of COOKED BOOKS by our JEWS in the US GOV!!!

      • Jack Daniels

        “OUR JEWS”? Who’s “we”, kimo-sabe?

        • NobodysaysBOO

          we PAY THEM!!!
          by now every Isralie has been given over $30,000 each in our poor nations tax money.

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