US Treasury to track cash buyers of prime real estate … The US Treasury has launched a test programme to track all-cash buyers of high-end real estate in New York and Miami, amid fears that the US property market has become a favoured destination for foreigners looking to launder ill-gotten assets. – Financial Times
Dominant Social Theme: To stay on top of criminality demands savvy detective work and enhanced anti-cash legislation.
Free-Market Analysis: The federal government is at it again, demanding that private industry compromise the privacy of clients because the state is wary of possibility of criminal acts.
Here's how the Financial Times puts it:
The Treasury issued orders on Wednesday requiring US title insurance companies in Miami and Manhattan to identify the "natural persons" behind shell companies used to buy high-end real estate in many all-cash transactions. The temporary order, which will take effect March 1 and run for 180 days, is designed to gather data ahead of a possible more permanent rule change.
The article quotes Heather Lowe, legal counsel for Global Financial Integrity, as saying that title insurance companies probably do NOT have all the information necessary in all cases. She is willing to put the best face on the Treasury order, however, intrusive as it is, explaining it is likely an exercise in trying to find out just how much "ill-gotten money" was flowing into US real estate.
"What I think they are probably looking for is if there's a dip in the market. Do the numbers rise some place else? What is the effect of putting this level of transparency in place," she said. "They'll probably use that data to see if there is a problem and a legitimate case for regulation."
Terrence Oved, a New York real estate attorney, is quoted in the article as saying that the Treasury's actions would lead to more permanent disclosure requirements, a situation he characterized as "disruptive."
The threshold of $3m for transactions in Manhattan was relatively low and meant many ordinary buyers would get caught up in the net, he said. The rules would also unfairly target people such as movie stars and professional athletes who used LLCs to shield their identity for privacy reasons.
Over at Doug Casey's International Man, Jeff Thomas would surely disagree with the reasons that Treasury is advancing for its latest probe.
In an article entitled, "The International War on Cash," Thomas makes the argument that governments around the world are targeting cash transactions simply because they cannot be easily controlled rather than because of suspicions of rampant criminality.
Here's how the article begins:
Back in 2008, I began warning of increasing capital controls that we would see in the future, as a component in the decline of Western economies (Western in the broad sense, including Japan, Australia, etc.) Along the way, it occurred to me that, at some point, governments might collectively attempt to eliminate paper currency in favour of an electronic currency – transferred from party to party solely through licensed banks.
Sound farfetched? Well, maybe, but what if the U.S. and EU agreed on an overall plan, then suggested it to other governments? On the face of it, this smacks of conspiracy theory, yet certainly, all governments would benefit from this control and would be likely to get on board. In fact, it might prove to be the only way out of their present economic problems.
When I first wrote on the subject, there was considerable criticism as to the possibility that such a programme would ever be attempted, let alone succeed. And, granted, it was so Orwellian that it was understandably seen as a crackpot idea. But since that time, the programme has been developing extremely rapidly. In the last six months alone, it has become so visible that it has even garnered a name – "the War on Cash".
Thomas provides us with updates on this "war," explaining that what he calls Phase I is underway. He cites actions in such countries as France, where limits have been lowered on how much cash can be transferred without reporting, and Sweden, which has begun treating "all cash transactions as suspicious."
Thomas explains how a Phase II might work as well.
Phase II will be the second wave of measures and they will be more draconian than Phase I: Create a definitive false flag event that demonstrates how physical cash is the primary means of funding evil acts in the world; Declare a date on which paper currency will become illegal (Until that date, it can be deposited into a bank. After that date, it becomes criminal to possess it.); Once all cash has been deposited in banks, increase negative interest rates; Confiscation of deposits can then be implemented, as desired, by banks …
Thomas makes other speculations, writing that at some point taxation will be by "direct debit" and money will be declared the property of the issuing state. This would allow the state to legally freeze or confiscate bank accounts at will.
How will the results of this war be received? Some savers will accept the outcomes, he believes, but others will seek alternatives to maintain as much privacy as possible.
Thomas offers some potential solutions to the latter group. He writes that an international war on cash will not necessarily yield global outcomes. Just as there are individuals that will resist government plans, so there will be some jurisdictions that will do so.
Those who want to anticipate the results of the war on cash and position their wealth in ways that will remain secure from confiscation ought to begin to seek out such jurisdictions now, Thomas advises.
One needs to locate jurisdictions that have historically been resistant to the plans of the great powers and have tended to endorse forms of limited government, he explains.
One then needs to transfer assets to these jurisdictions and also begin to convert assets into forms of wealth that are harder for governments to confiscate. These might include precious metals, gemstones and real estate. Thomas also advises that one create a plan for a quick getaway in case one is necessary.
It is very difficult for many people to internalize what's going on in the world today. These people may eventually find their affairs a good deal more compromised than those who make the hard choices now.