Wednesday, April 6, 2016

The Panama Papers Explained: Corporate VPNs

Okay, the Panama Papers is probably finally hitting MSM, which is cute, since usually 99% of the time no one cares, no one understands and no one will do anything about it.

I sure hope the shit hits the fan, and one of the first people I'd like to see cry is the Icelandic PM for still being such a dick after being exposed and then still lying about it. I wonder how dirty his money is.

Surprisingly, this Vox article has a very simple and easy way of explaining the Panama Papers leak, which I would encourage you to read.

And as the simple cartoon briefly explains, not all shell companies operate illegal activities. There can be really good reasons to have a shell company, and there can be really bad reasons to have a shell company as well.

It's like "junk bonds". It sounds like a shitty bond because of its name, and it could be shitty, but it is not always the case. The words just have a very negative association. Likewise "Shell corporations" sounds very sketchy, but they are not always illegal corporations.

The best analogy of a shell corporation that I can give is that it is like a VPN. It simply masks the identify of the owners. Whether it is used for legitimate or illegal activities is up to the owners.

I'm not here to debate if shell companies should be illegal, what's the controls that should be in place and limitations of these companies... that's for lawyers, bankers and politicians to fight it out. However, I would of course be very interested in the outcome. As mentioned, I think shell companies are like VPNs. And I use a VPN.

Right now though, what I am most interested in is to think about this: As an individual, what sort of risks would this bring to me?

Perhaps in the future, they will be a lot a lot more capital monitoring and capital controls in an attempt to thwart illegal money activities. Some banks and ATMs have limits as to how much physical cash that customers are allowed to draw out daily. If you have $50,000 in a bank account and there is a limit of $1000 of withdrawals a day, it would take 2 months to withdraw your cash and by then the bank would have ran out of money.

I've watched videos of people living in third world countries who have had their wealth ravaged by capital controls and hyperinflation, it never looks pretty.

As an individual, what can you do?

On the most basic level, I would never have only 1 bank account. I am sure many of you do not as well. I have 5 official bank accounts, and I am considering opening up 2 more while closing one. On top of these bank accounts, I have several places that can keep my money, but the risks are that the people keeping my money are not financial institutions and I would still need a bank account to retrieve my money. The plus side is, I don't need to withdraw the money into a Singaporean bank account.

On an intermediate level, I have a sizable amount of gold and silver and I am a bit more intimate with the physical gold and silver markets compared to most people. It would not be hard for me quickly convert cash into precious metals if I had to. I understand how the physical markets work, what products are the standard and the risks I take if I decide to place a "put" on my wealth. Buying gold and silver is like going to a strip club. Almost everybody knows what it is, but few people have actually done it and understand the finer details of it. Basically, I'm a strip club regular, and you've don't even know what it looks inside.

On an advanced level, I am considering about opening a bank account in a foreign country. Most countries will not just let anyone open up a bank account with them. Usually, you would need to be a citizen or PR, or employed in another country to do so. I have done so before (where and how, I will not disclose). In this regard, I might be more experienced than most people. It might not be immediate, but that's the medium term plan for now.

For readers that have closely read my posts, it should be of no big surprise that I have a plan B when it comes to Singapore (and possibly leaving Singapore). I don't know whether it is because I am getting older and more observant to the facts of life or if it has only recently been getting worse, but I am observing more and more "ugly" Singaporeans and it irritates me to the core. Of course, I could be like the majority of these whiny bitches and head over to social media comment boxes or take it to the forums and find over like-minded people so that we could all stroke each other and feel good. But no. That option is for people who are in NATO. No action, talk only. I talk about shit, and then I do it. Even though I am a Singaporean, I do not believe that just because I was born here and I have lived here most of my life, that I am required to be stay here, work here and die here.

If I am unhappy about my situation, I take action to fix it. Planning to have an overseas bank account and overseas investments is not illegal and it is not treason. It is in fact a prudent option to mitigate your financial risks and it also provides you with a platform to launch an alternative life. Even if I never have to execute my plan B, at least I would have a diversified stream of income as well. And of course, massive peace of mind to sleep like a baby at night.

Remember, no one got on the Titanic thinking that it would sink.


  1. There is no place for fear in trading you need to be confident and think positive to achieve bigger and that is possible when you take support from Epic Research.

  2. There are ugly people everywhere and reading "social media" and "viral news" only emphasizes the ugly. Anyway, I agree. It is an era of globalisation and nobody needs to be tied to anywhere. But Singapore is still quite a nice place to live in despite its shortcomings.

    1. Trudat owq. It is easy to spot imperfections anywhere if you are looking specifically for them. I have to agree, Singapore is a pretty great place to live now, especially with so much unrest in many other places.

      Having a backup plan does appease me greatly though, but that might take a while to establish because this kind of "insurance" doesn't come cheap and without effort and planning.


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