Sovereign Investor » Bob Bauman

Leftist Lies Attacks Your Right to Privacy

Bob Bauman — Wed, 22 Feb 2012 16:57:27 +0000

How You Could Make 150% Gains as Silver Soars to $75

The constant lies of Left-wing radicals, both American and foreign, continue without cease.

An example of this radical campaign of falsehoods appeared today under the byline of one Scott Cohn, identified as “Senior Correspondent, CNBC.” The arresting title of his article: “Ranch House Near Reno is a Thriving Tax Haven, and It’s Not Alone.” You can read it for the full details of Cohn’s distortions and slanted reporting, but one would suspect a “senior” reporter would have some integrity and concern for the truth. Not this guy.

Given that CNBC has become the broadcast mouthpiece of American leftists and the chief cheerleader for Barack Obama, Cohn’s article is still an unbalanced smear of the State of Nevada and its laws that permit incorporation of businesses without having a public record of the true “beneficial owners.”

Cohn wrongfully equates business ownership privacy with money laundering, tax evasion and criminal conduct – for none of which he offers any proof.

Anti-Privacy Conspiracy

For the last decade the U.S. and international radicals have fought to abolish financial and personal privacy with the specious argument that government has the right to know everything about your finances. This position is endorsed by President Obama and radical Democrats in the U.S. Congress who adopted the horrendous Foreign Account Tax Compliance Act (FATCA).

As part of their anti-freedom campaign these Leftists demand public and government access to all financial accounts of U.S. and others citizens, wherever located in the world – including the States of Nevada and Delaware.

The anti-privacy campaign began in 1990 with the Financial Action Task Force (FATF), a 33-nation offshoot of the Organization for Economic Cooperation and Development (OECD) in Paris. Both are public relations operations on behalf of the major welfare, high tax governments known as the “G-7.”

Using their alleged war on dirty cash as cover, the FATF proclaimed what it calls “recommendations” it insists countries must convert into national laws. It began issuing these “rules” in 1990, revised them in 1996 and is still at in 2012.

Behind FATF’s smoke screen about fighting money laundering and terrorism lies complete and utter destruction of financial and personal privacy for everyone. The true FATF objective is handing welfare state tax collectors complete access to every citizen’s financial lives.

War on Drugs Excuse

The original justification for FATF’s anti-privacy assaults was claimed to be waging the “war on drugs.” We were all supposed to surrender our financial privacy as governments pawed through millions of our accounts in hopes of finding one drug lord. Since the terror attacks of 9-11, 2001 the FATF cry justifying its latest demands has been “anti-terrorism.”

What FATF wants is an end to private beneficial ownership of corporations, trusts, foundations and partnerships. FATF claims legal entities including corporations, trusts, foundations and partnerships, and limited liability companies “can be exploited for money laundering or terrorist financing purposes.”

FATF’s solution to this non-problem — allow government and tax collectors carte blanch access to all records of all legal entities. The FATF assumption seems to be that privacy per se is bad and Big Brother government has an unlimited right to know all.

This decade old FATF lie was what CNBC’s Cohn repeated today in his slanted article about Nevada’s

laudable privacy laws.

Left’s Intent: Destroy Financial Privacy

This OECD, leftist, Big Brother anti-tax haven pressure is a smoke screen for welfare state tax collectors aiming for complete destruction of financial and personal privacy for everyone, (just as the so-called PATRIOT Act already has done in the U.S.)

For these anti-freedom dictators abolishing bank secrecy is not enough. They also want to end lawyer-client privilege, plus the imposition of a global system of total tax information exchange among all nations.

For citizens of the United States all this is an academic discussion — under the Draconian terms of the 2001 PATRIOT Act, financial privacy is already dead. The government has the power to obtain financial information in secret about anyone — and to confiscate your wealth.

Small wonder that many millions of Americans do business offshore to take advantage of the strong privacy laws in places such as Switzerland, Panama, Singapore, Austria and Luxembourg.

The Real Issue: Liberty

Of course the spurious cry by those who advocate ever increased government surveillance of not just our finances, but every aspect of our lives, is the old saw: “If you aren’t doing anything wrong, what do you have to hide?”

It is absolutely wrong to characterize this debate as “clean money versus dirty cash” or “security versus privacy.”

The true issue is the fundamental right to privacy.

Privacy is an inherent human right. True privacy is a basic requirement for maintaining the human condition with dignity and respect. The real choices in this debate are personal freedom and liberty versus government control of our lives and our fortunes.

Tyranny, whether it arises under threat of terrorist attack, alleged solutions to money laundering problems or under any form of unrelenting domestic authoritative scrutiny, is still tyranny.

Liberty requires security without intrusion — security plus privacy. Widespread surveillance, whether by police or nosey bureaucrats, in whatever form it takes, is the very definition of a police state.

And that’s why we should champion privacy, both personal and financial, even when we have nothing to hide.

P.S. As President Obama and the money-hungry government continue to think up new ways of taking as big a chunk of your wealth as they can, finding these offshore havens is more important than ever. With our Sovereign Society Freedom Alliance, I’ve assembled a team of the world’s top asset protection attorneys, tax specialists, and bankers to bring you the information you need to make informed decisions about how to protect your wealth. You can learn more about my research, and what steps you can take starting today, by clicking here.

Don’t Leave Your Estate Planning Until It’s Too Late

Bob Bauman — Wed, 22 Feb 2012 16:49:47 +0000

How You Could Make 150% Gains as Silver Soars to $75

John Goodman, founder and president of the posh Palm Beach International Polo Club, qualifies as a member of the “one percent” of the population who are “super-rich.” He has an airplane, yacht, polo ponies, and an unspecified amount of his late father’s $1.4 billion fortune from Goodman Manufacturing, a heating and air conditioning company.

But it is a recent and most tragic event for which Goodman is now making news.

Multimillionaire Goodman stands accused in a drunk-driving incident that killed 23-year-old University of Central Florida student Scott Wilson.

The tycoon, whose club is located in Wellington, Florida and was driving his Bentley at the time of the incident, stands accused of DUI manslaughter, vehicular homicide, and leaving the scene of an accident with a blood-alcohol level allegedly twice the legal limit.

His criminal trial begins on March 6. He could spend up to 30 years in prison if found guilty.

While this incident is terrible on many levels, it is also bizarre.

On the advice of his counsel, Goodman has adopted his 42- year-old girlfriend Heather Hutchins as his third “child”, as part of an asset-protection defense strategy. The goal is to protect some of his assets against a civil suit, in which millions of dollars in damages are likely to be sought.

However, as twisted as this case is, it highlights one primary point: Good estate planning should always be done early, with the best of legal intentions.

It should never be used as a last-minute attempt to avoid the consequences of a crime, alleged or otherwise

An Unusual Solution

Goodman’s lawyers argue that under the terms of a reportedly $200 million pre-existing trust fund created for any of the mogul’s “children,” his new daughter, Ms. Hutchins, eventually could get at least one third of the fund’s value, along with Goodman’s two biological children, Harriet and John Jr.

Counsel for the Wilson family claim Goodman’s legal maneuver is a way for the tycoon to maintain control over one third of the trust’s assets, a situation that will become all the more important if he has to pay out millions of dollars in the civil suit. Goodman’s counsel has denied this claim.

As an attorney, I know I can’t make that judgment without knowing the terms of the trust involved and other facts about Goodman’s estate plan.

But it underscores what I have long preached about the importance of early estate planning, with the added protection of an offshore components.

A senior U.S. Federal Reserve economist estimates that by 2050, the U.S. “baby boom” generation will pass on to their heirs some $41 trillion in assets, the largest potential inter-generational wealth transfer in world history.

Forbes magazine estimates that there now are 1,140 billionaires in America. A record 10.5 million U.S. households have a net worth of $1 million or more in 2012.

Despite the Great Recession that wiped out $15.5 trillion in household wealth in the U.S. alone, the total number of U.S. families with a net worth of more than $1 million, including real estate, will double by 2020 to 20.6 million.

But, in spite of these statistics, many wealthy people I meet remain completely unprepared for the unforeseen. Many don’t even have a will. Perhaps the prospect of acknowledging mortality blocks the need for action.

Noah Didn’t Build the Ark When It was Raining

An estate plan is essential to the long-term well-being of your family and heirs. Good estate planning will help avoid problems of control and sharing wealth with children. Many experts advise that good estate planning should include:

Making sure a basic plan is in place before diving into the more complex, and often irrevocable, estate planning.

Avoiding, when possible, giving one child control over another

Dividing up assets into dollar amounts, rather than percentages, to avoid disputes among beneficiaries over valuations and cost issues.

On the other hand, most advice on estate planning understandably does not deal with middle-aged girlfriend adoption.

And, if you have a sizeable estate – one that is worth more than $1 million – I believe you should consider an offshore component.

When you move some of your estate offshore – be it an offshore bank for great currency and investment diversification or a foreign trust for more robust legal protection – your heirs enjoy far greater protection from domestic U.S. creditors and lawsuits.

Importantly, those assets can remain much more confidential, avoiding the publicity and hassle of the U.S. probate process.

But, perhaps more importantly, proper estate planning with the prudent use of an offshore component means that in the event of a crisis you probably won’t have to adopt your girlfriend.

Faithfully yours,

Bob Bauman

P.S. There are a world of ways to help protect your family’s financial future, and trying to tackle them on your own can be overwhelming. That’s why I created The Freedom Alliance; to make sure my readers have the best, most up-to-date information possible to make informed decisions on how to secure their wealth. Click here to read my latest report, and find out how you can get “Off the Grid” and make sure your money stays in your hands.

Panama: An Offshore Banking Playground Just a Short Flight Away

Bob Bauman — Thu, 16 Feb 2012 22:40:40 +0000

How You Could Make 150% Gains as Silver Soars to $75

One of President Ronald Reagan’s favorite anecdotes concerned an always-optimistic six-year-old boy who, when taken to a stable piled high with horse manure, emitted a yelp of delight.

This little boy clambered to the top of the pile, dropped to his knees, and gleefully began digging out scoop after scoop with his bare hands.

“What do you think you’re doing?” his father asked, baffled.

“With all this manure,” the little boy replied, beaming, “there must be a pony in here somewhere!”

Living with the grim reality of oppressive government, snooping tax collectors and a media barrage of untruths about investing and doing business “offshore,” I know it is difficult to be positive. A siege mentality may seem more appropriate.

But I am here to suggest that in exercising your fully legal right to bank, invest, travel, live and seek profits offshore, you should never ignore the “playground” aspect of what you are doing.

Some years ago, a British-based company, Scope Books, published a series about a mysterious person identified as “Bill Hill,” who told tales of “P.T. Freeman.” The “P.T.” stood for perpetual traveler, among other things, and his shtick was touring the world as a “tax exile,” enjoying life and avoiding staying anywhere long enough to establish a taxable domicile.

Come Visit Your Money

Bill Hill was also the originator of the “Five Flags” theory of good living and asset protection, (about which I have written), each flag representing a different offshore venue for recommended action.

Now I am uncertain as to where I first heard the enticing phrase, “Come visit your money,” but I think it may have been from the Sovereign Society’s, long-time Swiss investment expert, Ron Vrijhof, a gentleman noted for his hospitality to clients visiting Zurich.

In those long ago pre-“Know Your Customer” days, when a foreigner could open a Swiss bank account simply by wiring funds, our man in Zurich cheerfully advised his clients to “visit their money in person” and take time to enjoy the beautiful country, advice he still recommends.

Indeed, on my own first visit to Zurich, Rob revved up his SL class Mercedes Benz convertible and drove south into the mountains, where he said he knew just the country inn for a delicious dinner of Swiss huhn rösti.

In beautiful summer sunshine, convertible top down, we ascended an impressive Alpine peak, the Andermatt, nearly 9,000 feet high at the peak. Slowly it got colder by degrees until I was shivering. That was when I first experienced, to my posterior’s surprise, heated auto seats.

My point is that life is too short not to take advantage of the many enjoyable places where you can:

1) bank and invest your capital;

2) enjoy the available pleasures, comfortable accommodations, good food, and pleasant company while indulging your interests, art, history, music, go fishing or just lay on a white sand beach in the sun.

Take, for example, the Republic of Panama.

As long ago as the 1920s, Panama adopted investor and asset protection-friendly laws governing banking, corporations and trusts, and later, private interest foundations. Unlike the U.S., Panama has a sensible territorial tax system that exempts all income earned outside the country.

At a time when the PATRIOT Act in the U.S. has abolished financial privacy, Panama maintains its commitment to maximum privacy without allowing foreign tax evasion or money laundering. It has more than 80 banks, including some 50 multinational banks, which collectively hold an estimated $100 billion in assets, with liquidity impressively high at an average 30%.

From 2005 to 2012, Panama’s economy grew by more than 8% a year, the fastest rate in the Americas. It also boasts a host of qualified offshore professionals and bankers.

Panama City offers thousands of modern condominiums and more than 100 skyscrapers (including a Trump Tower, of course), first-class hotels and restaurants, plus excellent high-speed Internet and other global communications.

Downtown Panama City, the balmy, tropical capital on the southern, Pacific end of the Panama Canal, suggests Miami, except arguably more locals speak English here than in some parts of South Florida.

No Taxes and Immediate Residence

Night clubbing and fine dining can be local delights. And the Panama Canal, now under a $6 billion expansion, is a must see.

For those who want to combine play with business, there are multiple retirement and vacation retreats on the Pacific side, Bocas del Toro on the Atlantic side, and Boquete in the northern mountains.

Panama also offers its famous pensinado program, which welcomes qualifying foreign retirees with immediate residence, no taxes and discounts on goods and services.

Citizenship is available after five years, under one of several programs that grant immediate residence.

You can easily find the equal of Ronald Reagan’s metaphorical “pony” in Panama without having to dig.

Panama is just one offshore playground. I’ll be back to tell you about other enticing locations in the future. Stay tuned and stay positive!

Faithfully yours,

Bob Bauman

P.S. Panama is just one of many offshore playground. As President Obama and the money-hungry government continue to think up new ways of taking as big a chunk of your wealth as they can, finding these offshore havens is more important than ever. With our Sovereign Society Freedom Alliance, I’ve assembled a team of the world’s top asset protection attorneys, tax specialists, and bankers to bring you the information you need to make informed decisions about how to protect your wealth. You can learn more about my research, and what steps you can take starting today, by clicking here.

America’s Slide into Greece

Bob Bauman — Thu, 16 Feb 2012 21:41:58 +0000

Setting the Record Straight on the Iraqi Dinar

President Obama, in a scandalous show of bad faith and dereliction of his sworn duty, proposed a phony FY 2013 budget plan this week that increases spending from $3.8 trillion in 2013 to $5.8 trillion in 2022.

True to his New Deal socialist antecedents, the Obama budget will add to the bloated size and scope of the federal government and the national debt. Each American’s share of this debt is now $49, 211.27.

Here is a right-on comment about the Obama budget by Washington Post columnist Charles Krauthammer: “The president knows that we are headed over a cliff. He just wants to get past Election Day as he does on everything. But this is a budget worthy of Greece and for the president of the United States to offer it knowing how dire our situation is, is truly scandalous.”

If You Spent Like Obama…

For a stunning revelation of what the $3.8 trillion Obama budget would mean in the understandable numbers of an average family who followed his example, see the ABC News analysis by Jake Tapper.

If your budget followed Obama’s example it would mean a family budget as follows (with comparable Obama budget numbers at right):

Total family spending: $38,000 $3.8 trillion Obama spending

Total family income: $29,000 $2.9 trillion Obama deficit for 2013

Total new debt: $9,000 $9 trillion new Obama debt added

Existing credit card debt: $153,000 $15.3 U.S. national debt

Quite obviously, no family could live like this — and neither can the United States for very much longer. Yet the president, who apparently thinks Americans are all ignorant dolts, told us he was “cutting” spending in his phone budget!

Fat Phony Budget, Non-Existent Cuts

Cato Institute economist Dan Mitchell (below) cut through the fog to get at the truth of what Obama claimed was a $2 trillion budget “cut” in spending over ten years.

“We have a budget of almost $4 trillion? So if we’re doing $2 trillion of cuts,” Mitchell said, “we’re cutting government in half. That sounds wonderful.”

But what the president was talking about is not even a cut. Obama just proposed that over the next 10 years, instead of increasing spending by $9.48 trillion, they’d increase it by “just” $7.3 trillion; calling that a “cut” is nonsense.

Mitchell gave an analogy: “What if I came to you and said, ‘I’ve been on a diet for the last month, and I’ve gained 10 pounds. Isn’t that great?’ You would say: ‘Wait, what are you talking about? That’s insane.’ And I said: ‘I was going to gain 15 pounds. I’ve only gained 10 pounds, therefore my diet is successful.’”

Snouts in the Feeding Trough

A central problem is that Americans in every demographic group are increasingly getting government handouts. That makes it that much tougher for weak kneed politicians to cut spending. Add to that the fact that half of all American pay no income taxes, so what do they care?

According to the Census Bureau’s data from the 3^rd quarter 2010, 49% of Americans live in a household receiving benefits from one or more federal and state programs. That’s 148 million people out of a total population of 304 million. More than one in three Americans lived in households that received Medicaid, food stamps, or other means-based government assistance.

The Greeced Slide

Of course Obama and the Left want to go right on spending without making any real cuts or reforms. What they want is more taxes with the goal of redistributing income from those who pay taxes to those who don’t. This is another cheap repeat of the old Roosevelt New Deal political plan of “Tax, Spend, Elect.”

Just take a look at the stark, revealing numbers about U.S. government spending:

Now compare U.S. and Greek deficits prompted by big spending politicians and selfish political demands:

The End Is Near

The plain truth is that the United States government is very close to bankruptcy – and the politicians of both parties who refuse to act to solve this national crisis are morally bankrupt.

The final reckoning day is soon at hand, the day when China, Singapore and all the other investors stop propping up the U.S. Then the game will end — with a resounding crash. You think those riots in the streets of Athens can’t happen here? Folks, you ain’t seen nuthin’ yet!

When that happens, (and at this rate in wont take a decade), U.S. Treasury bonds and Washington’s credit rating will be worth little more than those faked document piles of subprime mortgages issued by greedy bankers at UBS, Merrill Lynch, Credit Suisse, Citibank and the Bank of America.

When that day comes who will bail out profligate America? And most importantly, where will you be then?

Isn’t it about time you moved some of your cash and asset offshore to a country where it (and you) will be safe — rather than sorry?

The Sovereign Society can tell you how and can help you do it. Don’t wait until Obama and his gang jam the exits to freedom.

Switzerland Victim of IRS “Culture of Abuse and Intimidation”

Bob Bauman — Thu, 16 Feb 2012 14:14:54 +0000

Setting the Record Straight on the Iraqi Dinar

The U.S. Internal Revenue Service (IRS) is “out of control” and the U.S. Congress should passed legislation that will “end the culture of abuse and intimidation within the IRS.”

Way back in 1997-1998 those were the fighting words of U.S. Sen. Charles Grassley, (R-Iowa). As a Senate Finance Committee member, (he is now the ranking Republican), Grassley promoted an eight-month investigation of IRS taxpayer abuses, followed by a well-publicized round of Capitol Hill hearings that exposed brutality of the IRS in numerous taxpayer cases.

That long ago show of temporary concern produced a “Taxpayers Bill of Rights” and promises of IRS reform that were soon forgotten.

Now 14 years later, Grassley, his polling apparently showing a majority of Iowa voters suspicious of offshore tax havens, has taken to intermittent bashing of the IRS again. This time his complaint that the IRS should be even harder on alleged tax evasion offshore by U.S. persons.

Tax Evasion is a Crime

I certainly do not condone tax evasion, a punishable offense as it should be. But the IRS has long since tacitly adopted the view that legal tax avoidance is the same as illegal tax evasion. And with the morass that the Internal Revenue Code has now become, who can tell the difference.

I doubt the distinguished senator from Iowa, (with whom I had the honor of serving with in the U.S. House of Representatives), would admit the IRS is still engaging in “abuse and intimidation” (and even blackmail) — because this time the IRS tax brutality is aimed not Grassley’s Iowa farmers, but at the sovereign nation of Switzerland, long an ally of the United States. (See Dan Mitchell’s column yesterday, A Swiss Response to American Fiscal Imperialism).

IRS Destroys Oldest Swiss Bank

On January 27th Wegelin & Co., Switzerland’s oldest private bank, founded in 1741 in Saint Gallen, sold its business to the Raiffeisen Group under threats from the IRS. Three of the bank’s client advisers were indicted earlier in January on U.S. Justice Department (DoJ) charges of tax fraud and evasion.

A week later the DoJ had the bank itself indicted by a U.S. grand jury in New York, charging the bank had conspired with over 100 Americans to hide more than $1.2 billion in unreported client assets from the IRS. The bank is now a “fugitive from justice” because it failed to appear at a New York hearing last week.

The DoJ action made international history.

It was the first time an offshore bank had been indicted by the U.S. for enabling tax fraud by U.S. taxpayers. The DoJ also seized more than $16 million from Wegelin’s correspondent U.S. bank. Because Wegelin, (with a reported US$22.7 billion in assets) has no branches outside Switzerland, it used correspondent banking services, a standard industry practice, to handle money for U.S.-based clients.

Good Enough for Napoleon and Eugénie

Wegelin was one of the last “pure private banks” in Switzerland. It had eight managing directors, each of whom has accepted “unlimited liability” for the bank, meaning they are personally liable for the bank’s commitments.

That may have been a decisive factor in selling the bank to the Raiffeisen Group. In past centuries wealthy European families trusted the bank to manage their fortunes. In the French tradition of keeping cash in another country, clients included Napoléon III and his wife Empress Eugénie.

A Nuclear Threat

A knowledgeable source in Zurich told me that unless Wegelin turned over all the information the IRS demanded, it had threatened to cut off Wegelin from access to the U.S. banking system. This would be done by expelling the bank from the Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT).

I have written about SWIFT before; this system handles most of the world’s cross-border electronic payments, exchanging 18 million payment messages daily between banks and financial institutions in 210 countries.

Apparently Obama and his IRS considered U.S. tax evasion at Wegelin a threat as great as the country of Iran and Mahmoud Ahmadinejad, since the U.S. government has proposed the same cut off punishment to deprive Tehran of funds needed to develop nuclear weapons.

My Zurich source said the anti-Wegelin U.S. action was an effort to intimidate ten other offshore banks now under DoJ/IRS investigation including Credit Suisse, Julius Bär and Basler Kantonalbank.

Mu informant said Wegelin’s demise will only increase fears in Switzerland that the U.S. DoJ sees more to gain by picking off individual banks with the threat of criminal prosecutions, rather than agreeing with the Swiss government to a comprehensive civil solution that covers all Swiss banks.

Every Bank for Itself

Several Swiss media reports have accused some of the 10 banks of handing over data to the IRS without the knowledge of the Swiss authorities, or at the least planning to follow this expedient path.

“This could mean that some banks have lost faith in the ability of their government to protect them,” said Hans Geiger, emeritus professor at Zurich university’s Swiss Banking Institute “They appear to believe that they can get better results by going directly to the U.S. administration.” Do you really think so, professor? Duh!

In 2009, the untrustworthy banking giant UBS, about which I have commented many times, was forced to settle with the U.S. government over similar tax charges, paying a fine of $780 million, handing over the names of nearly 4,500 U.S. clients and admitting to wrongdoing.

What Next?

For an interesting summary of where Swiss banking may be headed, see A Hard Transformation For Swiss Banks by Dow Jones reporter, Anita Greil.

She suggests that regardless of how negotiations with the U.S. and other foreign governments turn out, “two things are now clear: Swiss banks will have to make sure that taxes are paid on clients’ assets, and this will require significant investment on the banks’ part in personnel and new information technology.” Ensuring this will cost over a half billion U.S. dollars overall, according to the Swiss Bank Association.

For smaller Swiss private banks, which are the majority, this will be difficult if not impossible to handle. Banking experts expect the big banks, UBS, Credit Suisse and Julius Bär to be the eventual winners.

Swiss Bank Secrecy is History

As for the historic 1934 Swiss Bank Secrecy Law, that has already preceded Wegelin Bank into oblivion. It’s still on the statute books, but the law has been superseded by a host of Swiss signed tax information exchange agreements (TIEAs), Swiss political weakness and by surrender to IRS blackmail.

The 1934 Law was passed to thwart the Nazis from obtaining information about the Swiss accounts of German refugees from Adolf Hitler’s persecution. Who could have predicted the irony of what I have called “the Nazification” of the U.S. Internal Revenue Service finally producing the demise of Swiss banking secrecy.

Last Word

Switzerland is among the world’s oldest surviving republics. In modern form it was born in turmoil created by the expansionist ambitions of Napoleon Bonaparte. It has withstood the depredations of the Carolingian feudal system, the Hapsburgs, the Reformation and two World Wars.

Through it all trust in the Swiss financial system has made the Swiss the managers of an estimated one-third of all worldwide funds held outside their country of origin, over US$8 trillion.

The Swiss will survive the IRS and be the better for the ordeal.

The Sovereign Society respect U.S. tax law and U.S. reporting requirements. We also value financial privacy, a concept that died in America with the PATRIOT Act. Switzerland still does have privacy remaining for law abiding and tax paying persons.

For our American and other national members, the Sovereign Society has long standing existing arrangements with reputable Swiss banks that are not under IRS investigation.

We also can recommend Swiss and other investment professionals that now are registered with the U.S. Securities and Exchange Commission (SEC) and can assist all U.S. client investment reporting.

Join us as a member of the Sovereign Society and we will be pleased to connect you with reliable Swiss banking and investment professionals.

Or would you rather keep trying to get a human voice at the Bank of America on the phone?

A Swiss Response to American Fiscal Imperialism

Bob Bauman — Tue, 14 Feb 2012 22:11:10 +0000

How To Escape From America, and Where to Go

Today’s column once again is by our friend and associate, Dan Mitchell of the Cato Institute. I list Dan’s views concerning the Obama government’s rape of Switzerland in the “I could not say it better myself” category. Be sure to sign up for Dan’s blog.

by Daniel J. Mitchell

Switzerland is in the unfortunate position of being bullied and harassed by the U.S. government. The crux of the problem is that the United States arguably has the world’s worst tax system for international activity, and this creates conflict with other nations, particularly ones that have good tax laws that attract investment.

This has resulted in a number of different attacks against Swiss sovereignty. On the multilateral front, the Obama Administration is actively supporting the anti-tax competition project of the Organization for Economic Cooperation and Development.

On the unilateral front, the United States is imposing onerous laws on the entire world, such as the Foreign Account Tax Compliance Act (FATCA), which seeks to coerce foreign financial institutions into acting as deputies for the Internal Revenue Service (IRS. And on the bilateral front, the American government has initiated actions that specifically target Switzerland, such as legal attacks on individual institutions and pressure for tax agreements that would violate long-standing human rights laws protecting individual privacy.

The challenge for Switzerland is that the United States is the most powerful nation in the world, and the U.S. government has decided to treat its “Sister Republic” almost as if it was some sort of pariah regime.

Swiss policies should be emulated, not persecuted.

What makes this situation particularly frustrating is that it is entirely the result of bad American policy.

America has pervasive double taxation of saving and investment and an imperialistic worldwide tax system, and those bad policies motivate the multilateral, unilateral, and bilateral assaults.
America is in terrible fiscal shape thanks to overspending by both Presidents Bush and Obama, creating an environment where the IRS has free rein to be extra aggressive in the search for more revenue.
America has a political class that is willing to engage in (or capitulate to) class-warfare politics, regardless of the adverse impact on U.S. prosperity and competitiveness.

To be optimistic, there is a possibility that these problems will become less onerous after the 2012 elections, even if President Obama wins reelection. To be sure, the President is hostile to the private sector and he ideologically supports higher taxes, so he will want to maintain the U.S. government’s unfriendly approach to Switzerland. But it is quite likely that Republicans will control both the House and Senate beginning next year, and that will hinder the President’s ability to pursue a hostile agenda. To cite one example, it is quite likely that Congress will seek to slash subsidies for the OECD.

If Governor Romney wins, that could make a difference, especially since he presumably will understand that bad American policy is the reason for the conflict. But that doesn’t ensure a change in policy unless America’s punitive tax laws are reformed. Unfortunately, Romney will be reluctant — because of his personal wealth — to advance policies that can be portrayed as helping the so-called rich. We can’t expect a Reagan-style agenda of economic liberty and individual freedom, so something like a flat tax is very unlikely.

In other words, while the situation will probably improve after the elections, there will still be major challenges. Given this semi-pessimistic outlook, what can Switzerland do to protect its fiscal sovereignty and human rights privacy laws?

Part of the answer is to have a reactive strategy. Swiss firms already are getting rid of American clients. This is particularly bad news for overseas Americans, who are being greatly inconvenienced by the bad laws coming out of Washington, but it is probably too costly and too risky for Swiss institutions to have customers that are also U.S. tax residents.

Swiss institutions also can seek to disengage from the American economy. Without direct investments in American stocks and bonds, there’s no nexus for the IRS to exploit. But while this might be an effective approach for particular firms, it’s presumably not realistic for the broad financial services industry.

The Swiss government also can help by effectively resisting some of the most outrageous demands by the American government. The Justice Department and Treasury Department are run by leftist ideologues, but some of the bureaucrats who negotiate agreements will not be as unreasonable. And the State Department presumably will have a better understanding of how America’s bad tax laws are fundamentally inconsistent with Switzerland’s legal and economic policies.

It is also important to have a proactive agenda. Switzerland should be more aggressive about explaining that the conflict with the U.S. government is a result of bad American tax laws. The Swiss government should proudly discuss its admirable human rights policy with regards to financial privacy. And it should educate people in the United States about how policies of fiscal prudence and respect for individual rights have created substantial prosperity.

Switzerland has many allies in the United States, both in Washington and all across the nation. And with an effective education campaign, more support can be generated from members of Congress, public policy groups, and academic experts. The message should be simple: Swiss policies should be emulated, not persecuted.

Last but not least, government officials and private sector representatives in Switzerland should offer some much-needed friendly advice to their American counterparts. There is increasing resentment around the world toward the United States, and there is a growing desire to restrain Uncle Sam — leading some people to say that it’s time to end the dollar’s role as the world’s dominant currency. This would be bad news for the United States, which reaps big benefits because the dollar is the main currency for international transactions, as well as the biggest reserve currency.

This would not happen overnight, particularly since the most obvious alternative — the euro — lost some prestige when the European Central Bank sacrificed its independence by agreeing to bail out some of Europe’s bankrupt welfare states.

But if several European nations decided to make a shift, joined by oil-exporting nations and Asia’s emerging economic powers, things could change dramatically in just a few short years. That is so especially because nations would see a fringe benefit of being much less susceptible to bad laws such as FATCA once correspondent relationships with U.S. institutions become less important.

To be blunt, the U.S. government needs to understand that bullying unilateralism to enforce bad law is a risky proposition. Not only is it discouraging foreign financial institutions from investing in the American economy, it also could cause other headaches.

Switzerland has the right policy and the moral high ground. With the right approach, a virtuous David can triumph over a misguided Goliath.

This article appeared in RealClearMarkets.com on February 13, 2012.

A Country Where Liberty is Paramount

Bob Bauman — Wed, 08 Feb 2012 19:23:16 +0000

How To Escape From America, and Where to Go

Sean Hyman is our Sovereign Society editor of both the Currency Cross Trader and Currency Capitalist. A veteran stockbroker, manager, and trader Sean always has good advice for investors about how to increase the value of their portfolios.

Sean is also an inveterate e-mailer of interesting news stories that usually manage to titillate my interest.

One such article arrived the other day and, knowing Sean’s selectivity, I stopped work and watched a video about “seasteading,” a new concept to me, defined as creating permanent dwellings at sea, called seasteads, outside the territory claimed by the government of any nation.

Libertarian Leanings

Well, as a long time friend of U.S. Rep. Ron Paul, (I serve in the U.S. House of Representatives with Ron in the 1970s), the libertarian idea of seasteads had an immediate if impractical appeal for me.

Most proposed seasteads have been modified cruising vessels, like the Freedom Ship (below) proposed in the 1990s but never built. It was to be three times as long as any ship ever built and would house 50,000 people. It too would be an independent floating country circumnavigating the globe continuously, stopping regularly at ports of call.

A New Sovereign Nation

A year or so ago a Freedom Alliancemember asked me what I thought about possibly forming a new nation that would issue second passports and do all the things The Sovereign Society advocates? He suggested that a person could drop his original citizenship and be a citizen of the new Sovereign Nation.

My reply: that’s a great idea – and why not?

For basic research I suggest studying this comprehensive list of small countries, some legally extant, others based on wishful thinking. There is also a list of self-proclaimed micro-nations ranging from the Kingdom of Ruritania to the Principality of Hutt River in Australia.

“What’s wrong with just starting your own country?” My late good friend, a staunch libertarian and the founder of The Sovereign Society, Bob Kephart, (left) used to ask rhetorically that very question in his geopolitically reflective moments.

Bob was a strong believer in minimalist government. (Actually, he was a quasi-anarchist who disliked all government.) As a self-made man, he used his wealth to promote liberty and freedom in every way possible, often helping to rescue poor souls caught in the clutches of uncaring government.

Sealand Redux

Coincidentally with Sean’s email about seasteads, a Fox News story last week suggested that Wikileaks is seeking to house its web servers in an offshore data haven, and mentioned the Sealand facility as “one possible location.” I wrote about Sealand when it was put up for sale in 2008.

Sealand is a former anti-aircraft platform perched on two concrete towers 8 miles off the coast of England. Entrepreneur Roy Bates took control of the facility in 1966 and declared it the Principality of Sealand, a sovereign nation and tax haven. In 2000, investors turned it into a colocation facility for web sites seeking to operate outside any government jurisdiction.

Sealand delighted Bob Kephart and he even joked about seeking citizenship from Prince Roy, its founder, a free British citizen declaring himself to be outside London’s control and from offshore thumbing his nose at Her Majesty’s mighty government.

To heck with Charles, the Prince of Wales; you too can be a prince!

A State of Freedom

Well, my point is that there is still something to be said for getting away from it all. (I’ll let you define what “it” means in your life); escaping especially from the constant drumbeat of bad news reporting diminished freedom and liberty. Even better is to escape from the collective oppression that now passes for “government.”

Solitude is defined as the state of being alone without being lonely. It is a positive and constructive state of engagement with oneself. Solitude is desirable, a state of being alone where you provide yourself wonderful and sufficient company. It is certainly enhanced by a surrounding state of unquestioned individual freedom.

Small wonder there are still dreamers, in the mold of the late Bob Kephart, who pause to consider seasteads, freedom ships and forming their own country — a place where liberty always will be paramount.

Come to think of it, wasn’t that the original idea of America?

That’s the way that it looks from here,

Six Simple Rules To Remember When Banking Offshore

Bob Bauman — Tue, 07 Feb 2012 21:13:40 +0000

How To Escape From America, and Where to Go

Former Stanford Financial Group chief financial officer James M. Davis told jurors Monday that the company had $173.6 million in cash reserves on hand as R. Allen Stanford (below) was telling his top brokers the Antiguan bank had more than $5.1 billion. Davis said the company had 35 to 45 days of cash on hand in the second half of 2008. By December, the bank had only $88.2 million in cash.

The U.S. Securities and Exchange Commission seized the company’s operations in February 2009 and Davis currently is testifying against Stanford in a plea deal. Stanford’s criminal trial is underway in Houston, Texas.

I wasn’t exactly surprised in 2009 when I saw news reports concerning the Stanford International Bank located on the West Indies island of Antigua and its owner, Allen Stanford, the chief of the Stanford Financial Group of Houston, Texas.

Prior to 2009 several Sovereign Society members had asked my advice about the unusually high returns Stanford International Bank “guaranteed” for CDs and deposits.

I did some due diligence and discovered enough disturbing information about both Stanford and his offshore bank that I recommended that our members stay away from the bank.

Let’s hope they took my advice. A lot of people lost a lot of money when the bank collapsed in 2009.

Massive Fraud

Stanford is on trial for conducting “a massive ongoing fraud” in the sale of about $8 billion of what he claimed were high yielding certificates of deposit held in his firm’s bank in Antigua.

Both the bank, which claimed $8.5 billion in assets and 30,000 clients in 131 countries, and his brokerage unit, which operated about 30 offices in the U.S., are named in the SEC. suit. At the time Stanford Financial claimed that it managed about $50 billion in assets.

Stanford’s phony bank was located on Antigua, an island in the West Indies in the Leeward Islands in the Caribbean region, the main island of the two island country of Antigua and Barbuda.

Independent from the United Kingdom since 1981, concerns over the lack of adequate regulation of the financial services sector prompted the U.S. government to issue a “financial advisory warning” about the islands in 1999 which was lifted in 2001.

My initial judgment about the Stanford Bank a few years ago was based on a very simple, yet basic axiom of wealth protection and investment: “If it sounds too good to be true, it probably isn’t true.”

Indeed, “Too Good To Be True”

It’s an old saying, but too many people considering offshore banking and investing seem tempted to ignore it — at their own peril.

Sadly, many investors, wanting to believe promises of unrealistically high returns, surrender their cash to charlatans who don’t deliver — and never intend to. This same pattern occurs repeatedly as Internet “offshore” web sites beckon visitors to send them cash so they can “get rich quick.” (The promoters that is, not the depositors). Similar fraudulent sales of second passports are also common.

Long before anyone heard of Bernie Madoff and his $500 billion rip-off, many other Madoff types were operating, especially in the offshore area. Stricter offshore regulation in recent years has curbed these frauds, but unfortunately some will continue as long as human nature, greed and gullibility exist.

Follow Basic Good Sense Rules

There are certain fundamental principles that govern offshore financial activities, in addition to life’s verities — honesty, truthfulness and generally moral conduct.

Unfortunately, many people who look offshore do so for very wrong reasons, including misplaced hopes for unreasonable profits. Many usually cautious people seem to suspend their good judgment when it comes to offshore business, banking or investments.

So keep these offshore (and onshore) rules in mind for your future actions:

1) A U.S. person must pay income tax annually on all income earned, without regard to where it is earned, and regardless of where in the world that U.S. person lives.

2) The law requires reporting to the IRS of offshore financial accounts over which a U.S. person has control; some reports must be more detailed than others.

3) U.S. courts have made clear that taxpayers cannot hide behind offshore trusts, corporations, foundations or other legal entities that are claimed to be recipients of income that actually goes into that U.S. person’s pocket.

4) Claims of fabulous return on investments that sound too good to be true are just that — untrue, and such claims are a hallmark of financial fraud.

5) Always do a thorough due diligence investigation — and ask for references.

6) Get good, reliable offshore advice and professional help, before you agree to anything.

In our publications the Sovereign Society provides reliable information about sound offshore investments, banking and foreign residence and citizenship, although we do not ever give individual investment advice. We can put you in touch with experienced professional in most offshore havens. All you need to do is — join us.

Australian Taxation Office Intensifies Their Anti-Tax Haven Witch-hunt

Bob Bauman — Wed, 01 Feb 2012 14:07:27 +0000

How You Could Make 150% Gains as Silver Soars to $75

Up front, I reiterate my basic belief that tax evasion is wrong (but try and define that phrase based on the crazy-quilt U.S. Revenue Code) — but I also strongly favor of the rule of law and full due process.

Canberra, the capital city of Australia, is located in the Australian Capital Territory (ACT), a self-governing area surrounded by the state of New South Wales. The city is comparable to the U.S. capital city, Washington, which lies with the District of Columbia, a similar area outside of any U.S. state.

Aussies commonly refer to Canberra as Australia’s “Bush Capital”.

In Australia the term “bush” stands for much more than the dry, wooded, grassless landscape that is uniquely Australian. The word also is used by big city dwellers in Sydney and Melbourne to describe back country areas and people, their culture and customs, not unlike the American terms “hillbilly” or “bush league” (baseball, not Republican Party politics).

Canberra is also home to one of the Sovereign Society’s distinguished professional legal associates, Terence M. Dwyer, (right) a leading tax and financial expert to whom we refer our members and subscribers.

Aussie’s Lament

Yesterday Terry sent me an email, rightfully complaining about the announcement by the Australian Taxation Office (ATO) and other police agencies plans to intensify the long running ATO campaign (Project Wickenby) against offshore tax evasion.

The ATO wants increased penalties and greater powers for investigators. The narrowly ruling Labor Party, under PM Julia Gillard, (below) seems determined to drive out badly needed domestic and foreign investment, mimicking Obama policies.

(Aboriginal activists mobbed Gillard and opposition Leader Tony Abbott in Canberra on Australia Day, January 26. At least 50 police, including a riot squad, protected them as they escaped out a restaurant side door).

Referring to the never-ending and always-expanding demands of the high-tax-loving, Paris-based, Organization for Economic and Community Development (OECD), Terry Dwyer asked whether Australia was about to “lead the way for the OECD’s next round of demands?”

He added what most astute Americans also are asking: “Why is it that one feels one is living in an age of increasing totalitarianism? When does one get to the ‘last territorial demand’? Whatever happened to the liberties of the subject and limited constitutional government?”

I Told You So

I often get requests for my opinion and information about Australia as a destination for Americans and others looking for a foreign residence and second citizenship. My answer for some time now has been that citizenship laws have some attraction, but that Australia’s tax collectors have been brutal in their anti-tax haven, anti-offshore crusades.

For the past decade I have been reporting on the ATO witch hunt aimed at alleged offshore tax evasion. Tax collectors have offered rewards to informers, possible tax amnesties, and issued scores of search warrants aimed at alleged evaders, especially the wealth, as well their accountants and attorneys. Common law attorney-client privilege has suffered.

Indeed, for freedom loving Australians, these unrelenting, highly publicized tax raids have raised serious civil liberties issues.

Crusading tax police have gone to the extreme lengths of raiding lawyers’ offices and wealthy person’s homes, grabbing files and computers. Leading citizens have been prime targets with lots of attendant tabloid publicity and what we Americans wryly call “perp walks.”

Numbers Game

As in the case of the U.S. Internal Revenue Service, the Australian “news” media largely has swallowed the ATO numbers, creating a U.S.-like public perception of anyone accused as guilty until proven innocent.

Since 2006, the ATO has charged only 62 people with serious tax avoidance, money laundering and fraud. Twenty-one people were convicted, although the ATC lost the abortive legal pursuit of Paul Hogan. Compare those numbers to the Australian population of 22,817,127.

This year alone, Project Wickenby operations will cost US$457.3 million but it has collected only US$630 million in outstanding tax revenue since it began, while claiming US$1.25 billion in uncollected tax liabilities established.

The ATC claims, without explanation, that since 2007-08 there has been a 22% reduction, about US$23.4 billion, in funds flowing from Australia to what the ATC calls 13 overseas “secrecy havens”; 50% to Vanuatu, 80% to Liechtenstein, and 22% to Switzerland.

No numbers were given for total lost foreign investment or how many Australians who have expatriated.

Extreme Example: Crocodile Dundee

Perhaps the most outrageous example of the ravenous Australian tax collectors’ anti-tax haven frenzy was the case of the famous Aussie actor known to millions worldwide as “Crocodile Dundee.”

In 2010, Paul Hogan was detained by tax police hours after arriving in Sydney for the funeral of his 101-year-old mother, Florence. Until he signed an agreement with the ATO he was prevented for weeks from leaving the country.

Hogan was accused by ATC of evading tax on US$34.5 million of alleged undeclared income. Apparently the ATO considered the 72-year-old film star an Australian resident for tax purposes for the years 1987-2005, despite the fact that he lived and paid taxes in the U.S. where he is a legal resident alien and has a permanent home.

Could It Happen to You?

I don’t know all the facts in the Hogan case, but the tax hungry government of Australia made a major public relations mistake. They could easily have settled the matter by negotiations without grabbing Hogan at his mother’s grave.

But this unfortunate story reinforces themes I have repeated over these many years – the importance of foreigners knowing before any move about the taxes in your intended nation, the impact on your home country taxes, about double taxation, tax treaties, the laws governing tax residence and tax domicile – and most important, obtaining competent, trust worthy professional tax and legal advice in both countries – well before you make your move.

If Paul Hogan had asked us I would have recommend skilled Australian and American tax and legal counsel with whom the Sovereign Society works, Terry Dwyer among them.

If you are planning to live or do business offshore, avoid crocodile tears – check with us first.

Belgium: Quick Residence, Fast Citizenship, Low Taxes

Bob Bauman — Mon, 30 Jan 2012 22:30:44 +0000

How To Escape From America, and Where to Go

Unless you are the equal of the late Winston Churchill, who was made an honorary American citizen by act of the U.S. Congress, quick citizenship these days usually costs a lot of money.

All the same, as the author of The Passport Book, I am often asked: “Which country will grant me second citizenship and a passport fastest?”

And the answer is this: Few countries have laws that grant immediate citizenship to foreign nationals based solely on economic considerations.

Two of them are the eastern Caribbean nations – the Commonwealth of Dominica and Saint Christopher & Nevis (known locally as St. Kitts & Nevis).

You pay for what you get, and the price can be $200,000 or more.

Austria also has a similar, rarely used law that grants citizenship – but it can cost $1 million.

Several other countries, including Ireland, Italy and Poland, grant quick citizenship to the foreign children or grandchildren of their current and former citizens.

However, most countries require five or more years of residence before naturalization as a citizen.

Uncommonly Easy for Entrepreneurs

Other countries welcome foreigners by granting immediate residency, but citizenship is a process that will take several years. Such countries include Panama, Belize, Uruguay and Paraguay.

However, there is a little-known European exception, whose liberal laws make it uncommonly easy for entrepreneurs, self-employed individuals and investors, who are not European Union citizens, to set themselves up as immediate residents. Citizenship can follow in as few as three years.

The country is Belgium – that tiny nation wedged between France and the Netherlands.

The only thing most Americans might know about Belgium is that it is the birthplace of Agatha Christie’s best-selling detective, Hercule Poirot.

However, Belgium has been called the crossroads of Western Europe – and for good reason.

Most of the continent’s capitals are within easy striking distance of Brussels, which also serves as the official headquarters of both the European Union and NATO.

As a result, about 3,800 foreign diplomats are based in the Belgian capital, second only to New York City, which is home to the United Nations.

After several years of proven physical residency, there is an official procedure by which you can declare yourself a citizen.

The government is bound by law to accept that declaration unless there is an official statement giving a valid reason for denying citizenship.

Residency Permits are Issued Annually

Leaving aside reasons for obtaining residency and citizenship based on Belgian family ties, most residence applications come from those interested in doing business in the country.

Applications for work and professional permits must be obtained before applying for a residence permit. In most cases, residence and citizenship can also easily be extended to a spouse and children.

Non-EU citizens must submit a “long-stay visa application,” which is subject to case-by-case approval by the government.

U.S. citizens may enter Belgium for up to 90 days for tourist or business purposes without a visa.

Upon arrival in Belgium, a foreigner intending to stay must report to the local authorities in the municipality where they are resident. Belgian law requires that everyone carry official identification at all times. This ID must be displayed upon request to any Belgian police official. U.S. citizens who are not residents of Belgium must present a U.S. passport.

For the first three years, residency permits are issued on an annually renewable basis and later an indefinite residence permit can be obtained.

The added attraction of Belgian citizenship and a passport is that it gives the right to live and work in any of the other 26 EU countries. Belgium allows dual citizenship, so new citizens can retain their original country passport.

Somewhat of a Tax Haven

The government denies it, but compared with other high-tax EU countries, such as France and Germany, Belgium is somewhat of a tax haven.

Even though a “tax resident” in Belgium is taxed on worldwide income, important exceptions apply, including:

no tax on capital gains
no wealth or net-worth withholding taxes
maximum tax on dividends of 15% to 25%, depending on type of shares
no tax on surplus value of private real estate, when owned for five years
the possibility of paying no inheritance tax

One aspect to gain Belgian residency and eventual citizenship is that you must learn Dutch, which is spoken by the Flemings in the north of country, or French, which is spoken among the Walloons in the south.

While no one expects you to speak these languages perfectly, bolstering your linguistic skills may in the end be a small price to pay.

If you are interested in Belgian residency or citizenship, contact Henley & Partners Belgium for assistance.

Faithfully yours,

Bob Bauman

P.S. If you’re serious about financial freedom, but you’re struggling to wrap your head around this challenging economy, if you’ve been overwhelmed by the idea of going “offshore” and if you’re concerned about the future, I urge you to read this.