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Beat the Black Beasts at Their Own
Blacklisting Game
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Wednesday, July 9, 2008 - Vol. 10, No. 162

Today's comment is by Bob Bauman, Legal Counsel, and Senior Writer for The Sovereign Society. 

A "blacklist" is defined as a list of persons or entities that are being shunned or banned because they are supposedly under suspicion, disfavor, or censure. Of course, blacklisting is in the eye of the beholder. One man's black list is another man's Honor Roll.

I was mildly surprised to learn that the first recorded use of this word dates way back to 1692. That was the same year as the Salem, Massachusetts Witch Trials.

In those quaint times what passed for due process meant that five women were executed for supposedly being witches. Perhaps that's why blacklists and witch hunts seem to operate in tandem.

Blacklisting in Hollywood of All Places

In American history, one of the most famous examples of blacklisting happened in 1947. At the time, the U.S. House of Representatives Un-American Activities Committee (HUAC) was investigating the Communist influence on the motion picture industry.

In the end, the movie industry actually blacklisted some professionals because they refused to provide evidence to HUAC. This included a group of screenwriters known as the "Hollywood Ten," who were members of the U.S. Communist Party, a Moscow-dominated group that advocated the forceful overthrow of the U.S. government.

Involved in this episode was one Ronald Reagan. The actor-turned President later said he was not very concerned about Communism until he returned from World War II to resume his movie career and became head of the Screen Actors Guild.

That entire era produced a bitter controversy about Communist blacklisting. Reagan, under threats against his life, assisted in exposing the Reds. He also gained a lifelong suspicion of the Evil Empire that contributed to the eventual fall of Communism.

What Does Blacklisting Have to Do With Today?

What got me to thinking about blacklists was an article by Dr. Marshall Langer. He is both a distinguished senior offshore attorney and retired member of The Sovereign Society Council of Experts.

In the May issue of the magazine Offshore Investment, Dr. Langer exposed the stupidity and political prejudice of tax collectors from various nations who have decided to blacklist of all things — tax havens.

Dr. Langer points out that national tax collectors have been so blind and irrational that they have officially blacklisted places that don't actually exist (like the "Pacific Islands," "Damask" and "Patau"). Meanwhile, one nation, Venezuela, even issued a blacklist with itself on the list...If that makes any sense.

 

What You Should Know Before You Cast Stones

You would think that few sensible people would object to tax havens. What we call "havens" are just countries or other jurisdictions that either don't tax foreigners, or give foreigners a tax break who do business there.

After all, tax competition among nations helps keep taxes lower everywhere, provides jobs, cuts costs and increases profits from business and investment.

But the Organization for Economic Co-operation and Development (OECD) is far from sensible. The OECD is a group that has often played bully and villain in its ham-handed attempts to crush tax havens and force a uniform system of high taxes worldwide.

However in pursuing its dictatorial goals, the OECD is simply doing the bidding of its 30 member nations. Many of these OECD nations are high tax, socialist welfare states like France and Germany that are determined to ring every last dollar, pound, or euro out of domestic taxpayers to finance continuing deficits and statist economies.

And you guessed it — the OECD publicity instrument of choice in this high tax campaign has been the phony "harmful tax competition" blacklist.

In the twisted OECD view, if a country freely chooses to impose no taxes that policy choice is "unfair" to high tax countries choosing to soak taxpayers for all they can get out of them. The OECD has created this smokescreen because they know sensible people take their business to where taxes are low or non-existent.

More Agencies, More Manufactured Drama

To lend drama to their demands, the OECD spun off a subgroup, the Financial Action Task Force (FATF). These worthies claim to fight money laundering (and more recently, countering terrorism), but in fact their goal is to abolish financial privacy in the process.

Both groups want unrestricted, automatic government access to any and all financial accounts anywhere in the world. Again, they're just doing the work of their tax collecting masters.

The Ineffectual Growl of a Paper Tiger

The irony in all this is that the OECD is nothing more than a paper tiger based on its members' agreement. It's not a government or international agency, even in the sense that the UN has legal standing. That's part of the reason why they haven't managed to achieve their presumptuous goals.

The OECD also presumes to tell the people and governments how they should conduct themselves. The OECD claims they're"...setting standards and creating values for the entire world."

These folks think they set the "ground rules for good behavior by multi-national enterprises and corporate governance principles" (The lazy, world media trumpets every OECD press release — even though they're all sycophantic documents that just push the OECD's liberal, elitist agenda).

This is a tall and very presumptuous order for the OECD's nearly 2000 bureaucrats, particularly because their personal salaries are all tax exempt. These 2000 officials get a tax break simply because of their coveted diplomatic status.

On top of that tax break, the OECD headquarters is housed in a fine Parisian mansion known as the Château de la Muette with a wine cellar that once belonged to the Rothschild family. Also, the OECD's annual budget is over US$300m with U.S. taxpayers footing 25% of the total cost.

Yet, the OECD Has NOT Managed to Squash Tax Havens

Even with a US$300 million allowance, the OECD has NOT managed to meet their goal of destroying tax havens.

Americans can still can avail themselves to bank and invest offshore. I suggest you take advantage of that freedom as soon as possible. Get your structures and bank accounts set up while it's still relatively easy.

In the meantime, I have a phrase to describe the OECD and the other blacklisters of tax havens — the French bête noire, "the black beast." First used in French literature in 1844 and it's still applicable today. It refers to someone or something unwanted or even hated, a pet peeve or strong annoyance — like the OECD.

BOB BAUMAN, Legal Counsel

P.S. Avoid my favorite pet peeve. Find out how to beat the fat-cats at the OECD at their own presumptuous game in my book, Where to Stash Your Cash Legally. (Now selling for a 25% discount throughout July!)


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Wealth:

Be Ready to Sell as Soon as Stocks Rally!

After a punishing decline in June, U.S. and international stocks are due for a serious bear market rally.

The number of traders betting against further declines, known as the level of short interest, now sits at a record 3.6% of listed equities in the United States. That means a vicious, powerful counter-trend rally is highly possible in July or August.

The 55% jump in short interest since October exceeds all other gains since 2000, according to Bloomberg. The six previous increases averaged 28% and lasted 11 months. During those periods, the S&P 500 declined an average of 6%.

But before breaking out the champagne to celebrate the end of this bear market, remember that we're still a long way from the finish line as it pertains to housing and credit. Also, the Fed has lost control of inflation. Many foreign central banks in Asia are way behind the inflation curve and other emerging markets will follow amid skyrocketing food and energy prices.

Personally, this is the worst year I've seen since 1998. And I'll be candid like always.

Most of my recommendations have pulled lower over the last 12 months — including my contrarian value investing strategies. Only gold stocks are working for me along with positions in agriculture, the yen, and reverse-index funds.

The final stage of bear market capitulation has not happened yet. The pain will truly end when everyone is dumping stocks en masse and more losses are inflicted. Use any intermittent bear market rally this summer to sell stocks. The worst is not behind us.

ERIC ROSEMAN, Investment Director

EDITOR'S NOTE: As Eric said, if you're not in gold stocks this year, you're missing out on the profits. Eric's Commodity Trend Alert subscribers have an entire precious metals portfolio to hedge their way through the worst year for stocks since 1998. Isn't it about time you did too? Try a risk-free trial to Commodity Trend Alert so you can take a quick look at Eric's best precious metal plays right now.


Privacy & Rights:

Beware: I Just Found More Scammers Online!

Several months ago, I wrote here in my blog about an advance fee fraud involving an "anti-terrorist clearance certificate." Recipients purportedly need the certificate to claim some type of offshore monetary award like an inheritance, a lottery win, etc.

In an advance fee fraud, a criminal offers you a large sum of money. But you get it only after paying a smaller amount to have the funds released. Exactly what justification they give you for the advance fee varies, but they're all fictions invented by criminals. Once you pay the money, the criminal — and your money — disappears.

Last week, a reader contacted me for assistance in obtaining a variation of the anti-terrorist clearance certificate — an anti-money laundering certificate. You can see an excerpt from this bogus email on my blog here.

Although I was reasonably sure this was an advance fee fraud as soon as I received the letter, I conducted some additional research to make sure.

First, I tried to find any record of the "National Drug Law Enforcement Agency Dakar-Senegal" and of its supposed director, "Dr. Usman Tijan." Although I found no record of any such agency, I did find numerous web postings mentioning the name of "Usman Tijan."

In one, Mr. Tijan (no longer calling himself a doctor) asks for financial assistance in recovering hidden diamonds to assist with his obtaining refugee status in Senegal. (Strange how he was promoted so quickly to head the national anti-drug agency!)

In another, Dr. Tijan claims to be acting on behalf of the national anti-drug agency, but the cost of the anti-laundering certificate is much higher: 4,250 "paunds" plus value added tax of an additional "$2,565 paunds" ($ sign in original letter).

In a third posting that involves Dr. Tijan's name, the letter is almost identical to the one I received from the reader, only the price of the anti-laundering certificate is now 6,120 euro.

To make absolutely certain that this is an advance fee fraud, I wrote to the actual Senegal anti-laundering agency, the "Cellule Nationale de Traitement des Informations Financières du Sénégal." I haven't heard back from them yet, but if they respond, I'm quite confident that "Dr. Tijan" and his purported anti-drug agency will be exposed as a scam. Until then — please avoid Dr. Tijian and his class of Internet criminal.

MARK NESTMANN, Privacy Expert & President of The Nestmann Group
www.nestmann.com


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