Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Eurozone Crisis Escalates, Smuggled Cash, Gold & Silver Seizures Soar at Italy's Borders,Diamonds Are Forever?

Stock-Markets / Eurozone Debt Crisis Aug 15, 2012 - 03:22 AM GMT

By: DK_Matai

Stock-Markets

Best Financial Markets Analysis ArticlePanicked savers are smuggling cash from Italy resulting in 41 million euros being seized in random spot checks in the first seven months of 2012, which is almost 80 per cent up year-on-year.  For each seizure by the border-control authorities and Guardia di Finanza -- Italian financial law enforcement -- it is likely that at least ten more cases slip under the radar of overworked and, in some cases, sympathetic police and border guards.  Italian police are now deploying cash sniffing Labrador dogs that are trained to sniff out bank notes to counter the rising flight-of-capital from Eurozone's third largest economy.  A number of seizures have been made at Leonardo da Vinci di Fiumicino airport in Rome and Malpensa airport in Milan where smugglers frequently attempt to get to the banking safe haven of Switzerland, which lies outside the clutches of the European Union and the Italian state. 


Once the money reaches Switzerland it can either be deposited in "secret" Swiss bank accounts for safe-keeping or be swiftly wired across to other perceived safe havens across the world outside the reach of European governments.  The recent haul covers bank notes and hundreds of kilograms of gold and silver.  In one smuggling instance alone, 50 kilograms of gold was found in a single hidden compartment under the seat of an Italian food store owner driving his car to cross the border into Switzerland at Ponte Chiasso.  Some veteran observers are claiming that this escalation of physical flight-of-capital out of the Eurozone peripheral nations is reminiscent of war time stories last heard of during the time of fascist dictators like Mussolini in Italy and General Franco in Spain in the 1930s and 1940s.

Is This the Tip of the Iceberg?

What the Italian authorities may be apprehending by way of relatively meagre cash amounts from the middle class may be only the tip of the iceberg.  Nine tenths of the physical flight-of-capital may be taking place through alternative means right under their collective noses.  Precious gem stone traders in diamond centres like Amsterdam in Netherlands and Antwerp in Belgium report a rising interest from established European families in the Eurozone -- including Germany, France, Italy and Spain -- that are seeking safety and security in regard to their personal wealth by implementing capital preservation strategies to diversify into alternatives like precious gem stones.  In some cases those wealthy families also want to be able to move tens of millions worth in hard currencies either out of euros or move that type of quantum of cash across European national borders in easy to carry -- dog-non-sniffable -- precious gem stones including multi-carat rare and significant diamonds that can fit inside a concealed pocket within a bespoke business suit or be worn as sophisticated customised jewellery.  Diamonds probably have the highest value-to-weight ratio amongst most physical asset classes and hold their value well over time.

Is Switzerland the New Casablanca of Eurozone Financial Refugees?

Italians are trying to take their money into Switzerland because not only is it outside the European Union and has its own independent currency -- the Swiss Franc -- but it also boasts a more confidential banking system which is outside the regulation of the European Union and less likely to confiscate EU citizens' savings.  Although the cognoscenti would argue that Swiss banking secrecy -- like Swiss cheese -- has just as many holes at present post the relentless efforts of the US Department of Justice (DoJ) and the American Internal Revenue Service (IRS) acting against eleven Swiss banks.  However, this does not seem to deter the average wealthy European citizen who remembers the experience of his parents and grand-parents during the first and second world wars when neutral Switzerland was one of the main safe havens in the middle of an extremely polarised global geo-political and financial firestorm.  The issue of countering Swiss banking secrecy is also of rising interest to the German, French and British tax authorities who have involved their intelligence agencies to ferret and to purchase, where necessary, the precious databases of names of belligerent tax evading citizens.  A study by the central "Bank of Italy" has revealed most of the country's "500 euro" notes are in circulation near the Swiss border.  In the first seven months of the year border guards including the Guardia Di Finanza made more than 2,600 spot checks at various crossings between Italy and Switzerland, and also at the country’s main international airports in Rome and Milan, to catch the smugglers heading for Switzerland's safe haven.  For every stash of cash and ingot of gold that is apprehended and confiscated there are many more equivalent booties belonging to desperate and scared savers that successfully pass border security undetected into Switzerland.  Is Switzerland now going to come under increasing pressure from powerful Eurozone neighbours given that the flight of capital is accelerating towards it?  Is the opening up of its confidential databases of bank customers and banking staff to the US tax and justice authorities the thin edge of a wedge that the European powers will now seek to replicate and to exploit?

Why the Cash & Precious Metals Crackdown?

Italian police are cracking down on cash smugglers out of Italy who are now using their shoes, underwear and even cigarettes to avoid:

1.  Paying rising taxes as a result of newly introduced austerity measures of the technocrat government headed by Prime Minister Mario Monti; and

2. The shock of losing the purchasing power of their savings in case the euro devalues significantly or collapses in coming months as trillions are printed by the European Central Bank (ECB) to salvage the Eurozone.

Guardia di Finanza chief Lt Colonel Giorgio Salerno says, "We are discovering new and imaginative methods of smuggling cash and precious metals into and out of the country every few weeks!"

Circumventing the Euro 10,000 Cash Limit

Italian police have announced an alarmingly steep increase in seizures as thousands of middle-class and wealthy Italians are getting involved in smuggling cash in and out of the country in a bid to beat the European Union regulations, which require the movement of any more than 10,000 euros or equivalent in cash across borders to be declared when entering or leaving a member country.  The bringing in of cash could be happening for a variety of reasons including the repatriation of liquidated assets from other Eurozone countries. A heavy tax duty needs to be paid on any amount above the EU threshold. If an individual is caught with any more physical cash or equivalent -- than that which is allowed to move undeclared -- there are heavy fines, confiscations and even jail sentences. 

Conclusion

Italian customs seizure of tens of millions of euros from savers after thousands try to smuggle banknotes and gold out of the country shows just how much of a battle Prime Minister Mario Monti faces in his attempts to solve Italy’s escalating financial crisis.  This relentless flight of capital cannot be good for the Eurozone's stability and sustainability as it afflicts the Eurozone's third largest economy which is simply too big to rescue.  Tax evasion is seen as a national sport in Italy, with an estimated 120 billion euros evaded each year.  Italy has 40 million registered taxpayers, but more than 28 million claim to earn 20,000 euros or less.  No wonder there is so much cash flying around in Italy's so called "black economy" that is now seeking a physical exit.  However, this national sport of Italy is about to get even more complex and interesting as the Eurozone crisis escalates step-by-step.  Are we going to see a similar flight-of-capital and exodus of cash not only from Italy and Spain but also richer economies in the Eurozone like France and Germany as this crisis continues to evolve at a breathless pace?

ATCA Background Reference

The rise in cash and precious metals smuggling across Italy's borders is entirely consistent with the two recent ATCA 5000 briefings:

1.  "Capital Controls, Border Controls and Bank Freezes: European Union Prepares For Emergency"; and

2.  "European Bankers & Top Politicians Fear Collapse of the Euro: Flight-of-Capital and Silent Bank Runs."

What are your thoughts, observations and views? We are hosting an Expert roundtable on this issue at ATCA 24/7 on Yammer.

By DK Matai

www.mi2g.net

Asymmetric Threats Contingency Alliance (ATCA) & The Philanthropia

We welcome your participation in this Socratic dialogue. Please access by clicking here.

ATCA: The Asymmetric Threats Contingency Alliance is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses asymmetric threats and social opportunities arising from climate chaos and the environment; radical poverty and microfinance; geo-politics and energy; organised crime & extremism; advanced technologies -- bio, info, nano, robo & AI; demographic skews and resource shortages; pandemics; financial systems and systemic risk; as well as transhumanism and ethics. Present membership of ATCA is by invitation only and has over 5,000 distinguished members from over 120 countries: including 1,000 Parliamentarians; 1,500 Chairmen and CEOs of corporations; 1,000 Heads of NGOs; 750 Directors at Academic Centres of Excellence; 500 Inventors and Original thinkers; as well as 250 Editors-in-Chief of major media.

The Philanthropia, founded in 2005, brings together over 1,000 leading individual and private philanthropists, family offices, foundations, private banks, non-governmental organisations and specialist advisors to address complex global challenges such as countering climate chaos, reducing radical poverty and developing global leadership for the younger generation through the appliance of science and technology, leveraging acumen and finance, as well as encouraging collaboration with a strong commitment to ethics. Philanthropia emphasises multi-faith spiritual values: introspection, healthy living and ecology. Philanthropia Targets: Countering climate chaos and carbon neutrality; Eliminating radical poverty -- through micro-credit schemes, empowerment of women and more responsible capitalism; Leadership for the Younger Generation; and Corporate and social responsibility.

© 2012 Copyright DK Matai - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules