Frankly, I’ve written so much about the UBS mess over the last year that I am sick of it…and I’m sick of the greedy, crooked UBS bankers and staff that stupidly thought they could use Swiss bank secrecy laws to cover their illegal tax evasion advice, while running up fat fees for themselves and billions in deposits for UBS.

This thoughtless criminal activity not only added to the instability of UBS – already $50 billion in the hole because of bad investments exposed by the global recession – but their conduct needlessly called into question the admirable privacy policies and bank secrecy laws of the Swiss government.

Asking for it

UBS tarnished not only its own reputation, but also that of a major nation and its people.

But worst of all, what UBS did allowed the tax bullies at the IRS to:

1) smear thousands of honest Americans who bank offshore;
2) attempt to scare away thousands more who could benefit by doing so;
3) pretend to extend U.S. tax law jurisdiction to the entire world;
4) use blatant economic blackmail against not only an errant bank, but against a friendly country that has long been a faithful ally and against its 7.6 million people.

The agreement lifts the threat of U.S. criminal prosecution against UBS, the world’s number two wealth manager by assets.

The IRS was not only willing to risk endangering the bank’s existence, but it could have dealt a major blow to the Swiss and U.S. economies. (UBS has 20,000 American employees).

The Anti-Offshore PR Campaign Rages On

You can expect that the left wing, anti-tax haven crowd will play this as the death, not only of Swiss bank secrecy, but the beginning of the end for all offshore financial centers.

Don’t they Wish!

IRS Commissioner Doug Shulman (left) crowed, “It’s a real sense that the world of bank secrecy is eroding.” According to The Times, “The agreement is likely to unnerve American customers of UBS who do not know if their names will be divulged, and could deter others from opening Swiss accounts in the future.”

On that second point, we hope not. There are still plenty of opportunities to open an offshore account with a sound financial institution…which is – sadly – is not necessarily the case in the United States.

And on the first point, I can speak for the whole of the Sovereign Society when I say that we don’t really care if illegal tax evaders are nervous. They should be.

But we certainly hope that honest, tax paying Americans (and others) who desire real financial privacy, true asset protection and expert investment advice will realize the fact that they still have the right to employ Swiss banks, investment advisors, insurance and annuity specialists – and not be scared away from the very real benefits offered by the world’s leading offshore financial center.

Swiss Banks Still Available

Whether all this will change the Swiss banking industry’s culture of secrecy based on law is doubtful in my opinion. But the IRS has made clear that their pursuit of tax evaders will not stop at UBS.

Some smaller, centuries-old private Swiss banks, however, are stepping up their efforts to attract American money, given the importance of foreign clients to the nation’s financial institutions.

Understand that the Sovereign Society does not condone tax evasion in any form, a point we have made repeatedly in our publications throughout our entire existence.

Of course there is a simple way for you to avoid personal tax troubles – file the proper IRS reports on time and pay your taxes when they’re due, as we have often explained.

We Are Prepared

To tell the truth, we at the Sovereign Society saw this coming a long time ago…

We meet regularly with Swiss and other offshore bankers, and we have agreements with reputable Swiss banks willing to accept new accounts from those who identify themselves as Sovereign Society members.

These arrangements are in full compliance with IRS and SEC rules and other U.S. laws. U.S. clients must sign an IRS Form W-9 that allows an offshore bank to report required information to the IRS.

As it has been since our founding 11 years ago, our staff is available to assist in opening a Swiss or other offshore account. Take advantage of these special Swiss banking arrangements and the advice of our Swiss advisors by visiting our member’s only website today.

We at the Sovereign Society believe that personal and financial privacy is an inherent human right, a requirement for maintaining the human condition with dignity and respect.

In all this ruckus about UBS and the IRS, the basic issues are preservation of our personal freedom and liberty versus complete government control of our lives and our fortunes.

Yours Truly,

Bob Bauman

Even President Obama allowed his less than impressive Secretary of the Treasury to make some noise against tax havens.

The orchestrated battle of words hurled at offshore financial centers got so heated that British PM Gordon Brown felt obliged to demand for “the end of tax havens.”

This belated anti-tax haven baloney comes from Her Majesty’s first minister whose government is in charge (and has been for a decade) of the United Kingdom’s many tax havens in its overseas territories (Bermuda, the Cayman Islands, British Virgin Islands, the Turks & Caicos) and its Crown Dependencies (the Channel Islands of Jersey and Guernsey and the Isle of Man), plus Gibraltar.

Does the Rt. Hon. Gordon believe that the City of London really can absorb all the dispossessed refugee bankers and trust officer that will flood in from these British world-class financial centers if he and the G-20 high tax goons shut them down? (Some unprincipled candidates, desperate for re-election, will do just about anything for votes!)

Spend vs. Regulate

The proponents claimed the G-20 meeting was not only going to solve the international economic crisis, (either by more Obama stimulus spending, or forced global regulation), but for desert, the G-20 would serve the collective severed heads of all tax havens displayed on a platter.

This entire hypocritical anti-tax haven campaign, as I have oft noted, is but an extension of the phony blacklists that have streamed for years from the tax-exempt minions at the Paris headquarters of the Organization for Economic Cooperation and Development (OECD), a taxpayer financed, pro-tax mouthpiece for the G-20 major nations who pay their salaries.

The OECD invented the blacklist and has used it skillfully as a public relations ploy to smear tax havens.

But in a classic case of removing the wind from the sails, the OECD blacklist ploy deflated when Switzerland, Austria, Luxembourg, Belgium, Hong Kong, Singapore, Liechtenstein, Andorra and Monaco, among others, all announced their agreement to broader but limited tax information exchange.

Even German foreign minister Steinbrueck, one of the most caustic anti-tax haven critics, has said he does not think G-20 leaders would come up with a blacklist of tax havens now. “As far as I see, there will be no such list at the London meeting,” he said.

Despicable Communiqué

When I asked one the leading American tax experts, Dan Mitchell (left) of the Cato Institute, what he thought the G-20 outcome might be he said,: “To be honest, I’m not sure what to expect from the G-20 meeting, other than a despicable communiqué attacking tax competition. My guess is that the real enemy is still the OECD, and the G-20 is just engaging in public relations warfare.”

As The Telegraph’s James Kirkup writes,: “The transatlantic disagreement over stimulus vs. regulation isn’t a full-blown row yet, but it’s not far off, and the still-skeletal Obama administration has enough worries at home without looking for more abroad. Better for the president to play safe and sign something anodyne in London.”

List Grows Long

The Swiss daily Tages Anzeiger reported that in a letter dated March 5 to British Chancellor Alistair Darling, OECD chief Angel Gurria provided an anti-tax haven blacklist including Switzerland and Singapore, as well as territories such as the Cayman Islands, Andorra and Montserrat.

The OECD branded 46 countries and territories for “insufficient progress” in meeting standards on tax cooperation and banking secrecy. (To the OECD that means an end to all financial privacy and automatic exchange of tax information among nations, as well as uniform higher taxes in all jurisdictions).

The OECD list also included Costa Rica, Chile, Grenada, Guatemala, Hong Kong, Liberia, Panama, the Philippines, San Marino and Uruguay, as well as Gibraltar, Guernsey and Jersey and a host of Pacific and Caribbean islands.

How Many Legions?

But as the brutal Soviet dictator, Josef Stalin was reportedly to have said about the influence of his enemy, His Holiness, the Pope,: “How many legions does the Pope have?”

The Pope was said to have responded through Stalin’s Foreign Minister, Molotov,: “Tell your master he will meet my legions in Eternity.”

Well, the OECD is loud and demanding, but it has neither any enforcement legions norand certainly not any heavenly allies.

The Tax Haven Test

So remember that on April 2nd, if tax havens and offshore finance are anything more than a minor part of the “global new deal” struck in London, then the G-20 global economic meeting will have failed.

And no matter what the G-20 does, tax havens will still be with us, fortunately.

Source: How to Gauge the Coming Failure of the London G-20 Meeting

As you read what follows, keep in mind the following dictionary definition:

demagogue – noun, verb, -gogued, -goguing. 1) a person, esp. an orator or political leader, who gains power and popularity by arousing the emotions, passions, and prejudices of the people. 2) to treat or manipulate (a political issue) in the manner of a demagogue; obscure or distort with emotionalism, prejudice, etc.

It seems taxes have always been a sexy issue, at least for the last millennium since Lady Godiva, that notoriously anti-tax Anglo-Saxon noblewoman who – according to legend – rode naked through the streets of Coventry in England in order to gain a remission of the oppressive taxation imposed by her husband on his tenants.

Naked Demagoguery

From all historic accounts, at least Lady Godiva was sincere about her tax protest.

On February 17, 2007 when the junior senator from Illinois introduced his bill, the Stop Tax Haven Abuse Act, he issued a ringing statement in which he decried what he claimed was an annual loss of $100 billion due to alleged offshore tax evasion by Americans.

“This is a basic issue of fairness and integrity,” intoned then Senator Barack Obama. “We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules aren’t disadvantaged.” In his 2008 Presidential campaign, candidate Obama often repeated this theme to applause, promising to crack down on tax cheats.

Do As I say, Not As I Do

Fast forward to 2009. President Obama’s choice to be Secretary of the Treasury is the supposedly indispensable Tim Geithner (who?) – thus making a tax cheat/incompetent who owed about $120,000 in back taxes head of the Internal Revenue Service.

Asked about the propriety of nominating a Treasury secretary who was a major tax scofflaw, Obama characterized the eight-year tax evasion as “an innocent mistake.”

Than came ex-Health and Human Services nominee, ex-Senator Tom Daschle, who was forced to pay back almost $200,000 in taxes with interest (but no penalties) on the free car and driver he had been receiving from a Wall Street friend for the past three years. And there was Nancy Killefer, who withdrew her nomination for Obama’s chief performance officer, because she too owed back taxes.

Not to mention my former House colleague, Rep. Charlie Rangel (D-NY), who is embroiled in a controversy over non-payment of years of back taxes on unreported income from a beach front villa in the Dominican Republic. Don’t worry folks, Charlie only heads the House Ways and Means Committee that writes all the tax laws.

Dutch Treat

But this tax hypocrisy by politicians is not confined to this side of the Atlantic Ocean.

Leftist members of the Dutch Parliament are in full cry against Princess Maria Christina of the Netherlands, the youngest of four daughters of the late Queen Juliana of the Netherlands and her Prince consort Bernhard.

It seems that Princess Christina, who lives in London and also holds British citizenship, has been exposed as being the beneficiary of private foundations that act on behalf of members of the Dutch royal family, both registered in the Channel Island’s tax haven of Guernsey, where they enjoy legal tax exemption!

“Eh gad,” say the Dutch parliamentarians, “this must be investigated!” (Forget the fact that the Netherlands is possibly the world’s leading tax haven for offshore registration of corporations that bring in millions of tax dollars).

It is not enough that the Princess was forced by Dutch law to renounce her and her children’s rights to the throne before converting to Catholicism when she married a Catholic in 1975 without the permission of Parliament.

Although the Guernsey trusts are fully legal, MPs say Christina should act as a role model. “She should not be looking for financial loopholes to avoid paying the full amount of tax,’ Labour MP Diederik Samsom said. (Someone should investigate him!)

British Blather

And not be outdone in hypocrisy, in London the British Left is demanding the political scalp of one Glen Moreno, the chairman of the Pearson corporation, which owns the Financial Times, who was appointed as acting chairman of the government’s UK Financial Investments (UKFI) company last month. UKFI was set up to manage the billions of pounds of public money that is helping to keep troubled British banks afloat.

Moreno’s sin? Until last April he was a trustee of Liechtenstein Global Trust, where allegedly some British citizens had accounts that may have been used for tax evasion.

Give ‘Em a Hand

So I will again quote the late, distinguished Judge Learned Hand of the U.S. Court of Appeals in New York, who in a memorable tax case dissent, offered these timeless remarks, “There is nothing sinister in arranging one’s affairs so as to keep taxes as low as possible…nobody owes any public duty to pay more than the law demands. Taxes are enforced exactions, not voluntary contributions.” [IRS Com. v. Newman, 159 F2d 848, 851 (2nd Cir 1947)]

Source: A Taxing Situation

Earlier today I received an email from a concerned member of the Sovereign Society:

“I just read a rumor that a bill is working its way through the U.S. Congress, that if becomes law, would authorize the federal government to seize all 401k’s and IRA assets. These assets would then be placed in a federally administered plan to provide ‘equal and adequate protection’ of assets for all retirees. This sounds like what recently occurred in Argentina. Have you heard anything about this and is such a scenario possible? If so, then would being offshore prevent a potential seizure?”

I certainly am aware of the situation in Argentina where, last October, President Cristina Kirchner confiscated US$29 billion worth in the country’s ten privately managed pension funds. This was presented as an emergency measure to meet her faltering government’s financing costs that had soared as Argentina’s commodity prices on exports had tumbled and thousands of farmers were on strike.

Double Defaults

This grab of private property was nothing new for Peronista Argentina. In 2001, Argentina defaulted on US$95 billion worth of government debt after a three-year economic meltdown that left Buenos Aires in bankruptcy.

At the time, that was the biggest government debt default in world history; but since then that number looks like chicken feed compared with the trillions in government bailouts of banks and private businesses in the U.S., U.K. Germany, France and elsewhere. This radical government expropriation of private funds only worsened Argentina’s situation and they are once again on the verge of national bankruptcy.

In a breathtaking piece of bravado, President Cristina Kirchner brazenly claimed the grab would “protect” retirees from the global financial crisis, while denying she was trying to “grab the cash” to pay off debt or to finance new programs or projects.

Expert Viewpoint

I turned to Larry C. Grossman, CFP, CIMA, Managing Director, Sovereign International Pension Services (no relation) and a member of our Sovereign Society Council of Experts. Larry specializes in converting American pension plans to offshore venues, which current U.S. law allows.

Here’s Larry’s opinion: “There have been several different academic papers published over the last few months, which have given rise to rumors such as these. At this point in time I am unaware of any such pending legislation.

“It is difficult to sort out fact from fiction and to decide what format it would take if something like this occurred in the U.S. Many of us believe if it does happen, your best way to conserve your assets would be to already have them placed offshore. There is an old saying that ‘bank robbers go to banks because that’s where the money is.’

“I have clients who own non-U.S. real estate in their IRAs and have done so for many many years. I think it would be difficult (although not impossible) for the government to force assets such as these to be repatriated to the U.S. Instead they would probably focus their efforts on grabbing ‘the low hanging fruit.’”

And obviously, that could be billions in existing private pension funds located and administered within the U.S.

History Repeats Itself

Beyond belief? Read American history.

* Within days of taking over the presidency in Mach 1933, President-elect Barack Obama’s hero, President Franklin D. Roosevelt, ordered all Americans to surrender to the government all their gold and gold-backed currency, allowing only small amounts for personal jewelry and dental fillings. In return Americans got devalued paper currency.

* In the last 25 years federal and state police and prosecutors, under the guise of the failed “war on drugs,” have seized billions of dollars worth of real and personal property under the civil forfeiture program. Only 20% of the property owners were ever charged with any crimes, but very few got their cash or property returned.

“The G7 states are already acquiring an unhealthy taste for the arbitrary seizure of private property“,says the London Telegraph columnist, Ambrose Evans-Pritchard,

“It’s a foretaste of what may happen across the world”.

World Recession An Excuse

It started with subprime mortgage borrowers, moved on to banks and has now progressed to whole countries. Iceland has already thrown in the towel, and Argentina stole its citizens’ pensions. Socialized bailouts and government controls are now the watchword in Washington as well.

Already governments in the U.S., Britain, and Europe are mightily meddling in the markets under the guise of “saving the system”, by taking ownership stakes in banks that rank above the rights of existing bank owners, then telling these banks how much to lend and what they must do with the cash. Ditto for auto and insurance companies.

Anything Can Happen

In response to that email from our Sovereign Society member, I replied that it is possible that some brainless members of the U.S. Congress may have introduced a bill that seeks to nationalize pensions, but I hope that it will not be given serious consideration, even by the liberal Democrat majority now in control.

For one thing, adopting such a law would be a major psychological blow to Americans’ confidence, possibly to the value of the dollar, and to the worldwide credibility of the new Obama government, at a crucial time when financial confidence is low and going lower.

But I served in the U.S. Congress when Democrats were in control and I’ve seen what happens when the Republicans are in charge. Meaning simply; anything can happen!

Source: Will Obama Nationalize U.S. Private Pensions?

Ordinarily a nutty proposal such as Johnston’s could be laughed off as evidence of a sick sense of humor or an advanced mental problem, but Johnston is not your run of the mill left-wing nut.

Prize Winning Radical

In 2001 Johnston won a Pulitzer Prize “for his penetrating and enterprising reporting that exposed loopholes and inequities in the U.S. tax code.”

At the time he was the tax reporter for The New York Times, and now is a columnist for the trade journal, Tax Notes. In 2008 he left The Times after 14 years and has since been hawking books he authored with titles such as his current tome, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich – and Cheat Everybody Else and the scintillating Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill).

The Liberal Conspiracy

I’ve never held much stock in conspiracy theories, especially as they apply to the American news media and what one might call the “U.S. leftist elite.”

These condescending liberals are always certain they know better than the common man. They don’t need to conspire among themselves. Knee-jerk liberals know automatically what the leftist party line is at any given moment: big government, more regulation and control, higher taxes, and welfare state economics are all second nature to them. Mention an issue and they always parrot the left-wing party line.

Johnston’s Bilge

In 2001, I wrote the following: “In many ways a classic example of this is The New York Times. More particularly, its highly biased ‘reporter,’ David Cay Johnston. I’ve been reading his ‘reporting’ bilge for years and he never misses a chance to dump on people of wealth, U.S. corporations or, his special ‘bete noir’, tax havens and the offshore financial world in general.“

At that time in 2001, Johnson was engaged in a multi-article smear against American corporations that legally moved offshore to reduce high U.S. taxes and to increase shareholder equity value and dividends. He twisted facts to claim the true reason for these offshore moves was fattening corporate salaries.

Unfortunately this sort of class warfare is good for sensational, if false, headlines that stir up controversy. Democrats in the U.S. Congress, such as Michigan Senator Carl Levin, have used the manufactured issue of offshore tax havens to claim Republicans favor “big business” at the expense of that mythical “little man.” Johnston’s slanted reporting at The Times was a precursor to Senator Barack Obama’s “Stop Tax Haven Abuse Act” S. 681, first introduced in 2007.

I’m not going to bore you again with the economics or the facts about tax havens, but we should all recognize: 1) the Big Lie for what it is, and; 2) those charlatans who habitually seek to hoodwink the American people into surrendering our financial freedoms.

Johnston’s War

But I’ll let Johnston speak for his radical self. The following is a direct quote from his Mother Jones article – and, based on his past statements, I don’t think he is kidding:

Invade the Caymans!

In 1983 just 10% of America’s corporate profits were funneled through places that charge little or no corporate income tax; today more than 25% of profits go through tax havens. The Obama administration could tell the Caymans – now fifth in the world in bank deposits – to repeal its bank secrecy laws or be invaded; since the island nation’s total armed forces consists of about 300 police officers, it shouldn’t be hard for technicians and auditors, accompanied by a few Marines, to fly in and seize all the records. Bermuda, which relies on the Royal Navy for its military, could be next, and so on. Long before we get to Switzerland and Luxembourg, their governments should have gotten the message.

Barring gunboat diplomacy (tempting as it is), there is no reason we cannot pass laws to block financial transactions with tax havens or even, Cuba-style, make it a crime for Americans to visit or do business with them without special permission. Congress could declare the hiding of funds a threat to national security and require that anyone with offshore assets disclose them to the IRS within 30 days and pay taxes, interest, and penalties within 180 days. For the holdouts, temporary special teams in the IRS and Justice Department could speedily pursue civil or criminal charges.

Source: Obama To Declare War on Cayman Islands, Bermuda

This from The Sovereign Society:

Last week, tax-hungry officials from the increasingly socialist countries of Germany and France declared another round in their long running war on Switzerland.

Their aim once again was against traditional Swiss bank secrecy, which the Franco-German politicians claim is little more than a cover for massive tax evasion. As usual, they didn’t offer any proof for this claim.

Over several centuries and during two World Wars, peaceful Switzerland always has maintained its traditional neutrality. It’s kept out of numerous wars involving both France and Germany, usually with the latter attacking the former.

The last time a war of sorts was declared against Switzerland was in George and Ira Geshwin’s 1930 Broadway musical hit, Strike Up the Band. In the musical, the plot centered on a Babbitt-like American cheese tycoon who tries to maintain his monopoly on the U.S. market by convincing the United States government to declare war on Switzerland.

I suspect that the current effort by France and Germany will be just about as successful, (but much less entertaining), as Gershwin’s spirited musical militarism.

Another Skirmish – Another Show!

Reacting to these renewed pressure from European Union officials, the Swiss government vehemently defended its tax system and its financial privacy.

This may look just like another episode in the decade-old, anti-Swiss political road show, but there’s one new tactic. This time, EU cronies are using the current world economic disruptions as bogus proof that tax havens cause recessions! Please.

Tax-hungry politicians have repeatedly criticized Switzerland for its low taxation and banking secrecy laws. Biased critics claim that these laws provide European citizens with loopholes for evading taxes in their own countries.

Naturally, these anti-Swiss demagogues ignore the fact that Switzerland participates fully in the EU tax directive program. This means Swiss officials already collect taxes from foreign account holders and pay it to their home EU governments.

The most recent criticism coincides with a rapidly spreading global financial crisis that has prompted governments worldwide to spend billions of dollars to bailout ailing banks. With a recession looming in the U.S. and Europe, governments are grasping at any straw to stop a sharp fall in tax income.

Swiss Banks Don’t Know the Meaning of the Word “Surrender”

Economists doubt, however, Switzerland will give up its banking secrecy or radically adjust its tax laws. They’re saying the country is strong enough to defend itself against the EU’s complaints. They note that Switzerland, as a member of the Organization for Economic Cooperation and Development (OECD), can effectively veto any decision by the OECD to blacklist it.

According to EU estimates, the world’s tax havens, not including Switzerland, have attracted around US$5 trillion to US$7 trillion in assets because of low or nonexistent taxation. Swiss banks manage around US$4 trillion in assets, about 50% from foreign individuals and institutions.

At present, only three European countries (God bless them!) – Liechtenstein, Monaco and Andorra – are on the OECD’s tax haven blacklist.

Source: Life Imitates Art: War Declared on Switzerland

More from Bob in The Sovereign Society:

Concerned about the gloomy economic situation and the liberal drift in U.S. politics, a good many Americans are seriously considering the possibility of moving themselves and their finances offshore – while they still are able to do so.

The Sovereign Society (and yours truly) have long suggested that the Republic of Panama is the ideal place for retirement, a second home, or even to house your asset offshore protection trust or family foundation. It’s one country in this turbulent world that is proud to be known as a tax haven.

Healthy, Liquid Banks Thumb Their
Noses at Global Crisis

Now Reuters reports (Oct. 13) that Panama’s banks are flush with liquidity and well-placed to weather the international credit crisis.

The country’s banking superintendent – Olegario Barrelier – says liquidity in Panama’s banking sector stands at around 58% of deposits. Plus, they also have manageable exposure to the international markets that have been pummeled by the U.S. credit crisis.

“At the moment our banks are good, very good. They are healthy, they are liquid, capital is nearly double what is required. They are being financed by local deposits and are not dependent on external financial markets,” he said.

No Lenders of Last Resort in Panama
So Banks Have to Be Responsible

Panama has long been a center for offshore banking, where the U.S. dollar has been the official currency for nearly a century.

Panama is home to 90 banks, nearly 40 of them international. That makes Panama Latin America’s largest banking center south of Miami, (which it is rapidly overtaking in assets). Among the major banks are HSBC, Citigroup and BBVA.

With no central bank, no federal reserve and no government lenders of last resort, Panama’s banks have been encouraged to stay highly liquid, which they have.

These banks maintain a solid 58% loan to holdings ratio, which puts the banks in a strong position. Compare that to major U.S. banks that have had to resort to billions in federal bailouts to stay afloat.

Preemptive Strikes to Cool Credit and Manage Inflation

Superintendent Barrelier said the global crisis would eventually hit Panama, but it will only slow Panama’s economy, not inflict major damage on the financial system. Since January, Panamanian banks have been encouraged to tighten credit to cool spiraling annual inflation, which is near 10%, a reflection of how the dollar has declined over the last few years.

Between 1955 and 2000, inflation averaged 2.4% per year, during the 1990s barely exceeding 1% a year. Annual inflation has averaged 1.4% for the past 30 years, which is much lower than in the United States or most major nations.

Bad Timing in Washington

In late September, Panama’s President Martin Torrijos, his Vice President and Minister of Foreign Affairs, Panama’s Minister of Commerce and Industry and the Panama Canal Administrator met with President George Bush and members of the U.S. Congress in Washington.

This was the fifth time that the two leaders met since President Torrijos took office in September 2004. But his timing for this visit was less than auspicious.

One seasoned Panama observer commented: “President Torrijos must have thought he had the worst luck in the world. Here he was with three of his top guns in Washington, with hat in hand, hoping to get a trade deal, when the flood gates of an economic disaster unfolded around him. You can bet there was little time to talk about anything but the economy with the various congressmen and senators.”

Plenty to Brag About in Panama

Nevertheless, Torrijos still has plenty to brag about when it comes to Panama’s economic status. Panama’s strong economic performance of the last few years continues, despite the deteriorating global environment. Even the local real estate boom – while definitely cooling down – continues with skyscraper condos going up all over Panama City.

Panama was one of the fastest growing economies in the world in 2007 with real growth rising to 11.2%. The GDP is expected to post a growth of 9.5% during 2008. Buoyed by a strong, sophisticated services industry and a maritime and logistical transportation hub, Panama has taken advantage of global trade flows, recording an average annual GDP growth rate of 8.6% over the past four years.

It is now positioning itself as a “gateway to the Americas” and beyond.

Why Smooth Sailing Will Continue for Panama’s Economy

Don’t forget the Panama Canal wealth. Panama’s economy benefits every year from the land, infrastructure and the tolls paid by ships and other Canal income.

Canal operations generated over US$1 billion in total revenues during the 2006 fiscal year. They needed much of that for the constant maintenance the Canal requires, but they still earned enough to generate a surplus. Tolls have declined this year as overall shipping has slipped worldwide.

The massive expansion of the Panama Canal now underway is on schedule to be completed by 2014 – exactly 100 years after the original canal opened in 1914. The Inter American Development Bank is loaning Panama US$400 million towards the estimated US$6 billion canal expansion costs.

All things considered, Panama, with its special pensionado program aimed at attracting foreign residents, is worth your consideration too.

Source: Panama And Its Banks Weather The Global Storm

In the latest chapter of government intervention, Switzerland absorbed $60 billion of distressed debt from UBS’s books. The government also took a 9% stake in the bank. Meanwhile, Credit Suisse called upon key shareholders (including the government of Qatar) to raise capital.

But Bob says the only Swiss banks in trouble are those that abandoned their traditional banking principles and “Americanized” their business. Thankfully, the vast majority retain the strict secrecy laws that will protect your privacy.

More from Bob at the Sovereign Society:

While the two leading Swiss banks, UBS and Credit Suisse, expanded their operations into the United States and were burned for their efforts, most Swiss banks remained safe and untouched.

In the second quarter of the year, UBS watched as 43.9 billion Swiss francs (US$39.6 billion) flowed off their books as savvy customers took their assets elsewhere. Thousands transferred their funds to sound cantonal banks and the few remaining legendary Swiss “private” banks.

Patrick Odier – senior associate of private bank Lombard Odier Darier Hentsch – told Swiss newspaper Le Temps Thursday that clients were flocking to private bankers to safeguard their assets.

“The numerous clients who are inquiring currently at our private banks are here seeking refuge, advice and expertise in asset investments,” he said.

But There’s No Banking Crisis in Switzerland

Switzerland is NOT facing a banking crisis. On the contrary, Swiss banks are coping with the global financial crisis, the head of Switzerland’s banking association said on Sunday.

“I am convinced that no Swiss bank will collapse,” Pierre Mirabaud told Swiss newspaper Sonntag. “The Swiss banking system is healthy. The cantonal banks, the regional banks, the private banks – they are all doing very well.”

“Switzerland is better positioned than many other countries. You cannot talk about a banking crisis here. We have more than 320 banks. Only the two big banks are directly affected by the crisis,” he said. But Mirabaud also sounded an upbeat note on UBS and Credit Suisse, saying they were no longer in the eye of the storm.

As Always – Swiss Stands for Safety

Historically, over the centuries, Switzerland has remained the place to safeguard your cash and personal assets, especially in times of trouble. We think that still holds true.

The fact that both UBS and, to a lesser extent, Credit Suisse got into trouble simply proves they abandoned their traditional conservative Swiss banking principles in the race for easy money.

Even in the current crisis, Swiss banks manage one third of all assets the world’s offshore wealth. Total cash assets of the Swiss banking system are estimated at US$2 trillion or more, while the total value of security deposits is well over US$3 trillion. Assets under Swiss management have risen significantly in recent years, reaching a high of US$4 trillion in 2007, according to the Swiss National Bank and the Swiss Bankers Association.

In recent weeks we have assisted Sovereign Society members and A-Letter readers seeking safer banking havens, many of them seeking to open Swiss bank accounts.

Based on our long experience, (we never have recommended UBS and Credit Suisse), we prefer private contacts with sound Swiss banks that have never “Americanized” their businesses. We recommend banks that adhere to the strict Swiss bank secrecy law that protects your financial privacy.

If you need help with Swiss banking, let us hear from you.

Source: Swiss Banks Survive the European Blame Game

Two years ago, I and others called attention to a dangerous provision slipped into an omnibus appropriation bill. The provision gave the President of the United States the unprecedented power to deploy the U.S. military for domestic duty within the United States as he sees fit.

President Bush (or someone who had his ear) came up with the disturbing idea that the U.S. military should be put in charge of domestic police matters when a “major catastrophe” occurs within America.

The operative factor here depends squarely on how one defines “major catastrophe.” It’s an elastic phrase that could be expanded at the stroke of a presidential pen. (Read some of the Presidential Emergency Declarations currently in effect and you may have trouble sleeping.)

Nevertheless, this extraordinary power was written into law. Now, for the first time, an active U.S. Army Infantry Brigade has been assigned “to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.”

Reportedly, these active duty troops will “learn new skills, use some of the ones they acquired in the war zone and more than likely will not be shot at while doing any of it. They may be called upon to help with civil unrest and crowd control.”

What possible rationale could there be for permanently deploying the U.S. Army inside the United States? One has to assume they would be used for such things as “crowd control,” other traditional law enforcement functions, and a seemingly unlimited array of other uses at the President’s sole discretion. What good could this serve the American people?

Perhaps they will be deployed to assure that the pending elections (or any Florida recounts) will be orderly. Or maybe they will be sent to Capitol Hill to convince a congressional majority that Wall Street deserves a US$700 billion bailout.

Recalling the unconstitutional excesses under the misnamed PATRIOT Act, are we now to believe a military trained to kill the enemy is going to play the role of Officer Clancy on the local beat?

PS: In the aftermath of the 9/11 tragedy, the PATRIOT Act became law with great haste. At the time, Bob called this law the “single greatest assault on personal and financial privacy in US history.” To learn about this far-reaching privacy invasion — and what you can do about it, click here.

Source: The Quiet Militarization of America

As a child I assumed Franklin D. Roosevelt was America’s only president. He was the only one I knew about until my seventh year when he died in April, 1945.

One of FDR’s memorable quotes, (and there were many), was in the opening paragraph of his First Inaugural Address, on March 4, 1933. FDR spoke the words at a time when America was in an economic panic, banks were closing, unemployment was soaring and the stock market had collapsed.

By the time the market crash bottomed out in 1932, stocks had lost nearly 90% of their value and the market did not again reach its previous highs until 1954.

The new president understood that the American people wanted reassurance and hope, but he also wanted them to understand that irrational fear was standing in the way of recovery.

Thus it was that he intoned his famous quote: “This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself – nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

It’s hard to understand the impact of this financial crisis until it hits somewhere close to home. Last evening I was on the phone with my daughter, and she asked if I thought she should transfer funds from her bank to a credit union as a protective measure.

I explained the role of the Federal Deposit Insurance Corporation (FDIC) and that there was a companion agency that insured credit unions, the National Credit Union Administration (NCUA)

So there’s no need to transfer assets because the United States government is the insurer of last resort in both cases. And backing the government are 300 million plus Americans and the trillions in taxes they pay. (For more about the FDIC, click here for an essay by David Newman, Market Analyst for The Sovereign Society.)

The FDIC insures up to US$100,000 in a single account, per account holder. If you know the rules well, however, it is possible for a single person to extend that coverage to more than US$500,000 at one bank. You can do this by using multiple account ownership categories (private, commercial, business, investment) since the US$100,000 insurance limit applies by account category and per account holder.

Check back on Thursday and I’ll give you my seven-step asset protection checklist for shielding your cash even if your accounts are worth more than US$100,000.

BOB BAUMAN, Legal Counsel

Source: The Great Depression of the 21st Century?