QUESTION: Mr. Armstrong; there is a lot of hype from the gold bugs that the dollar will collapse July 1st because of the new FATCA reporting requirements. Is there any truth to this for I cannot see how this is possible with all the geopolitical events. And the banks have been chasing Americans out in advance since 2011. I know you will give us a straight answer on this.
Thank you for all your help
DF
ANSWER: You are correct – this is TOTAL and COMPLETE NONSENSE that is once again being spun by gold promoters to trap unsuspecting investors trying to convince people the dollar will collapse and I suppose we all use yuan and rubles. They have taken a serious issue that is collapsing the world economy and spun it into a story to sell gold as always.If anything, it will cause a capital contraction back into the USA and that is behind a dollar rally – not collapse.
FATCA was passed back in 2011 and introduced by one of the most dangerous Democrats on Capitol Hill – Harry Reid. He is as much a Marxist and so extreme left he makes the perfect bookend to match McCain who never saw a county he would not invade. FATCA was passed back in 2011 and ever since Americans have been thrown out of banks on a worldwide basis. I have reported how FATCA is destroying the world economy – not the dollar. It should be noted that, FATCA was not subject to a cost/benefit analysis by the House Ways & Means Committee because nobody dared to look at what they KNEW was unconstitutional and treated ALL American citizens as economic slaves. So there was ZERO analysis of its impact upon the domestic or world economy. It was stuffed in the bill and sponsored by Senator Harry Reid of Nevada. So if you want to know the man that thought he was king of the world and obviously does NOT represent the American people – this is the guy.
There is also a serious problem with the reporting requirements, including penalties, that apply to all US citizens, including those who are unaware that they even have American citizenship since the USA considers ALL persons born in the USA are citizens and even if born overseas by one parent that was American. Under international law, FATCA is clearly a violation for it is imposing requirements on institutions outside the USA over which they have NO territorial jurisdiction. FACTA considers the entire world belongs to the IRS.
FATCA requires foreign financial institutions (FFI) of broad scope – banks, stock brokers, hedge funds, pension funds, insurance companies, trusts – to report directly to the IRS all clients’ accounts owned by US Citizens and US persons (Green Card holders).
Everyone has known this was coming since 2011. Hedge funds in Switzerland refuse to accept Americans as do banks. The impact has long hit because everyone has anticipated the beginning of the reporting starting July 1, 2014. FATCA will require FFIs to provide annual reports to the Internal Revenue Service (IRS) on the name and address of each US client, as well as the largest account balance in the year and total debits and credits of any account owned by a US person. The risks are far too great for all FFIs so the solution has been to refuse to do business with Americans. Reid has been destroying more domestic jobs for Americans than anyone in history.
Domestically, FATCA added 26 U.S.C. § 6038D (section 6038D of the Internal Revenue Code) which requires the reporting of any interest in foreign financial assets over $50,000 after March 18, 2010. FATCA also added 26 U.S.C. §§ 1471–1474 requiring US payors to withhold taxes on payments to foreign financial institutions (FFI) and nonfinancial foreign entities (NFFE) that have not agreed to provide the IRS with information on US citizen/green card holder accounts. FATCA also added 26 U.S.C. § 1298(f) requiring shareholders of a passive foreign investment company (PFIC) to report certain information. This means an American cannot even own 10% of any foreign company. Reid is absolutely ruthlessly insane.
If an institution does not comply, the US will impose a 30% withholding tax on all its transactions concerning US securities, including the proceeds of sale of securities on that institution’s entire business PRESUMING they have American clients (guilty) without any proof whatsoever.
In addition, FATCA requires any foreign company not listed on a stock exchange or any foreign partnership which has just 10% U.S. ownership to report to the IRS the names and tax I.D. number (TIN) of any US owner. Americans have been kicked out of everywhere already for the past 3 years.
FATCA also requires US citizens and green card holders who have foreign financial assets in excess of $50,000 (higher for those who are bona-fide residents abroad) to complete a new Form 8938 to be filed with the 1040 tax return, starting with fiscal year 2011.
This is what I have been writing about. They have destroyed the VELOCITY of the entire global economy. How is this supposed to hurt the dollar? It is DEFLATIONARY causing a shrinkage of the world economy and it is forcing Americans into the US stock market domestically. How are domestic citizens going to sell the dollar? Where is the money supposed to go? It cannot leave the country and Obama will impose more currency controls very soon. The only way to invest overseas is at a domestic broker in the USA. The implication they will run to gold, well this has been known for 3 years now. The big money cannot go into gold – it is a tiny fraction of the total economy and gold pays no interest that institutions require INCOME on investments.
So no – this is more hype. July 1st has been anticipated already – the damage has been completed.It is creating massive DEFLATION since it will make the economic decline far worse and it is one factor that has caused the decline in the emerging markets – Americans have been sent home packing. Thank you Harry Reid – you and Hollande of France should be great drinking buddies – you think the same – confiscate anything earned by people who work and hand it to people who do not but vote to keep your ass in Washington.
BTW – thank you so much Nevada for infecting the world with this crazy Marxist. Even Hitler respected the sovereignty of Switzerland and did not invade them simply because Germans had accounts there. Reid respects no borders nor does he respect the Constitution or International Law. He believes he can rule the world and this is the essence of old world IMPERIALISM. Unfortunately, he is of the crowd of antiquated people extreme left and right we need to purge the system of to save the day after tomorrow.
