From the front page of this morning's New York Times: "Only five days into the Obama presidency, members of the new administration and Democratic leaders in Congress are already dancing around one of the most politically delicate questions about the financial bailout: Is the president prepared to nationalize a huge swath of the nation’s banking system?"
To a large degree, the answer is that, thanks to George Bush, the last Democrat Congress and President Obama, billion dollar bailouts already have made banks wards of the U.S. government, feeding off taxpayer funds.
American taxpayers are now the biggest shareholders in Bank of America, with about 6% of the stock, and in Citigroup, with 7.8%. But the government’s influence is far larger than those numbers suggest, because it has guaranteed to absorb the losses of some of the two banks’ most toxic assets, a figure that could run into the hundreds of billions of dollars.
And already the government as quasi-owner has begun the political meddling I predicted only last week when I said: "Fast forward to the future day when Obama's regulatory bureaucrats will be telling banks where to put millions, to whom to make loans, who gets mortgages -- and who doesn't."
After I wrote that The Wall Street Journal detailed how U.S. Rep. Barney Frank (D-MA), the godfather of the FannieMae and FreddieMac subprime housing mess, had personally intervened to get some of the bailout billions for a failing bank in Massachusetts.
Plain Folks Intelligence
My fellow Marylander, The Baltimore Sun's acerbic columnist, the late H.L. Mencken, observed: "No one in this world, so far as I know, has ever lost money by underestimating the intelligence of the great masses of the plain people."
But what happens when that great mass of people are gripped by an almost irrational fear, as it appears Americans are today? In 1757, one of my heroes, Edmund Burke, wrote: "No passion so effectively robs the mind of all its powers of acting and reasoning as fear."
Senator John McCain was pilloried by Barack Obama during the 2008 campaign for making the truthful statement that the fundamentals of the American economy were sound, as they still are now.
Yet in his Inaugural Address the new, perhaps chastened, President Obama, referring to "this winter of our hardship," gave his revised estimate that: "We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished."
Danger to Liberty
The problem sof American banks are real and of their own making. And some of this fear is well placed.
Now all the world knows the stories of stupidity, excess and greed that has brought Wall Street to its knees. President Thomas Jefferson, (who died in near personal bankruptcy), may have approached the truth in a statement attributed to him: "I believe that banking institutions are more dangerous to our liberties than standing armies."
That certainly is true when banks are managed by greedy dunces oblivious to the laws of mathematics and ethics. And it wont get any better if politicians and government bureaucarts are attempting to manage what remains of American banks.
Offshore Trend
In the last several months we have been deluged by Sovereign Society members (old and new) seeking information about offshore bank accounts -- how to set them up, where to get them, how they operate, what the reporting requirements are.
Since our founding over a decade ago, the Sovereign Society has provided international banking guides for members. Drawing on years of experience, we recommend selected banks in jurisdictions where friendly governments welcome foreign financial investors, where banking institutions provide the savvy services investors require. These banks range from Panama to Switzerland and Austria, to Singapore and Hong Kong.
It is our job to explain the positive benefits of having an offshore bank account. Based on each individual's unique needs, we direct members to the right bank in the right jurisdiction, sound institutions where you can protect your assets and managing your wealth.
Continuing Due Diligence
Safety and stability, adequate capital, a good track record, professional, experienced leadership -- all of these are factors we consider when recommending offshore banks. Indeed this sort of due diligence is a continuing work on our part.
Even as you read this, our executive director, Erika Nolan, is in Europe meeting with bankers and financial advisors in Zurich and Vienna. The goal is to determine new banking possibilities and reaffirm existing associations, with banks that we and you can, indeed, bank on.
Each of these banks is financially stable, offering modern facilities, services and the necessary understanding to serve an international clientele effectively. The banks the Society chooses have liquidity ratings well above the international minimums set by the Bank for International Settlements in Basel, Switzerland.
Added Protection
And going offshore adds a strong layer of protection and can be done in more ways beyond banking.
Whether it's in a Swiss or Liechtenstein life insurance wrapper, retirement annuity or an Isle of Man or Panama asset protection trust, placing your assets offshore puts them out of reach of frivolous lawsuits. Litigants usually are ready to settle for pennies on the dollar when they find out how difficult it is to locate and collect your money offshore.
And if you place your 401k or other retirement plan in a suitable offshore jurisdiction - Liechtenstein or Switzerland, for instance - it can be configured to be essentially judgment proof, plus it is covered by strict financial privacy laws that are non-existent in the United States.
Join Us
Americans are in now caught in a financial twilight zone, especially as it pertains to banks. For your own sake, we urge you to join the Sovereign Society today and open the door to safe and secure offshore banking -- while you still can. We welcome you. You can bank of it.
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