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Tunisia/Swiss banks/Gold – What’s Next?
The blow up in Egypt is going to create ripples all over the globe. It
will certainly be disruptive for equities and the dollar. It will
influence global bond yields and PM prices. The oil market could be
in for a short-term shock. It could have a significant affect on
European GDP prospects. So there is a lot of uncertainty. I will make only one forecast of the lasting impacts of what is unfolding. Swiss banks and the Swiss government are in for another pounding over the issue of banking secrecy.
I’m sure that you have heard about the Tunisian leader who looted the
vault for $60mm worth of gold as he headed (quickly) out the door. (ZH report) That story made a big stink. This story today from NZZ is going to smell worse:
From the article (my translation):
Last
Wednesday the Federal Council announced: Within seven days were reports
of "tens of millions of francs," received in Switzerland from the family
of the deposed ruler of Tunisia Ben Ali . All assets of the family must
be blocked and reported to the Department of Foreign Affairs (DFA). This action was taken by the Federal Council on Regulation by emergency law issued since last Wednesday.
So not only did Ben Ali (and his wife) attempt to steal a ton and a half
of gold, they were also attempting to pirate away tens of millions in
cash. As with the gold story the authorities in Switzerland moved
quickly to seize the ill gotten gains and make things right. Right?
Baloney! Ali had money in Swiss private accounts way before last Wednesday:
The banks and other financial institutions reported suspect funds from the Ben-Ali clan only after the overthrow of the ruler - but not in the long years before, when he was in power and committed the alleged crimes.
Daniel
Thelesklaf (first head of the unit for combating money laundering in
2000 and now director of the Basel Institute on Governance) said: “The reporting requirement in the Money Laundering Act has remained largely a dead letter. The case of Ben Ali is the best example of it”.
"There is a gap in the legislation on money laundering and potentates like Ali. Therefore, it is naive to believe that there is no other money in Switzerland of potentates or their accomplices."
Bingo! Ali had money in Switzerland for a long time and other Potentates (Kings) have money there too. This stinks. Once again Switzerland is where the bad guys go with hot money.
In the scheme of things the Tunisia story is not a big deal. The amounts
involved were small. Tunisia is yesterday’s news at this point. No one
really cares if the former leader tried to stash some cash in Swiss
vaults.
But the number of Swiss black accounts and the aggregate amounts in them from the “Potentates” of Egypt, Saudi Arabia, Jordan will prove to be staggeringly large.
There are some folks in Switzerland who are crapping in their pants over this. The question is, “What to do?”
Should they attempt to "get ahead" of the coming problem by disclosing
that some “Potentates” from other areas also have accounts as did Ali?
Or do they wait to see if the Potentate falls and then follow the
example set with Tunisia where they act after the fact?
If they get in front of the curve they will have violated banking
secrecy rules. To act first and make a public announcement regarding
other hot money would cause those poor leaders to fall. For these
reasons Swiss Inc. will not take any action until after the next
Potentate tumbles.
The Swiss are going to look just horrible as a result. Should we lose another government (we will) and in the carnage it is disclosed that other Potentates have used Swiss banks to stash cash (we will) there is going to be some broader backlash.
Switzerland has addressed the black account problem for Americans. They are doing the same thing for a few other EU countries. That leaves the rest of the world.
There is at least a trillion of foreign cash in Switzerland that is
watching this aspect of the Tunisia/Egypt story. Should we see the next
chapter, where the Swiss “out” some other Potentate based on “new”
information, the rest of those account holders are going to get very
nervous.
Should we get the headline that the Swiss have acted against another
leader I would recommend getting long physical gold, fast. If hot money
is not safe in a Swiss account it will go into physical gold.
»
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Wow, I guess you really are reality challenged, aren't you comrade Brucie?
http://swiss-bank-accounts.com/e/banking/general/opening-how.html
You really don't have a clue...
Bruce Krasting
You write, "You folks think I'm making a political statement. Not the case. I'm just trying to predict money flows"
No you were making a political statement, you made it 3 times and here's your first:
"Swiss banks and the Swiss government are in for another pounding over the issue of banking secrecy.
That is a political statement and you underlined it to put it across. Then you finished with another sentence saying they'd cleaned up (out) US bank accounts, working on EU and now "the rest of the world".
That is a statement about regulatory progress, sweet f.a. to do with investing money flows. You're hiding in plain sight, we can see you, you're wearing your Feds on your sleeve.
Now where are the Feds on US mortgage fraud and $Billion Dollar bonuses paid for by US citizens for a totally bankrupt and insolvent US banking system?
Ok, so even if (a big if - where's the proof? ) every swiss account with US name has been closed, were due taxes paid? I'm not even talking about the penalties... And where did the money go? The the Cayman islands?
My "beef" is that not one "important" name has been disclosed. Same as with Spitzer madam's balck book... The powerful interests have been protected. The small fish will go through the meatgrinder, the sharks and whales are swimming free.
No you were saying Switzerland stinks when in fact they're just good bankers. They cannot stop funds if nobody has prosecuted. You hammered Swiss secrecy but that's a free market offering, you want to stop the free market working for what?
Your blaming the Swiss when its the corruption that is to blame, endemic in Govt and endemic in your US banking system. Systemic fraud and theft is absolutely rampant in US banking, what are you saying about that?
You only have accusations of wrong doing, US banking is already patently committing fraud in mortgages and patent theft from US citizens via a ponzi schemes from US bankers, the FDIC and Washington being the launderers.
What are you thinking about this stink in your own backyard?
Have you anything to say about US regulators leaving the goalposts wide open?
Do you personally sleep well at night? Deflecting criticism by pointing out other institutions also worthy of criticism is not a credible defense. It is mere deflection. And I think this whole discussion centers around "moral hazard," something I would venture you do not believe exists, particularly within a "good" banking system. That is, a smooth running and legal banking system has no moral responsibility to ever consider where the money is coming from.
And they wonder why the masses don't like bankers. Yeesh.
I agree with this post, ZG. Someone walks into a bank, Swiss or any other and says "I have a billion dollars." or 500 lbs of gold or anything else and "I want to deposit it here." There's no legal requirement to do anything other than welcome them as a customer. They should not throw open the books and the vaults any time anyone, even governments send them a memo. It is private property.
The problems are back in Tunisia, Algeria, Egypt, Saudi Arabia, etc. The problem is the entire government is corrupt. That is where auditing, accounting and regulatory actions should be taken. The problem is NOT in Switzerland. If legal documents that satisfy the Swiss are presented then they can decide to open the books and vaults.
However, the most likely course of action is that one dictator will replace another in each of these countries. They will trade Mubarak for the most popular imam or ayatollah. Another general may take over. There is nothing more moral about the newest dictator compared to the last.
I would like to think that I could safely store my property somewhere, especially outside the jurisdiction of my own increasingly corrupt and ravenous government and someone would tell them to go to hell if they tried to confiscate it.
"I would like to think that I could safely store my property somewhere, especially outside the jurisdiction of my own increasingly corrupt and ravenous government and someone would tell them to go to hell if they tried to confiscate it."
Those days are gone, my friend. Better get a shovel and start digging a deep hole.
B Thunder
Your white noise aren't you troll?
The US banking system is bankrupt and paying out $billions in bonuses. Your executives are totally incompetent and their raking the money into their pockets by the truckload.
What are you gibbering on about Switzerland for???
Your entire banking system is endemic with mortgage fraud and theft from US citizens.
What are your regulators doing, chasing a few Hedge Funds around while $Billions are being siphoned off in plain site of EVERYONE!
The NY Fed is overleveregaed 80/1. Who the hell is supposed to regulate these loonies?
The Federal reserve just authorised itself to cook its books! How are your regulations coming along?
What have you criminally insane Yanks got to teach anybody about anything?
"Your white noise aren't you troll" - my white noise i am troll??? Ha hablo this ingles, compadre!
BTW, this is not about USG nor about the Fed and US banking system. And what, the Swill banking system is the model of stability? Without the Fed's bailout of AIG, UBS would have been kaput. And the Swiss central bank? A few more "unfortunate" EURO/CHF trades, and it will be kaput.
This is about the criminals who run the world and the Swiss providing the safe heaven for their stolen money. And that not one authority is willing to seriously investigate neither the Swiss nor those who have the big money there. The Fed has many problems, but there's no evidence that much of foreign dictators' loot is in its vaults.
"What have you criminally insane Yanks got to teach anybody about anything?" - that you better shake in your boots, 'cause one way or another we'll come to you and kick your ass! With tanks, with unmanned aerial drones, with George Soros, or with food inflation courtesy of Ben Bernank.
Yes this is about criminals and looking at the US banking and political elites you're looking at the biggest criminal network in human history. Bernie Madoff is a a part-time operator compared to the laundering scheme of US citizens wealth from Washington to Wall Street.
When the shit (debt) implodes US banking will be going down the tubes and the Swiss will be left standing.
Count the cost of propping up your parasites, what they've raked in in $Billion Dollar bonuses while their banks were driven into the ground and required a $Trillion to prop up.
Where are the over-paid, over-staffed Feds and US Regulators?
US banks corrupt??
http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-c...
the Drugs industry run rings around the Feds, have been for decades, maybe they got their ideas from Wall Street how to do it without getting scratched?
So, you resent any US writer criticising Swiss banks because the US financial system is corrupt?
Why? Is Bruce supposed to criticise everything that deserves criticism, in every article? He decided to write a (topical) piece on Ben Ali's Swiss accounts, and the Swiss banking system's approach to despots' accounts in general ... should he also mention everything else bad in the world too? What about those Russian oligarchs, huh? And the subjugation of homosexuals in Uganda? Why doesn't that get a mention? What about the Spanish conquest of the New World? How was that fair? And Bruce must obviously have been in favour of Indonesia's slaughter of the East Timorese, for I don't once see it mentioned in the article. What a hypocrite that Bruce is! Sort out your personal subjugation of the Mohawk nation before criticising Swiss banking, Bruce.
Hey Zero. You have apparently mistaken the ZH crowd for bloggers at HuffnPuff.
If you see the regulars standing up for the various versions of big money on this site, you're smoking better stuff than you can buy in Vancouver.
Dr Sandi
You write, "If you see the regulars standing up for the various versions of big money on this site, you're smoking better stuff than you can buy in Vancouver."
No I see US Regulators standing DOWN not up. Don't you even on whacky tobacco?
I see US Regulators not only standing down I see them sitting on their fat useless crony arses (again) next to the goalposts playing deaf dumb and blind while completely insolvent US bankers drive truckloads of US citizens money through the goal and into their bank accounts.
Do you see that?
And I see systemic mortgage fraud from origination to slice and sale sale with AAA ratings for piles of fraudulent shit also going straight past the US Regulators noses for nearly a decade and them still sitting on their fat useless crony arses.
Do you see that?
In fact when i look at what's going on in US banking, The Fed and Washington I see a bankrupt lunatic asylum full of frauds and thieves having a party with the US Regulators and sending the bill to US citizens who ate speechless, powerless and every day more are wising up to an elite that is out of control, running riot and don't know what's coming to them when this $Trillion Dollar piece of shit hits the fan.
Do you see that?
I know you've only been posting here for like six minutes, but have you ever read anything here? The ENTIRE FUCKING MISSION of this site is to expose the shit you're ranting about. Just because the US system is faulty doesn't make everybody else a saint.
Or to have it put more succinctly, read Hulks post. He's much better at not wasting time on imbeciles than I am.
Stand down ZG, you are preaching to the choir...
Hulkster, you're concise! I like that.
And I promise not to make you angry. At least, not when I'm within clobberin' range.
Maybe you need to spend more time looking around this site. This whole place is loaded with people who share your pissed off viewpoint. You're right.
But calling us a bunch of co-conspirators isn't going to get you invited to Christmas dinner.
You've got as much power to fix this as any of us! So stop pissing, moaning and typing. Buy an airplane ticket to NYC and start cleaning some clocks.
I would point out, however, that they throw your ass in prison for a long time for taking direct action against corruption in this democracy. That's why the U.S. is the world leader in per capita imprisonment.
Piss off a cop and take the dirt nap. Speak out of line and do some hard time.
There are not enough pissed off people to take up arms against the American Potentates and their thugs. And frankly, I don't want to be nearby if that happens. The wrong guys almost always win violent confronations.
Dr Sandi
Yes I can see your parasites have a security system in place. No fascist paradise can do without it. But when the debts hit the fan i'm troubled you'll be running from the fight. Gun Law makes the elite think again about using their arms surely? Which just leaves 10,000 parasites and 260,000,000 citizens, why need to run?
Dr Sandi
Yes I can see your parasites have a security system in place. No fascist paradise can do without it. But when the debts hit the fan i'm troubled you'll be running from the fight. Gun Law makes the elite think again about using their arms surely?
A serious gold correction has already started ......
http://stockmarket618.wordpress.com
Right... UPWARDS! and it has nothing the fuck to do with reading tea leaves and all to do with fundamentals.
Ha ha. Just another newbie and his charts. With apologies to R.M. Nixon, "we're all technicians now."
Hulk, nothing wrong with TA, just with most of those who try to practice it.
Another TA loozer here...
whatever
At least he has an opinion. Say, what's yours?
That TA applied to a fraudulent market is worthless . TA has no consideration for World events, which for Au , is a great way to arrive at a $900 per ounce pricing, which many here have done in the past year...
Not true.
Technical analysis takes into account all market participants, all their thoughts and all their feelings into one instantaneous package.
The problem with TA is that we all read in biases where there should be none. The biggest problem with any type of analysis is removing emotion from the equation.
Don't believe me? How many quant/math wizards have tweaked their protocol to get it to "fit" into a dataset? A couple, at least? All chartists are doing is reading the same dataset in the form of a graph, then applying thier own biases and emotions over the top of the chart.
Technical analysis works just fine when you can look at the data objectively, which most cannot do.
Try back testing various technical indicators on PM and FX using Trade Station or any kind of software like that. It is a proven fact that technicals don't work very good on PM compared to FX.
Howd those forex trades work out for you Orly?
Great.
How about yours?
PM's are working out nice, thanks for asking!
Awesome!
Of course, that is to assume that I am without biases or attitudes. That is not at all the case. It is something that I struggle with all the time.
I can be wrong. Grand Supercycle can be wrong. I do have a soft spot for people who stick it out there and tell me why. I have little sympathy for people who will cherry-pick a trade at laugh about it.
So, like I said, sell GBPUSD hand-over-fist.
Many years ago, I used TA on stock trades and agree with your points above on TA.
Best of luck to you as we move forward into a most uncertain future...
Same to you, Mr. Hulk, sir!
(Lord knows I wouldn't like you when you're angry...)
:D
Unfortunately, Switzerland is where the so called good guys go with their dirty money so don't expect too much regulation. The bad guys will just move to some other laundering locale. Plenty of them. Corruption is here to stay.
Forget switzerland and get your glasses out and blinkers off.
The US banking system is involved in systemic mortgage fraud, institutionalised robbery from US citizens, having to be propped up to the tune of $Trillions.
How are your US Regulators doing?
washington has everything to teach the world about Governance hasn't it? Not like corruption is endemic in every financial product in the US is it?
Such variety of expression.
And unwittingly done in a venue where most actually agree with you but where you seem to somehow believe that no other government should also be criticized.
Spare everyone the repetition, please.
Fred
Let me clarify my position and Comrade Brucie Babies article which reads above,"As with the gold story the authorities in Switzerland moved quickly to seize the ill gotten gains and make things right. Right? Baloney! Ali had money in Swiss private accounts way before last Wednesday."
At this point the Swiss deserve no condemnation, they have done zippo wrong, they have seized what has been demanded by the Tunis Govt. Brucie is jumping the gun. Not only that he is criticising the Swiss banks (not Govt as you mention) for not seizing previous deposits which their banks have received perfectly legitimately (legally) while their client was still President of the country.
"Way before last Wednesday". Yes Brucie way before there were any issues raised. Brucie is a classic regulator expecting banks to accept funds and somehow crystal ball wether they are legit or not.
No banker can ever anticipate wrong doing. they have to wait for the Feds to do their work first. Which as we all know from the Madoff case even with 6 years of tip offs and patent clear evidence these over-paid, under-worked, over-staffed crones of Regulation STILL cannot do their jobs competently.
If only Brucies totally incompetent industry of uselessgoal-wide-open finger wagging crones did even half a job then maybe they could tell bankers their jobs eh?
can you imagine what the King Tut mask is worth? actually it's worth is simply priceless. any human being could not afford it. nor should any one beable to buy or sell such treasures. imagine the wealth this figure represents to the Egyptian people and the whole. G O L D in that there mask. they knew the intrinsic value and what it represented in this King. love the story, always have. it is all i knew about.
And even as we speak, there's a crazy guy running around Cairo, wearing it on his head.
forget Cairo arse wipe, have a look at your own banking system?
It's systemic fraud, systemic theft, systemic corruption.
How's US regulation coming along?
painting the goalposts while letting the frauds kick home runs by the bucketload
You have apparently mistaken me for some other arse wipe. I don't even HAVE a banking system. Although it would be nice just to be able to steal money from people without fear of retribution.
My wealth is tied up in precious metals, which are safely stored far from the boys in suits. I already grabbed my bat and ball and went home.
How the other kids behave isn't my lookout.
Anarcy implies individual responsibility. Theft implies lack of individual responsibility. Stealing stuff, then having other thieves hide it "legally" reeks of a lack of moral courage and individual responsibility.
Irresponsible behavior does not, in my mind at least, equate with the ethics of anarchy. Theft is irresponsible behavior as it devalues the rights of those around us.
Decent anarcy is a bitch when you get humans mixed into the equation, as their self-interest is rarely enlightened.
I'm all against anarchy which is breaking rules. Right now the US looks to be teaching the world about anarchy, your bankers are so far out of control they're literally insane
How do you go $Trillions into bankruptcy and pay yourself $Billions in bonuses, the money coming from US citizens?
Is that not anarchy?
Forget Tunisia siphoning off a few million, US bankers, politicians, Feds and regulators are the biggest money laundering operation I've ever witnessed in my life. American banking has taken theft (from citizens) and fraud (mortgages) into the $1000bns category. Bernie Madoff is just a beginner compared to the Washington-Wall Street ponzi scheme.
Enuf already
"How do you go $Trillions into bankruptcy and pay yourself $Billions in bonuses, the money coming from US citizens?
Is that not anarchy?"
No, it's not anarchy it's facism. Maybe better check your definitions.
Look at his avatar, look at his name, then read his post, "I'm all against anarchy". I sense you would have a more gratifying debate with the skin on top of last night's gravy.
Vint and Colonal
Let me explain boys. Fascism is precisely what the political-corporate set up is in the US and Europe. Clear as daylight.
Anarchy is the breaking of rules, in effect a group being lawless. That again is precisely where we are at, a parasitical elite in the West running riot over international and national law on waging false wars, theft from citizens and fraud (to mention but a few).
My belief is no rules. I believe in freedom and free markets, they are both self-regulating (no Law or Govt required).
I am not an anarchist because I have no rules to break. I accuse the fascist parasites of anarchy because they made their own rules, they support their own judicial systems and they are driving a horse and coaches and show complete contempt for them all.
Please ask for clarity before you whip out those pea shooters of yours and miss the target again. Peace & Love
First you claim the US is anarchist. Then you claim it's fascist. Then you claim that it's an anarchy because it breaks its own fascist rules. You are all over the place.
What college are you currently enrolled in? Just asking so I can make sure not to send my kids there.
Colonel
I'm not all "over the place" tis you who cannot follow simplicity of description, let's try again:
the system of Govt is fascist (collusion of Big Govt and Big Biz)
current behaviour is anarchy (running roughshod over the laws, Lawlessness) as the US Govt and Wall Street are currently out of control regards fraud and theft of US citizens money with nobody prosecuting, applying the Law
I can't make it any simpler, maybe you can step up your game a bit?
Good to see the Colonel still swinging!