Unbanking vs. Underbanking: How To Break Up With the Financial System

[Onebornfree and Freedom Network commentary: the recent events in Cyprus "should" remind us all of the inherent lack of safety in the idea of leaving all, or most of our money within the banking system. What happened in Cyprus is possible elsewhere despite politicians and bureaucrats "assurances" otherwise ; total confiscation of U.S. bank account assets, possibly under different economic circumstances from those applying in Cyprus, but regardless, don't kid yourself, account confiscation in the US is a distinct possibility given the realities of "the system" itself. 

And in any case, total confiscation of your U.S. bank account is already possible without any sort of financial or economic  crisis as the excuse, and has already happened to 100's of 1000s of individuals in the U.S. who have been accused of a crime by the U.S government, for example: accused of  tax evasion. 

 In these cases and others,  [typically involving those ever"charming" R.I.C.O. statutes],all bank accounts of the accused are "frozen"pre-trial , thereby preventing the supposedly "presumed innocent until proven guilty", accused person of having the financial resources  to properly defend themselves against the charges. Typically , the accused is magically found guilty as charged in the court system of "the land of the free", and all frozen assets become the property of the U.S government. 

Offshore Banking Anyone? 

Of course, the real solution to all this is for the concerned  US citizen to open an offshore bank account in a suitable jurisdiction where confiscation is extremely unlikely. It is still legal for U.S citizens  to have foreign bank accounts [but that might change!] . If you would like to discuss offshore banking with me, either by email or via Skype, let me know. Regards, onebornfree & Freedom Network   ]

Unbanking vs. Underbanking: How To Break Up With the Financial System

by Daisy Luther
 The Organic Prepper

"Breaking up is hard to do, especially when it is with a tracking service like a financial institution.

Sometimes you can make a clean break and other times you have to remain “just friends”.

The US government actually has a name for people who have no bank accounts – they call these folks “the unbanked”. The FDIC defines the unbanked as “those without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another.” Another term is “the underbanked” – “people or businesses that have poor access to mainstream financial services normally offered by retail banks. The underbanked can be characterized by a strong reliance on non-traditional forms of finance and micro-finance often associated with disadvantaged and the poor, such as check cashers, loan sharks and pawnbrokers.”

According to the government, the above scenarios are crisis situations which must be rectified for “your own good”. There is legislation on the table in many states to set up banking facilities for the unbanked and underbanked. The assumption is that most folks who do not deal with a bank are too poor to do so. This could be true in many cases: high minimum balances, bad credit history, NSFs, and account fees can all preclude having a bank account for those in difficult financial straits.

However, the government has a couple more reasons to insist that everyone should have a bank account:

1.) Ease of confiscation

We need only to look at the horrible situation in Cyprus to see how bank accounts are like all-you-can-steal-buffets for the powers that be. A suggested theft TAX of up to 20% of the money in Cypriot bank accounts may be levied in order for the country to meet it’s staggering debts in the terms of the proposed EU bailout. The banks of Cyprus are loaded with the money of residents and businesses of other countries that have used them as a tax haven. The banks have been closed for several days and frantic customers are left to withdraw the maximum daily balances from ATM machines in an attempt to salvage what they can. Many people fear the banks will never reopen their doors.
Think it can’t happen here? I wonder if the people of Iceland, Greece, Ireland, Hungary, Argentina, Spain, and Portugal thought that too.

2.)  Privacy Information

The second reason that “everyone should have access to banking services” is the digital trail that it leaves. Every dime you receive and spend out of these accounts is part of an intricate system of surveillance. When your money goes into a bank – any bank – Big Brother knows about it. It’s a simple matter of compiling information via your social security number (or other federally- assigned number) to find out how much you make, how much you have, and where it comes from. This can be used to prosecute you for tax purposes, to locate you through where your pay comes from, and to follow your personal money trail for a variety of different reasons.

It can also be used to track your spending – Big Brother can find out that you spent $2000 at a gun store, that you purchased online from a prepper supply website or that you bought some books with “questionable” content in order to paint you as a threat.

Unbanking

So, in this day and age, is it possible to get by completely without a bank account?

It’s tough. Most work places prefer to pay through direct deposit. Many landlords, mortgage companies and finance companies do business through direct debit. You’re going to pay some steep fees if this is the route that you choose to go. For some, it might be worth it, particularly if you only have a few transactions in a month.

Here are some places you can cash checks for a fee:

• Check cashing depots

 • Some retailers like Walmart, 7-11, and some grocery stores (the number of these is dropping rapidly)


• Pawn shops

• The issuing bank will sometimes cash a check drawn from one of their accounts for a non-account holder

• Some prepaid credit card accounts will accept a direct deposit (in my opinion, this is nearly as unsafe as having your money in a bank account)

• Through a friend or family member’s account (also risky – for both you and the account holder)


Privacy Information

Here are some ways you can pay bills without a bank account:
• In person, with cash, cashier’s checks, or money orders
• Through the mail, with cashier’s checks or money orders
• Online, with prepaid credit cards
• Through a kiosk using a prepaid credit card
• At a check-cashing depot or retailer

Underbanking

Your next option is underbanking. For some people this may be the most realistic way to break up with their bank – it’s the “just friends” version. If you have a lot of transactions that go through your account every month, it isn’t necessarily practical to get rid of your account. Keep in mind that all of the above methods of unbanking still have a component of financial tracking. The checks and bills still have your personal information tied to them in most cases.

When you underbank, you still have an account. Set this up with the lowest possible fee and the lowest possible required balance. Shop around to find the best deal. Consider a credit union or community bank instead of one of the big mega-banks. They are slightly safer, emphasis on slightly.

Your paychecks from work can be directly deposited, which will make your employer happy. Employers rarely want to do something outside the norm, and if everyone else gets their pay directly deposited, writing a check for you will make you stand out – the opposite of what you want to do. As well, any other checks you receive, like refunds, tax returns, etc., can be processed through this account.

The goal here is to keep as little money as possible in this account. Banks are no longer the safest place to keep your money, and the .00001% of interest you will accrue is just not worthwhile.

Immediately upon payday:

 • Pay all your bills online or through a kiosk out of this account – rent, utilities, credit card payments (hopefully you don’t have those)



• Buy necessities like groceries if you need to reduce the amount in the account for withdrawal purposes

• Calculate the amount of payments that will be coming out of your account between now and your next pay (rent/mortgage, car payment, insurance)

• Remove all money except that required for impending debits and your minimum balance. Get it in cash.

Avoid Financial Surveillance

The government wants everyone to have a bank account for another reason besides quick accessibility for the purpose of thievery. Big Brother wants to know what you earn, what you spend, and where you spend it. Every penny you spend could one day be used against you, as more and more things become illegal in the police state that is taking over the western world.
Use your bank account as little as possible if you’ve chosen to underbank:

• Buy stuff with cash

• Skip registering your belongings by serial number for warranty purposes

• For heaven’s sakes, don’t get one of those “customer loyalty” cards that track every purchase you make and provide you with “rewards” or “points”

• Buy from places that don’t track you, like yard sales, Craigslist, farmer’s markets, roadside stands, your brother’s friend’s sister’s boyfriend

• Work for cash: this is another suggestion that won’t work for everybody, but if you can do some odd jobs for cash, even if you make slightly less money doing so, this is money that can’t be tracked.

Think about how your purchases tell a story about you that you might rather keep to yourself. Are you buying lots of farm equipment, soil amendments and seeds? Are you buying ammo every week? Are you stocking away large quantities of food or medical supplies? Have you recently purchased 2,347 books on different guerrilla warfare tactics? OPSEC is more than just keeping your mouth shut about your prepperly ways.

Ditch the Dollar

Although you require some fiat currency to function in today’s society, as well as some in an emergency fund, consider using other forms of currency whenever possible. The following suggestions won’t work for everyone, but some folks may be able to ditch the dollar in the following ways:

 • Engage in the barter system: trade goods and services with like-minded people.


• Keep precious metals like gold and silver in a fireproof safe for your “savings account”

• Immediately convert fiat currency into tangible goods: food, ammo, home defense items, tools, etc.

• Work towards self-sufficiency – if you buy less, you can earn less: grow your food, repair your own home or vehicle, do things manually instead of using expensive equipment, lessen your dependency on the grid

• Simplify – this goes hand in hand with self sufficiency: find your entertainment from library books and online resources, skip eating out, take a walk instead of joining a gym – the less you feel you need, the less money you will have to earn.

The decision to unbank or underbank is unique to every individual. The further away you can get from “the system” the more privacy and security you will have. The suggestions above are not meant to be comprehensive – they’re meant to get you thinking about how you can disengage. As always, your suggestions in the comments can greatly benefit others!"

Reprinted with permission from The Organic Prepper.
March 25, 2013
Daisy Luther writes daily tips, strategies and prepping ideas at The Organic Prepper and Girls Gone North.
Copyright © 2013 The Organic Prepper

Terry Coxon on Government, the Reality of Regulation and the Importance of Asset Protection

[Freedom Network  and Financial Safety Services commentary: Terry Coxon is a person who I have read and admired for many years now, his book "Keep What You Earn", is, in my humble opinion  an all time classic on asset protection. I would encourage anyone reading this Daily Bell interview to read that book at least twice through. Also, I believe his much maligned Passport Trust system is a very important and useful tool for the individual seeking more financial privacy, safety, and therefor by direct effect, more personal freedom.]

                                                       

Introduction: Terry Coxon is the author of Keep What You Earn and was for many years a close collaborator with and editor for the late Harry Browne. He currently is a regular contributor to The Casey Report. Mr. Coxon has a distinguished history as an architect of innovative financial planning arrangements, including the Permanent Portfolio Fund, the United States Gold Trust (the first gold ETF), the Passport Financial Offshore Trust and the Open Opportunity IRA.

Daily Bell: Glad to speak with you again. Let's jump right in. You've been speaking out for freedom and free markets for decades. Yet things seem to be getting worse. Why is that?

Terry Coxon: Once the public accepts or even tolerates the notion that regulation is needed for one thing, it's ready to accept every claim that regulation is needed for something else. Roll back the clock and look at what has happened.

The unstated premise of the Pure Food And Drug Act of 1906 was that individuals acting privately are too lazy, gullible and silly to stop handing their money to providers of rotten food or of poisons labeled "medicine," whereas individuals acting as government employees are energetic, shrewd and purposeful. If you accept the premise, then of course you want the same energetic, shrewd and purposeful people to prevent any mistake that you fear the lazy, gullible and silly might make. That's why today anyone who wants to smoke in a bar in California has no choice but to grab the stool by the window and lean his head out.

Daily Bell: Does regulatory democracy work?

Terry Coxon: I'd call it a great success. It works splendidly for:

        •       Businesses, especially the bigger firms, that want to freeze out new competitors

• Politicians who want to point to their accomplishments

• Politicians who want campaign contributions

• Politicians who want to re-enforce the dependency of their business constituents

• Foggy-headed individuals galloping to the rescue of millions of people they will  never meet

• Utopians who enjoy their thoughts of intellectual and moral superiority

• People who enjoy punishing

• People who doubted that they really existed until they acquired the power to punish

• People who've decided that their best career plan is to collect a government paycheck for                     going through the motions prescribed by particular laws

•        Individuals who are afraid of being free

• Individuals who resent those who are not afraid of being free

The numbers add up.

Daily Bell: Who is behind regulatory democracy and why does it continue to function from a regulatory and enforcement aspect despite its failure?

Terry Coxon: It hasn't failed at all. Just ask any of the people I've listed. It delivers what they want.

Daily Bell: Why do facilities like the SEC continue to gain power despite their incompetence?

Terry Coxon: You can rate the SEC as incompetent only if you judge it by its stated purpose. If you judge it by how well it serves the people on my list, it's performing swimmingly.

As for the public, any investor who thinks he's being protected by the SEC is a sheep waiting to be shorn. Quiz the people waiting in the sheering pen and you'll find that the place is crowded with people inclined to believe that individuals holding government-employee IDs are energetic, shrewd and purposeful.

Daily Bell: You were caught up in the system via the SEC. Tell us about that.

Terry Coxon: Imagine Martians destroying your planet.

Daily Bell: What needs to be done to reduce this regulatory plague?

Terry Coxon: I don't know that there is anything that can be done to stop the plague. Freedom is man's natural state but it is not his usual condition. By history's standards, liberty for the general public is an abnormality. The best you can do is to understand the problem, so that your head doesn't get filled with fictions and so that you can try to avoid getting hurt. One way to look at The Daily Bell is as a mental health project. By confirming for visitors that their doubts about government are in fact well founded, you help them get past the official fictions and stay grounded in reality.

Daily Bell: We believe we've noticed an uptick in the aggressiveness of the regulatory state − the aggressiveness regarding gun control, for instance. We believe that there is a power elite behind this aggressiveness. We believe that this group is pushing forward with plans to consolidate world government. Disarmament is part of that plan. Agree? Disagree?

Terry Coxon: Some people are far more effective than most in moving government in their preferred direction. Call them the power elite if you like but I don't believe you need to refer to a power elite to understand and explain how government works.

The starting point in making sense of government is to stop thinking of it as though it were a person. It's not a person. It's many thousands of people (including the members of what you call the power elite) pushing and tugging on one another in an effort to direct and control their collective power. It's a scrum. Everyone in the scrum has his own purposes, which is why government so often behaves in a contradictory fashion − attacking cigarette companies while at the same time subsidizing tobacco farmers, for example. Multiple personality disorder is an excellent model of government behavior.

Today most of the people in the scrum are lovers of big government, and they feel about private gun ownership the way monkeys in trees feel about panthers. There is a reason for their passion about gun control: Control over weapons is at the heart of government power.

It's a postulate of political science (both among libertarians and among more conventional folks) that government is the institution that holds an effective monopoly on the exercise of force. I think that touches on the truth but then glances off it. The monopoly isn't on force per se. It's a monopoly on intimidation. I've come to that conclusion by considering how a monopoly arises spontaneously.

A natural monopoly occurs in an industry if and only if the available technology supports unlimited efficiencies of scale. In such a situation, where any firm can turn out the product more efficiently than any smaller firm, the result is that the biggest firm forces the others out of business. It becomes a monopoly.

It's the production of intimidation (more so than the production of force) that enjoys efficiencies of scale. Regardless of how large or small the groups, a larger organized group of unarmed men can be expected to succeed in subduing a smaller group of unarmed men, if that is what they set out to do. And the intensity of the motivations of the two unarmed groups matters little. Both groups know who is likely to win any contest so even if the members of the larger group are only marginally interested in prevailing, the usual result is that no contest takes place because the smaller group sees that the odds are badly against it. The smaller group is intimidated.

Lovers of big government hate privately owned guns with such passion and obsession because weapons dampen the economies of scale in the production of intimidation. A single armed individual may succeed in overcoming multiple armed government employees, even though he would have no chance of overcoming them if no one were armed.

And private weapons dampen the efficiencies of scale in the production of intimidation in another way. With lethal weapons as part of the mix, motivation becomes a big factor. Three armed men who are seen to be seething with anger or who show a belief that they either must prevail or die may succeed in intimidating six armed government employees who are watching for 4 o'clock so that they can start getting overtime pay.

I wish the truth were gentler but that is, I believe, how things actually work. For myself, however, I have no taste for being part of either group.

Daily Bell: You deal a lot with asset protection and estate planning. Tell us about that.

Terry Coxon: It's a big topic.

No one wants to be a financial victim of what so many governments have become, but protection means dealing with multiple threats to wealth and covering all the bases. Here's a broad outline.

1. Decide on the kinds of things you want to own. That's the first step because you make can those decisions independently of how you handle the next steps.

2. Decide where you want to own things. Keeping everything in your home country is a mistake because it means volunteering now to cooperate in whatever the government decides to do tomorrow.

3. Decide how you want to own things. In the US, direct, personal ownership just isn't what it used to be. It's now more of an illusion of property than a reality. Direct personal ownership now means that you are the government's unpaid custodian. You take care of things until a tax collector or a regulatory agency or a judge says "hand them over." Using a foreign company to hold assets, especially liquid assets, would be a big improvement. But the thorough solution is an international trust. You hire the right institution to own things for you. No arrangement is sturdier.

4. Build exactly one plan, a single plan for all your objectives. That single plan should coordinate the goals of asset protection, internationalizing your investments, avoiding estate taxes, reducing income taxes, achieving privacy and generally becoming less dependent on what happens in your home country. If you have a separate plan for each objective, you risk tripping over yourself.

Most people can be far better protected than they are. For people in the US, all the goals I listed (which are the ones most commonly mentioned by my planning clients) are achievable to one degree or another.

Asset protection. It's not difficult at all to put liquid assets absolutely beyond the reach of future litigation risks, and it doesn't take long to get it done. Sixty days is plenty of time, once you decide to act. Immoveable assets, such as real estate, are more of a problem but the problem is solvable.

Estate tax. That's a tax on not planning. Even the largest taxable estate can be whittled down to almost nothing, and it can be done without interfering in investment decisions or giving anything away before you really want to. But it's a more complicated project than protecting against lawsuits, and it's a slow, gradual process that may take years.

Internationalizing your investments. Setting up accounts with foreign institutions has become a gigantic chore. But it's a kind of grunt work. What it takes is patience and persistence.

Income tax planning. There are some simple but rewarding steps that most people overlook. Few investors realize what they can accomplish with a familiar, homey thing like an IRA. There are other approaches that can accomplish even more, if your assets are large enough and if you have a tolerance for complexity.

Financial privacy. You can't have any but your heirs can have plenty.

Daily Bell: Tell us a little about the Passport Trust program. It's been quite a success.

Terry Coxon: An international trust is the permanent, robust solution for protecting family wealth. Nothing else comes close. I designed the Passport Trust program to make international trusts easy to understand and to eliminate unnecessary costs. Controlling costs lowers the wealth threshold at which real protection becomes practical.

Because an international trust can accomplish so much, getting the full advantage of one requires a lot of information. But the core concepts are quite simple. If you're curious, start by reading "Your Own International Trust." You can find it as a PDF at Passporttrustinfo.com. In ten minutes you can become a minor expert.

Daily Bell: Thanks for your time once again.

Original article source.