Monetary Collapse on July 1st?

Most of you have seen the ads and the alerts that on July 1st, the Dollar will collapse. I received the same spam that Bob talks about in the article. I was in the process on trying to figure this out because I have received several questions from readers about it, then all of sudden I come across Bob Rinear's article which is much more articulate than I could ever be. Did I previously mention in a post that Bob Rinear is becoming one of my favorite sources of common sense information?

Does The World Stop July 1st?

By Bob Rinear

Over the past few months, my inbox has been littered with spam Emails suggesting that on July 1st, the US dollar will collapse, the lights will go out, and martial law will be put in place. All I have to do is cough up a few hundred bucks to get the authors letters, and I’ll know everything I need to get around this disaster.

But, it has been so effective at stirring people up, that I’ve probably fielded a couple dozen questions from our subscriber base, asking indeed if July 1 is going to usher in some form of collapse. So, I figure I best do a quick outline of what this is all about, and see if we’re all going to be reduced to babbling rubble in a month.

The basis for this doom and gloom scenario is that House bill HR 2847 which is titled “Hiring Incentives to Restore Employment Act” goes into full effect on July 1. Well that sounds tame enough, what’s the issue? Well, inside this monstrosity is a section labeled the “Foreign Account Tax Compliance Act” which most will know as FATCA, and that is the basis for the apocalypse warnings.

If you’ve ever truly read any Government “bill” you know it is loaded to the gills with “blah blah blah” of Article 2 of section blah blah blah, which is subnoted in index 9, subset 4, of blah blah blah….. but I can wrap it up for you relatively compactly. Basically the gist is this.. Uncle Sam is broke. When nations go broke they start looking for income in every nook and cranny. So, they pass more and more laws to make sure they know what everyone has, where it is and how they can tax it. FATCA does that for all the US citizens with foreign connections, such as offshore accounts, foreign stock holdings, etc.

They want to make sure no one’s making a dime they can’t get their ransom on. 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 aall clients' accounts owned by U.S. Citizens and U.S. persons (Green Card holders).

Starting July 1, FATCA will require FFIs to provide annual reports to the Internal Revenue Service (IRS) on the name and address of each U.S. client, as well as the largest account balance in the year and total debits and credits of any account owned by a U.S. person. If an institution does not comply, the U.S. will impose a 30% withholding tax on all its transactions concerning U.S. securities, including the proceeds of sale of securities.

In addition, FATCA requires any foreign company not listed on a stock exchange or any foreign partnership which has 10% U.S. ownership to report to the IRS the names and tax I.D. number (TIN) of any U.S. owner.

FATCA also requires U.S. 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, but this has been in effect since 2011.

Okay, so why the utter doom and gloom sales pitch about this act collapsing the dollar, and forcing us all to eat bugs in the front yard? Well, the underlying theme is actually correct. It WILL accelerate the move OUT of US dollars that I’ve been showing you all for two years now. I’ve been telling you of the “global reset” for more than two years as a new global reserve is going to replace the dollar. Many think FATCA will be the straw that snaps the camels back.

All the articles I’ve penned about the Chinese wanting out of the US dollar, how they are forming alliances with dozens of countries to use Native currencies and bypass the dollar, etc, are all real, and YES…FATCA will push even more countries that have been sitting on the fence to say “the hell with this US regulation stuff, we’re not dealing with all this”

Multiple reports have suggested that small and medium-sized firms, unable to bear the compliance costs or the crippling withholding taxes, would be especially likely to ditch American markets. "On the institutional side, the cost of becoming FATCA compliant may be prohibitive for some foreign institutions, and therefore they will divest from their American holdings," explained Douglas Goldstein, author of The Expatriate's Guide to Handling Money and Taxes and director of Profile Investment Services Ltd. Indeed, compliance costs borne by the private sector are expected to dwarf the amount of additional U.S. tax revenue — perhaps by hundreds of times.

Okay, so now you know what the hype is all about. The question is, do we all come to a grinding halt on July 1? No, we don’t. This bill was crafted in 2010 folks, and it has been postpone/delayed a couple times. Nations, and institutions have had years to work the system, and decide if they’re going to play ball or go home. So, most of them are “ready” for this nightmare. But there’s no doubt that some of the fence sitters, when finally faced with “doing” the work, instead of just planning for it, are going to toss in the towel.

I think that the biggest “problem” isn’t going to be chasing down Ex-pats for their income taxes, those numbers won’t be significant enough to make a major difference. Where things could go bump in the night, is that it very well might push more foreign investors to completely shun our markets. In other words, why buy US stocks, if Uncle Sam is going to butt in on every transaction? They can instead buy emerging markets, BRICS markets, and not have to have us breathing down their neck.

It is moves like this bill, that proves to you all that the US is in the final stages of a long drawn out collapse. When nations do stupid things as ours has since the early 70’s, they run up debts they can’t pay. Before they toss in the towel and give up and let everything crash, they first go on a witch hunt for every penny they can scrape up to keep the illusion alive. We’re in that stage now.

Just like I mentioned in Sunday’s letter, the elites don’t pick up the phone and tell you what they’re doing. You have to be a forensic economist and put the pieces of the puzzle together to see the big picture. This act is simply another, albeit a very large…piece of the puzzle.

On Sunday I showed you the Deutsche report on bringing the Chinese yuan to the “world stage”. I also showed you the groundbreaking EurAsian pact that Russia is forming, as dozens of nations shun the West, for the economic stability of the East. Add up the times that the foreign nations have said that they’re tired of the US dollar hegemony, and toss in the gold that China, India, Russia and others are amassing and you can easily see the big picture emerge. The US is a desperate old gal, who wants to keep her façade of strength and superiority, but it’s all just make up. Everyone knows it except her own citizens, who are kept in the dark by the main stream media.

I think it also bears mention that our Government continues to militarize itself inside our borders. Years ago we made serious mention of the billions of rounds of ammunition that the Dept of Homeland defense was amassing. Then I showed you all the armored vehicles that have been populating cities and towns across the Country. Just a couple weeks ago the Dept of Agriculture started submitting for bid applications to acquire Submachine guns, Body armor, ballistic vests, etc. I don’t think you have to be a paranoid conspiracy freak to want to know just what on earth the Dept of Agriculture needs with a bid for .40 caliber “full auto” tactical weapons capable of holding 30 or more rounds???

The explanation for billions of rounds of hollow point orders and all this military style armament is that it is for training purposes, etc, but let’s be realistic. I pump more rounds out of my guns than just about anyone you’ll ever meet….yet I don’t use hollow points for my target shooting. I’m supposed to believe that this is all for training purposes? I’m supposed to believe that towns having tanks and half tracks, is all about better policing? I don’t think so. It’s just another part of the big picture. As the dollar continues to be shunned and collapse, as the Emerging markets join at the hip and create trade zones that exclude the US… we’re going to break down both economically and socially. They see it coming and they’re arming for the day.

UrbanMan's Comment: Hollow points for training ammunition? Yes. Most agencies practice and qualify with the same duty ammunition. I believe the LARGE governmental ammunition purchases were because of new EPA lead restrictions would necessarily drive up ammunition prices and drastically effect ammunition availability for the civilian population. That's your clue to stock more ammunition while you can find it, AND afford it.

Just Tuesday we learned that the Russians and the Chinese have created a joint “Ratings agency” for investments. They’re tired of the old boy network of Moody’s and S&P. They’re tired of having them place ratings on things based on political pressure versus fundamental economics. So, they will discard the ratings agencies, just like they’re discarding our dollars. But sometimes you have to pay attention to see just how pervasive this move “East” is becoming. Sometimes it isn’t broadcast in big headlines for all to see. For instance in April the Saudi’s held a very public parade, and what was rolling down the street? Chinese made missiles. Not US made. Many wouldn’t notice and others wouldn’t care. But that was a very public “thumbing of the nose” to the US by the Saud’s.

No, the world doesn’t stop on July 1. No, the dollar doesn’t collapse in a heap. No, we don’t have martial law in every town. No, the lights don’t go out. None of the doom and gloom you’ve been warned of is going to happen on July 1. It is however ALL going to happen. It just won’t happen then. It comes in fits and starts, a little at a time. The dollar has been in a slow motion collapse for years. The economy has been sinking for years. This will continue until the day they “pull the plug” on it. When is that? No one knows.

But the one thing I do know is that a date won’t be broadcast. It won’t come because of a bill that’s going to go into effect. No, when the collapse hits, or the reset or what ever you wish to call it, it will come out of the blue, probably on a Sunday night/Early Monday morning, with NO warning. So, don’t sweat July 1 folks. That’s just noise. You can however sweat all the things that point to the fact that all the evils are indeed going to hit at some point. Okay? Good.

UrbanMan's Comment: Perhaps Rinear's most significant point is that "the date of the monetary or dollar collapse WON'T be broadcast. It'll come without warning." Get prepared for it as it coming. It would sit you well to have some silver and maybe some gold bullion on hand as well. Think about it.