July 1, 2015
Singapore
Yesterday over coffee, a friend of mine leaked the news that JP Morgan’s private banking division here in Singapore is going to start charging negative interest rates.I almost fell out of my chair.He’s a successful hedge fund manager and one of their best customers. So when he received the notice, he rang up his private banker and demanded to know why.Between ridiculously low interest rates (banks are closing loans here for 0.9% or lower) and the increasing costs of compliance, “we can’t make money anymore...” was the response.It certainly paints a clear picture of how screwed up the entire financial system is.Compliance is a major component in this. Bankers around the world are buried up to their eyeballs in paperwork and regulations now.They can’t make a move or approve a single transaction without first doing anti-money laundering, terrorist financing, and tax evasion due diligence.Imagine it like this: your banker rings you up tomorrow and says, “The government of China requires us to have all of our depositors fill out this paperwork. So I need you to send this form back to me ASAP…”You’d probably think it was a joke.
Or at a minimum think, “Wait, what? I’m not Chinese. You’re not a Chinese bank. Who cares about some stupid Chinese regulation?”
And you’d be right.
Except that’s precisely what the United States is doing right now.
All over the world, bankers are contacting their customers and forcing them to fill out paperwork to comply with idiotic US government regulations. Even when there’s no connection to the US.Here in Singapore, the bankers are completely miserable about it.
They’re so angry for having to call customers and say, “Yes I know you’re in India, and I know we’re in Singapore, and I know you’ve been a customer for 10 years. But you still have to fill out this US government form or else we’ll close your account.”
It’s ridiculous-- all of this because the US government is bankrupt.
A few years ago they passed the Foreign Account Tax Compliance Act (FATCA)-- a major part of their crusade to stamp out tax evasion and bring in more tax revenue.FATCA is now in full force. Banks all over the world have been forced to enter into information sharing agreements with the IRS, meaning that they have to report on all of their customers and force them to fill out meaningless forms.
Needless to say, this costs a lot of money.
If you own a business, you can just imagine how frustrating and expensive it would be to have your employees toil away on senseless paperwork instead of... you know, doing real business.
The US government tells us that all of these disclosure programs have brought in about $6.5 billion in tax revenue.
Yet the costs of compliance are estimated to cost at least $8 billion, with some estimates over 10x higher.
Now that’s a neat trick. Uncle Sam gets the money and passes off the costs to everyone else.
And those who don’t comply with America’s rules are destroyed.
The most blatant example of this was last year, when a French bank was fined $9 billion for doing business with countries that Uncle Sam didn’t like.
Bear in mind, this was a French bank, not an American bank.
They violated no French laws. Yet they had to pay the US government $9 billion for doing business with places like Cuba.
(Ironically, Cuba is now BFFs with the United States, but it’s not like the bank is going to get a refund.)
More recently, the US government destroyed an Andorran bank that was accused of weak anti-money laundering controls.
And a few years ago they took down the oldest private bank in Switzerland.Every bank in the world has seen these incidents, and they’re scared. They could be next.
And that’s why you can’t get a single financial transaction done anymore without first submitting a mountain of paperwork to prove that you’re not a terrorist. Or financing terrorists. Or laundering money. Or doing business with the Axis of Evil.
Even outside of banking it has become utterly ridiculous.
A friend of mine here runs one of the largest bullion depositories in Singapore; he wanted to buy some raw gold and have it made into bars, so he contacted a refiner.
The refiner said, “Sure no problem. I just need you to send us some compliance documentation before we get started.”
Then he sent a list of no fewer than 22 items that he needed to submit-- copies of licenses, passports, certificates, etc.
22 items. Just to have a refiner make some gold bars. Ridiculous.
So obviously they’re not going to waste their time. Which means there’s some business that could have been done, but won’t, simply because of the compliance costs.
The US government has really screwed the world on this. Paperwork is the priority. Not business.
And all because America is bankrupt.
This trip to Singapore has been very eye-opening for me as I’m just now starting to understand how much people within the financial system despise the US government.
They feel like they’re being forced at gunpoint to be volunteer spies and tax collectors, simply because US politicians have been financially irresponsible.
And to me, it’s the biggest sign yet that America’s financial dominance is coming to an end. They’ve essentially engineered it themselves by alienating the whole world.
The transition isn’t going to be smooth. And it won’t happen overnight. But there will come a time, and likely soon, when the United States gets displaced.
And the rest of the world can hardly wait.
Until tomorrow,
Simon Black
"Like slavery and apartheid, poverty is not natural. It is man-made
and it can be overcome and eradicated by the actions of human beings."
- Nelson Mandela
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Most people think that Federal Reserve notes are American money. But are they? Congress was created by several states of the Union, via the national Constitution, so it is SUBJECT to that Constitution. And while that Constitution gives it power to COIN MONEY, banknotes are NOT coins, and they're NOT money. They're a mere CURRENCY, and mere PROMISORY NOTES. Why do you think there's a signature of the US Treasurer and the secretary of the Treasury on them? Those signatures validate those notes as PROMISES to pay, by the two organizations that those two persons represent; Federal Reserve System and Dept. of Treasury.
So if Congress doesn't issue FRNs under its power to coin money, where does it get the authority to issue those? Some would want you to believe that since Congress has the Constitutional authority to borrow money on credit of United States, it also has power to emit bills (banknotes) into circulation using the borrowed money. But it CAN'T, since no such power was given to Congress. In fact that power was in Articles of Confederation, but WAS SPECIFICALLY REMOVED when Constitution was created (see below).
So the ONLY POSSIBLE power under which Congress could "emit bills" (based on the borrowed money) into circulation, is Congress's unlimited power over 10-square mile area of District of Columbia!!! So FRNs are PRIVATE "money" of DISTRICT OF COLUMBIA, A.K.A. the United States.
And that's FOREIGN to the United States of America (the Republic).
So I hope that you realize that Federal Reserve notes are:
1) Mere Promises to Pay
2) Issued by a PRIVATE bank
3) NOT American/national money of the Republic (lawful money)
4) Currency of the FEDERAL gov't, AKA the Legislative Democracy of the District of Columbia (legal tender)
So the ONLY way FRNs would be Constitutional, is if they're used in District of Columbia and territories. In states of the Union they're UNCONSTITUTIONAL, since they're FOREIGN CURRENCY.
If Federal Reserve is a central bank, not a national bank, then it only makes sense that FRNs are PRIVATE currency, not a national one. Furthermore where did Juilliard get the idea that power to borrow money on credit of US ALSO includes power to issue circulating notes on the money borrowed? It did NOT. The only way they could do that would be if those notes issued would be an INTERNAL currency between the banks, which I believe FRNs originally were (between 1913 and 1933), or were internal currency of D.C..
So Congress's power to borrow money on credit of US DOES NOT includes power to issue circulating notes on the money borrowed, as that power was SPECIFICALLY removed from the US Constitution, See below.
In other words, issuance of debt notes FRNs into circulation is unconstitutional, and would only be legal under Congress's unlimited power over areas under its exclusive jurisdiction, i.e. the District of Columbia. In other words, FRNs are a PRIVATE currency of the federal gov't, NOT a national currency of USA.
So FRNs are a currency of the federal gov't, so it is NOT American/national money, as America, which is a Union of 50 sovereign states, does NOT include the District of Columbia, That is just a separate territory (not a state), over which Congress has an EXCLUSIVE jurisdiction.
So they might be "lawful money" in federal areas (corporate Democracy), but not in states of the Union (dejure Republic). And by "lawful money" here I mean a valid currency, NOT real national lawful money.
In other words, FRNs are NOT national currency, but only a private (domestic) currency of District of Columbia, so if you're not a federal subject, AKA US person, you're entitled to redemption of that private scrip in national currency such as US notes.
Here's a short article that explains why Congress does NOT have power to 'emit bills' based on the borrowed money:
"The original draft of the Constitution reported to the convention by its Committee of Detail empowered Congress “To borrow money and emit bills on the credit of the United States.”625 When this section was reached in the debates, Gouverneur Morris moved to strike out the clause “and emit bills on the credit of the United States.” Madison suggested that it might be sufficient “to prohibit the making them a tender.” After a spirited exchange of views on the subject of paper money, the convention voted, nine States to two, to delete the words “and emit bills.”626 Nevertheless, in 1870, the Court relied in part upon this clause in holding that Congress had authority to issue treasury notes and to make them legal tender in satisfaction of antecedent debts.627"
When it borrows money “on the credit of the United States,” Congress creates a binding obligation to pay the debt as stipulated and cannot thereafter vary the terms of its agreement. A law purporting to abrogate a clause in government bonds calling for payment in gold coin was held to contravene this clause, although the creditor was denied a remedy in the absence of a showing of actual damage.628
http://law.justia.com/constitution/us/article-1/19-borrowing-power....
And it does seem to me that destroying US Notes or blocking them from circulation would be criminal, as it would deny people their right to PAY OFF the national debt, and thus leave them in a PERPETUAL DEBT, which equates to INVOLUNTARY SLAVERY.
I mean, if our use of FRNs makes us liable for the national debt, then we OBVIOUSLY should have the power to REPAY/REDUCE the principal of that loan from Federal Reserve, via the 12USC411 demand for lawful money.
And if the Treasury destroys US Notes, it FORCES on us a PERPETUAL DEBT that we're NOT ALLOWED to repay. And that IS SLAVERY.
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When you think about it, it's pretty obvious that FRNs are a PRIVATE currency, since it says "FEDERAL RESERVE notes", not "UNITED STATES notes". I.e. they're issued by Federal Reserve (a PRIVATE bank), and the Treasury seal on them just means that US is the COSIGNER for that negotiable instrument. It could also be a bill of exchange, but those usually don't have a signature of the Payor on them.
So it's just a PROMISORY NOTE issued by a PRIVATE bank, and cosigned by the Dept. of Treasury. Which means it is NOT lawful money or national currency, and no one can be forced to use it as money. And if you aren't liable to use it, you're entitled to redeem it in real, national money (gold and silver coins), or, if US is bankrupt, then in national currency which is backed by the US Treasury (thus making you a creditor of US, rather than the FedRes).
And obviously, when you sign a promisory note, you, or the organization you represent, is LIABLE to PAY IT ON DEMAND. And when you don't, you're basically a CRIMINAL, just as if you gave someone a check, well knowing that there's no money in the account to cover it.
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And here's how Congress deceived the American people by creating FEDERAL STATES such as CA, FL, TX, etc. and ZIP codes that also designate federal areas. In other words, Congress does NOT have jurisdiction in states of the Union (except for interstate commerce), so its agencies would have to REGISTER as FOREIGN AGENTS when operating in states of the Union. They don't register that way. And the way they get around that is by convincing everyone that they're living in CA, TX, WA, NY, etc. and in a federal ZIP code, which are federal areas, so they don't have to register as foreign agents, because YOU GRANT THEM JURISDICTION by admitting to live in CA, FL, NY, etc, and in a ZIP code (=federal area).
