August 14, 2014
Spoleto, Italy
Remember in the first Bourne movie when Jason wakes up after being rescued from the Mediterranean Sea?
Suffering from amnesia he doesn’t remember who he is, or what had happened to him. The only clue he has is a tiny surgically implanted projector that displays a safe deposit box number for a bank in Zürich.
For a very long time Switzerland was the hallmark of privacy, especially financial privacy. Swiss banks were known as discrete, prudent and savvy financial partners.
The country’s tradition of bank secrecy goes back all the way to the Middle Ages and was first officially codified in the Banking Law of 1934, which made it a criminal act for a Swiss bank to reveal the name of an account holder.
The reasoning for strict financial privacy and even numbered accounts was simple.
Personal financial matters between bankers and savers should have confidentiality protection, the same as is given to health and legal matters between doctors and patients or lawyers and their clients.
However, after the enormous amount of pressure that the Swiss have been exposed to in recent years, especially from the US and the EU, they’ve rolled over.
In October 2013, the Swiss government stated that it intended to sign an international agreement under the auspices of the OECD that would align Swiss banking practices with those of others.
Thus effectively ending the special secrecy that clients of Swiss banks had enjoyed in the past.
It’s important to understand just how monumental this shift is—for the Swiss to give up their bank secrecy is the equivalent change in the national psyche to Americans giving up their guns.
Swiss banks therefore have lost their allure, sending many of their clients fleeing for other privacy-oriented jurisdictions—Singapore, Hong Kong, Luxembourg, Lebanon, Panama, Cayman Islands etc.
And yet, it’s important to note, that even in those places, real financial privacy within the conventional banking system no longer exists.
Globally, financial nudity is now the norm in banking.
Even jurisdictions that nominally still have financial privacy laws on their books are casting them aside under pressure from the US, and without much of a fight.
If you still want to retain a certain degree of financial privacy, it’s necessary to hold some of your assets outside of the conventional banking system.
Own alternative assets. Real estate. Gold and silver. Collectibles, such as stamps, rare coins etc. Art. Fine wine. Private businesses. Etc.
I know what you’re thinking—where’s bitcoin on that list?
While bitcoin is a great concept and an incredible technology, it doesn’t exactly fulfill our security criteria.
It’s a pseudo-anonymous digital currency that’s not really private. Every transaction is out there in the public domain and is just as traceable as using your MasterCard.
Remember—advocating for financial privacy and banking secrecy doesn’t have anything to do with evading taxes, it’s a fundamental right that every person should enjoy.
I have always considered tax evasion to be against the very core of what we’re trying to do at Sovereign Man, which is to increase people’s freedom and their choice of options.
Evading taxes does just the opposite. All it does is to bring you into the crosshairs of law enforcement agencies, ultimately reducing your freedom and wellbeing.
