By RUSS WINTER of Winters Actionables

Obama canceled his scheduled meeting with Russian President Vladimir Putin last week. Although Obama didn’t give his reason for the cancellation, the media stoogery speculated it was because of Russia’s protection of whistleblower-patriot Edward Snowden. What is not being reported is that Russia has been warning its citizens and institutions since last March’s Cyprus bail-in to divest assets out of western banks.

Additionally, last week Yao Yudong of the PBoC’s monetary policy committee called for a new Bretton Woods system to strengthen the management of global liquidity. In an article in the China Securities Journal, Yao called for more power to the IMF as international cooperation and supervision are needed.

Because of the U.S. dollar hegemony, the lion’s share of all global dollar-denominated transactions pass through the New York. This includes those that have absolutely nothing to do with the U.S. In turn, these transactions are monitored by the New York State Department of Financial Services, which was created in 2011. This agency plays a special role in the exposure of bank and company wrongdoers, real or imagined.  Around 4,500 organizations, with assets of $6.2 trillion, are under the direct control of this agency.

This circumstance, the unnecessary power and the unlimited surveillance/invasion of privacy are powerful incentives for non-U.S. banks and companies to replace the U.S. dollar with the currencies of other countries when making international payments, while at the same time creating their own regional systems of international payments.

Thus, recent Western self-inflicted wounds have opened the Pandora’s box for China and Russia as well as other BRIC nations to pressure hard for non-dollar settlement of trade, and in particular oil. I submit that this agenda and the G20 meeting Sept. 5-6 is the venue for this to be revealed. THAT should be the real concern for the U.S., and it ties direct into my earlier article, China Maneuvers to take Away US’ Dominant Reserve Currency Status. 

As far as the timing, there are just too many coincidences happening on the gold and other fronts to assume the yellow metal does not play a role here. Is it a coincidence that JP Morgan has literally cornered the gold market [see Banker’s Participation Report].

The Shanghai Gold Exchange has had deliveries equal to the world’s production for months straight.

The Comex registered gold is only at a mere 2% of open interest.

Chart source: Garrett Goggin

Is it a coincidence that GOFO has been negative for 25 straight days, and gold in backwardization?

Is it a coincidence that the stock market witnessed four Hindenberg Omens in the last week?

The end of Dollar hegemony is going to be a “gap” game-changer. 

*Gold Forward Offered Rates:

Americans renouncing U.S. citizenship surged sixfold in the second quarter from a year earlier as the government prepares to introduce tougher asset-disclosure rules.

The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside, is searching for tax cheats in offshore centers, including Switzerland, as the government tries to curb thebudget deficit. Shunned by Swiss and German banks and facing tougher asset-disclosure rules under the Foreign Account Tax Compliance Act, more of the estimated 6 million Americans living overseas are weighing the cost of holding a U.S. passport.Expatriates giving up their nationality at U.S. embassies climbed to 1,131 in the three months through June from 189 in the year-earlier period, according to Federal Registerfigures published today. That brought the first-half total to 1,810 compared with 235 for the whole of 2008.

“With the looming deadline for Fatca, more and more U.S. citizens are becoming aware that they have U.S. tax reporting obligations,” said Matthew Ledvina, a U.S. tax lawyer at Anaford AG in Zurich. “Once aware, they decide to renounce their U.S. citizenship.”

Fatca requires foreign financial institutions to report to the Internal Revenue Service information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest. It was estimated to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation.

The 2010 Fatca law requires banks to withhold 30 percent from “certain U.S.-connected payments” to some accounts of American clients who don’t disclose enough information to the IRS. While banks can sign agreements to report to the IRS individually, many are precluded from doing so by privacy laws in their jurisdictions.

The Treasury Department last month announced that the IRS will delay the start of Fatca by six months until July 1, 2014, to give foreign banks time to comply with the law. The extension of the act follows a previous one-year delay announced in 2011.

Financial institutions including Canada’s Toronto-Dominion Bank (TD) and Allianz SE ofGermany have expressed concerns that Fatca is too complex.

The latest delay comes after the Swiss government agreed in February to simplifications that will help the country’s banks implement Fatca.

“The United States wishes to ensure that all income earned worldwide by U.S. taxpayers on accounts held abroad can be taxed by the United States,” the Swiss government said on April 10.

Since 2011, Americans, who disclose their non-U.S. bank accounts to the IRS, must file the more expansive 8938 form that asks for all foreign financial assets, including insurance contracts, loans and shareholdings in non-U.S. companies.

Failure to file the 8938 form can result in a fine of as much as $50,000. Clients can also be penalized half the amount in an undeclared foreign bank account under the Banks Secrecy Act of 1970.

The implementation of Fatca from July next year comes after UBS, Switzerland’s largest bank, paid a $780 million penalty in 2009 and handed over data on about 4,700 accounts to settle a tax-evasion dispute with the U.S. Whistle-blower Bradley Birkenfeld was sentenced to 40 months in a U.S. prison in 2009 after informing the government and Senate about his American clients at the Geneva branch of Zurich-based UBS AG. (UBSN)

The additional compliance costs for companies to ensure that Americans they hire are filing the correct U.S. tax returns and asset-declaration forms are at least $5,000 per person, said Ledvina.

For individuals, the costs are also rising. Getting a mortgage or acquiring life insurance is becoming almost impossible for American citizens living overseas, Ledvina said.

“With increased U.S. tax reporting, U.S. accounting costs alone are around $2,000 per year for a U.S. citizen residing abroad,” the tax lawyer said. “Adding factors, such as difficulty in finding a bank to accept a U.S. citizen as a client, it is difficult to justify keeping the U.S. citizenship for those who reside permanently abroad.”