MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Archive for May, 2009

Be Suspicious!

Sunday, May 31st, 2009

While doing research for our brief on the future of offshore banking I came across very disturbing figures. All over the web, mainly in blogs or special interests news site, you read following news: Nationals of India have bank deposits of USD 1456 billion in Switzerland, followed by Russia (USD 470 billion) and the United Kingdom (USD 390 billion). The unknown author cites the Swiss Banking Association Report 2006 as the source for these figures. Within days these numbers made it from the virtual to the real world and even became part of the political debate in India.

What made me really wonder, besides the accuracy of these numbers, was the source. Why should the Swiss Banking Association (well known to keep privacy in high regard) issue such numbers? The answer is easy: It never did, and no offcial publication ever included these numbers. A simple check on the website of the Swiss Banking Associaton would have been sufficient to find this out.

Indeed it was a fake message to fuel the ongoing discussion on offshore banking and fire the anger against affluent citzens. Don`t get me wrong: I neither endorse tax evasion nor do I believe from a pragmatic standpoint that offshore banking will have a big future. However, if bloggers, journalists, interest groups and politicians want to be taken seriously they should at least check the source before bashing their own citizens or, even worse, foreign countries.


Krugman: Don’t Fear Inflation - Really?

Friday, May 29th, 2009

Over the last months I have learned quite a bit about zeros, actually how many zeros you need for billions, trillions, or zillions. The US government (and a few others as well…) is printing money like never before. So, how big is the risk of inflation? (remember, inflation is that really ugly animal that eats away your wealth quickly) Today Paul Krugman, Nobel price winning economist and big stimulus fan, has put an interesting thought piece into the New York Times. I am not sure if his reasoning can stand the test of time but we all should hope and pray that the man is right.


Animal Spirits

Thursday, May 28th, 2009

Animal Spirits - great new book by George Akerlof and Robert Shiller (yes, that’s the guy who has been talking about the housing bubble for years!). Offers insight why mathematical formulas of economist often fail to predict booms and busts, and how mass psychology comes into play. Get a lot of background on the current crisis, or the irrational exuberance of the dot-com-boom. Read it, and understand why economies fall into depression or why wealth bubbles develop despite all the theory of efficient markets. Not all of the stuff is new, but most of it certainly challenging conventional wisdom. 4 out 5 points!