What can you buy for only $870 million? How about the death of the U.S. dollar?

15 thoughts on “What can you buy for only $870 million? How about the death of the U.S. dollar?”

1. Good article Deckard1138 and thank you for posting. I’m wondering about this sentence: “American residents in Asia seeking to hide assets only have to find a strictly local Asian bank with no links to the US banking system.”

   The article fails to mention any specifically, that would be a needle in the haystack, wondering which he refers to and would be quite a find. Almost any bank in Asia will have a US correspondent account (unless you are talking about Iran)

2. @isaac

   Also my understanding was that FATCA essentially divides the non-US world into two parts–countries, banks, and individuals–into two parts: those who are FATCA compliant and those who are not FATCA compliant. Part of what is required in being FATCA compliant is that any time when money is transferred from the FATCA world to the non-FATCA world, the 30% withholding is applied.

   So if this Asian country has an IGA, then by local “law” the banks there have to report “US persons” to their central tax authority, even if they have no direct links to the US banking system.

   If they don’t have an IGA, then it is true that some banks will choose to comply and some won’t. But if you transfer money to a non-compliant bank, then the 30% withholding is applied.

   At least that is my understanding of how the US wants it to work. Whether the US really has the muscle power to arm twist the whole world into this regime remains to be seen of course.

3. Like I have said before, I suggest that all banks charge the tremendous investments they have to do in order to comply with FATCA to the USG. Maybe that will wake them up a bit and realise that the IRS can’t expect this to be free ride. Like in any other business you have Revenue, Cost of Goods which results in a Gross Margin. The Cost of Goods should be invoiced to the USG. I can’t make it any simpler!

4. If nothing else, watching this chess game play out will be … interesting.

5. The camel’s nose is under the tent.

6. “Foreign financial institutions are now more than just tax bounty hunters for the US Internal Revenue Service (IRS), but pawns in an historical power play for control over the global financial system.”

   I LOVE this phrase – how true, how true!!!!

7. Interesting – has anyone actually used UnionPay? I wonder if this shadow non FATCA banking will take off.

8. There are always unintended consequences for every action. (For every action there is an equal and opposite reaction) It is the job of those in power to see these reactions and fix them before they destroy those whom the pretend to be helping.
   Unfortunately the D.C.Pukes (U.S.Gov) couldn’t find their collective back sides, with both hands and a map.

9. I have a Unionpay credit card. IIRC I got either a free TV or some grocery store vouchers when I applied (it was a while ago. I hope it was the TV, because I’m sure I never filed the relevant IRS form declaring the grocery store vouchers as offshore debt instruments or whatever.) So I suppose now my purchases are being monitored by Beijing rather than Fort Meade. And I have the emotional satisfaction of not generating any revenue for American companies, same as when I buy Mexican avocados instead of California avocados and Australian instead of U.S. beef.

   So I made my small contribution to decreasing Washington’s power over my local bank, but unfortunately, it’s not going to make a difference soon enough to help anyone who still has FATCA problems. Your credit card is still issued by a bank, and your bank is still being threatened by the IRS so that it will hand over all the information it has about you.

   FWIW, when HSBC & one of its local subsidiaries switched their ATM cards to Unionpay last year, it caused all sorts of problems because Unionpay is still not widespread overseas:
   http://www.scmp.com/business/article/1261120/hsbc-end-unionpay-chaos-new-plus-atm-card

10. What is “Unionpay?” Can I get anything like this in Canada?……or similar?

11. @Eric – thanks for the info. I guess the only way to use the UnionPay somewhat out of the system would be to also use a non FATCA compliant bank. Basically, never mixing the two systems. The knock down effects of FATCA are only starting to surface. Wait until pass through withholding is implemented. Personally, I have seen many variations of what people characterized as ‘US Person’ are doing in their own life. Mostly, it is a separation of husband/wife accounts putting all in the wife’s account (non US) (or husband’s if he is the non US); wife (nonUS) opening a non US company and account and giving access to the US spouse via Internet banking, etc etc etc. People do what they have to to survive what is an unfair, oppressive and hypocritical US tax system that is the opposite of the rest of the world’s standard.

    My hope is that this will all backfire on the Democratic Party ( and some idiot Republicans) that supported this nonsense.

12. Union Pay Canada http://en.unionpay.com/englobalization/all_globzlization/enus/Canada/

    Apparently as of 2011 over 60% of Canadian atm’s accepted it. http://en.unionpay.com/news/newsroom/file_62650643.html

    Moneris, which is Canada’s largest payment processor, expects to launch UnionPay card acceptance as part of its service offerings to merchants in fall 2014.
    http://www.moneris.com/en/About-Moneris/NewsAndEvents/2014/Month/Feb%2027.aspx

13. That’s interesting. I would love to have an alternative to Visa or Mastercard, i.e. anything which has no ties to the USA. Unfortunately my bank in Germany doesn’t offer UnionPay cards (yet?).

14. Steve and all,

    “I have seen many variations of what people characterized as ‘US Person’ are doing in their own life. Mostly, it is a separation of husband/wife accounts putting all in the wife’s account (non US) (or husband’s if he is the non US); wife (nonUS) opening a non US company and account and giving access to the US spouse via Internet banking, etc etc etc. People do what they have to to survive what is an unfair, oppressive and hypocritical US tax system that is the opposite of the rest of the world’s standard.”

    How true your statement is. That husbands and wives are reduced to taking actions such as this reveals an egregious human rights abuse which the US government is perpetrating against people who are associated with that country in the smallest way. A formal complaint to a major international human rights body will be filed by the end of the week. There are still a couple of days left to read the complaint and add your name to the submitters’ list. Please click on the Human Rights Complaint link on the sidebar.

15. Latest dispatch from Sovereign Man (Simon Black):

    August 6, 2014
    Vilnius, Lithuania

    When you think about “strong banking”, what country comes first to mind?

    A few years ago, the most obvious answer would be Switzerland.

    Today, however, Switzerland’s reputation for banking is nowhere near where it once was.

    Starting in 2009, the US, as chief financial bully, led the charge in assaulting the country’s banking sector and dragging it down brick by brick.

    The pummeling has continued ever since, culminating in the end of banking secrecy in the country altogether.

    Meanwhile, as Switzerland endured one blow after the next, the Chinese renminbi (RMB) quietly slipped past the steadfast Swiss franc to become a more popular currency for use in trade settlements.

    Eager to restore some of its former banking luster, Switzerland has taken note of this and is rapidly positioning itself to become a major center of European RMB trade.

    So the government of Switzerland recently signed a bilateral currency swap agreement with China, enabling the two countries to buy and sell up to 150 billion RMB or 21 billion Swiss Francs of each other’s currencies.

    Switzerland is just the latest to join the queue, as nearly 25 other central banks already signed similar agreements with China.

    Every few weeks, and with increasing frequency, we’re hearing news of the next country that is accepting China’s future financial primacy.

    There’s no denying that both sovereign nations and market participants are accepting the validity of the RMB as a major trade currency. This is no longer an anomaly, but part of an obvious trend.

    To be fair, it’s not that the RMB is a shoe-in for the next global reserve currency—because the country and its currency undoubtedly both have problems.

    What’s really being revealed with these latest developments is relative confidence.

    It may not be clear whether or not the RMB will make it to the top, but what is clear to everyone is that the USD is going down.

    Here we see ambitious countries like the UK and Switzerland proactively trying to adapt to and take advantage of the changing financial climate.

    The sole tactic of the US government, on the other hand, is to lash out at countries which make them feel threatened.

    They rally the whole world against Russia for acts of war. They blast China as a currency manipulator.

    And all of this as if the US wasn’t dropping bombs by remote control drone… or heavily manipulating its own currency.

    This has accomplished nothing other than to demonstrate just how weak and insecure the former financial superpower has become.

    Continuing to believe that the dollar is going to maintain its global reserve status is now not only foolish, but financially hazardous. To countries, businesses and individuals.

    Those that accept these changes and try to get out in front of this trend will do incredibly well. They are the ones who will survive intact when the financial system resets.

    Those who ignore the trend do so at their own peril.

    Until tomorrow,

    Simon Black
    Senior Editor

    SovereignMan.com