New tax law forces North Americans to seek freedom elsewhere

New Tax Law Chases Americans Away
By Jeff D. Opdyke, Editor of Profit Seeker

Dear Sovereign Investor,

How do you divorce your country?

I don’t mean the physical process of renouncing your citizenship to live the life of an expatriate. That’s simple enough; just a bunch of bureaucratic paperwork. No, I mean the emotional process of severing ties with the nation that bore you, that raised you up, that provided you the opportunity to succeed.

Expatriation happens all the time, all over the world, every day. And I understand the universal rationale — people following their dreams of a better life somewhere other than the country stamped on their passport. Most commonly, that’s people from foreign lands, roughly 1.1 million a year, flocking to America. Because as I’m routinely told on my trips abroad, America still maintains its image — however anachronistic — as the shining beacon on the hill, where the greatest symbol of freedom beseeches the world: “Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me; I lift my lamp beside the golden door.”

But when the flow reverses noticeably, when Americans feeling tempest-tossed themselves are heading out through the “in” door, you’re left with my initial question: How do you divorce your country?

Between January and March of this year, a record 1,001 Americans terminated their relationship with America. They divorced their country.

Their reasons are varied. Some married a foreign national and decided to make a new life in the spouse’s homeland. Some are — or, were — hyphenated-Americans going home again for family or, given the booming economies in emerging nations, to pursue greater opportunities in faster-growing markets.

But many quit America because they feel America has quit them.

And I have to imagine they made their choice with the same sense of ambivalence I feel toward expatriation: Love of country, but hatred of how politicians, lobbyists and the legal system are warping or simply eradicating the ideals that made her so great.

People I know — people I’ve talked to many times — will say the solution is to vote those politicians out. That’s naïve. You can dress a donkey to look like a show pony, but it’s still an ass underneath — by which I mean that the American political culture is now so corrupted by money and influence that changing political flavors does nothing to alter the underlying reality of America’s political decay. It’s that decay that’s leading increasing numbers of Americans to abandon America.

We’re now at a run-rate that will see more than 4,000 Americans relinquish their U.S. citizenship — and that dramatically undercounts the real number. Certain types of expatriations, ones in which the expat is not required to file exit-tax forms, aren’t reported. Given that the exit tax kicks in when net worth tops $2 million, or average annual income exceeds $155,000 for five years running, it’s easy to see how the real number of expats is higher than the official numbers indicate.

Rise of the American Expatriate

Those escaping America for political reasons are a unique version of refugee — the American refugee. They’re fleeing because of financial persecution — or, at least, fears of its impending emergence. There’s no developed country in the world quite as desperate financially as our own. By now, we all know about the $17 trillion in debt, and the $125 trillion in on- and off-balance-sheet obligations that are of such enormity that the International Monetary Fund sees no way for that debt to go away through normal measures of economic growth or taxation. It — along with a growing chorus of other voices — sees some form of wealth confiscation as the only viable option.

Expats are seeking divorce because they sense this option is all that America really has left. When it will be executed, no one knows. But the expats are the visionaries. They see a dismal future for their wealth — potentially even society — here at home. They see government moves such as America’s taxation on global wealth or the Foreign Account Tax Compliance Act (FATCA) as desperate moves by a desperate government groping for any cash to keep the beast fed until the beast’s own gluttony brings about a violent death.

So, how do you divorce your country?

Reluctantly? With heavy heart? With a melancholy sense of fait accompli, begrudgingly accepting that our future has already been cast and that, while this situation will change in the future — possibly though a violent separation of the union — we are powerless in the near term to change anything of importance?

The 1,001 new expats are sending us a message: As frustrated, angry, sad Americans, we have just two honest choices: Stay and try to arrange our lives as best we can to protect our family and our wealth from the ravages so clearly on the horizon … or pack up our memories, divorce our country and pump a little Green Day into your earbuds as we jet off to a new homeland … I hope you had the time of your life.

Until next time, stay Sovereign …

Jeff D. Opdyke
Editor, Profit Seeker

The Sovereign Investor Daily
55 NE 5th Avenue, Suite 200
Delray Beach, FL 33483

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What A Bank Run In China Looks Like: Hundreds Rush To Banks Following Solvency Rumors by Zerohedge

Another timely article by the Head Trouble Maker over at Zerohedge. Although US banks are supposedly carrying insurance from the FDIC, there is never nor has their ever been enough in the FDIC to cover more than a small bank failure. The ratios regulated in the US are a joke, thus US banks are highly insolvent:

http://en.wikipedia.org/wiki/Reserve_requirement

A depository institution’s reserve requirements vary by the dollar amount of net transaction accounts held at that institution. Effective December 29, 2011, institutions with net transactions accounts:

  • Of less than $12.4 million have no minimum reserve requirement;
  • Between $12.4 million and $79.5 million must have a liquidity ratio of 3%;
  • Exceeding $79.5 million must have a liquidity ratio of 10%.[5]

 


 

http://www.zerohedge.com/news/2014-03-25/what-bank-run-china-looks-hundreds-rush-banks-following-solvency-rumors

What A Bank Run In China Looks Like: Hundreds Rush To Banks Following Solvency Rumors

 
Tyler Durden's picture

Curious what the real, and not pre-spun for public consumption, sentiment on the ground is in a China (where the housing bubble has already popped and the severe contraction in credit is forcing the ultra wealthy to luxury real estate in places like Hong Kong) from the perspective of the common man? The photo below, which shows hundreds of people rushing today to withdraw money from branches of two small Chinese banks after rumors spread about solvency at one of them, are sufficiently informative about just how jittery ordinary Chinese have become in recent days, and reflect the growing anxiety among investors as regulators signal greater tolerance for credit defaults.

Reuters explains:

 
 

Domestic media reported, and a local official confirmed, that ordinary depositors swarmed a branch of Jiangsu Sheyang Rural Commercial Bank in Yancheng in economically troubled Jiangsu province on Monday. The semi-official China News Service quoted the bank’s chairman, Zang Zhengzhi, as saying it would ensure payments to all the depositors. The report did not say how the rumour originated.

 

Chen Dequn, a resident in Yandong, just outside Yancheng, said she saw a crowd of about 70 to 80 people gathering in a branch of Sheyang Rural Commercial Bank in her town on Tuesday.

 

“At the moment there are about 70 or 80 people in there. Normally there’d only be about 10,” she told Reuters by telephone.

 

Officials at another small bank, Rural Commercial Bank of Huanghai, said they had faced similar rushes by depositors, triggered by rumours of insolvency at Sheyang. “We will be holding an emergency meeting tonight,” an official at the bank’s administration office told Reuters, but declined to comment further.

 

Why Yancheng investors suddenly lost confidence in the security of their bank deposits is not clear, given that the Sheyang bank is subject to formal reserve requirements, loan-to-deposit ratios and other rules to ensure it keeps sufficient cash on hand to meet demand.

Why the jitteriness? Because until now, bank failures in China have been unknown, as Chinese banks are considered to operate under an implicit guarantee from the government. That is changing. Which is why the rumor mill is on overdrive:

 
 

“It’s true that these rumours exist, but actually (the bank going bankrupt) is impossible. It’s a completely different situation from the problem with the cooperatives,” said Zhang Chaoyang, an official at the propaganda department of the Communist Party committee in Tinghu district, where the bank branch is located.

And Bear Stearns is fine…

 
 

Zhang was referring to an incident that rattled depositors in Yancheng in January, when some rural cooperatives — which are not subject to the supervision of the bank regulator — ran out of cash and locked their doors. Local officials say several co-op bosses fled after committing fraud.

 

China’s central bank governor said this month that deposit rates are likely to liberalised in one to two years – the most explicit timeframe to date for what would be the final step in freeing up banks to set their own interest rates.

 

It is widely expected to introduce a deposit insurance scheme before freeing up deposit rates, to protect savers in case a liberalised market puts major strains on smaller banks and alarms the public. Analysts also expect the controls on deposit rates to be lifted gradually. Is China’s debt nightmare a province called Jiangsu?

Why are bank runs like these only set to accelerate? Simple – unlike the US China has zero deposit insurance. Reuters expplains:

 
 

The case highlights the urgency of plans to put in place a deposit insurance system to protect investors against bank insolvency, as Chinese grow increasingly nervous about the impact of slowing economic growth on financial institutions.

 

Regulators have said they will roll out deposit insurance as soon as possible, without giving a firm deadline.

In the meantime, there are always helpful investor relations people willing to explain calmly just what is going on:

 
 

When contacted by Reuters by phone on Tuesday, an official at the Jiangsu Sheyang Rural Commercial Bank branch hung up, saying she was busy.

Others were even more helpful:

 
 

An official at the administrative office at Jiangsu Sheyang Rural Commercial Bank said the bank would publish a statement shortly. On its website, the bank says it is capitalised at 525 million yuan and had total deposits of 12 billion yuan as of end-February,

 

Officials at the Jiangsu branch offices of the China Banking Regulatory Commission (CBRC) declined to comment. The Yancheng branch of CBRC and the propaganda offices in Yancheng city and Sheyang county did not answer calls seeking comment.

Busy or not, for now, the banks may have survived following yet more capital infusions from the local government, but what happens when the default wave that has claimed solar, coal, and real estate developers finally impacts a deposit-holding institution? How will China – which has far more total deposits within its banking system than in the US (since the US banks fund themselves mostly using ultra-short term, overnight shadow funding) – survive a nationwide bank run we wonder?

 

 

Are You Preventing Economic Collapse for Your Family? | Silver Doctors

I don’t consider myself a “prepper”; I’m just a normal redneck with goats, sheep, and hogs who hunts and fishes. I guess I do it because it’s how I was raised. We never considered it prepping it was just getting ready for winter. One of the things most preppers and even rural folk fall far short on is food preservation. Even people who grow gardens tend to consume it fresh, and knowledge of preservation like canning is lost. People who hunt and fish are addicted to their freezers and vacuum sealers as well. At my house we can moose, meat, fish and vegetables. We know how to smoke fish so that it lasts as well. Buying lots of cans and keeping them in the garage isn’t really teaching any skill or practicing self-determination…. Hell, even a squirrel can stuff a hole full of acorns. Doesn’t make a squirrel smart.

This is a video about money… Real money vs fiat. If you think learning how to preserve your food supply sounds like a good idea, why not explore ideas about how it preserve wealth? How about videos and books on how to grow your own wealth and not just how to grow vegetables?

We should all be looking at wealth preservation and growth as closely as we look at reloading, marksmanship, bug outs, and other prepping topics. Why just get ready for “collapse”?
Why not get ready for the end of the dollar as the reserve currency of the world? Guess which one is going to happen first?