What’s Left of Financial Privacy?

A friend wanted to withdraw 10k from his bank account to keep the cash on hand because he is concerned about the financial stability of banks especially after what happened in Cyprus.  What he found out surprised him but it was something I already knew. The bank didn’t have 10k in the vault to give him and what is more due to the amount the bank office would need to file some federal forms.  Now my friend was a little miffed about the reporting requirement and the office told him if he withdrew 1k every so often it wouldn’t require any extra paperwork (like reporting the withdrawal or contacting the nearest Federal Reserve Bank to order the cash).

The vast majority of the loss in financial privacy is driven by the war on drugs and the war on terrorism.  Beyond banking there are also reporting requirements for those purchasing gold and silver as explained in this article. Under the current laws, metals dealers are required in some situations to file a 1099B and if they think you are trying to get around the reporting requirements such as my friend did withdrawing his cash 1k at a time, the dealer is supposed to file a suspicious activity report.

I suppose when it’s all said and done I am one of those people who would rather live with risk and rely on the help of my neighbors than see an all powerful state attempt to provide me with total security by stripping me of privacy.  And this post doesn’t even touch on the forfeiture laws which give law enforcement a perverse incentive to seize your property.

Advertisements