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Another Bear Awakens
I talked with a Swiss banker from Geneva today. The conversation went like this:
BK – Are you guys still seeing boatloads of money coming in from outside the country?
Geneva – Yes, the money is still coming. In the past two weeks the Swiss National Bank (SNB) was forced to intervene in support of the 1.20 peg. The amounts were big, over EUR 20 billion was purchased.
BK – What is going on at the borders? Is money still coming in by car?
Geneva – Yes. The border guards can’t search every car. The latest development is that the Border Guards are now searching some of the cars that are leaving Switzerland.
BK – Why would border guards stop cars that are leaving Switzerland? What are they looking for?
Geneva – Mules. Professionals who smuggle money. It is very easy for a Swiss to go to a bank and withdraw a large amount of paper money. The mules bring the cash over the border to French and Italians who want Swiss Francs. The Mules also bring Euros into Germany for those who have private accounts in Switzerland who want cash to spend.
BK – Is the paper money coming in and out of the country being done in large amounts?
Geneva – Yes this is big, but compared to the bank transfers that go on, or the amounts held in Euro Swiss (rolling FX positions) is much much larger.
BK – Where is the money coming from?
Geneva – From all over the globe, but not the USA. If an American comes in, we just show them the door.
BK - Where does the most money come from, France or Italy?
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Geneva - In the past few weeks we have seen more inflows from Russians than any other country.
BK – Russians? That’s surprising. What do you attribute this to?
Geneva – It’s politics and economics together. People are afraid.
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The following looks at the performance of the Russian Ruble versus the dollar the past few months. Not pretty at all:
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This ain't about Greece any more folks.
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Arbitrage?
Russians have been all over news buying wildly expensive properties. And Brits too, like the hideous Ecclestone girls. And a brit paid 40 mil for 3 acres , Gulf front, in Naples Florida.
Maybe a leading indicator of a collapsing curency.
all currencies are collpasing soon...
cept Tangibles! AU/ Ag ftw~
You do realize that if currency fails at the Macro (Global) level, your PM's will not do you one bit of good, right? JiT will shut down, mass rioting, no more energy deliveries, etc. No one will care if you have PM's because nothing will exist on a GLOBAL level, ie tangibles/commods, that will be available for sale. Even if you do find something for sale it will be based on BARTER of like commods, something someone can use for the here and now, such as one chicken for a bushel of corn, etc. The PM mental masterbaters, from what I continue to read, have really never delved into the affects of a global collapse, nor have the researched micro events, and juxtaposed them with a possible macro - global event.
SO WHAT IS YOUR SOLUTION-EINSTEIN? -What are you smart people doing?
My solution? Why should I share given your caustic words? The smart people won't tell you what they are doing.
Read early American frontier histroy. What you say is correct, but Spanish silver was readily accepted along with barter. That's why a lot of PM guys stock up on silver coinage. At one time, it was money in America. It will be again.
Ok, the frontier and today are two seperate beasts ie structure, and population, energy dependency, etc. Most were selfsufficient back then. Either by trapping, bartering with Indians who grew something, pelts, etc. Todays farms are basically corporate functioning at levels not obtainable unless it were for CHEAP oil. No one grows anything. No one is selfsufficient. Almost all products are shipped in from overseas. That, and the metallity of today - is where is my free shit, or I'll take what I want. If and when the macro global currency fails, barter for tangible commods will be the only viable method. This will be within the realm of people literally going ape shit to survive.
Unless the FCA/EZV guys are searching for the paper certificates to the uncollateralized BWCGTFBCWT obligations- they're wasting their time... since Customs never searches the cars with EU diplomat/kleptocrat plates or the associated airport baggage. Even the low dollar kleptocrats from the banana republics learned long ago that when not using a legitimate corporate shell and an instant electronic transfer that it’s best to simply avoid customs when crossing international borders.
The last couple months there has been an annoying increase in bad drivers with EU plates around Zurich, I liked it better when they stuck closer to Geneva and their high kleptocrat altar at Palais des Nations.
Must be a good mule if it made it all the way from Russia.
The border guards will certainly stop you if you smoke a king size cigarette.Your pack may be worth 10,000 Eur.
This should be an olympic sport! What country can win the race to the bottom in devaluing their currency. I still bet ole uncle sam will save it's welfare/afscme/socialist classes and break the back of it's savers through devaluation and zirp before any of these other's can.
What savers? They were taken out in the 1990's. All that's left are dollar/debt holders, a non-savable asset.
Besides, it isn't whose savers are gone first, but last. Luckily for TPTB, the mass of those people are highly religious, and thus susceptible to manufactured conflicts that have been going on for centuries.
Meanwhile for us godless Westerners, we get more Progressive white guilt about "doing our part globally."
Wasn't Russia ditching their USD holdings here recently? I bet they wish they hadn't now.
And what about all the gold buying in Russia...guess those guys ARE happy to be holding a real asset.
Im tellin' ya.. you cant make this shit up...
cats and dogs living together...
www.weebls-stuff.com/toons/aaaaaaaaaaaaahaha/
all paper.. is soon to be toilet paper!
ruble going down probabley means oil is heading lower and is expected to stay low.
and/or that a few oligarchs are about to die under "unusual circumstances"
I think we should be proud that we managed to go through this transition without war, like the last time.
It's almost over so the rebuilding can start soon.
Like after the last time, the average person will come out much better, and the top a LOT better.
Europe is the place to be.
And it's sunshine,loppypops, rainbows....
nothing has been sunshine, loppypops, rainbows in the past decades
we're killing the planet, and are becoming deranged as a species
all i'm saying is, a new round is starting, the end is not coming, just another round
Morph, not start over.
OMG, that is so funny!
Never mind that this is a reurn of the late '30's.
well, mostly it's a rerun of the 70's, for Switzerland. Long story of French, Germans and Italians all fleeing from their taxmen and the financial controls of that time.
I think even Sophia Loren was once caught as a "mule on it's own account" at a routine border control.
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Russian Money? I thought a lot of it is in banks in Cyprus, the Tax-Heaven-Caribbian-Isle-of-the-Med. Is this money fleeing, too?
Wish any of that were true.
We are just now getting into the teeth of this crisis. Everything up to now was theatre and positioning.
The real action starts after US elections. Whoever gains the Presidency (and it doesn't matter who it is) will set loose the chain of events that destroys the world as we have known it.
After November, know where your towel is.
http://en.wikipedia.org/wiki/Towel_Day
Hey you sass that hoopy Ford Prefect? There was a frood that really knew where his towel was. +1
They may have some issues for the moment, but as their the ONLY solvent soverign left with no GDP to debt problem, they are in the catbirds seat, globally.
It has it's downsides for them.
In fact, I bet they wish it wasn't happening.
Thought this was another wookie story, but then realized it's before noon.
+1 (Golf clap)
BK – Where is the money coming from?
Geneva – From all over the globe, but not the USA. If an American comes in, we just show them the door.
So, the Swiss still do discretionary banking, just not for Americans. That's reassuring.
This is a long standing policy caused by our wonderful bureaucrats at the IRS. Swiss banking law prohibits banks from revealing information about their clients. American tax law prohibits banks from NOT revealing such information. Since Swiss banks obviously have to have an international (American dollar) presence, the only solution to the Catch 22 is no new Swiss accounts for Americans.
I went through the process a couple of years ago, but didn't do it. I would've had to travel to Zurich and open an account in person, with a $500,000 minimum. Only a few Swiss banks were accepting Americans at all. I'm glad I didn't bother. I would have made some cash for few months, but then the SNB decided to control the rise of the Franc, so I wouldn't have much of a gain. The reality is that the banking system is the problem, regardless fo the country. Get your money out while you still can.
BTW: Also on the restricted list: North Koreans and Nigerians. Welcome to the bottom rung of humanity.
The easy way around this is just owning physical Swiss currency. Those 1,000 franc notes don't take much room behind the toilet paper holder in the bathroom either. They also don't have any W9 or 1099 forms either. They might even pay a better interest rate than some Swiss bonds, ie zero percent.
I can't help but wonder if there's a profitable market for these. It's still legal to sell them in the U.S. That may change if they get popular.
FeralSerf
The easy way around this is just owning physical Swiss currency
Why would one do that?, they pegged it to the Euro.
Oh, I'm well aware. But you can buy Swiss francs at home.
Notice how the IRS anticipated a rising demand for hiding, not just protecting wealth.
It's almost like they know what's going to happen next...
They know what's going to happen next because they already know what they are going to do next.
The drama is no longer about little things. Assuming it ever was about little things. It is now only about very very big things.
"It's almost like they know what's going to happen next..."
I think its pretty clear... that they do....
Yeah. That's why they ordered so much ammo.
I fully expect the US Govt to attack and wipe out a few million Americans.
Yup, changing the levels for trading halts from 10, 20 & 30% to 7, 13, & 20% is one clue that they are preparing for another "Lehman moment."
Sux.
All I can say is oh shit. The day that people realize that there is no longer a central bank put under the market is the day we get a massive crash. Until then, carry on...
Interesting story. It isn't unusual for Russians to transport paper currency across the EU for small gains - ask anyone at the VTB, but I dare say the Rouble will bounce back with a vengeance if/when oil prices hit the highs again later this year after the elections. It's already gaining against the EUR/USD basket as I type, although that probably has more to do with the recent Russian central bank sell intervention on Friday.
I'm not sure whether the guy in Geneva is saying the paper smuggling is bigger than electronic transfers or not. If he is, then that would be unbelievable. If true, it sounds like something momentous is about to happen.
He says that the paper is smaller than the electronic. Sorry for the poor translation.
No biggie, & thanks mate for all your efforts on our behalf.
Money mule - another job opening closed to Americans! It ain't fair us being stuck with smuggling dope...
They took our jorbs!
BTW, I chuckled at the "showing the Americans the door" response.
Too bad they didn't do it before the Gold Wars (as Ferdinand Lips has written about), but rather, after sound banking had been destroyed.
Read the HIRE Act of 2010 (the U.S. law which forces Swiss banks to show Americans the door) and you won't be chuckling.
It's worldwide, not just Switzerland.
Read the HIRE Act of 2010 (the U.S. law which forces Swiss banks to show Americans the door) and you won't be chuckling.
Canada,and Australia still will do business and open accounts for Americans(show up in person for Canada),
Don't worry. Someday they will need poor Americans to smuggle in pesos from wealthy Mexico.
Don't worry. Someday they will need poor Americans to smuggle in pesos from wealthy Mexico.
And I KNOW the Mexican Maf,er' Guvmint will take kindly to Amelicans crossing illegally into Mehico.
Irving Berlin - Russian Lullaby
Where the dreamy Volga flows
There's a lonely Russian Rose
Gazing tenderly
Down upon her knee
Where a baby's brown eyes glisten
Listen
Ev'ry night you'll hear her croon
A Russian lullaby
Just a little plaintive tune
When baby starts to cry
Rock-a-bye my baby
Somewhere there may be
A land that's free for you and me
And a Russian lullaby