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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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He's kicking homeruns left and right.
Obviously the concept of anarchy has eluded you. Anarchy is more about civility with a lack of rules, as opposed to breaking rules.
To me, anarchy is like libertarianism, but without the damnable meetings.
But the little "I heart Anarchy" avatar is really cute!
Thanks for playing, though. Check in again next year if you have something new to contribute.
I believe most people equate the concept of anarchic governance with chaos. It probably would be if instituted now, but it is certainly a nice utopia to look forward too if human nature could support it. I fundamentally disagree with anarchists on the causes of bad human behavior.
Bruce Krasting
I don't mean to pry but are you an idiot?
Reason I ask is you are making Switzerland out to be doing something wrong here when in fact they're doing everything right. Namely they're a good safe place to store your money.
That's apposed to your fumed up pile of fraudulent propped up shit bag banking )so much for regulation eh?)
You also appear to be blaming Switzerland for other peoples corrupt Govt systems, that leaders can siphon money out of their country so easily. The system is called "democracy2 but it's actually as we see here in Europe and you in America the breading ground for parasitical scum like you wouldn't believe. So maybe you could think things through you might realise Govt is the problem, not the solution.
So i just wanted to point out blaming Switzerland and say they "stink" for good banking is not the problem. You've got the wrong end of the stick with your head up your arse too, can you smell anything now?
It's the apparatchik's sworn duty to attack any form of democracy that's working.
Expect more of this BIG government tripe from comrade Brucie, he's steeped in it...
+ for freedom and free markets
- for Regulation (and Comrade Brucie opinions) of free markets
Ah! Your position is clear. You find it acceptable that Switzerland is a safe harbor for the likes of Ali's ill gotten gains.
An interesting perspective on things. Are you sure you want to defend that? Tough sell.
How about you let his former country (you know the one where they kept electing this POS) deal with indicting the bastard and recouping any ill-gotten gains?
Perhaps, he made it all legally during his presidency from 1987 through 2011, this is just his pre-prepared golden parachute?
I know you are aware that the hundreds of millions of people killed under comrades Stalin and Mao happened legally in the USSR and PRC, right?
Come one comrade, be honest and tell us why you really hate the Swiss...
I'm just defending the Swiss for being good bankers which you think stinks.
What really stinks is the US banking system. Until you sort that sack of shit out you put a sock in it son.
Until your US regulators can sort fraud and theft out in plain site of everyone you have nothing to teach nor any backbone/soap box to teach any other country, got it?
Your bankers are completely incompetent and are stone cold bankrupt having to be propped up by US citizens who have given politicians NO mandate to bail them out or award them bonuses for their completely shambolic banking system.
You have nothing to teach the Swiss. US banking is a pile mortgage fraud thieving manue your regulators painting the goalposts and letting the goals in left right and centre. US banking and regulation is beyond a joke. Smell that
I sense that English is not your first language. You confuse the words "you" and "your".
You are correct when you say, "Your bankers are completely incompetent and are stone cold bankrupt....." By this you mean "America's bankers are sinners". Fine, I think most here would agree with you on that. But don't blame me for that.
But then these words, "You have nothing to teach the Swiss" This is directed at me personally. Did you want to do that? If so, I object. I'm a Swiss citizen and can say as I will. I don't think you have to be Swiss to criticize Swiss banks however.
Calm down.
Bruce Krasting
Yes 'you' as in the personal have nothing to teach the Swiss. You've accused them of receiving ill-gotten gains from senior Govt officials. How are they to know anythings wrong until they are indicted or deposed from their country (is that illegal?).
We have a regulatory system that puts the onus on bankers to check if a client is a money launderer or drug washer. How do they check that? It is the duty of the Feds to find them, not bankers. Bankers can only react AFTER the Feds have done their work which they don't.
You endorse regulation and international regulation but neither system has added anything to the industry, just hindered. I've had friends businesses crushed by incompetent and corrupt regulators who were great at their job s and great for their clients.
Regulation is fascism. The addition of regulators is simply to impose the (legal) parasites power base over free businesses to ratchet control, shut you down for any reason, and pervert the free market for larger entities gain.
Regulation is a protection racket for Big Corps who love Big Govt to protect them from the free market. Meanwhile the Regulators have all proven completely incompetent time after time to stop REAL BIG systemic problems.
Your endorsement of more regulation and more restrictions is at best ignorant of the ability of these crones to improve anything and at worst an endorsement for their corruption of the free market.
Your slamming the Swiss for just being good bankers deserves a retraction from you also
Great opening line, thanks so much for sharing.
I don't mean to pry, but do you get beaten up in school a lot?
Your insightful post has won our daily ZH prize of a pound of real gold coins with a rich chocolate center. Just post your home mailing address right here and we'll whisk them off to you immediately.
Why blame switzerland for being good bankers?
What has the propped up sacks of fraudulent thieving shit of US banking got to teach these guys?
Maybe you can teach them how US regulation is working too?
It sure ain't Bin Ali and Mubarak's money! It is illegal to launder money, case closed.
Why blame Switzerland for "secrecy". When here in the US the politicians, bankers and the Feds can commit theft and fraud in plain sight?
+1
Bruce is being point specific. I am sure when the dollar collapses Brucdce will write up on the Bushes/Clintons pulling their funds from their accounts, too.
Bush got away with murder, literally. If he can wage false wars around the planet and walk free from your Feds what have the Swiss got to answer to Bruce for?
What's the problem locking up the frauds of Wall Street, does Bruce see prisons rammed with too many petty crooks to squeeze the big-timers in?
Richard Russel advises his clients to get out of dollar assets! Way ahead of him and most likely you should get out of all fiat currency related assets!! Bankster fraudsters want it all!! Bottom line! If it burns you aren't holding real money!! Got out of the ponzi go round 3 years ago!! Closed out banks accounts, got cash being trashed and turned most of it into silver eagles over a 2 & 1/2 year period!! No debt! No 401k!(Took the 20% hit just to get "MY" funds out of bankster fraudsters hands) Try to put your hands on that 401k cashout now and you'll get paper alright; a mountain of paper work and come up with bupkiss lest you have one foot in the grave! Hardship discharge of money only otherwise you borrow against it!! Tried to get my wifes out after the '08 Fall market crash and redemptions were exiting the market in droves! Best we could do with her 401k was stop paying into it and buy food storage/commodities with that paycheck stipen!! That move has paid great dividends as inflation chews away the buying power of benron burnokio bucks!! Litmus test with daisy chain implosions of weak nations getting eaten alive by inflation will be seeing it wash ashore in Americon'd!! Certainly a benron 20 dollar FRN won't doesn't buy as much in the past so it won't in the future! On the other hand a silver quarter melt value will put as many FRN's in your hands to buy what you could years ago, today, and into the future as the dollar dies!! Near dead now as it's only intervention by dead head feds to leave it in an illusion of having an intrinsic value!! Paper fiat races to zero continually and most AmeriCON'd can't wait to buy their next losing lotto ticket with a devaluing cash; fast becoming trash!!
Sorry, I can't read anything with that number of exclamation marks!!!!!!
+1,
Edit:
[Tyler Durden] advises his [readers] to get out of dollar assets! Way ahead of him and most likely you should get out of all fiat currency related assets!! Bankster fraudsters want it all!! Bottom line! If it burns you aren't holding real money!!
Got out of the ponzi go round 3 years ago!! Closed out banks accounts, got cash being trashed and turned most of it into silver eagles over a 2 & 1/2 year period!! No debt! No 401k!(Took the 20% hit just to get "MY" funds out of bankster fraudsters hands) Try to put your hands on that 401k cashout now and you'll get paper alright; a mountain of paper work and come up with bupkiss lest you have one foot in the grave! Hardship discharge of money only otherwise you borrow against it!! Tried to get my wifes out after the '08 Fall market crash and redemptions were exiting the market in droves! Best we could do with her 401k was stop paying into it and buy food storage/commodities with that paycheck stipen!! That move has paid great dividends as inflation chews away the buying power of benron burnokio bucks!!
Litmus test with daisy chain implosions of weak nations getting eaten alive by inflation will be seeing it wash ashore in Americon'd!! Certainly a benron 20 dollar FRN won't doesn't buy as much in the past so it won't in the future! On the other hand a silver quarter melt value will put as many FRN's in your hands to buy what you could years ago, today, and into the future as the dollar dies!!
Near dead now as it's only intervention by dead head feds to leave it in an illusion of having an intrinsic value!! Paper fiat races to zero continually and most AmeriCON'd can't wait to buy their next losing lotto ticket with a devaluing cash; fast becoming trash!!
Vancouver a "safe haven"?
Well, perhaps, until some blogging fuckwits start advertising it and cocking it up for those of us already here.
Call a place paradise and kiss it good-bye.
If it makes you feel any better I'd call Vancouver a lot of things before calling it either a safe haven or paradise. Wet grey and congested for starters.
Not to worry, Mish, Rosie and a few others like Garth Turner have been doing their best for the past couple of years to convince the world that Canada is in an asset bubble - particularly Van with its real estate.
Apart from that and to the comment above, as water becomes the single biggest issue facing the planet circa 2525 there just might be a few extra stars added to Old Glory
Not if the EU/China/Russia doesn't get there first.
Canadian Officials are already cutting a water deal with EU. As a bonus, the agreement will carry decrees that decimate what is left of that country's sovereignty.
Heh, I bet most Cdn.s don't even have a clue...
http://news.guelphmercury.com/videogallery/753523
If you prefer text:
http://www.canadians.org/media/trade/2011/14-Jan-11-a-2.html
Bonne Chance Canukistanians.
Yeah, yeah. That's what they said about Cleveland too...
You are right, as well as ahead of the curve (great job tying in Swiss banking with the Fall of the Middle East): anything could happen nextt week.
Volatility traders betting get their jocks on. Everyone else order some popcorn. It is going to be a wild week or two. Fiat may not make it out alive.
Oil prices will likely spike, and that is with the Suez fully functional. If the suez closes, there may be a run on fiat. Everyone will want to spend it on real things, or at least paper commodities.
The funny thing is that oil could crush the dollar. Imagine that, the dollar ending its reign as the world's first fiat reserve currency, ending the world's financial system at the hands of crude. It is the perfect storm. Here we sit on the plataue peak while Bernanke sets fire to the economy. Who didn't think it would come down to oil vs the dollar.
Yet this is not the only focus. How can it be when former Heads of State are running off with entire countries' gold reserves? So what happens to the price of gold when the world finds out there is none up for sale? Supply/demand......is simple as pie.
Great post. Crossing my fingers.
From Bloomberg/Businessweek 1/23/11
A new Swiss law set to take effect Feb. 1 may allow authorities to return to Haiti as much as $7.3 million frozen in Duvalier’s accounts, said Jenny Piaget, a spokeswoman for the Swiss foreign affairs department...
What do you know about this 'new law' Bruce. It was awfully peculiar to see 'Baby Doc' show up in Haiti claiming he only wants to 'unlock these funds' to help rebuild his country.
It makes sense within that mindset. Baby Doc was originally using that money to "build" the country when he was in charge. So he can just pick right up and continue his fine work on behalf of the Haitian people, if only the Swiss would return what was rightfully stolen by Baby Doc and Daddy Duvalier.
Bruce Krasting thinks that he has the right to judge who is a "potentate". Think this through. Is the Queen of England a "potentate"? What about of Netherlands? Putin? Blankfein? Anyone who worked for Blankfein could be a minion of a Potentate. How about Brusce Krasting, has he ever received a banker bonus? Should we disallow the Swiss from banking with potentate minions like Bruce Krasting?
But what is even more galling is that the US allows "potentates" from all over the world bank there, why doesn't Bruce start checking into whether Ali has bank accounts in New York or London?
Bruce, your never ending quest to expose tax cheating is very offputting. Perhaps instead of working to feed the the corrupt system that you obviously benefit from, you should champion fundemental freedoms like financial privacy.
I've got no problem with financial privacy. But there are a few potentates I'm not so happy with....
I just report the facts pal. This is NZZ that reported on this. A leading Swiss newspaper. You know them, I'm sure. Write them your missives.
What about the US, Bruce? Do you really think that your banking system is so pure? Do you think there is no "potentate" money on wall street? What about what Bernanke and his pals at the big banks are doing? What a Stanford and Madoff who got away for decades with a "wink" from your precious SEC that so many tax dollars support.
This is not NZZ indignation, this is east coast liberal indignation. Talk about the pot calling the kettle black.
Oh come on comrade, redistribution of wealth is AOK with you...did you so quickly forget about cutting SS benefits and throwing 80 year olds under the bus?
Go ahead, pull the other one....
Spoken like a nervous potentate.
nervous potentate minion.
Maybe even an impotentate.
What appears to be insinuated in this article is that Swiss banking is bad because they allow people to make deposits into their institutions without prying into the business of the folks making the deposit. Implying that somehow the banks are responsible for the fraud being perpetrated by the depositors.
Banking privacy laws are being targeted by the OECD and have been for decades. Their goal is for no one to be able to keep their personal currency/banking transactions private and away from the prying eyes of the controlling agencies in their respective gov'ts.
One can blame the banks for their privacy laws (which I believe should remain intact for the benefit of the majority of lawful depositors)or blame the individuals ripping off their constituents for their fraudulent behavior.
I didn't think Bruce was passing judgement, just predicting that if the faith in the system is broken money is going to fly out of there faster than the Ben Bernank's ass.
Bingo.
Remember when the Fed threatened to expose all the americans with their holdings in swiss accounts. Problem was whomever initiated this witch hunt failed to realize the american politicians also utilize the swiss for their money laundering. That little stint was quelled quickly.
heh heh another dude named ben runs off with the loot,
i can smell the bagles from here. and his wife looks like
another yenta a la jackie o. show me one head of state who doesnt look like a little kike proxy for the house of red shield. hell even hillary changed her name from rhodsky.
probly dyes her hair blonde like jewess eva braun did.
http://www.iamthewitness.com/
YOu know the Jooz are pretty smart. Maybe Eva Braun did have Hitler's love child and he now is secretly pulling the zionist strings. It would explain their apartheid, racial superiority, and the increasing calls for a final solution to the palestinian problem. Hitler was really a false flag event to discredit anti semitism and establish cover for the zionist state of israel. He just pretended to be offended by rumors of his Jewish ancestry. Those Jooz are so smart! If you control banking, media, and entertainment you rule the world! Hitler as a secret double agent was utterly brilliant!
Your comments are way over my head, but you seem very smart about things. Have you committed your final solution to writing yet? You should write it up and offer it to those worthy and in need. I feel we are on the egde of something big here at ZH so maybe you could publish here first?
Hey Adolf. Your mama's fucking the drywall guy again. Better go upstairs and make sure they're using condoms.
The new CH tourist slogan; Schweiss! Not all Nazi!
Well, maybe China or some other asian country would let their banks become the next safe-box for hot money from all-around the world.
Singapore is where a lot of smart hot money is parked.
I have experience in both Switzerland and Singapore. There is a lot of dumb money in Singapore. Just check out their property prices and get back to me. It might be the global elite paying those crazy prices but this place could be over-run in the blink of an eye and who would intervene to stop it from happening. Blind eye anyone? Dumb money is there and thinking it is the safe haven Switzerland of Asia. Fail.
Yup. That seems like a MUCH better bet.