Banker X on Gold, Real Estate and Residency Diversification in Troubled Times
by Anthony Wile
The Daily Bell
by Anthony Wile: Ron
Holland on the Inevitability of Societal Chaos, How the Elites Will
Try to Maintain Control – and How You Can Protect Your Wealth From
Bell is pleased to present this exclusive interview with Banker
Banker X provides us with this interview anonymously so that he
can speak frankly about the inner workings of the Swiss financial
system. As someone who has held high posts in both the private and
public banking fields throughout several decades, Banker X is in
a great position to compare and contrast several kinds of Swiss
banking models through several eras. We are certain our readership
will find his comments enlightening and certainly food for thought.
Additionally, some of the grammar and phraseology within the interview
has been adjusted as English is not Banker X's primary language,
though he speaks it well.
It's nice to have you back.
It is a pleasure to sit down with you again.
What's going on in the world today, moneywise?
As you've pointed out, we're probably on the cusp of a new era.
The old system is breaking down but a new one has yet to be formed.
Who will create the new money system?
Good question. Obviously, certain governments would like to do so.
What about those standing behind governments?
The secret powers? Perhaps so. But the issue is not so much "who"
as "what." As in what kind of system is being planned.
There is no doubt that for many involved the preference is for a
basket of currencies plus gold. The resultant "bancor"
as Keynes called it, may be issued out of the IMF, though only if
they can get power sharing worked out.
Yes, right now the US has a veto and it's hard to see them giving
This is a big issue, and it is one that's standing in the way of
what powerful people want accomplished. There's no obvious solution
either, and one wonders how well this whole issue was thought through.
You mean the issue of global economic crisis? We believe it may
have been in a sense planned to create a global currency and deeper
There is no doubt that central banking manifests itself in periodic
crises. Those in power obviously know this and no doubt anticipated
a crisis. As your paper has pointed out, those at the top of the
EU were aware that a crisis was coming and hoped to further consolidate
power as a result.
We've suggested they miscalculated and that the Internet itself
is making it a good deal more difficult for these plans to unfold.
For whatever reason, they are having considerable difficulties.
But whether the EU succeeds or fails, as it is now constituted,
the impetus for something new will probably remain. The old system
has been decimated and rising countries such as the BRICS don't
trust the dollar anymore. Putin is furious about it and just denounced
Bernanke. The question then becomes whether the BRICS and other
countries, perhaps in the Middle East or Africa or even South America,
will go off on their own and create something new or whether that
kind of effort will remain circumscribed.
You mean circumscribed by the current international agencies.
These are the product of the Western powers-that-be and are generally
resented abroad. But they are very powerful as well and have been
in place a long time. I don't see anybody upsetting the World Bank
or IMF, but I do see the possibility of other rising power structures.
Sound like we're living through a chaotic time.
That may be so. It's one reason my business and businesses like
it are flourishing. We're seeing increased interest because of this
financial turmoil and potential complications. We're not only speaking
of classical banking either. There are other elements as well, other
kinds of considerations.
By that do you mean perhaps real estate or gold?
I would say many of our clients are giving these assets a good deal
of consideration. What's going on in Europe, Britain and America
is increasingly questionable. From the point of view of a client
who is fairly well off and has alternatives, the wider world is
a consideration. Whether its Asia, Central & South America or
even Africa, there are a growing number of people who are considering
alternative residences. Also, there are a number of countries that
are easing various restrictions to take advantage of this trend
... countries that offer low tax and no tax packages to immigrants
seeking the safety of a hip-pocket residency. There are a number
of ramifications to such decisions.
Are people taking tangible assets out of the country?
There are several points of view. If a country as powerful as the
US decides to confiscate gold, then its reach will probably be long
indeed. If it wants countries to freeze assets abroad, they probably
will, some of them anyway. But the idea of third-party storage of
assets especially gold is still a compelling because
they are in fact OUT they have migrated on their own, leaving
their proprietor behind. And if one wishes to travel in times of
crisis to their hip-pocket residence, the difficulties of taking
their assets along has already been resolved. The assets (gold primarily)
have already been removed and can be accessed at will. There is
much to be said for keeping assets on hand and that may be
a better purpose for silver, at least domestically speaking
but also for having some assets distributed abroad. Simple enough.
Right. Regional diversification, right. You can say that goes for
real estate, investments or assets of all sorts.
In this day and age, the old strategies don't apply. Gold itself
has risen in purchasing power from US$350 to nearly US$1,600 an
ounce. Silver has moved from US$4 an ounce to US$35 an ounce. Meanwhile,
stock markets have not kept up, except in places like, say, China.
We have doubts about China.
Probably so. They have been trying to print their way to prosperity.
Price inflation is surely going to follow the massive amount of
monetary inflation they have embarked on - it is inevitable. They
have fully imported the West's central banking fiat money system
and, with the same arrogance exhibited by Western money powers,
they believe they can centrally manage their money supply better
than the invisible hand of the marketplace. China has created some
seriously tough waters to have to navigate, or so it appears.
We don't have so many doubts about the future of gold and silver.
Traditionally in troubled times gold and silver have served as stores
of value. Gold is especially good because the value is considerably
higher making it a very portable way to relocate significant wealth
and storage is not a problem especialy here in Switzerland.
What about gemstones and diamonds?
Good as well, but they are not money and their value is very subjective.
But gold and silver are universally liquid. There is no subjectivity
involved in determining the market value of bullion it is
what its weight is, pure and simple. And gold has the advantage
The same approach might be taken to real estate in terms
of diversification anyway.
Very true. There are plenty of people preparing for the worst, but
they are doing so within the context of their own country and perhaps
their own region. This does nothing to address the fundamental point
regarding the issues that they are trying to prepare for.
International diversification again.
If you are concerned about the social fabric shredding, about civilization
breaking down, the idea that you are building some sort of bunker
ten miles or a hundred miles away from where you live seems to me
to be not entirely effective.
You may want to diversify out of the country?
That would be the idea. And there are many affordable options in
regions that offer great lifestyles. People just need to take off
the blinders and open their eyes and they will quickly find there
are wonderful options that would be far from painful, should one
ever choose to actually move to the hip-pocket residence. But most
people are too scared to think outside the box they grew up in.
And that is exactly what the powers-that-be bank on, so to speak.
The key is
to find a jurisdiction that is affordable for you, offers the kind
of lifestyle you either have today or would like to have, and then
to employ human action and put the plan in motion. And even if by
some miracle Bernanke, Obama, et al. are able to steer the American
economy away from the disastrous shores it seems destined to crash
into, you still have a nice location to go and enjoy for family
What about banking? If you choose another country, should your banking
be close by.
In this era, with current and future technologies, I would think
the two don't necessarily go together. You can bank anywhere in
the world if you have the means. And you can live almost anywhere
as well these days. However, it is usually prudent to have a local
bank account in the country in which you seek to be a resident.
Many countries will require it, as capital coming in to purchase
the real estate may need to be verified for its "cleanliness"
at the local level. No big deal, just part of today's overly cautious
worldwide banking industry. Additionally, it makes paying for routine
things much easier if you have some local banking established.
that, many of the established Swiss private banks have affiliate
banking relationships in many of the regions that are of greater
interest to people seeking a second residence. This affords people
the ability of maintaining the majority of your asserts in Switzerland,
where there exists a much greater degree of comfort with respect
to banking efficiency, while at the same time having a cohesive
means of transferring "down" capital to the local account
established in the country of residency.
Why do people go offshore as regards banking leaving aside
potential social break down?
There are a lot of reasons. The first is lawsuits. If a person is
running a business or a professional, it may be highly unlikely
they will be involved in a lawsuit, but it does happen. People do
want to protect themselves so they place funds offshore usually
in a foundation or an offshore trust. It is still visible money,
and these clients do have to pay taxes, but when it comes to lawsuits,
a lawyer working privately or for a government will have a much
harder time, if successful at all, at piercing the structure and
getting at that money. This assumes the client has had the proper
advice on setting up an asset-protection structure, of which there
are several excellent provisioners of such services who work in
a legally compliant manner so that the client is not breaking any
clients seek offshore banking services is to diversify and be able
to buy efficiently whatever assets they want. They don't have the
rules and regulations that you would find in Canada and the US,
for example, which are designed to keep the domestic capital in
domestic assets. Wall Street and Bay Street would like everyone
to just keep on trusting in the establishment brokers and their
domestic products. The world is a big place and there is much more
opportunity for those that wish to look.
can get anything you want. The waters are open, so to speak.
reason people seek offshore services is because they are already
doing business offshore and have foreign source income.
Are there tax advantages?
No, not especially. For example, Canadians may utilize Barbados
for tax efficenct treatment of foreign earned business income
and many of Canada's largest corporations do, as there is a tax
treaty between Barbados and Canada that greatly minimizes the tax
burden to Canadians utilizing such a structure. But generally speaking,
if you are an American citizen or Canadian resident then you need
to declare your offshore holdings and, in most cases, there are
no tax advantages to be had.
are structures that do afford people the ability to lower their
domestic tax burden, but like anything else, every person's situation
is unique and the client really needs to get competent legal advice
both offshore and domestically. The plan should be above
board, secure and efficient. There is no reason for someone to go
through all the effort of structuring a lifestyle plan only to negligently
ignore the domestic reporting requirements. Each person's offshore
plan should be deisgned to help them sleep better at night, not
Yes, they are huge. In many offshore venues, it's a one to one situation,
client to bank, and bank to client. That is how communication goes.
We do not talk to anybody else, only the client.
Access is easy
as well. Clients can wire transfer anywhere in the world. People
can say, wire $50,000 to their account in Hong Kong bank, or broker,
or to a place in Europe, or anywhere they like. Generally speaking,
other than some provisions on daily or weekly withdrawl maximums
(some banks, some jurisdictions), there are minimal restrictions.
What's your position on the American IRS?
Well they are doing their job. The United States is in desperate
need of money, not that it can help their self-imposed fiat-money
debt crisis at this point. But the IRS will still continue to villanize
countries like Switzerland in an attempt to "scare" people
into bringing their assets home. The problem only really exists,
as mentioned above, for those who have planned to evade taxes rather
than legally mitigate them. The former may indeed not be sleeping
so well, but the latter group should be perfectly fine. There is
no law against banking internationally. It just isn't encouraged.
But as long as clients report their worldwide income, the IRS should
be on no concern.
No bank endorses
tax evasion, and we are not looking to have the IRS breathing down
our necks because of neglience. So, if a corporate compliance department
deems a client to have a questionable structure, the client may
need to seek additonal legal counsel domestically in their
home country or internationally, or both. Banks today are taking
a much more proactive approach to structure analyzation that in
the past, they have no choice.
We have been
talking a lot here about the IRS, but its important to note that
the tax authorities all over the world notably British, German,
Italian and French have all stepped up their efforts to put
pressure on offshore banking jurisdictions. The same diligent approach
to structuring tax and asset protection needs applies to all jurisdictions,
not just the US.
Is offshore banking associated with crime and tax evasion?
Practically speaking, it used to be more than it is now although
that may not be the perception of many people. I know there is a
lot of hoopla about tax evasion, drugs and crime being associated
with offshore banking, but quality banks will not knowingly get
involved in dealing with that type of business, at least not here
in Liechtenstein or Switzerland. Good clean business is what we
What is the best place?
For quality banking services, Switzerland. You just cannot beat
these jurisdictions for experience and efficiency in banking. For
corporate/trust structuring, well that depends on the client's individual
situation. For many American's and Canadians the Bahamas and the
Cook Islands are popular, also Belize, but there are several and
each has its own advantages.
There are many
good locations that work well depending on the client's needs. Most
Swiss private banks can help direct clients to quality international
tax and asset protection lawyers who, in turn, can put the client
in contact with a quality domestic attorney in their home country
who is familiar with international structures. It is much better,
usually, if a client is working within a vertically integrated team
that is familiar with each other. Otherwise the client may incure
extremely high additional costs in putting together their plan because
all parts of the knowledge chain require due diligence not
just on the client or his/her structure, but also on the advisors
involved. If there is not an already existing vertical of relationships
well then the client has to bear the costs of what can be
a long and arduous process. Better to work from one end of the structure
or the other but to find proficient professionals who really know
what they are talking about.
Is it necessary to visit the bank physically?
Not necessarily, although it is a good idea to do so. If you are
coming into the bank via a recognized chain of relationships, whereby
the bank has confidence in the introducing party, as mentioned above,
then it may not necessary. However, the days of just picking up
a phone, sending a copy of your passport and a utility bill and
then wiring cash without ever visiting the bank, are long
gone. You must be properly structured and have the ability to clearly
demonstrate the source of your funds. If it isn't clean money you
will not get through the front door, at least not of any reputable
bank that wants to stay in business.
What are some other advantages to offshore banking?
I mentioned earlier, bank secrecy is number one and it goes hand
in hand with protection. So if you are a lawyer, an accountant,
a professional engineer, an architect, a doctor, or a businessperson
with deep pockets easy to sue then you should look
for asset protection. And the best form of asset protection is a
custom designed offshore structure and banking relationship(s).
Global asset diversification and flexibility are other primary concerns
for most people. Most of the larger Swiss private banks have international
trading desks that cover all major and emerging markets. The whole
world of possibilities opens up to clients once they step into the
In my opinion, the advantages offshore far outweigh any disadvantages.
Of course, Switzerland's banking system has been under attack.
The Swiss have been at this for hundreds of years, and they've been
attacked before and survived. The system is stronger for it and
the nation's prosperity is bound up in banking secrecy. No matter
what is announced publicly, private banking remains strong, in part
because it administers the money of the elites. Without getting
into details, I will say that many prominent banks may perform a
variety of transactions, some far more secretive others. And often
the private services are merely a smokescreen, a cover for the vast
transactions taking place elsewhere. Switzerland has an international
role to play and it has been playing that role for a very long time
You think it's all for show?
The top elites are cracking down all over the world regarding money.
You can see it if you look. So they had to make a show in Switzerland
as well. But for the big private banks and for a number of money
services nothing much has changed. Nothing can change. Switzerland
is the capital of the money industry. It's where the elites hold
their conferences like Davos. And where the Bank for International
Settlements is located. Zurich is an international city and once
Brussels falls it will become even more prominent. The Swiss did
not do any of this. The country was chosen by Western elites for
a number of reasons. And chosen long ago.
Interesting points. How does one locate a person to help with offshore
The Internet is full of information on offshore banking. But be
careful, do your due diligence and do not get lured into any of
these one-size-fits-all programs. There is no "golden arch"
under which all can fit.
can take a trip to one of the many asset protection-oriented conferences
being held by professionals in this space. That is likely the best
way to meet people who assist you without having to expend too much
expense or effort.
There are also
some very good offshore-related newsletters and publications that
can help point you in the right direction. Once again, do your own
And how does one locate a person to help with locating suitable
offshore jurisdication for residency?
Same thing, check the 'Net and do your due diligence. I will say
that one of the fastest growing regions for secondary residences
is South America. Many of my clients find island living too restrictive.
So countries like Chile, Colombia and Brazil and very attractive
locations to name just a few.
Thank you for your time, most appreciated.
Thank you, it's been a pleasure.
We are grateful
as always for Banker X in all his incarnations. The insights
we share are widely known throughout the offshore world. It is a
legal and important world, with growing resources. The worse it
gets in the West, the more people look abroad. That's human nature.
There is no
doubt that conditions are turning increasingly chaotic in the West
insofar as money is concerned. Thus his points are well taken. Diversification
is far more than what security is on which stock market. It has
to do with the dispersal of assets generally and the securing of
an affordable and suitable secondary residency option. It all comes
down to not putting all your eggs "in one basket."
this point one should have some hard money assets and they
should be dispersed. Some at home and perhaps some abroad. That
way if you want to leave the country you don't have to drag your
assets with you. And that brings up the point of where you are heading.
Just as one
wants a diversified portfolio, it may be wise to have a diversified
real estate portfolio as well at least one other place to
stay. This may simply be a vacation home, but in times of crisis
it can also be a haven for yourself and your immediate family.
for all these eventualities is a somewhat grim and perhaps costly
chore. But we started this newspaper to cover the fear-based promotions
of the power elite and their outcomes. We have seen nothing to change
out mind in terms of what's going on in the world.
In some ways,
things are better as we believe the elites are losing their
grasp at least a little. But this brings up the issue of increased
chaos as well. We have no doubt the power elite is trying to foment
chaos through wars and economic collapse.
On the other
hand, some of the upcoming chaos may simply be the result of elite
over-reach. Either way, things are bound to get messier, in our
opinion. The immediate antidote is diversification of all facets
of one's economic life. That's what this interview reinforces. It
seems to us a fairly reasonable approach.
with permission from The
Wile is an author, columnist, media commentator and entrepreneur
focused on developing projects that promote the general advancement
of free-market thinking concepts. He is the chief editor of the
popular free-market oriented news site, TheDailyBell.com.
Mr. Wile is the Executive Director of The Foundation for the Advancement
of Free-Market Thinking – a non-profit Liechtenstein-based foundation.
His most popular book, High
Alert, is now in its third edition and available in several
languages. Other notable books written by Mr. Wile include The
Liberation of Flockhead (2002) and The Value of Gold (2002).
© 2011 The
Best of Anthony Wile