Michael Maloney makes a distinction between “currency” and “money”. Currency is issued by government. Money has always been gold or silver. He outlines in the following video how various currencies dominate world trade only for a short time before they collapse and something else takes over. At the end of World War II, the US dollar became the dominant currency, and for the first time ever in history, the world had one reserve currency. Today, in Maloney’s view, there are various events which are bringing the greenback’s status as the world’s reserve currency to an end–nails in its coffin. One of those nails is FATCA. See at 18:00 minutes in:
Nail, or maybe the last spike? Or perhaps even more fittingly, a wooden stake?
Shades of things to come for the U.S. Dollar:
As countries along the new Economic Silk Road (stretching from Brazil to Africa and on to China) bypass the USD coupled with the USG’s inability to punish these large countries for abandoning the USD means the USD as a sole reserve currency is finished sooner then Washington believes.
FATCA isn’t about tax but preparing for capital flight when Homelanders wake up to the fact the US position in the world has changed for the worse and the USG doesn’t want them to leave with untraceable assets for the USG to tax.
“Homelanders wake up to the fact the US position in the world has changed for the worse and the USG doesn’t want them to leave with untraceable assets for the USG to tax.”
I live in the USA. I think the first part of the above quote–that the US position in the world has changed for the worse–is something that most Americans living in the USA are already quite painfully aware of. The second part–that the US government will try to keep them in the USA through devices like FATCA–is much less well known stateside.
Agreed 100%. For as much as I’ve been immersed in FATCA, and as much as I’ve been speaking to people in the US about its implications for us “homelanders” (especially in the last few weeks), I have to remind myself all the time that the wider population really has no idea how grave the law could prove to be for all of us.
So there would be some there who definitely could envision their government would try to “keep them in?”
Fascinating and easily understood, including (for us who are versed on the subject) the FATCA “Berlin Wall” statement. The average person within the US hasn’t heard of FATCA, have they, let alone the implications for themselves and their families?
Thanks for the post, Petros.
Maloney gets the big pictures well as many of the libertarian conservatives (Rand Paul et al). Most homelander Dems and mainstream Repubs remain arrogantly stuck on stupid, hence legislation such as FATCA, PATRIOT Act etc.
Guns and butter, butter and guns — both parties are out to grab as much money as they can and expats (having no representation) are the current targets.
There has been a lively debate over at Jack Townsend’s blog over the last couple of weeks. Jack is “wilfully blind” about the pure hell that CBT, FATCA and FBARs causes for expats and considers our complaints as being “anecdotal” without sufficient evidence to support. Hopefully more Brockers can chime in to enlighten him some more as well as his practicianer readers.
FATCA will precipitate a financial trade war.
And it’s a trade war launched unwittingly by a divided and dysfunctional Congress; without objectives, a plan of battle, or accountability,
Already foreign financial institutions are embargoing U.S. persons. Expect sanctions to expand with unforeseen consequences.
Here are other factors adding to this perfect storm…
Outstanding U.S. public debt as of today exceeds $15.5 trillion.
– Each U.S. citizen’s share of this debt is about $55,000.
– More than 40% the U.S. public debt is held by U.S. Federal Reserve Bank and other U.S. government – they are their own best customers.
Source: National Debt Clock
Number of illegal immigrants living in U.S. is about 11.7 million.
Almost equal to the population of Ontario, Canada (16.6 million).
Source: Pew Institute
More than 47 million Americans receive food stamps in 2013.
More than the entire population of Canada; about one-sixth of entire population of U.S.
Source: Washington Post
The Epidemic of U.S. Gun Violence continues unabated.
– Every year in the U.S., on average >100,000 people are shot. Each day an average of 289 people are shot. 86 of them die.
Source: NBC News & The Brady Campaign To Prevent Gun Violence.
I believe 1 July 2014 won’t result in an overnight collapse for the USD, however, it’s like a cancer for the USD insofar other countries for a number of other reasons that Mr Maloney points out want to break the USD’s sole reserve currency status.
The US is engaging in global financial war against the world and seeking to punish anyone who wants to dump the USD. However the global backlash has become so wide spread that yes the USG can put out the USD fire in Libya, but it can do nothing about India, Russia or China. That’s where the crunch for the USG lies.
If you make your currency difficult to use, use sanctions because the USG believes countries are ‘boxed in’ and have to use the USD, eventually countries will go elsewhere.
Countries are signing these IGAs has a short term measure to be active in the weaning sunset years of the USD world knowing that pressure is building for change. Once the sole USD world disappears, FATCA becomes redundant.
At that point Senators Schumer and Levin can get out and scream Congress but the world won’t be listening. So the USD becomes redundant so will those clowns.
FATCA has made Americans abroad into toxic persons. The toxicity will spread to the US dollar as well. Banks will be afraid of losing 30% if a few errant persons with US indicia happen to slip through the cracks.
Even if they sign up for FATCA, banks will pare back on their US holdings and transactions and avoid doing business with Americans in general in order to reduce their exposure to risk.
Weaponizing the dollar will bite Amerika right in the ass and deservedly so.
it is not just expats that they will be going after
“..Jack is “willfully blind” about the pure hell that CBT, FATCA and FBARs causes for expats and considers our complaints as being “anecdotal” without sufficient evidence to support….”
I’ve noticed that he tries very hard to redirect blame and responsibility for a remedy on to individuals abroad and the ACA and absolves the US government (and of course party in power) of any responsibility whatsoever. That is when he even grudgingly acknowledges that there is or even ‘might’ be a problem – even for those who are compliant abroad. It gets pretty egregious when those with no effective representation or recourse and living and paying a full set of taxes where they live outside the US are blamed by someone who knows all the complexity of the issues very wel,l for the harm that results from the machinations of those living inside the US who derive direct benefit from within its system. It is clearly blaming the victim when he repeatedly asserts that individuals abroad and voluntary organizations with limited funds like the ACA are responsible for taking on the massive task of proving that the IRS and Treasury and Congress are causing great harm and holding them to account, and that somehow it is our fault that there has been no remedy. Particularly unjust when the Maloney bill to fund a commission to even look into expat issues can get no traction.
What more proof of the depth and severity of expat CBT issues should be required when the IRS’ own Taxpayer Advocate asserts that some of the complaints made at Jack’s blog – which he dismisses, are considered by the TAS to be “Most Serious Problems” in her reports to Congress? And if the Taxpayer Advocate can’t education or motivate Congress to act, then how could we expect to be successful and accountable for the US lack of redress?
How ridiculous it is for him to assert that it is up to those abroad to force the US government to disclose data which would help to show how bad the effects of FATCA, or the harm caused by the OVD programs, when it has refused to provide ANY information even under FOI claims filed. It is only the TIGTA report which divulged some of the data necessary to analyze what was actually happening. Even biased FATCAfather ‘Dick’ Harvey acknowledged that there were problems that FATCA was causing with expat’s legal local banking where they live abroad.
I only just saw this news that the Fed wants to add fees to bond fund exit to force retail investors to stay in them as interest rates rise. They have a massive balance sheet to pull back and somebody has to pay.
This video (slightly dated) is a good compliment to the Maloney video in the main post.