Since it is now July, and hotter than a cat on a tinfoil hat, this story may make your temperature rise:
We’ll have an update on July – never mind, just watch the video.
Since it is now July, and hotter than a cat on a tinfoil hat, this story may make your temperature rise:
We’ll have an update on July – never mind, just watch the video.
Christine Lagarde did not mention “FATCA” or the “collapse of the dollar.” Someone here might be too influenced by the symbolism as focused on in Dan Brown’s The Da Vinci Code. She was trying to be entertaining and humorous while showing a grasp of numbers and avoiding talk about/throwing up a smokescreen of the global economy.
The relevance here is the potential impact of FATCA and the onerous reporting and penalties. For some financial institutions (even for those who did not previously consider themselves FFI) they may decide not to deal with U.S. banks, companies, or financial instruments. This would not be a decision on the margin, but could involve deciding to completely not deal with them, instead of a decision to reduce dealing with them.
Also, there is the impact of FATCA to make US financial institutions more choosy about dealing with “foreign” entities.
That all might reduce demand for the USD and increase demand for other currencies.
Well, it seems that the talk of currency and divestment has caused the Congressional office staffers to cook up responses. I wrote about completely different matters to my congressmen (the IGA’s and the security issues). However, the response came back defending currency arguments and defending divestment arguments:
“Thank you for contacting me regarding U.S. currency. It is good to hear from you.
In your email, you inquire about a law that may affect U.S. currency starting in July 2014. According to the Congressional Research Service (CRS), during the 111th Congress, the Democrat-led House passed H.R. 2847, officially titled the Hiring Incentives to Restore Employment Act (P.L. 111-147). H.R. 2847 was approved by the Senate and signed into law by the President. This legislation included certain tax compliance provisions. Those provisions, collectively known as the Foreign Account Tax Compliance Act (FATCA), were intended to improve tax compliance on Americans who hold foreign bank accounts.
In general, FATCA requires foreign financial institutions (FFI) that hold certain U.S. assets to report information on those assets to the Internal Revenue Service (IRS) or face a penalty. Since the U.S. taxes its citizens on worldwide income, the purpose of FATCA is to prevent Americans with overseas bank accounts from evading taxes. While some individuals are concerned that FFIs may divest themselves of U.S. assets, according to CRS there are no reports of large banks or investments firms divesting of U.S. assets. Additional information regarding FATCA is available online at http://www.treasury.gov/connect/blog/Pages/Myth-vs-FATCA.aspx.
Thank you again for taking the time to write to me. I value your input. If you haven’t done so already, I would like to encourage you to visit my website at http://www.lummis.house.gov. There you can sign up to receive my newsletter, and have access to a wealth of other information. I won’t flood your email box, but I will provide you with updates once in a while about activities in Washington that affect our lives in our state. I hope you will sign up so that we can stay in close touch, and I look forward to seeing you in ur state.”
So, there indeed is a bit of buzz going in to Washington about FATCA versus currency and versus divestment as a result of the various articles in newspapers and the investment blogsites.
@Mark Twain
LOL, they referred you to Stack O’ Lies’ classic Mythbuster report for some fine truthy stuff. If this is the best that the Congressional RESEARCH Service can come up with then the US is indeed in DEEP trouble.
FATCA is a cancer on the US dollar. At some point the US dollar will require chemo, surgery, or radiation to stem its advance.
At the World Cup last night it was interesting the Angela Merkel chose to sit in the same box as Putin. I’m sure the football wasn’t all they were discussing last night.
Putin is on a South American tour and actively setting up the financial infrastructure with Brazil to bypass the US dollar on settlements. Putin probably thinks the US has shot itself in the foot with FATCA and he’s only going along with it until the BRICs complete setting up the new infrastructure to bypass the US dollar.
The US laughs that it bullies countries into IGAs but once an alternative settlement currency is available the joke may be on them.
Predictions of the collapse of the US dollar risks becoming a self-fulfilling prophesy if enough of the right people believe them.
The balance of articles is definitely getting more hostile since 1 July. Lots of interesting stuff. French are getting mightily ticked off in particular, but Latin America too. Some talk of swaps and moving out of dollar, but it looks like small amounts still. It’s not so much FATCA, although that plays its part, as the way that the U.S. was able to fine BNP Paribas under U.S. law because a dollar transaction went through New York and the way the deal on Argentina has been blocked.
So far, the big thing that is clearly noticeable is the running up of real estate prices in various places (New York, London, Taiwan) as a way of hiding cash. Not a trend I like, since some people need a place to live.
http://www.inner.org/gematria/gematria.htm
https://jhaines6.wordpress.com/2014/06/04/a-conversation-with-hillary-rodham-clinton-and-christine-lagarde-on-putin/
http://www.abovetopsecret.com/forum/thread1020085/pg1
Would seem that the number 7 is one of their favorites: “Illuminati” (Bavaria 1776), religious texts (“on the seventh day”), seven days of the week, seven colors of the rainbow, seven seas, seven continents, even the statue of liberty with 7 spikes on her crown…
Wonder what they’re planning for 2014.
More seriously, a senior economist from the Chinese Agricultural Bank has suggested that BNP Paribas is a play at maintaining U.S. control of global economy. He predicts euro/Chinese rmb/dollar pillars emerging to the world economy. He sees FATCA, though, as something that foreign countries like, since it stems the black market. Not being Eric, I had to make do with google translate.
http://news.sina.com.tw/article/20140715/12891636.html
This might be possible. One of the strangest stories I have run across is the one below, which seems to suggest that Americans have been aiding and abetting foreign tax evasion by opening foreign accounts on behalf of other people, telling the foreign government that U.S. tax was being paid on the money and then not declaring them to the U.S., either.
http://www.jdsupra.com/legalnews/false-foreign-gift-claims-and-wire-fraud-47923/