Dateline: Kuala Lumpur, Malaysia
In 1961, East Germany began construction on a nearly 100-mile long wall around the city of Berlin. The Berlin Wall is, to this day, among the most grim reminders of how government suppresses freedom of movement.
For the dictatorial forces in East Germany, the reasoning behind erecting the Berlin Wall was sound. Even as the most prosperous economy in the eastern Bloc, East Germany had seriously fallen behind its western counterpart in terms of economic prosperity.
The best and the brightest were running, not walking, for the exits in an effort to find greater prosperity in the western world. No amount of eastern propaganda accusing the West Germans of still being Nazis could keep talented people in a third world hellhole.
As a result of nearly one-quarter of the country’s population emigrating for greener pastures, the East Germans decided that taking positive action to keep people in their country was no longer worth pursuing.
So they built a giant concrete wall and fenced everyone in.
In situations like this, there are always those with special privileges. Just as there are always rich guys in communism, the privileged elite – and those needed to keep up appearances – are granted special access.
In the case of the Berlin Wall, this meant nine border crossings, many of them off-limits to the East Germans that were believed to want to flee. Checkpoint Charlie, the most famous of all the crossings, was open only to Allied personnel and foreigners.
For those not so lucky, the western world and the prosperity it offered was on the other side of a so-called “death strip”.
Today, westerners have forgotten the lessons of the Berlin Wall. All too eager to keep out some Mexicans from crossing the border, US persons have advocated building a wall along the US-Mexico border, not realizing that – as Ron Paul so adroitly pointed out – borders can be used to keep people in, as well.
For those who argue “it can’t happen here”, one look at the propaganda used to support the Berlin Wall’s erection should be all it takes to convince you the governments will always find plausible deniability for their dictatorial acts.
Today, borders are a bit less important in a world that operates on information. And just as German forces in World War II attempted to bring down their opponents’ economies with counterfeit bills, your money is a key weapon to keeping you in place.
A little earlier, I went to one of the multinational banks to clear up some forms that needed to be filled out. I wish I could say what happened shocked me (and it may well shock you).
Thanks to financial imperial laws like FATCA, every bank on earth is now Uncle Sam’s bitch. They all must report the details of any and every US person account holder or face a stiff withholding tax.
Just one US person slipping through the cracks and – kapow – the whole bank will be in a world of hurt.
Of course, many banks have responded by showing US persons the door. I shared with you earlier that there are some countries you just shouldn’t bother trying to open an offshore bank account.
In fact, I was quite pleased just to find ONE bank in Switzerland, the archetypal offshore banking haven, to share with my US and non-US citizen clients alike. Switzerland and Liechtenstein are just two countries that have hung the “Americans not welcome” sign on the door.
There are still countries where you can bank offshore, but it’s getting harder.
Last month, I spent a couple days in Hong Kong opening bank accounts, buying gold, and taking other internationalization steps.
As some have reported, Hong Kong bankers have little patience for foreigners these days, especially Americans. One mention of the word “tax” as your reason for wanting to set up shop there and they’ll show you the door.
Heaven forbid you want to go somewhere with low taxes.
However, I’m still dealing with one of the account openings – a private bank account that is scared to DEATH of the IRS.
Opening a foreign account as a US person requires filling out a W-9 form so the bank knows who to turn in. The US government has made it painfully clear to offshore banks that so much as one “i” dotted incorrectly could land the bank in hot water.
I’ve literally been back to the bank, or its local branch here in Malaysia, four times filling out new forms, only for some other ninny at the bank to call me back and say I missed something.
Of course, because these banks are all living in mortal fear of the United States government, they’re quite gun shy about telling me WHAT it is I did incorrectly on the form.
Today, I finally got a banker to walk me through how they wanted the form, step by step.
For one thing, it should EXACTLY match your drivers license. That means your full nine-digit ZIP code, any misspellings, everything.
However, the banker then explained that the US government is on the warpath about something else: signatures. And it’s quite ironic.
You see, the US government is using laws like FATCA to keep its citizens with a box. Just as the East Germans erected a wall around their territory to keep citizens from fleeing, the United States is so deathly afraid that its citizens will try to move their money out of the country that is erecting as many virtual walls as it can.
A number of de facto capital controls are already in place in the United States and Europe, with more being enacted each year.
Everything from a “war on cash” that allows governments to trace your every dollar, down to the money you use to fill up your gas tank, to financial reporting requirements that make moving moneys very difficult are part of their plan to make sure your money is within their borders so they can steal it whenever they please.
Cyprus, Argentina, Ireland, Australia, Poland, Hungary, and others are the most recent examples of this.
A government rolling in cash wouldn’t mind if you moved some money to Hong Kong or Singapore or Switzerland to diversify your geographical risk.
I mean, what’s the harm in saying “I don’t trust a bunch of banks with tiny liquidity, a boat load of shaky loans in declining US real estate, all allegedly backed up by a flimsy government-run, politically-motivated insurance fund that has one penny for every $3 in deposits?”
Nothing. Unless your government needs to steal that money to pay its ballooning, out of control debts in the near future.
They’re very good at finding a good “cover story” for just that.
So imagine my surprise when the US government also expects my signature to be fully boxed in between two very small lines. The signature you see below is fully unacceptable (forget the fact that my normal signature would be out of this frame entirely):
Talk about taking bureaucracy to new heights.
It’s one thing to run a crippling bureaucracy on your own. It’s another to force every bank, credit union, and bank vault on earth to cooperate with you under penalty of nearly one-third of their cash being siphoned off as it flows through the nearly unavoidable (for now) US financial system.
Here is what the US government deems acceptable for cowering banks to keep on file:
I measured the difference in that tiny loop that went above the line when I got home. It came out to roughly one-eighth of an inch.
That entire micro-signature is something suitable for some kind of tiny creature, and took me four tries (and the banker going to the printer to push the “copy” button three different times) to get JUST right.
Because any millimeter of error and – boom – the bank is in hot water in an audit.
For me, it’s a small but ironically powerful symbol of just how adamant the US government is to keeping its citizens caged on its tax plantation.
It got harder for US persons to open an offshore bank account this year as FATCA was rolled out over the summer. Over time, it will only become more and more difficult as the US government realizes it can – at least until the whole thing collapses – bully the rest of the world into doing whatever it wants.
There are still safe havens that accept Americans and Europeans who have been targeted as toxic assets. If you need some help, just let me know.
