For more than 350 years, Switzerland has fought outside power’s efforts to get information on who holds banks accounts in their country. The Swiss have resisted all the way through world wars where powerful enemies were on their borders. The protection of secrecy of Swiss bank accounts and assets held there has become one of the backbones of the Swiss economy.
The portrayal of the assault of the IRS against Swiss Banks has usually been seen from a U.S. perspective. There is an insinuation that the IRS will put Swiss banks in their place, and they certainly do have the power to do that, provided it is against the branches of the Swiss banks inside the U.S. While the Swiss have complied with the IRS to some extent, through the revelation of tax evaders names inside the UBS branches in the U.S. (4,500 out of 45,000 U.S. citizens with UBS accounts) the Swiss are not cow-towing to the IRS demands in disclosing all names of U.S. clients they have despite the pressure from the IRS to do so.
While the Swiss have no desire to protect lawbreakers and will hand over information and assets of people in Switzerland who can be proved to have broken the law, the concept that the U.S. will have to apply fines or gather information inside Switzerland is not acceptable there. Switzerland will retain that power in Switzerland. Swiss Bankers will have to work out their own future within these laws.
There has been a lot of talk about other places to hold assets including gold –whether it be Singapore, Hong Kong, the U.K. or Canada—but none of these places have a history of protecting foreign-owned assets against nations seeking to either take them or get information about them. If it were deemed even slightly against national interests, we believe those governments or companies (particularly those with branches inside the U.S.) would happily hand over one or both to a nation such as the U.S. Take Canada for instance; it is fused at the hip to U.S. interests and to its economy. Should the U.S. require them to work with them on those they deem acting against U.S. interests, history shows that they will cooperate with the U.S. on information disclosure and asset seizure.
In Switzerland, we see a nation fighting to protect such foreign clients, despite the potential cost to themselves. We cannot see any other country following their footsteps.
In the last World War, Switzerland became the haven for all valuable assets, whether it was from U.S., U.K., French, or even German citizens. It was completely neutral! The same applies today and is encapsulated in law there. We expect the same will apply in any future crisis, even those much bigger than an invasive Taxman lipitor price.
There is no alternative place to retain your gold and silver, plus any other valuable assets if you want to keep them through extreme times. To look at the FATCA and FBAT reporting laws coming in, in isolation would be myopic because additional reporting requirements –such as for precious metals—could be passed overnight, if deemed in the national interests.
With us now downwind of more financial crises, according to the Bank for International Settlements, we have to protect our wealth from the most extremes of times. If we don’t, we may well lose it.