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On Bullying Friends
Lost in last week's Taper Talk and generally bad markets was a development that I think has some legs. The Swiss Parliament basically told the US Department of Justice to fuck off. I'm very surprised by this outcome - I would have bet against this result. There will be repercussions.
The details can be found here. The quick story is that after many years of pressure from the US DOJ, the Swiss Government was forced to offer up new legislation that would (1) end banking secrecy, (2) force the Swiss banks to open their books, (3) force the banks to pay pay fines and (4) obligate the banks to identify the names of specific employees who assisted US customers in evading taxes. Eveline Schlumph, the Finance Minister and former President, championed the proposed laws in the political debate. She fell flat. The Swiss said "no" with a 126 to 67 vote.
I believe that this outcome came as a surprise to the tough guys at the DOJ. They have been beating the Swiss Banks to death for years. The most recent example is Wegelin Bank. This 270 year old bank was forced into selling its "good' assets at a cheap price and then just shutting down what was left in a matter of weeks. That's how powerful the DOJ is.
It's 100% certain that the DOJ is going to retaliate for the "No" vote in Switzerland. It has to; there is too much at stake. The only question is which Swiss Bank comes under the DOJ rifle scope. I think the DOJ is going to come out swinging for the fence and target a big bank. Credit Suisse, Julius Baer and the Cantonal Bank come to mind.
If the DOJ indicts a Swiss bank, it can prevent it from making dollar based wire transfers. The DOJ will order all US banks to not make transfers on behalf of the targeted institution . At that point, the bank is functionally shut out of all dollar based business. No global bank can operate for long without the ability to make transfers in dollars.
This possibility has been discussed openly in Switzerland. That's why I'm surprised at the vote outcome. The Swiss parliament has taken a step that could result in a hammer blow to one of the country's important institutions.
A fallback position for a Swiss Bank that is indicted is for the Swiss Central Bank (SNB) to assume the role of the indicted bank, and make all of the necessary dollar based transfers on its behalf. The SNB's Thomas Jordan has indicated he's lukewarm to this approach. Jordan understands that if he pushes against the DOJ, the outcome will be an indictment of the SNB.
It's possible that some last minute deal will be pulled out of the hat. But any attempt by Schlumph to ram through a solution over the objections of the Swiss Lower House will create a different set of problems. I'm not sure how this ends up. There are several scenarios that lead to trouble. The US Treasury has already labeled the SNB as a currency manipulator; the peg policy of the SNB could come under more criticism if the Swiss don't play ball with he DOJ. The thought that the SNB could get hit with an indictment if it comes to the aid of an indicted Swiss bank, is a black hole of uncertainty.
I think that most Americans would support the move by the DOJ to go after untaxed offshore accounts. A very small group of people are evading taxes; that means that everyone else has to chip in for them. The Swiss understand this, but they do not like being bullied. Make no mistake, the DOJ is playing the bully in this story.
Assume that Canada told the USA that it had to change its immigration laws. That this had to be done ASAP, and under terms that were not at all acceptable to Americans. If the the USA did not bow-down and accept the Canadian terms, then Canada would end all oil exports to the USA and divert the crude to China.
I don't think that scenario would go over very well in America. From the Swiss perspective, the DOJ muscle is no different.
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The world has become Greece where as governments become more insolvent their only recourse is to transfer private wealth to their coffers. The more they tax the more people will try to evade them and the more punitive tax collection will become. As with all other forms of organized crime the one thing you don't want to do is get between them and what they consider their money. The US is the biggest bully on the block but the other governments are largely going along because they are broke too. We have seen the broke Europeans saying as much when speaking about all of the assets available to their balance sheets when taking private property into consideration. I believe that much of the intelligence gathering happening now is as much about monetary controls as security.
<<I believe that much of the intelligence gathering happening now is as much about monetary controls as security.>>
No expert but FWIW I believe you are right about this. It's a question now of who will last longer - 'tax evaders', or the govvy spy network. I expect the surveillance funding to run out first.
Good for the Swiss- they see the writing on the wall as far as the US goes. Bruce's bleeding heart socialism shows through w/ the fact that "everybody should chip in as far as taxes"- fuck that -anybody with half a brain and the means to do it should try to evade paying even one pfennig in taxes to the fucking cocksucking leeches in the govt.
Every citizen who successfully extricates themselves - from the "taxes" that the scum at the top use to try to imply 'consent of the governed' - has my respect. Where fascists write/enforce the 'laws', an outlaw is what anyone of principle should aspire to be.
In a world where 'law-abiding' has come more and more to mean 'fascist-enabling', tax evasion is part of the (still-fledgling) Resistance.
It is the duty of every family-head to legally pay as few taxes as possible.
It has simply become a system of shakedowns. Do what Kennedy, Kerry, Bush and Rockefeller do:
Set your estate and assets into a system of Trusts.
This will free up money to give to vetted & worthwhile charities and investments.
They don't care a lick for your family. Why should you care for them?
Agree. There may be a better way of not even having to do that. I came across these sites this weekend and kinda got lost in them:
http://newyorkcommitteemen.com
http://free-school.com
http://1215.org
A New Hope?
That first site is very interesting and if the real deal they have what appears to be an actual workable remedy/lawful procedure that can be replicated throughout the country and used to start to clean up this shit show here in USSA, starting at the county and state level via the common law Grand Jury.
The other parallel track is to begin to sue gov't officials for violating the people's inalienable rights. This can be done individually (death by a thousand cuts) or in a group (class?) using Common Law courts. Ha, but we don't have any anymore of those you might say. There's a procedure to turn most courts into common law Courts of Record. It apparently has been tested and succeeded many times in CA by Bill Thornton of 1215.org and is now being tested with at least one lawsuit in NY with a 2nd Amendment case currently in play against Gov Cuomo, the State Senate and Assembly.
First site also has past webcast shows available and some audio of Common Law classes by Bill Thornton of 1215.org.
I'm still going through the site and evaluating everything for myself. It will take a while since there's a lot of material. Since I'm not versed in law it could all be horseshit. But so far this seems different from other sites and my gut tells me this has legs.
Note: I'm no law expert.
Wonderful!
Perhaps the Swiis will decide to circumvent the $USD via the BRICS Development Fund and render its world's reserve status as null-and-void, eh?
The relationship between nations is no different than individuals.
No nation likes to be ordered around as most people resent it.
I don't blame the Swiss. Security of bank accounts has been their cornerstone.
The DOJ often oversteps its bounds.
Good for the Swiss.
Cornerstone indeed. For decades. Centuries. TPTB don't like secrecy. How to pry open the legendary safety of Swiss banks, their national identity ahead of watches chocolate and cuckoo clocks? Declare a "war" on drugs, pass a Bank "secrecy" [unsecrecy] Act. Define "money laundering" to include Swiss banking and attack, attack, attack! Start a "war" on "terror". Leave the definition of "terrorist" vague and define aiding and abetting to include Swiss banking, and attack, attack, attack! If that doesn't work, send the DOJ out to apply the fulsome leverage of the "mightiest nation on earth" to destroy the little country's capability to serve as a financial center and one of the truly neutral states in the world.
But wait! The USA is no longer number one. Incredibly, it has squandered its influence and leadership, its financial hegemony and its strategic leverage in the world. It's no longer the elephant in the room; it's a walabee who thinks it's an elephant (or an elephant wannabe walabee). When the Russians and Chinese put the final nail in the coffin of the dollar as a reserve currency, the Swiss will be holding the hammer.
When you step back, you will notice that our position in the world was inadvertently moved to the edge by the Bush administration and has been deliberately pushed off the cliff by the Obama administration. The U.S. is losing its capability to bully. Very soon, such attempts will merely piss people off. The Swiss parliament is probably saying that now.
"TPTB don't like YOU HAVING ANY secrecy" fixed it.
"...to the tough guys at the DOJ..."
Have to disagree with your opinion of these American apparatchicks, pseudo tough guys at best. More like acquisitive little cowards hiding behind a corrupt facade of self-righteousness.
I think that was the point.
It is one thing for the American legal system to be corrupt and shoddy within the US boundaries. (how many cases ever get to an honest trial)
Quite another for the lazy, sloppy plea-bargaining crooks to try and plead a case in an international court.
Like their incompetent extradition paperwork for Snowden shows, they have forgotten how to play by the proper rules
Trying to shut down Swiss Banks (today Switzerland, tomorrow the world), might be the tipping point for the rest of the world to day go fork yourself.
agree 100%
just like when the US tried to play hardball with nations doing business with iran to buy oil, the move just pushed others away from the dollar, and towards yuan and gold. it was another nail in the coffin of the dollar as reserve currency.
likewise, the more they try to bully others who use the SWIFT system, the more incentive they create for an alternative to the SWIFT and the dollar.
Yes, what Jim Willie has been saying for a long time
The non-dollar framework is already halfway in place, swap agreements, the BRICS bank ...
Just a few more acts of gross bullying stupidity by the US government, and it will be implemented
And the world will celebrate as America's dollar collapses
---
The 'Day the Dollar Die', prophetic 1979 reggae song by Peter Tosh, on his album 'Mystic Man':
« The day the dollar die, Things are gonna be better
The day the dollar die, No more corruption
The day the dollar die, People will respect each other
Finance ministers groaning, Unemployment is rising, And I hear my people crying ...
The day the dollar die, It's gonna be nice ...
The day this here dollar die, There be no more inflation
The day the dollar die ... We will love each other ... »
http://www.youtube.com/watch?v=EtwmjcsQi1E
Stupid crap. why the hell should I pay more taxes because some assh.... fellow american has bought off a Swiss banker? Let them be indicted or worse - jail them. Those shits are making money on our clepto bankers doing criminal deals with Swiss scum. Oh hell; just shoot the pricks.....
If DOJ wants to go after our tax cheats, then they should do so without telling another country how to run their finances! It is not Switzerlands obligation to make sure US citizens pay what they may or may not owe to uncle obammy......
What people do not understand is the largest tax haven in the world is the United States. In Delaware and Nevada you can create a company and never declare who the owner is. Then, you open an account in the US, wire in some funds, and presto you have a undeclared Mexican, undeclared Irish, undeclared Argentina, etc. etc. account. We have more undeclared funds within the US than there are in Switzerland. Then, we have the exception to money laundering rules for home purchases, great for real estate commissions, but another way to take that Russian Oligarch's funds and purchase a nice Palm Beach or New York City home without declaring the funds in the jurisdiction where they were earned, and should be delcared. The US is a do as I say not do as I do country - and this is why the rest of the NSA, CIA, SEC, FBI employees need to follow Snowden's lead and bring the government back to the people. It is clear the 40% obese couch hugging slurpy drinking SUV driving American people can not be bothered.
I tell the Swiss, this is your time, this is your last chance. I am sitting in Geneva looking out my office window, and what I see does not resemble Switzerland in 2005. If you wait any longer, if you roll over anymore and let the US have their way with you, in 10 years this country will be gone the way of Italy, France and Spain. Not horrible, but you are losing everything special about Switzerlnd.
Why should I have to pay taxes because you and your ilk want government?
While I get his sentiment, the underlying implication is undeniable.
All hail the state!
We should send the IRS after him for paying his maid in cash, or the neighbor kid for mowing the lawn...
best comment of the whole month.
The black hole that is the US government will suck up anything it finds hidden in Switzerland, but you are mistaken if you believe it will make any difference in your taxes. Its needs grow ever greater.
It's insights like this that gave ZH the 1B hits.
I hope its credit Sw.
They were the fucks behind the tvix fiasco
I hope its credit Sw.
They were the fucks behind the tvix fiasco
DOJ indict the SNB?
LOL
And just how much faster does this administration wish the dollar to become an asterisk* global reserve currency
* As in Used to Be, as in fuck it, we'll clear world wide in something other than the Greenback.
But wait there's more....
Don't answer the above question because I'm absolutely certain that for the sake of a political win regarding transparency (of which ironically, there is fuck all none in the US government) they will fuck it up so bad that other nations will simply abandon the Greenback.
Nobody needs that shit from the Americans.
After all, it is the foreigners holding dollars that are the ones going out of their way for the Yanks, not the Yanks helping out the rest of the world.
Bon soir American global economic hegemony is the risk
So what'll the US do if everybody else says they'll just use another currency?
And no, no horseshit about it can't be done....
Then the US is the one left out of the world trade.
Oooops!
If one believes that Obama's goal is to beach the USSA on the shoals of has-been empiricism then what you speculate could certainly be the goal of such a DoJ attack, not a consequence. Think about it for a minute.
Everything these people do is ostensibly for the greater good but always turns out to be detrimental to the USA. Chasing tax evaders sounds like good cover for pushing others to dump the dollar.
No "oops" about it.
Intentional.
There's gold - and chocolate in them thar Swiss Miss hills.
Who needs fakey bux in the new world currency order ?
Nowbuddie, buddie !
I heard a rumor that Toblerone is to be the new reserve currency. (foil-backed)
Fondue is Gold.
Why doesn't the DOJ pick on the Caymans...where all of the shell corporations are located?
I guess the Swiss must have pissed off one of the Masters of the DC Minions.
Congratulations, Bruce. I have not held out much hope for Switzerland but we'll see whether this show of sovereignty lasts. The cynic in me wonders which of the oligarchs would have been compromised by handing that information over.
For now, good news is good news and I'm glad there's a nation that still has a spine in the 'western' economies. Gives me hope that others may follow suit, and/or the Dark Empire's Dollar may finally be collapsing for real. Do you suppose...?
PS: Bruce, are be able to elaborate more on what kind of legs this has? I know it's all speculation and not really part of your article but that's why God created a comments section!
There afraid because they could losw hundreds and hundreds of billions of dollars overnight in regard to deposits.
snowy is giving everbody a set....ride on...
Wel, most people obviously could care less what the DOJ does
DOJ - seems to be an oxymoron doesn't it?
When nothing is make sense anymore, consider desperation of despotism. Now all is make sense.
"Assume that Canada told the USA that it had to change its immigration laws. That this had to be done ASAP, and under terms that were not at all acceptable to Americans. If the the USA did not bow-down and accept the Canadian terms, then Canada would end all oil exports to the USA and divert the crude to China."
Assume that Mexico told the USA that it had to change its immigration laws. That this had to be done ASAP, and under terms that were not at all acceptable to Americans. If the the USA did not bow-down and accept the Mexican terms, then Mexico would, well, what?
No more Canuck hockey players for the NHL in the US. and no more cheap whores in Texas.....
Parliaments and democracy are such quaint concepts these days. I think we can assume the executive branch of Swissy will find a way to implement what the US/NWO wants.
i hope you're being sarcastic...
otherwise, your ignorance shows. ;-)
Seriously! People still think their Bank account info anywhere on the planet is secret? I think the NSA would disagree. They are just looking for a way to bring this account info out in the open without having to resort to the old "Issue of National Security" ruse.
you have heard of FBAR?
...and it's great to see more journalists using the "F" word