BE SURE TO UNDERSTAND HOW TO PROTECT YOUR BULLION GOLD FROM BEING CONFISCATED

"There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government."

~ Benjamin Franklin


Dear Mountaineers,

My commentary this week will be brief and will focus on two key topics instead.
First of all, Ron Holland has written an important piece on the issues and chances of gold confiscation, and on how to prepare for that scenario most effectively.

While Ron´s comments are US-centered, you should read his comments thoroughly, irrespective of where you are from. As we proceed further into the erratic twilight zone of this Debt Supercycle, the prospect of gold confiscation will not be limited to just America. No matter where you live, you need to understand your options and study some of the more technical aspects of avoiding the pitfalls of the monetary, fiscal and regulatory shenanigans your government may have in store.

Secondly, I have added a short update below on our latest conclusions regarding the US reporting rules on foreign bank and financial accounts (FBAR). I believe this update will be important to some of our American subscribers, particularly those with an interest in the reportability of variable annuities and life policies acquired from international life insurance companies.

In this context, and in reference to the quote by Benjamin Franklin above, I will close with the following comment:

At BFI, we are dedicated to helping our subscribers and clients to define and implement international wealth management strategies in full compliance with the rules of their home country. Admittedly, Big Brother (Uncle Sam, Giovanni, Gustav and all the rest) is making it increasingly difficult and more unattractive for good, law-abiding citizens to keep from - as tax authoties would certainly term it - "defrauding their governments". However, compliant AND effective strategies are still available and should be pursued!

Sincerely,

Your "Swiss Mountain Guide"

Frank R. Suess

RON´S PANORAMA - FREEDOM AND GOLD: IS IT TIME TO CONFISCATION-PROOF YOUR GOLD HOLDINGS?

He who owns the gold makes the rules.
An old adage

Actually in the real world it goes more like this: "He who makes the rules owns the gold." Since Washington makes all the rules and regulations, my fear is that Congress, or by Presidential Executive Order in a real or contrived crisis, Washington, could again outlaw the ownership of gold in the United States.

The Confiscation Scenario

What could be the Washington response if - or, as I believe more, "when" - a global sale of Washington treasury obligations and the dollar develops in the future? Here is my take on the threat, the 36 years of confiscation protection myths offered, and your three real protection options.

What would you do under the following scenario? You wake up tomorrow morning to find out that as a result of an overnight crisis, Washington has ordered bank safe deposit boxes and private vault facilities sealed for the duration of the crisis. The reason for the lock-down: a review and inventory by bank officers to find unreported gold assets.

Then, a new Treasury ruling comes out requiring every American to temporarily exchange their gold for US dollars, to be held in safekeeping by the Treasury for the duration of the financial emergency.

Third, all bank and investment firms, bullion dealers, coin shops and numismatic operations are ordered to compile and turnover the transaction records and mailing list of every gold, silver and numismatic transaction, lead and client in their record base of the last 30 days.

Finally, if you have lost your gold or are unwilling to comply with the gold exchange, then you would be assessed an "unproductive assets tax" equal to 100% of the value of any assets on the confiscation date, based on client records from the dealers.

A willful failure to exchange your gold would also be subject to a penalty of 10 years in prison and/or a fine of $164,000. Note: this is the 1933 Roosevelt gold confiscation prison penalty and fine of $10,000 adjusted to the value of our depreciated 2010 dollars today.

Is This An Extreme Scenario?

I wish it were! Today we are living in the most perilous economic times we´ve seen since the Great Depression. On December 31, 1974, President Gerald Ford ended the era of private U.S. gold ownership restrictions which had started 41 years earlier with Roosevelt´s Presidential Executive Order # 6102. Note: the F.D.R. theft exempted gold coins with "unusual historic value" such as numismatic coins.

Why Washington Must Confiscate Your Gold Wealth?

Washington and the Treasury Don´t Have the Gold Holdings They Claim. The US Treasury claims to own 261 million ounces of gold bullion but why should we believe them? Since the government lies about everything today, I seriously doubt they are telling the truth about Washington´s gold ownership. A recent poll has shown that 80% of the people don´t trust their government and when you add the 22 million government employees and their families, one could say zero percent of productive Americans in the private sector trust the government. So why should we believe this statistic?

Although Gold Hasn´t Been An Important Factor To Central Banks & Governments, It Will Become Crucial In A Future Crisis. As long as the American people and foreign central banks, nations and investors accept our dollar and trust we can service our trillions in national debt and unfunded government liabilities, none of this matters. The situation will turn on a dime when a future run develops on our Treasury obligations and the fiat dollar, probably sometime in the next decade. What happens then to our false gods of unlimited national debt and fiat currency? You know the answer.

After Hyperinflation, Washington Will Need Massive Amounts of Gold For A New Dollar. Historically, when currencies collapse during hyper-inflation, the solution is to establish a new currency. This is a likely Washington reaction in the aftermath of a dollar-destroying sovereign debt crisis in the U.S.

How would the Washington political establishment respond to the public´s discovery that government is morally and economically bankrupt? What would it do to try to restore confidence in Washington and its establishment leadership? The answer is a new, post-collapse dollar with a link to gold designed to provide reassurance without imposing true monetary discipline. Although this would be like covering lead with gold-plating, the public might buy it for a few years, especially if the old dollar´s collapse could be blamed on an outside enemy or crisis. Washington will need your gold.

Washington and the Wall Street Establishment Can´t Allow Gold Investors To Profit At Their Expense. Do you really believe for even a moment that Wall Street and the international banking cartels that own Congress are going to allow gold investors (the sworn opposition and antagonists of fiat currency, the Federal Reserve and everything they hold profitable) to reap 100%, 1000%, or 5000% profits when Washington´s government debts and fiat dollars collapse into a hyperinflation nightmare? I think not.

Massive Gold Profits Will Indicate Victory For Ron Paul and the Austrian School of Economics. The political elites and their failed big government Keynesian policies of central bank manipulation, fiat currency and massive government indebtedness will be shown as a catastrophic Ponzi scheme imposed against the American people. They dare not allow this to happen as the consequences would be loss of political control, public outrage and calls for righteous retribution and a settling of scores. This would be great, but the enemies of gold will do everything possible to keep this from happening.

What Have Been Your US-Based Confiscation Protection Options?

In the 36 years since gold ownership was legalized, coin and bullion dealers have usually suggested three alternatives to protecting your gold wealth from the risk of a future confiscation action:

Buy Rare Coins with "Unusual Historic Value". Many firms have suggested that numismatics with far higher commissions and mark-ups than bullion coins would be exempt as it was in 1933. Why expect Washington to exempt numismatics this time around when one of the main promotional benefits touted for rare coins for 36 years has been that they would likely avoid confiscation? Today, the government is even more likely to confiscate these coins specifically because many investors have purchased them to avoid a future confiscation.

Store Your Gold In A Safe Deposit Or Private Vault Storage. This is an excellent idea to protect your gold assets from conventional theft, but this actually makes it even easier for Washington to steal your gold as I outlined in the earlier scenario.

Hide or Bury Your Gold. I once had a very paranoid client who buried all of his gold in the backyard but a couple of years later had a heart attack and it took his wife years to dig up the large backyard to find all the gold hidden from the supposed "imminent communist takeover". If Washington were to even threaten to obtain client gold and coin records, I think few Americans would go so far as to break the law and fail to follow an emergency order with the threat of heavy fines and jail time.

So, I believe "He who makes the rules owns the gold" and in a future financial or political crisis situation, most of your US-based gold and coins would be at serious risk of confiscation or exchange for highly depreciating paper dollars. It would be a simple, easy operation for Washington to accomplish and so you should make your plans accordingly.

So How Can You Confiscation-Proof Your Gold Holdings?

First, I still believe you should hold some gold in your possession or in a safe deposit box for short-term financial liquidity and a hedge against an economic crisis situation. This remains my recommendation for small gold holdings but large gold investors should consider other alternatives due to the growing threat of gold confiscation.

Second, having the gold stored offshore in either allocated or unallocated storage may or may not exempt you from confiscation, recall or forced repatriation back to the U.S. It depends on how the Treasury might word the "freeze ruling" on safe deposit box and vault storage.

The best solution is to utilize accepted, legal asset protection strategies which have provisions and legal language making it impossible for you to comply if under force or undue duress from third parties.

How do you do this? First, you can purchase and store your gold offshore in an allocated program like the one offered by BFI, called Global Gold. 

                  

Second, foreign annuity or life insurance contracts can be structured to meet U.S. regulations and the advisor can create a portfolio of physically held precious metals as investments within the contract for a portion of your funds.

What is particularly interesting in this option is that physically allocated precious metals can be boutht within the sanctitude and safety of an insurance policy at the INSTITUTIONAL rates afforded to the insurance company as a large institutional investor. In other words, you benefit from the insurance-based advantages (as discussed below) of asset protection and tax deferment AND the economic benefits of buying precious metals at a FRACTION of what you would pay in the US or if you acquired the metals personally.

Moreover, this type of arrangement could serve as an excellent asset protection and wealth preservation strategy with the opportunity for tremendous gold profits during a financial, debt or dollar crisis. Owners of life insurance contracts are prohibited by U.S. regulations from choosing investments or making the investment decisions involving an insurance contract so there would be no way you could legally comply with a confiscation demand.

Persons with too much gold or numismatic assets in their home countries can liquidate, pay taxes and transfer the proceeds to a more protected status offshore as mentioned above. In some cases, existing precious metals owners can also ship the bullion - an in kind transfer - to the gold storage facility offshore to reduce their at-home political confiscation risk.

Note, Swiss insurance and annuity regulations make these insurance products the ultimate in asset protection, lawsuit and asset seizure protection and would be uniquely suited for gold confiscation protection.

I´m a paid contributing editor and writer and only consult with clients on retirement planning and big picture trends and scenarios. I never discuss individual investments or recommendations. Therefore, for more information on these strategies, consult with BFI or your offshore advisor.

In conclusion, time may be very important here as none of the ideas mentioned above will work after a crisis or confiscation order. Act today to secure your wealth.

Freedom is greater than silver and gold.

Written on the wall of the Town Hall in Basel, Switzerland, back in the 1500´s

Today in 2010, the quote above still rings true for those of us who value liberty. 500 years later, the people of Switzerland still have their freedom and their gold, while in America we are losing both as surely as the sun will rise again tomorrow. The only question is when.

History shows us that just preserving your wealth and retaining ownership of your gold will not guarantee your freedom and liberty. But it can provide the future funding to return freedom and gold and the restoration of the republic of our founding fathers back to our nation. I urge you to secure your assets and continue the fight for freedom and gold.

Until then, I´ll be singing the"To Freedom & Gold Anthem" at FreedomFest this year in Las Vegas. Click here to listen and I´ll continue writing more about the growing threats to our wealth and liberties.

Ron´s Panorama is contributed by Ron Holland and offers economic, financial and social considerations for Americans, from an American - with a somewhat Swiss perspective. Ron is a retirement expert and consultant, who works out of Zurich and is a contributing editor to the Mountain Vision Newsletter.

UPDATE ON FBAR REPORTING FOR AMERICANS

On February 23rd, the US Treasury Department´s Financial Crimes Enforcement Network (FinCEN) released its proposals on several aspects of the Report of Foreign Bank and Financial Account (FBAR) rules. FinCEN proposed these changes to become effective as of June 30th, 2010.

We discussed these proposals in more detail in the Mountain Vision Update of June 4th. This week, we give you a brief update on the most relevant facts and our conclusions in reference thereto, which quite frankly continues to leave many Americans in limbo on the subject.

We have researched this topic thoroughly and are in touch continuously with a variety of legal professionals that are staying on top of this issue. However, beware that neither any members of the Mountain Vision editorial team, nor any of the directors, advisors or asset managers of BFI, represent themselves as qualified or licensed US tax attorneys. We hereby recommend, if applicable, that you seek solid and qualified advice from a tax attorney with a good understanding of international law and US tax rules to formulate your personal conclusions and decisions.

That said, the following facts are worth considering:

- The changes to the current FBAR rules are PROPOSED changes. As of this day, they have not yet been confirmed.

- Currently, it is very probable that the deadline for the proposed changes will be postponed to the end of the year.

- The proposed changes, by definition, confirm the prior position held by us and our legal advisors. Contrary to many financial advisors and attorneys who have, over the past few years, repeatedly rushed to a conclusion that now surely foreign variable annuities and life policies were subject to annual FBAR reporting, we have always held the position that, as long as a variable annuity or life policy is structured and maintained in compliance with US tax law in order to afford legal tax deferment on the growth of a policy´s cash value, it is not reportable on an annual basis.

We will continue to monitor this matter and, if and when we hear of anything new, we will inform you.

NEWS BRIEFS

Free Markets Need a Spiritual Dimension

In his Daily Bell article of June 13th, free market advocate Anthony Wile commented on an editorial by Dr. Nathaniel Brandon and made a few points in regard to the the spiritual dimension of current affairs, an aspect that, in our opinion, is critical to our times and deserves thorough consideration. His comments ended with the following statement: "When the current freedom movement finally finds its Martin Luther - or at least a substantive spiritual underpinning to support its free-market conclusions - miracles may happen."

The Mountain Vision editorial team could not agree more. We are reminded of what Solzhenitsyn once stated in his famous "Voice from the Gulag" on the failing of atheism:

"Over a half century ago, while I was still a child, I recall hearing a number of old people offer the following explanation for the great disasters that had befallen Russia: ‘Men have forgotten God; that´s why all this has happened´.

"Since then I have spent well-nigh 50 years working on the history of our revolution; in the process I have read hundreds of books, collected hundreds of personal testimonies, and have already contributed eight volumes of my own toward the effort of clearing away the rubble left by that upheaval. But if I were asked today to formulate as concisely as possible the main cause of the ruinous revolution that swallowed up some 60 million of our people, I could not put it more accurately than to repeat: ‘Men have forgotten God; that´s why all this has happened´."

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Foreign Funds Swell Swiss Banks

Rich foreigners are increasing the funds they hold in Switzerland, according to reports by some of the country´s leading private banks. Jacques de Saussure, designated senior partner of Pictet, one of Switzerland´s biggest private banks, says his group has seen an upturn, in spite of uncertainties about Swiss banking secrecy.

"There are suddenly new reasons for having your assets in Switzerland," said Mr de Saussure, in one of his first interviews before next month becoming senior partner.

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U.S. Asset Managers Worried Obama Could Confiscate Gold

Speaking at the FT Silver conference in London earlier this week, lead-off speaker John Levin, HSBC Bank´s Managing Director, Global Metals and Trading (HSBC is one of the world´s top precious metals traders and its vaults in the U.S. and Europe hold huge holdings of gold and silver bullion) recounted conversations with some of the U.S.´s top asset managers controlling massive amounts of capital asking if HSBC had the capacity in its vaults to store major gold purchases.

On being told that the bank´s U.S. vaults had sufficient space available, he was told that they did not want their gold stored in the U.S.A. but preferably in Europe because they feared that at some stage the U.S. Administration might follow the path set by Franklin D. Roosevelt in 1933 and confiscate all U.S. gold holdings as part of the country´s strategy in dealing with the nation´s economic problems.

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Debt Spreading "Like a Cancer"

The economic situation today is drastically worse than a couple years ago, and the euro is doomed as a concept, Nassim Taleb, professor and author of the bestselling book "The Black Swan," told CNBC last week.

"We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base," Taleb said. "Bank balance sheets are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn´t improved," he added.

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Pimco Sees Pound Vulnerable, Inflation a Threat for Long Gilts

The British pound is vulnerable to declines on sovereign-debt risks and U.K. inflation may erode the value of longer-term debt, said Pacific Investment Management Co., which runs the world´s biggest bond fund.

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George Soros Believes that the "Crisis is Far From Over"

Billionaire investor George Soros said "we have just entered Act II" of the crisis as Europe´s fiscal woes worsen and governments are pressured to curb budget deficits that may push the global economy back into recession.

"The collapse of the financial system as we know it is real, and the crisis is far from over," Soros said at a conference in Vienna. "Indeed, we have just entered Act II of the drama."

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Greece Cut to Junk Status!

More bad news for Greece: Their credit rating was cut to non-investment grade, or junk, by Moody´s Investors Service, threatening to further undermine demand for the debt-strapped nation´s assets as it struggles to rein in its budget deficit.

In making the four-step downgrade to Ba1 from A3, Moody´s cited "substantial" risks to economic growth from the austerity measures tied to a 110 billion-euro ($134.5 billion) aid package from the European Union and the International Monetary Fund. The lower rating "incorporates a greater, albeit, low risk of default," Moody´s said in a statement this week from London. The outlook is stable, it said.

Hmmm, do we actually care what these people say anymore?!?!

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Peace in the Middle East Appears Light Years Away...