In the generation of my grandparents, it was almost common sense to have an offshore bank account with some money in it that no government new about. This was not so much to avoid taxes. They grew up in the 1920s and 30s in Germany. They experienced first hand how bad politics can get. They new that when governments get desperate, they will plunder their citizens. And if things get really bad, states might even endanger their lives which means you might have to pack your things and leave. If that happens, it certainly is a good idea to have some savings outside the country that will hopefully give you a good new start. In other words, the offshore account served as insurance against the insanity of politics. This insurance of course works best if the local government does not know about it. Otherwise it might just force you to hand it over. Of course my grandparents hoped they would never have to cash in that insurance, but they knew that the risk was simply too real to be ignored.
What my grandparents did, seems like a wise thing to do. After all, their actions were based on their life experience. And unfortunately, the risk of governments becoming very tyrannical again has everything but gone away. That is why it is so scary that hiding money from the government is becoming increasingly difficult.
At the moment, Leviathans favorite word in the fight for economic domination seems to be “transparency”. For some reason the word has a positive feel to a lot of people. Certainly, transparency of governments would be a good thing. That way we, who are unfortunately on the receiving end of the governance, could better control what the people with real power are up to. But governments are exactly not becoming more and more transparent. They have gigantic and quickly growing programs that are increasingly not accountable to anyone. If someone dares to reveal these programs to the public he is immediately threatened with severe consequences. The best example for this is Edward Snowden.
When it comes to ordinary citizens however, transparency is suddenly embraces as a wonderful thing. The reason is the same. While the government hates to be transparent as that means being controlled, they love transparency of everyone else because that means they are able to control. For that reason they are for example working on, and have already largely succeeded in, making all our online activities transparent.
But what really would give them almost complete power is if they were able to control our economic activities. That is why they are working on a complete transparency of the financial industry worldwide. The clear goal is to know about every economic transaction an individual makes. If they manage to succeed in doing that, they will have full control over everyone’s lives. That is because everyone essentially has to take part in the world wide work sharing activities in order to survive. That means that everyone has to be in the system. And if they knew all these activities they could then sanction some and reward others. That way they could control exactly what everyone is doing with their lives. And modern technology unfortunately makes facilitating this sick dream more and more realistic.
Btw. when I am saying ‘they’, I am not necessarily referring to a conspiratorial group of people. Although there undoubtedly are a lot of people who actively design our financial and political system, often what looks like a conspiracy is just a system running its cause. The people within the system do not recognize themselves as evil villains seeking control. Normally, they genuinely believe that they are working towards making the world a better place. But that unfortunately does not make it any less dangerous. To the contrary, it makes it more dangerous. I wish the problem were just the Bilderbergs trying to enslave us all. In that case the solution would be simple, we only had to fight a small group of people. But I fear we are up against something far more pernicious than that. I am talking about wrong ideas.
Anyway, to achieve the ‘control through transparency’ goal, two things need to happen. Firstly, every business activity needs to be documented. That is one of the reasons why there is a war on cash going on. I have written before about this. Since then, this war has intensified. The Euro zone just decided to abolish the €500 note and the US is discussing getting rid of the $100 bill. The strategy is clear. Make it less and less convenient for people to use cash and they will more and more stop using it. Once it is not used widely anymore, abolishing it can be justified with cash just being too expensive. At that point, all transactions will be documented within the financial system.
That will not just give the government more taxing powers. If it wanted to, it can also know most details about your life. From what you buy they can know things like your daily routines or your diet. One can draw clear conclusions about your personality, how sociable you are, whether you are a day or night person, whether you are in a relationship or not etc. Nevertheless, like for most criminals the most important thing is to get your money.
However, documenting all your economic activities is not enough to have control. The government also needs to somehow get those information before it can analyze them. And here I only just realized how far advanced this process already is.
In recent years, we have seen the US government clamping down aggressively on anyone who helps her citizens to hide money in a foreign bank. FATCA, the Foreign Account Tax Compliance Act is a pernicious piece of legislation which requires every financial Institution worldwide to report to the tax authorities in the US about their US customers. That means that no US Person (US citizen or resident) is able to have an offshore bank account that the IRS does not know about. But really it means that most US Citizens cannot have an offshore bank account full stop. Most banks are now rejecting anyone who might have US tax liabilities as customers. The risk of getting into a fight with the US Empire is simply too big.
This however was only really bad for US Citizens. But now, FATCA has effectively gone global. Not only that, but it is on steroids. The Common Reporting Standard (CRS) is an agreement of currently around 100 participating countries to automatically share information from local financial institutions with the relevant tax authorities. The important word to notice is “automatically”. So far it used to be the case that a lot of states (not all!) complied with specific requests from tax authorities. Usually these requests needed to have some kind of reasonable suspicion of wrong doing.
But now, once a year, all of the participating countries are required to report on all the existing bank accounts from people that are relevant to the tax authorities. Information transmitted are Name, address, account balances, stocks, dividends, you name it. And it is not just banks who have to report. Included in the agreement are also Trusts and Insurance companies. It brings data exchanges between governments to a whole new level. The agreement is active from the beginning of this year, with first reporting happening in September 2017 and 2018 respectively.
Part of the agreement is a clause that explicitly overrides any form of legislation, be it statutory or common law that protects the privacy of people and companies in that jurisdiction. The lack of respect for privacy shown in this agreement is shocking. But the thing that most surprised me about this is that, looking at the list of participating countries, signatures of the agreement are pretty much all so called tax havens. Lichtenstein, Andorra, Jersey, Switzerland, Cayman Islands, Singapore etc. All those states, known for their good bank secrecy, will be part of this global financial transparency. That means that CRS literally abolished bank secrecy worldwide all at once. From now on, there is no place to hide within the financial system. All your business activities and savings are being documented and reported. The only hope left is to somehow slip under the radar.
This is a disaster for everyone who wants an insurance policy against bad political outcomes. Also, I think a lot of people do not realize how important it is for our standard of living that at least the most talented entrepreneurs can hide some capital from the tax man. These tax havens are a little bit of what the black market was in the Soviet Union.
If all of this money now becomes transparent, and therefore accessible to governments, this will have serious consequences for our standard of living. Shutting down the exit doors to Galt’s Gulch simply is a very bad idea. But these idiots in our governments actually believe that they can centrally plan the economy. They cannot. No one can. If they try hard enough however, to clamp down on the real economy outside of the control of governments, they might just ultimately end up destroying the wealth creating machinery that makes our lives so comfortable. Just look to Venezuela or Greece to see what the result might look like. However, these are small local economies in a otherwise still functioning global economy. If it happens on a global scale the outcome will be a lot worse. I am shocked. The only thing left to say is, hold on to your gold! It is the only cash that governments really do not control.