100 Billion Reasons To Have Non-Reportable Assets

Authored by Simon Black via SovereignMan.com,

In early March 1938 in a dusty corner of the Arabian desert, Max Steineke finally had the breakthrough he was hoping for.

Steineke was the chief geologist for the California Arabian Standard Oil Company (CASOC), a venture owned by what we know today as Chevron.

And he hadn’t had a lot of success despite years of effort.

Steinke was convinced that massive oil reserves were beneath the sands. He just couldn’t find any.

His prized oil well, what was called Dammam #7, had been riddled with mishaps, accidents, and delays, and it was costing the company a LOT of money.

Steinke was about to be shut down when, finally, on March 4, the well started gushing. And Saudi Arabia was never the same.

Today oil constitutes more than half of Saudi Arabia’s GDP and more than 90% of government revenue… and it is the reason why Saudi Arabia is one of the world’s richest nations as measured by per-capita GDP.

But all that success also comes with risk: what happens when the wells run dry? Or when the oil price falls?

That’s what they’re dealing with now.

Saudi Arabia has been in and out of recession over the past few years due to the steep decline in oil prices. And the government is desperate to raise revenue.

Last year the Saudi government announced “Vision 2030,” a long-term plan to diversify its economy and reduce dependence on oil revenue.

The plan includes developments like a new beach resort on the Red Sea where women will be allowed to wear bikinis. This is pretty forward thinking, folks.

The government also announced that it will sell a portion of the national oil company, Saudi Aramco, through an IPO on a major stock exchange– a move they believe will generate $100 billion for the government.

But none of these options fixes the short-term problem. Saudi Arabia needs cash. Now.

So over the past few weeks they’ve found their source: theft.

Under the guise of a ‘corruption crackdown’, the government of Saudi Arabia has arrested hundreds of its wealthiest, most prominent citizens, and frozen more than 1700 bank accounts.

The government claims that these men illegally acquired their wealth through graft and corruption.

Now, to be fair, it’s true that there’s an enormous amount of corruption in Saudi Arabia.

I lived in Riyadh years ago when I was a young intelligence officer, and the corruption was obvious from Day 1.

For example, I remember mid-level Saudi army officers explaining how they would accept bribes and kickbacks to award small contracts to local suppliers.

These were military commanders who were essentially stealing from their own units.

For us it was unthinkable. But for them it was normal. They discussed it openly with each other, as if they were trading tips on how to steal even more.

Saudi billionaire Prince al Waleed (one of the people who has been arrested) also used to speak quite candidly about how he made his initial fortune through bribes and kickbacks.

So it’s clear that a lot of people in Saudi Arabia have made money in illicit ways.

It does strike me as a farce, though, to see extremely corrupt bureaucrats and politicians arresting corrupt businessmen… and then confining them to the very swanky Ritz Carlton hotel in Riyadh.

The timing is also suspect– the Saudi government needs the money and cannot afford to wait for their long-term plans to generate income.

They’ve already started borrowing pretty heavily, issuing close to $40 billion of debt in a single year– that’s a big chunk for a country with a $650 billion GDP.

But they know they can’t keep borrowing forever… hence the ‘anti-corruption purge.’

They’re now telling their captives that they’ll be free to go if they ‘voluntarily donate’ 70% of their wealth to the government.

Estimates vary for the amount of money the government will bring in through this theft; the lowest amount I’ve seen is $100 billion (again, an enormous sum in Saudi Arabia).

The Wall Street Journal reported that the Saudi government is targeting as much as $800 billion… an amount that’s larger than the entire Saudi economy.

To put that number in context, it would be like the US government seizing $22+ trillion of Americans’ wealth– more than the value of every company listed on the New York Stock Exchange combined.

All of this, naturally, is taking place without any trial or due process. They’re just seizing and freezing assets.

If you’re thinking, “Thank goodness I live in a free country where that would never happen,” think again.

This is really no different than Civil Asset Forfeiture in the Land of the Free, the legal framework where countless federal, state, and local agencies have the authority to seize and freeze every asset you own without even so much as charging you with a crime.

(They can even take your kids away!)

I think there’s a pretty big lesson here: desperate governments almost invariably resort to stealing from their own citizens.

And that’s why one step in a Plan B is to have some non-reportable assets.

The government knows about every local bank account you’ve opened. They know what’s in your domestic brokerage account. Or what real estate you own.

And they can seize it all in a heartbeat.

So it’s a good idea to have a few assets that they don’t know about… assets that you’re not legally required to tell them about– like an offshore bank account.

This includes things like physical cash, precious metals, and yes, cryptocurrency.

You won’t be worse off for having some non-reportable assets– especially cash.

Think about it– it won’t make a difference if there’s $20,000 in your bank account or in your safe. It’s not like the banks pay interest anyhow.

But if the worst happens, this emergency savings could be a life-saver.

Do you have a Plan B?


Theosebes Goodfellow HockeyFool Mon, 11/20/2017 - 18:57 Permalink

In the cult of booty, all booty crimes are acceptable, as the recent occurrences in kingdom of Dar al-Saud are proving. That said....

All governments are corrupt. It's the nature of power. If men didn't "sin", (transgress against one another), they would have no need for it. Sadly, the cult of the god in Mohammad's head is slightly more "transgressional" than most, but not by a whole lot.

As Mel once uttered, "It's good to be king."

In reply to by HockeyFool

MisterMousePotato Theosebes Goodfellow Mon, 11/20/2017 - 19:11 Permalink

"For us it was unthinkable."He wrote that, didn't he? I mean, really, really wrote that?To be sure, it isn't clear whom he meant by "us" (American intelligence workers in MENA? Americans in general? U.S. Military personnel?), but I got the impression he was referring to just all us normal Americans; that none of us could ever even imagine that someone in government - whatever branch - might parlay whatever power that individual might have into personal gain at the expense of the American people at large.Hm.Frankly, that's about all I see.

In reply to by Theosebes Goodfellow

August HRClinton Mon, 11/20/2017 - 22:16 Permalink

This is just about the only way a US citizen can succesfully boycott the IRS via non-reporting of income.Ideally, the second passport would show a different name from the US passport.  Unfortunately, almost all decent passports will display the holder's place of birth, thus showing any financial institution that cares to take a look that the bearer is a US citizen... until he can prove otherwise.  And  most reputable financial institutions will care to take a look.As Simon has pointed out, US citizens can legally avoid US income tax (and other countries' as well) if they retain foreign-earned income in an offshore structure, typically a corporation... just like Google, GE etc. do.   So now you know why Simon lives in Chile....

In reply to by HRClinton

Not Too Important Mon, 11/20/2017 - 18:02 Permalink

Great idea until you get caught, then you're fucked.Although, it seems the ultimate goal of LE Asset Forfiture is for LE to live off the land when their budgets dry up. Sessions is even writing training materials on how to do it on a grand scale.If you haven't seen the movie or read the book (better) - 'The Road', by Cormac McCarthy. The Feds are getting ready for it, and training the states.With Mueller investigating the Obama Administration, we've got the criminals investigating themselves. This isn't going to turn out good for us.

Kprime Mon, 11/20/2017 - 18:06 Permalink

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Two-bits Mon, 11/20/2017 - 18:09 Permalink

Metals, crypto, cash, booze, cigarettes, gasolineEach can get you out of a jam but the key is having the right asset at the right time. Why not hold them all? 

attila404 Mon, 11/20/2017 - 18:13 Permalink

"where women will be allowed to wear bikinis"They're gonna start letting the whores run around. SA is finished, just like the western world.

HuskerGirl Mon, 11/20/2017 - 18:19 Permalink

I was going to point out this is no different than Civil Asset Forfeiture before I got to that point in the article. But the first move by the US Government is likely going to be to move retirement plans away from "evil" Wall Street into a "safe" government investments like Social Security. It's estimated there is over $26 Trillion in retirement accounts.  It's too rich for our government to keep their hands off of it.  And the sad thing is all those saps who haven't saved a dime for their retirement will be all for this.   And the proposals have already been made to do exactly this, starting with 401(k) accounts.  

roddy6667 HuskerGirl Mon, 11/20/2017 - 20:12 Permalink

First the gov will set up a system where failed pensions and 401K's will be invested in gov't bonds. Nobody will complain about this. Then, the gov will put "risky" retirement money in "safe" gov't bonds. Very people will complain about this. Then, one morning America will awake to find that ALL retirement money of any kind is now in a gov't program where it is put in gov't bonds. When you retire, you get a pension from the fund like an annuity. The gov't then proceeds to spend the $26 trillion they just stole from all americans.If you don't believe me, then just make a mental note and remember where you heard this first.BTW, income properties, a good retirement plan,  would probably fly under the radar. Cash, stocks and bonds will be seized.

In reply to by HuskerGirl

itstippy Mon, 11/20/2017 - 18:35 Permalink

The U.S. Government has promised more benefits to its citizens than it can deliver.  I don't believe they will confiscate assets to pay for them; rather, I think they will deny the benefits to people who can afford to pay for them themselves.  They will "means test" Social Security and Medicare benefits in the future, just as they "means test" Obamacare subsidies and Medicaid today.  You may think you're entitled to receive your promised future entitlements, but legally you aren't.  The government makes the rules, not Wise King Soloman.  Simon is correct.  Hard assets outside of the financial system's tracking apparatus are a good idea.  And keep your mouth shut about them.