Appalling Practice Is Only Used in Two Nations—And the US Is One of Them!

It’s sort of an obscure story, but it’s also incredibly instructive. That’s the story of how Eritrea—a tiny, mostly unheard-of country in East Africa—taxes its citizens who live abroad. Eritrea is one of only two countries in the entire world that taxes its nonresident citizens on their global income. Specifically, Eritrea levies a flat 2% tax on the income of its citizens who reside abroad. Nearly every other country in the world bases its tax system on residency rather than citizenship. For example, if you’re an Italian citizen and leave Italy to become a resident of and earn income in Dubai, you would not have to pay taxes on that income to the Italian government. If you were an Eritrean citizen, on the other hand, you would have to pay taxes to the Eritrean government no matter where you live and work. This practice has been condemned as “extortion” and a “repressive” measure by an “authoritarian” government by the media. In fact, even the UN has weighed in. In Resolution 2023, the UN Security Council condemned Eritrea for “using extortion, threats of violence, fraud and other illicit means to collect taxes outside of Eritrea from its nationals.” You may be thinking, “What’s the controversy? Eritrea is getting criticized, and rightly so.” To understand the controversy, we have to examine the only other country on the planet that has a similar tax system. Eritrea’s Expat Tax on Steroids The only other country to tax its nonresident citizens globally is of course the US. The US essentially does exactly the same thing as Eritrea to its nonresident citizens, except that it’s done on a much bigger scale and with absolutely draconian penalties. Eritrea’s paltry 2% tax is a mere fraction of the top 39.6% federal tax rate that expat Americans have to pay—even if they earned that income abroad and never set foot in the US. (The US does allow for an exemption of a limited amount of foreign earned income, if strict requirements are met.) It should also be noted that Eritrea is a poor country and has a very limited capability to actually enforce its 2% expat tax. Many Eritreans who live abroad have never even heard of it, let alone are frightened by it. The US, on the other hand—being the world’s financial and military superpower (for now at least)—does have the capability to enforce its byzantine tax system literally anywhere in the world. When you consider this capability and the penalties—which can only be described as cruel and unusual—it’s no surprise that US expats are terrified. And they should be… or they aren’t paying attention. American expats are threatened with prison and outlandish fines merely for not filing a litany of complex forms correctly—even if no taxes are due in the first place. When you consider the totality of it, it’s not actually a fair comparison to contrast poor little Eritrea and its relatively modest expat tax to the monstrosity of the US system. Eritrea gets hounded, ostracized, and sanctioned for using—according to the UN—“threats, harassment and intimidation” to “extort” taxes out of its citizens living abroad. You would think there would at least be a peep of criticism for the only other country that does essentially the same thing, but on steroids. But you’d be wrong. If you listen for it, all you will hear are the crickets chirping. This isn’t surprising, though. Even though it’s clearly a double standard, it’s easy to understand why it exists. As the world’s sole superpower and issuer of the premier reserve currency, the US is not accountable to anyone. It’s a heck of a lot easier to push around some small, impoverished African country than it is to stand up to the US juggernaut—just ask Canada. Canadian Confusion Recently the Canadian government took the drastic step of expelling the head of the Eritrean consulate in Toronto because he had been involved with levying the 2% expat tax on Eritreans living in Canada. It would seem that Canada doesn’t like foreign governments shaking down Canadian residents. That is, unless the foreign government is the US government. Somehow I don’t expect the Canadian government to give any American officials the boot… even though they’re shaking down vastly more Canadian residents for vastly more money. Curiously, Canada’s reaction to the US’s expat tax is exactly the opposite of its reaction to Eritrea’s. Rather than taking action to prevent the US government from harassing US citizens living in Canada, the Canadian government has amazingly facilitated it, by complying with the FATCA law—even though it contradicts Canadian law. The Uncomfortable Truth It’s always better to face reality than to ignore ugly truths. And the story of Eritrea’s expat tax helps us reveal a big one. Namely that Americans—especially those who live abroad—are living under one of the worst tax systems in the entire world. A rather ironic situation, when you take a look at history. Americans went from revolting over a comparatively small tax on tea to the system which exists today. But don’t hold your breath for positive change. At least not as long as the US dollar remains the world’s premier reserve currency. Until then, no other country is going to meaningfully stand up to the US as it forces its tax policies on the rest of the world through things like FATCA. Likewise, positive change through the US political system is just as unlikely. Most Americans passively accept as “normal” the current tax system. And insofar as they want change, many Americans want more people to “pay their fair share.” The bottom line is that it’s simply not possible to stop this tsunami. The best you can do is to educate yourself on your options, and take practical steps to protect you and your family. Moving some of your savings abroad in the form of offshore bank and brokerage accounts, foreign real estate, and physical gold held in safe jurisdictions will go a long way toward protecting yourself. Obtaining a second passport is an important part of the mix as well.

Passport Programs - from under $30,000 to over $2,000,000

The super-rich have a growing number of options for obtaining second passports through economic citizenship. These programs are most attractive to the wealthy from countries whose passports don't allow for much visa-free travel—Russia, China, and the countries of the Middle East, for example. Spending anywhere from US$100,000 to more than US$2 million depending on the country, those paying for second passports see them as investments for their future and that of their children.

Grenada is one of the latest nations to put a Citizenship Investment Program in place (having closed their previous program in 2001). The program they have today requires an investment of at least US$310,000 (including fees) in an "approved" real estate project on the island. As only one project has been approved, you have little choice where to put your money.

St. Kitts & Nevis and Antigua & Barbuda also offer invest-in-real-estate-for-citizenship programs. These come with higher investment requirements (US$400,000) but at least give you have more than one option in each case for where to invest. On the other hand, none of the real estate investment options in any case is really a sound investment. You're putting up your money for the passport, not the property opportunity, and hoping that maybe you'll get your initial capital back someday.

As the number of super-rich in emerging markets grows, more countries are trying to get in on the action. As recently as a few years ago, the only two legitimate economic citizenship programs on offer were from Dominica and St. Kitts & Nevis. In the last six months, Antigua & Barbuda and Grenada have thrown their hats into the ring...as has Malta. 

Malta's program was controversial when they launched it, so they made some adjustments. It's a fast-tracked citizenship opportunity, but you have to be resident in the island nation for at least 12 months before you qualify for naturalization. The worse news is that the investment requirement works out to more than US$1.5 million.

If you're not one of the world's super-rich, don't despair. You can still obtain a second passport; it will just take you a little longer. If you're not up for making the big up-front investment, your option for becoming a naturalized citizen of another country is to be resident in that country for a specified period of time. That period ranges from three years in Uruguay if you're married (five years if you're single) to 20 years in Andorra. Most countries have five-year residency requirements.

In Belize, establishing residency can be as simple as showing up and renewing your tourist visa every month for a year. 

Many countries make it possible to obtain residency through investment. One of the most affordable such options is offered by Colombia, where you can invest as little as US$35,000 (depending on the exchange rate) in a program that results in residency. Portugal is on the upper end of this scale; the required investment for residency in this country is €500,000 in real estate. Generally speaking, the better the passport, the higher the investment requirement for residency.

Here's the most important thing to keep in mind if you're shopping residency programs with the ultimate goal of obtaining a second passport. Before you invest, make sure you understand the residency requirements as they apply to potential naturalization. In addition to legal residency, most countries require actual physical presence, both to maintain residency and to qualify for naturalization. Sometimes those rules aren't written in the statutes so you should speak with an immigration attorney who has experience with naturalization before starting down any path.

For example, Ireland requires 60 months of "reckonable" residency in a nine-year period of anyone who would apply for Irish naturalization. Of those 60 months, the final 12 must be consecutive and must immediately precede your naturalization application. In Panama, the requirement is five years of permanent residency status. That means that time under a temporary residency permit (which, for most visa programs, is what you get before you're eligible for permanent residency status) doesn't count toward the time required to be eligible for naturalization.

So, again, make sure you both understand and are willing to follow all the associated residency rules before committing to any citizenship-through-residency program. The Dominican Republic has a program which offers citizenship in one year. The cost of  naturalization is under $30,000. And, it is recognized as the most economic of passport programs.

Please contact us regarding any of the passport programs mentioned here. BankerTrust@gmail.com

Intelligent People have a Plan B

In August 1939, just days before Hitler's invasion into southern Poland, General Wilhelm List walked the lines of his German 14th Army making final checks and inspections. 

He must have thought it strange-- between Army Group North and Army Group South, there were over one million German troops hovered on the Polish border. And they weren't exactly hiding under rocks.

Everyone knew that the invasion was coming. Especially civilians in Poland. 

They were surrounded by German forces on three sides. And on 23 August 1939, the Soviet Union signed a non-aggression pact, effectively acquiescing the fourth side. 

It was obvious that the entire country was about to be turned into a war zone.

Yet seemingly unfazed by this prospect, well-to-do locals were on holiday at the seaside, or keeping cool up in the Carpathian mountains. 

Sixty miles to the north of List's 14th Army, people in Krakow were a enjoying warm summer days in Blonia Park and on the banks of the Vistula River near Wawel Castle. 

It was as if they were completely oblivious to the enormity of the consequences about to befall them.

After all, the government and local papers were telling them to not worry. Poland had prepared some basic defenses, and their military commander Edward Rydz-Śmigły was supposed to be a strong general.

They had been told to be confident. So they were confident. 

On the first of September, 1939, Hitler's armies invaded. And despite suffering massive military losses, the Polish government spread all sorts of misinformation on the radio, telling its people about phony victories against the invading German hordes. 

None of this was true. And within hours, a multi-year military occupation began that would turn people's lives upside down. 

Looking back, it's like watching a cheesy horror flick where some idiot character obliviously walks into the dark room where the killer is lurking. 

Human beings have a natural tendency to ignore obvious warning signs and take the path of least resistance. It's a much simpler prospect to stick our heads in the sand than to acknowledge uncomfortable truths and risks.

There are plenty of those today.

Last year, the United States government took in $2.6 trillion in total tax revenue. Yet they spent $2.5 trillion just to cover mandatory spending (like Social Security) and interest on the DEBT.

Bear in mind that 10,000 people per day become eligible for Social Security benefits... and the debt gets bigger every year. They are growing much faster than the government's tax revenue.

And it is an arithmetic certainty that they will soon fail to collect enough tax revenue to even cover mandatory entitlements and interest on the debt.

US economic growth ground to a halt in the first quarter of this year, and was later revised to be negative. And governments across the West are now so desperate for growth they're counting prostitution and cocaine sales in their GDP figures.

Meanwhile, the US Federal Reserve has expanded its balance sheet to the point that, after subtracting its unrealized losses, there's just $3.1 billion in equity to back over $4.3 trillion in assets. 

That gives the Fed a margin of safety of just 0.07%... meaning the most important central bank in the world that issues the most widely used currency in the world is practically insolvent. 

Look... there might not be any army groups encroached on the border. But the warning signs are just as clear as they were back in Poland in 1939. This is not a consequence free environment.

Unfortunately, most people are just as oblivious.

It may be days, weeks, months, or years before anything happens. But intelligent people don't ignore the obvious risks to their livelihoods and their families. 

Intelligent people have a Plan B. Intelligent people have their second passports ready.

As An American, Why You Need A Second Passport Now

If you’ve never heard of the obscure and seemingly boring Foreign Account Tax Compliance Act (FATCA), we don’t blame you.

Few people have, and even fewer fully grasp what it really means or the terrible things that it’s a harbinger for.

That so few people understand FATCA is perhaps not surprising. Often, otherwise offensive government actions and institutions are given dull and opaque names to obfuscate their true purpose.

We think the Federal Reserve is an excellent example of this.

After two experiments with central banking in the US failed to take root in the 1800s, anything associated with a central bank became deeply unpopular with the public.

So, the central banking advocates decided to try something new—a fresh branding strategy.

Rather than call their new central bank the Third Bank of the United States (the previous ones were named the First and Second Bank of the United States respectively), they decided to give it a vague and boring name that would conceal from the average person what it really was: a central bank. They chose the name “Federal Reserve” for that purpose.

We’d say they were pretty successful, unfortunately. Nearly 100 years later, most Americans don’t have the slightest clue what the Federal Reserve is, what it does, nor how it affects them.

We believe the same dynamic is at work with FATCA.

While FATCA is ostensibly about cracking down on offshore tax evasion, we think another motive is at play.

So let’s peel back the layers of this onion and find out.

The optimistic estimate for FATCA is that it will bring in around $9 billion over 10 years, or $900 million on average per year.

With the deficit in fiscal year 2013 for the US federal government at $680 billion, the expected $900 million from FATCA isn’t even a drop in the bucket (actually around one-tenth of one percent). Even in the event that the US will moderately reduce its deficit in the future, the revenue from FATCA will remain a pittance in comparison.

So it begs the question: Why would the US government go through all the enormous trouble and cost of implementing FATCA if it’s going to bring in such a relatively meager amount of money?

FATCA on Steroids

FATCA’s real purpose is not to collect money, but rather to pave the way for a global FATCA, informally known as GATCA.

You see, complying with FATCA often breaks the privacy laws of other countries. To get around this problem, the US government has been negotiating bilateral agreements with pretty much every country in the world.

However, it’s not practical for each and every country to create their own version of FATCA and accompanying web of bilateral agreements. It would be a very slow and tedious process.

So to address this issue, the central planners at the G20 and OECD devised what they call a new “global standard” of automatic financial information exchange between governments (i.e., GATCA) modeled on the US’s FATCA.

In other words, unaccountable bureaucrats from these supranational institutions are foisting upon the world a FATCA on steroids.

However, GATCA would have never been possible in the first place had the US not cleared the path with FATCA.

The G20 and OECD needed the US—the sole financial superpower (for now at least)—to strong-arm and cram down the throats of the rest of the world this privacy-killing measure. There’s no other entity on the planet with the capability to do so.

The very big stick the US wielded was access to the US financial system and the world’s premier reserve currency. Don’t sign up for FATCA and forget about accessing the US dollar or US financial system, and by extension the vast majority of international trade. It wasn’t long before most of the world fell in line.

Now that FATCA has become a fait accompli, the foundation has been laid for GATCA.

Unfortunately GATCA also will likely become an irreversible reality in the not-so-distant future.

We believe it’s highly probably that the OECD, the G20, and others will sanction or otherwise blackmail countries that don’t comply with GATCA. The pressure will likely be too enormous for the vast majority of countries to bear.

In the end, this means a permanent record of every penny you have ever earned, saved, borrowed, or spent anywhere in the world will be available in an instant to be analyzed and scrutinized, and shared with any number of local and global government agencies, all regardless of any actual or suspected wrongdoing.

But wait, there’s more!

If FATCA wasn’t the end game, don’t expect GATCA to be either.

Let’s peel back the final layer of the onion.

What Comes Next

Did you really think that all these governments would go through all the trouble of creating the architecture to gather all this global financial data with GATCA and then just let it collect dust? Of course not. They’re going to leverage this data as much as they can.

It’s no secret that collectivists the world over have long fantasized about creating a global tax with a planetary taxation authority. Whether it’s the global carbon tax, a worldwide tax on financial transactions, or a UN tax on air and sea travel, all prior attempts at creating a global tax haven’t really worked, as the infrastructure for collecting the data and enforcement wasn’t in place.

However, that could all change with GATCA, which could provide a platform to make the disturbing dream of a global tax a reality.

Bankrupt governments like France and the UK are also on board, as it allows them to more efficiently fleece and control their citizens. Strangely, you never hear financially sound countries, like Switzerland, Singapore, or Hong Kong advocating for FATCA, GATCA, or a global tax. It’s only the failed welfare states drowning in debt, and that’s not a coincidence.

All of this dovetails perfectly with the disconcerting global success of the economist Thomas Piketty. Piketty is sort of like a modern John Maynard Keynes in that he is giving academic cover and legitimacy to what otherwise should be perceived as radically destructive policies—like an inescapable global wealth tax.

Old Wine in New Bottles

Similar to how the income tax was originally sold to Americans, FATCA is being sold as a measure targeted only at the “rich.”

Of course, once you give politicians an inch, they will take a mile.

You’ll recall that when the federal income tax was introduced in 1913, those making up to $20,000 (equivalent to around $475,000 today) were only taxed at 1%, the top bracket kicked in at $500,000 (equivalent to around $12 million today), and the tax rate there was only 7%.

Of course once the infrastructure was in place for the federal income tax, the politicians naturally couldn’t resist ramping it up until we have the monstrosity that exists today, which most Americans passively accept as “normal.”

Expect a similar dynamic and gradualism with FATCA, GATCA, and a global tax.

What You Can Do

Obscure and boring wording was used to conceal to the average American the true purpose of the Federal Reserve, and the same is true about FATCA.

In reality, FATCA isn’t about stopping tax evasion or collecting revenue, as the numbers clearly show. It’s all about setting up the architecture to the ultimate goal of establishing a global tax as envisioned by Piketty and his fellow travelers.

Unfortunately there’s little any individual can practically do to change the trajectory of this trend in motion. It's time to secure a second passport and cut through the smoke and mirrors while making the most of your personal freedom and financial opportunities around the world.

Protect Your Wealth

Johnny Carson once joked: “The difference between a divorce and a legal separation is that the legal separation gives you time to hide your money.”

Putting money out of reach — from a spouse, children, business partners, or even employees — is a rather unsettling, but very popular topic.

Money is easier to disguise when it never surfaces. This may not seem like a secret, but it is. Using a bit of discretion and living beneath your means may seem counter to the “American Way” but it’s smart.

Bragging and flashing cash is a big risk these days. The less you flaunt your wealth — and your personal details — the less likely people are to reach into your pockets. Often, you are your own worst enemy.

The other mistake many people make, other than flashing the cash, is volunteering private information. Telling people about your wealth is one of the fastest ways to get on the radar.

I fly roughly 100,000 miles a year and I’m always amazed at the stories complete strangers tell me during the course of the flight. Small talk is fine … but revealing your net worth, bragging about your latest real estate development, divulging your portfolio assets, and the like makes no sense.

Besides keeping your lips sealed, use discretion with today’s technologies. Smartphones, text messages, Facebook and computer transactions all leave a trail that can easily be picked up by a spouse. And, these trails are very hard — if not impossible — to wipe out.

We are a huge advocate of not using electronic communication for anything truly confidential. This is especially true when it comes to financial accounts, trusts, etc.

If you want to ensure real privacy over your financial information, you have to go back to basics.

Elect to have any detailed financial statements from banks or brokerage firms held for you. Then instruct the companies to forward the documents to a lawyer. Normally, asset protection or family attorneys offer this service, and this is especially true if you are a client. Opt to go to the lawyer’s office to open and review the mail, make any necessary phone calls or sign any necessary papers. Leave any documents you need to retain in the custody of the lawyer to ensure maximum privacy where it is shielded by the rules of lawyer-client privilege. Shred anything that isn’t worth saving.

Our advice is to use discretion when it comes to your wealth, and that applies to everyone … except governments and tax authorities. There you must be fully transparent and fully compliant. Tax returns are not part of public record so they can’t be accessed without a lawyer and a judge. 

And by all means obtain a second passport. Besides offering financial privacy, it will allow access to all sorts of financial institutions that only having a US passport will not.

Unfortunately, many people make their most private financial details “public” all by themselves. Keep your secrets to yourself. It will save you thousands.

Warning to US Citizens - Act Now to Obtain a First Passport

We want to issue a serious warning to US citizens: act now to obtain a first passport – a U.S. passport, or you may soon lose your chance.

You might think you are entitled to a U.S. passport as a matter of right. But when we turn to page six of a 2005 re-issued passport it states: “U.S. Government Property.” It tells us that: “Upon demand made by any authorized representative of the U.S. Government, it must be surrendered.”

By law, the government can refuse to issue or renew your passport for reasons ranging from an outstanding federal-arrest warrant to an existing debt of $5,000 or more in delinquent child-support payments.

Earlier this year, the U.S. Senate passed a bill by Senator Barbara Boxer (D-CA) that would have denied or revoked a U.S. passport if the IRS claimed a person owed $50,000 or more in delinquent taxes. Fortunately, this bill was killed in the House.

But pause and consider your situation if the U.S. State Department refused to issue you a passport, or if it revoked your current passport – you would lose the right and ability to travel to, or live in, a foreign country. If you are already abroad, you would become an instant illegal alien, subject to deportation to the United States.

Ironically, until a century ago, almost anywhere you went in the world, passports were not required for international travel. Rare passports were used mainly to insure passage of diplomats sent to negotiate peace treaties or carry official papers.

Now governments use passports as another part of citizen control and surveillance. Official passport control marked the Cold War years, but now it is applied with a bureaucratic, computer-driven vengeance, justified by the endless “War on Terror.”

Will you be able to Move Freely?

We often get questions about the possibility of currency and capital controls, but thinking Americans should be equally concerned about foreign travel controls – the possibility that the government is planning a geographic prison for those they decide to keep within the U.S. borders – for whatever reason.

If you need proof of the ominous direction in which this passport-control movement is heading, PapersPlease.org, an affiliate of the First Amendment Project, has reported on what the U.S. State Department is planning for future passport applicants. And it looks like a systematic restriction of selected Americans to the homeland. This goes far beyond any of the existing unfair, secret “no-fly” lists or brainless TSA body scans, searches and groping.

Robert Wenzel, writing in the Economic Policy Journal, notes that in 2011 “…the State Department proposed a new ‘Biographical Questionnaire’ for U.S.-passport applicants” that required those receiving a long-form DS-5513 application to answer a host of invasive, personal questions ranging from every address at which you have ever resided and your lifetime-employment history, to whether or not you were circumcised and, if so, with what religious rituals.

Wenzel reveals: “Ignoring massive public opposition, and despite having admitted that it is already using the ‘proposed’ forms illegally without approval…” the State Department now wants approval for two “new” passport application forms, both just as objectionable. The State Department is now seeking approval for a somewhat revised Form DS-5513 as well as a new Form DS-5520, both for passport applicants, containing many of the same inane questions.

Don’t Wait – Take Action

Don’t let your voice go unheard. Tell the State Department exactly what you think of their new requirements – you can (and should) send written comments by fax to (202) 395-7245. When you submit comments, state that they concern the Office of Management and Budget’s review of proposed Department of State information collection requests, Form DS-5513 (ICR Reference Number 201208-1405-002) and Form DS-5520 (ICR Reference Number 201208-1405-001).

In the meantime, don’t take any chances. You can and should apply for a U.S. passport now. How to obtain a passport is explained here, including how it can be done online. An adult passport costs $135 with Form DS-11 and a minor’s passport is $105 with Form DS-82. Be aware that first-time applicants must appear in person after filing.

A Second Passport Now

The law requires a U.S. citizen to use his or her U.S. passport to leave or enter the country. What I have told you here makes absolutely clear that what also is needed is a second passport issued by a country whose government, unlike the United States, does not treat its citizens like so many sheep to be herded into pens.

Protect yourself before you might be denied your first passport, the first step to a valuable second passport and greater freedom.

Contact us at BankerTrust@gmail.com if we can assist you in acquiring a second passport.

Rational for a Second Passport

Imagine that your country and banking system are so broke that you have to receive approval from a special committee just to send your own money to your kids who are away at university...

Crazy, right?

But that's exactly what's going on in Cyprus. And it all happened overnight.

Just over a year ago, people across Cyprus went to bed thinking everything was just fine. They woke up the next morning to a brand new reality: their government AND their banking system were flat broke.

In collusion with other European powers, the Cypriot government FROZE bank accounts across the country. Suddenly an entire nation had no access to their savings.

The government spent weeks bickering about whose funds they were going to confiscate in order to bail out the banks... all the while maintaining the freeze.

Finally they made a decision: wealthy people would have their funds seized.

But this wasn't a victory for everyone else... because simultaneously the government announced a flurry of severe financial restrictions.

Sure, people could log on to a bank website and see an account balance.

But it was nothing more than a number on a screen. It didn't mean the banks actually had the money. Nor did it mean they were free to access their own funds.

Cash withdrawal limits were imposed. Funds transfers were curtailed. Cypriots were even forbidden from doing something as simple as cashing a check.

Peoples’ savings were essentially trapped inside of a highly insolvent financial system.

These destructive tactics are called capital controls. And one year later they're still in place. Some are being relaxed. Others are being maintained.

But by its own admission, the Ministry of Finance still believes there is a "lack of substantial liquidity and risk of deposits outflow. . . that could lead to instability of the financial system and have destabilizing consequences on the economy and society of the country as a whole."

Naturally, since this is an "emergency situation" in their view, they have to impose these "restrictive measures" in order to safeguard "public order and public security".

In other words, capital controls are for your own good.

This is exactly the sort of thing that happens when governments and banking systems go bankrupt.

And every shred of objective evidence suggests that many of the 'rich' nations of the West are in a similar position.

Some of the largest banks in the US (like Citigroup) have failed their stress tests; this means they are inadequately capitalized to withstand any major financial shock.

Then there's the FDIC, which is supposed to insure deposits in the Land of the Free. But the FDIC itself is inadequately capitalized, failing to meet the legal minimum for its insurance fund.

All of this is backed up by the US government, whose net worth is negative $17 trillion.

The Federal Reserve is supposed to be able to bail out the banks. But at this point, with $50+ billion in unrealized losses and a net equity of just 1.35% of its record $4+ trillion in assets, the Fed itself is practically insolvent.

This is the reality: inadequately capitalized banks are backed by an inadequately capitalized insurance fund backed by an insolvent government and nearly insolvent central bank.

Hardly a beacon of stability. Yet this is the system in which literally hundreds of millions of people have misplaced their trust and confidence.

It doesn't take a financial guru to figure out that this is not a consequence-free environment.

All that's required is the independence of mind to look at the facts rationally and understand that, like Cyprus, this could all change overnight.

It's worth considering that at least a portion of your savings may be much safer elsewhere-- in a stronger, well-capitalized foreign bank located in a stable country with minimal debt.

If you are a US citizen, getting a second passport to open a foreign account in recommended.
As the number of foreign banks and brokerage houses who do not accept US citizens grows, having a second passport becomes a necessity for financial security.

It may be wise to consider is option while you still have the ability to do so.

Contact us at BankerTrust@gmail.com on obtaining a Dominican Passport.