When Congress and the President sought to institute a measure of capital controls on the people of the United States, and keep the public from rushing outside the country to move their money for protection, they came up with a scheme known as FACTA. FACTA is the Foreign Account Tax Compliance Act, and under this draconian piece of legislation is the demand on any foreign bank that does business with the U.S., or utilizes SWIFT to trade in dollars, that they must provide the Internal Revenue Service all personal and financial information on any America having an account outside of the U.S..
The ramifications of this became felt almost immediately as foreign banks began closing customer accounts and halting any future programs that allowed Americans to transact, invest, or deposit money offshore.
And on Jan. 13, the next phase of FACTA came online as the IRS announced the initiation of a database to monitor in real time customer accounts of sovereign and foreign banks. Known as the International Data Exchange Service, this colossal repository will now treat anyone with abank account as a suspect and person of interest, and assume guilt no matter if any financial crime or evidence of tax evasion has occurred.
Yesterday, the IRS announced the International Data Exchange Service.
If you’ve not heard of it, it’s is an outgrowth of the Foreign Account Tax Compliance Act (FATCA), which requires every single bank in the world to get in bed with IRS to share information about customers.
We’ve said this over and over, FATCA is probably the dumbest law in the history of the United States. And I don’t say that lightly, because there’s definitely stiff competition.
Like any other bankrupt government, the US government has taken to intimidating its own citizens and the entire world in an attempt to make ends meet.
Here’s the ultimate irony: there are nations in this world that are not recognized by the United States. The Turkish Republic of Northern Cyprus. Abkhazia. Etc. Yet banks in these regions still have to sign up with the IRS.
It’s like– you don’t exist. But you must still comply. – The Sovereign Man Blog
With the Patriot Act, the government can access your financial information on a whim or at the drop of a hat using the guise of ‘War on Terrorism’ as its excuse. And now, the U.S. believes it has the moral authority to claim access to foreign banks and sovereign countries simply because they control the reserve currency and the medium for most global trade. Which in the end leads to only one effective solution for the American people, and perhaps account holders situated around the world… if you do not want Daddy government monitoring and spying on your bank accounts, then what reason is there to hold your money any longer in a bank or financial institution?
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, and hosts the popular web blog, The Daily Economist. Ken can also be heard Friday evenings giving a weekly economic report on the Angel Clark radio show.
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Contributed by Secrets of the Fed of Secretsofthefed.com.