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  1. Join Date
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    Default US Dollar Situation Very Disturbing Development...

    Hi there

    This is Felix writing. In the middle of November of 2007, I had a gathering on a big yacht with 200 of our members. We discussed many things, but one of the things I suggested to people is to open bank accounts in Switzerland.

    I suggested to people opening accounts with UBS, which at that time required a minimum deposit of only $100,000 US Dollars.

    Today I received an email from my attorney who specializes in US Tax Law.

    Here is exactly what the email said:

    "I thought you would find this interesting: UBS is no longer accepting US clients…current accounts will remain, but no new accounts. This is an amazing development. There are other options, but most require large deposits ($3m+) from US clients."

    This email sent a shiver of disturbance up my spine for the following reasons.

    1. I am not sure if you knew this or not, but after the stock market bust in the late 1920s, the US Government passed a law, which made "gold holdings" illegal. They instantly confiscated everyone's gold, and gave them pennies of what it was actually worth, and whoever tried to buy gold again, became a criminal and was either heavily fined or went to prison. This was a desperate act of the government to inspire people to keep spending their money and stop them from hoarding it in other instruments.

    2. I am not sure if you knew this or not, but just a short while back, in 2006, the US government stopped reporting the size of its money supply. That basically means that since 2006, it has been creating money, and nobody in the world officially knows how much money has been put into circulation. This means that the US dollars might be so overinflated in value than most people even realize.

    3. In the beginning of 2008, Chinese officials have mentioned for the second time within a few months that they are holding too many dollars, and they would like to diversify their portfolio. Please note that Japan and China have been the two biggest parties buying up dollars, and their demand for dollars is what has kept it afloat.

    4. Several times in 2007, and perhaps before that, there were serious suggestions made by some European country officials to set Euro as currency to buy and sell oil with. The fact that demand for oil has been high, and that in order to buy oil, one must buy it in US dollars, has also kept demand for dollars high.

    So, to make the long story short, we have the US Fed printing as much money as they want, with nobody knowing how much exactly they have been printing, and I have a feeling that the supply of US dollars is increasing a lot more rapidly than demand for them. In addition to that, there are threats from many different parts of the world to hinder demand for US dollars even further.

    Now, I hope you understand more clearly why that email from my attorney disturbed me. If a major Swiss Bank is stopping to accept US accounts, perhaps it's one of many preparation steps from US government to make sure its citizens do not get their money out of the country, in case there is another major financial crisis similar to the Great Depression.

    This is just another suggestion that if you have a lot of savings in US dollars or other US instruments, I strongly recommend to take it out of the country.

    According to the words of my attorney, it seems like Switzerland has shut its doors, but perhaps doors into some other European countries are still open...

    Interested to hear your thoughts and suggestions.
     

  2. #2
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    Jan 2008
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    Default Yep

    very interesting,

    I believe the bailing out of Bear Stearn was the first time since 1927 that a bank has had to have massive injection of funds.

    Credit world wide is harder to get The housing markets in the poo

    Oil has been riding on the back of another USA war
    sounds like 1970 again

    Does this mean forex is the future???

    But what to buy,what to sell and when to hold
     

  3. #3
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    Default Try opening accounts in other countries

    If Switzerland is no longer accepting account holders from US then try some other countries. I have heard this story about a year ago. US government has been printing too much dollar. I am no expert in economics but I heard Citibank Singapore is currently having a special promotion for opening international accounts, and you can keep money in that account in different currencies like Euro, GBP, Yen.
     

  4. #4
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    Default ...

    Hello Felix,
    I think you are going too far.
    1. The letter from your attorney – From what I know UBS is in major problems a lot more then US Institutions and remember they have no Fed to help them less regulation and NO FDIA insurance so beware.
    2. The US government - Today they don’t have to make "gold holdings" illegal all they need is to have all the brokers and their clients deleverage and all those Bubbles will blow (Gold, Oil and other commodities also the Old German DutchMark which is called today EURO).
    3. As for living your money in the US – I'm not an American (I live in Israel and India) but most of my assets are in the US. I think if the US is going down every one will, but I don’t think that is going to happened.

    Have the Best,
    Sadhoo.
    Last edited by sadhoo; 03-20-2008 at 12:13 AM.
     

  5. #5
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    Default Not such a new development

    Felix,

    While I completely agree that things are deteriorating very quickly, the hesitance of the Swiss banks to open accounts for US citizens is at least 2 years old. This is a result of difficulties imposed by the PATRIOT Act and not a recent response to any requests from the US government.
     


  6. #6
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    Default New margin requirements

    Also new rules coming in about margins from April. That should reduce trading activity.I think Japan scenario is now seriously a possiblility. Can you see doing carry trades in US $?
     

  7. #7
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    Default

    i also thought credit suisse were also in this boat? can anyone clarify this?
     

  8. #8
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    Default Wells Fargo

    Hi Folks,

    IMO, keep your money in Euros, but if at all possible, keep it onshore as well. Wells Fargo is one of the last standing AAA rated US banks. They did not get into the subprime mortgages like the other banks -- they're very solid as a result. My partner and I learned that we can hold our business accounts in Euros there, good way to hedge against the battered buck. Also, keep your finger on the pulse of the plans for the "North American Union" -- the Amero (new currency to replace the Canadian dollar, US dollar and Mexican peso) is already in print. It's one of our government's prime agenda to dissolve our econonic and political sovereignty in the guise of world unity. If we don't stop it, it'll be here before too long, and there's no telling how it will affect the dollar's value when we have to convert over. Stay vigilant in these difficult times, continue to fight for our country's sovereignty, buy American made products, vote on election day.

    pfgroup
     

  9. #9
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    Default

    hi all,
    I think under the situation, u.s. government would rather encourage export of money so that more of the dollars are invested abroad ( especially in flourishing economies like switzerland ), so that dollar earn more returns there ( in foreign currency) to be imported back to u.s.
    and obviously, under the scenario, switzerland and japan would rather be reluctant accepting those investments. Similarly, they wouldn't want to invest in U.S. either.
    under the scenario, It wouldn't be a bad idea to consider opening accounts in an economy lower to u.s., may be like singapore/ Hong-kong.
    pcindia
     

  10. #10
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    Default

    Many interesting points, but this has nothing to do with UBS's decision to not open US accounts. I concur with sadhoo and andrewdarnell on that note.

    Much of what was been said about demand for the dollar is true. Oil is a big part of that demand and has been since the 1970's. Kissinger made a security deal with the Saudis that has promoted dollar based oil trade, but now we see this changing. To some extent Iran and Venezuela have already moved away from the dollar and others are threatening. Iraq is rumored to possibly trade in other than dollars in the future, but we'll have to wait and see. We are already seen the currency pegs begin to move amongst oil producing nations with Kuwait's shift to a basket of currencies from a pure dollar peg. Others are resisting, but for how long?

    Don't be surprised if you see major economic changes in the Gulf countries driven by Iraq's upcoming dominance of the oil trade. It may seem far fetched to some, but it has started and Iraq's leadership role will soon become clearly defined for all to see. So whatever Iraq does in regard to a trading currency for oil will serve as a bellweather for others in the region. There may be some other big economic surprises coming out of Iraq, but it's all speculation so I won't go there, except to repeat a quote of General Petraeus from CNN today when asked if he'd consider the war a victory, Petraeus said:
    they had pushed the bottles of champaign to the back of the fridge and would wait until someone else makes that announcement when it has become extremely obvious to everyone that the situation has changed.
    While Japan and China are holding large quantities of dollars, their relationship with the US is still mostly one of co-dependence. Let's face it, it has been the high dollar that initially increase imports from China and Japan, and it has been the more recent creation of dollars out of thin air that has allowed US consumerism to continue. Until these countries can replace a large portion of their business with the US with exports to other nations, they are stuck in this trade game with the US for better or for worse for some time. These countries have long been aware that the Fed has been flooding the economy with dollars and elected to stay in the game for the sake of their own economies. So in the short term, there is little that these countries can do. In the long term, the US need to better mange it's financial affairs starting by making a dent in it's debt.

    Meanwhile the high Euro is killing EU exports, so there is political pressure on the Euro to decline against the dollar. This is not value driven, but driven by the economic necessity for the EU to export goods. The world has been highly dependent on the dollar and cannot easily escape the incredibly irresponsible fiscal policy of the US.

    Quote Originally Posted by sadhoo
    3. As for living your money in the US – I'm not an American (I live in Israel and India) but most of my assets are in the US. I think if the US is going down every one will, but I don’t think that is going to happened.
    You're actually better off with investments in the US than most US Citizens because the US acts like a tax haven for those investing from abroad in the same way that it tries to deny offshore havens to those from the US.

    Just some thought's to consider.
     

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