Scarying away the people with money
International hacking is in the news again. Last weekend a hacker got into the files of a law firm in Panama that specializes in setting up companies in the Caribbean area for foreign nationals. Over the years, they have created thousands of these organizations for folks from all over the world.
Panama, much like Switzerland, has been a place that for years has specialized in the transfer of wealth for folks with money. Grand Cayman, the Turks and Caicos are places with bank secrecy laws which also make them good places to keep your banking private. Now remember, if you are a U.S. citizen and have an off-shore bank account, you must report that fact to the IRS. Depending on your individual circumstance, you may even owe some taxes on foreign earnings. It’s all perfectly legal.
The world today contains over six billion people. About one billion of those live pretty well primarily either in English speaking countries, Europe or Japan. Of course the premier spot with the best living conditions is right here in the U.S. North America has the most food, pure water, money and individual freedom in the world. There is, as a consequence, the most money also.
The newspapers in the days ahead are going to be full of exposes of wealthy folks globally who have diversified their wealth off shore from their countries of citizenship. The most common reason for that is that they, like you, don’t entirely trust their elected officials at home. Heck, I don’t entirely trust those officials either.
I’ve run into several people over the last decade who have “gone offshore” with some money. None of them struck me at the time as mafioso. One person interviewed in the latest newspaper account said the offshore wealth was for survival if the U.S. government failed. Another person was economically terrified of the present presidential candidates and was considering a transfer of citizenship. People with wealth want to hang on to what they have earned.
This transfer of wealth to places of apparent security is not new. During World War II both Nazis and Jews placed great amounts of wealth in then impregnable Swiss banks. Due to Swiss/U.S. accords, this is not a place where U.S. citizens can maintain their anonymity. Therefore, Panamanian lawyers set up LLCs to obfuscate ownership and Panamanian banks transfer funds through anonymous entities.
It’s just supply and demand. If all folks thought their government was trustworthy and the tax laws of their country were fair, then there would be no money going offshore from any country.
I don’t have a problem with people running for shelter when they expect an economic tornado. What I am interested in is that savings equal investment and that investment then equals jobs. It’s bad enough that we are exporting jobs because of governmental policies but to export capital as well is just plain stupid.
The United States prospered for 200 years by guaranteeing economic and other freedoms to individuals. Associated Press reporter Nancy Benac wrote this week that when talking about one presidential candidate’s actions and words “All of it would run smack up against the stuffy traditions of a government structured to rein in the power of the individual.”
Is your candidate in favor of granting more economic freedoms, or is he or she for controlling individual and economic freedoms?
Some of the candidates right now seem like they’re in a ring throwing economic body blows here and there. Meanwhile the people with money who could invest it are bobbing and weaving away.