Tags: IRS | Z Street | exempt | dollar

Z Street and Its Impact on the Investment Markets

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Monday, 30 Jun 2014 08:24 AM Current | Bio | Archive

The economy of the United States is in trouble.

This seems obvious to me in spite of all the pundits and experts on television expressing their joy about an economy that is expanding at rate of 2 percent.

That presumes, of course, that the investing public believes the numbers put out by the government. You trust the government, don't you?

In a recent memo sent to customers by one of the world's largest wealth managers, they said that "so long as there is no better option out there for the world's go-to means of exchange and store of value, no dollar collapse will be precipitated by the implementation of FATCA."

The Foreign Account Tax Compliance Act (FATCA) is the foreign financial account crackdown that is making the United States an even bigger pariah financially than it is as a matter of foreign policy. Essentially, the United States is using the power of the dollar as the world's reserve currency to effectively bludgeon every other country into submission.

The dollar can be thought of as a share of stock in the company known as the United States. It serves as the embodiment or proxy for the U.S. economy. In essence, the memo says that the U.S. economy has value only because every place else is worse.

Why do people invest in the market?

Because they believe that the company stock or bonds have something called value in terms of dollars. It's a belief that they think somebody else thinks the investment has value. When they think other people think that the investment — or currency — doesn't have value, then it loses its value to the investor.

You trust the market only because you think the dollar is trustworthy. And that depends on how people perceive the U.S. government as financially trustworthy.

And that is where the impact of the Z Street case comes in. Z Street was formed as a nonprofit for the purpose of "educating the public about Zionism; about the facts relating to the Middle East and to the existence of Israel as a Jewish State; and about Israel's right to refuse to negotiate with, make concessions to or appease terrorists."

Z Street Inc. filed its lawsuit against John Koskinen In His Official Capacity As Commissioner of Internal Revenue (originally it was IRS Commissioner Doug Shulman) in 2010 and claimed it was targeted as part of the IRS' "Israel Special Policy." The IRS supports this policy, as reported by other commentators, because Israel is a country where there is a higher risk of terrorism and thereby Z Street might be funding terrorism.

After four years of litigation, the IRS was ordered by the judge to file a substantive answer to Z Street's lawsuit. Every defense claimed by the IRS was denied. With the IRS filing its response, then "discovery" will commence. Under the federal rules, once the lawsuit was threatened, the IRS had a duty to preserve every piece of evidence.

While Congress thus far has been stymied in its attempts to investigate the alleged IRS wrongdoing, the IRS and anyone else in the federal government — or out of the government — is now a target for Z Street.

Lois Lerner, former director of the IRS' Exempt Organizations Unit, took the Fifth. She's entitled to. However, the next person to claim the Fifth only lends credence to the presumption that there was, indeed, a conspiracy to target conservative organizations applying for tax exempt status. If there is ever a claim of Executive Privilege for some reason, then the president will be implicated directly by the privilege claim.

The importance of Z Street is that this case, according to The Jerusalem Post, "may be what forces the IRS to pull aside its carefully constructed curtain." Exactly, what happened to the Wizard of Oz. But do not expect a happy ending this time.

As the Z Street case and the Congressional investigation of IRS criminal behavior proceeds, any investors who think seriously about financial security must answer for themselves a question.

Do trust the government and the value of the dollar?

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Kleinfeld
The economy of the United States is in trouble. This seems obvious to me in spite of all the pundits and experts on television expressing their joy about an economy that is expanding at rate of 2 percent.
IRS, Z Street, exempt, dollar
678
2014-24-30
Monday, 30 Jun 2014 08:24 AM
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