Harry Browne's Complete Guide to Swiss Banks

HARRY BROWNE'S COMPLETE GUIDE TO SWISS BANKS, by Harry Browne, New York: McGraw-Hill Book Co., 1976, 534 pp., $9.95.

Fie on you, Harry Browne! You've taken all the mystique and thrill out of Swiss banking. You've told it all. Swiss banking is now naked, fully exposed, explicitly revealed. Is nothing secret? What! Numbered accounts are just like any other account with no hidden advantages? Anyone can open a Swiss account by mail with a lousy hundred bucks? Swiss accounts aren't just for criminals and tax evaders, but for us law-abiding citizens too? Curses!

But Harry Browne is not all villain. With ubiquitous light comes unknown gems. Take Swiss custodial accounts, for instance. Did you know that you can have your Swiss bank put aside your money in practically any currency (Swiss francs, what else!), place the bills in an envelope, mark it with your name and account number, and transfer it to the bank's vault? The envelope of money bills is your property, not the bank's; so even under bankruptcy, the bank is legally barred from using these funds to pay outstanding debts. 'Tis not possible with most U.S. banks, where money you deposit becomes the property of the bank. You become the creditor; the bank, the debtor. Not so with a custodial account at your local Swiss bank.

Or how about the multicurrency checking account, where you can write a check in pounds when in England, in marks when in Germany, or in dollars when in America—all with the same blankety-blank checkbook? Great for the happy multinational, isn't it?

All this simply points to the extraordinary, diverse services of Swiss banking, far in excess of the provincial banking in the United States. Our banks won't store your gold and silver (let alone sell it, in most cases), won't sell and buy stock securities and commodities (by legal restrictions), and won't pay interest on checking accounts (except in New England). Yet Swiss banks will do all that and more.

So much for the bizarre. Now for the renowned, which Harry details with alacrity. Why should American Joe Moneybags open a Swiss bank account? Harry has three reasons: protection, privacy, and profit. Translated, that means protection from government, privacy from government, and, best of all, profit from government—surely worthy goals.

But one really wonders how much of a white knight a Swiss bank is. Can it truly protect you from the government? Col. E.C. Harwood, who is most familiar with the Fed's dirty tricks, says that "agents of the U.S. have obtained almost unfettered dominion, direction, and control over the Swiss government and its agencies. You can forget what you have read about Swiss banking secrecy." Harry staunchly maintains that secrecy is still alive and well in Switzerland, but I'm not so sure when filling out IRS Form 4683 on foreign accounts.…

One point Harry fails to emphasize enough is that Swiss banking is not for the small investor. Swiss banks do nothing for free and will nickel and dime you to death if you invest a paltry $100-$1,000. If you don't have $5,000 to play with, Harry's book won't do you much good—except perhaps to set up a simple savings account. But be careful. I know of one person who left $700 in a Swiss savings account for over a year before finding out that it was below the minimum balance ($2,500) to earn interest!

But if you do have the dough, Harry Browne's Complete Guide to Swiss Banks is indispensable. He surveys dozens of Swiss banks, from the largest to the smallest. Since Swiss accounts are not insured, Harry provides his own stringent liquidity tests to determine their ability to withstand severe monetary upheaval and management problems. For U.S. clients, he recommends only medium- and small-sized banks—Cambio & Valorenbank, Banque Indiana, and two Deak-owned banks, Foreign Commerce Bank and Bankhaus Deak in Vienna, among others.

Harry also provides excellent tax counsel that has not been readily available. As in his previous bestsellers, he also offers his own investment advice, which can be summarized as follows: buy gold (20 percent of assets!!), buy silver, buy Swiss francs—and store them in a Swiss bank. It's an old story by now, and Harry is still flying high on the 1971-74 primary bull market in these categories. For those of us unfortunate souls who followed his advice after 1974 and lost money, well, all Harry can say is that the decline in gold, silver, and Swiss francs is simply a short-run interruption of the long-run bull market. But, when, oh when, will the short run end? (Perhaps, dear Keynes, in the short run we're all dead too!)

An economist by profession, Mark Skousen is managing editor of Inflation Survival Letter and author of two books. Playing the Price Controls Game and the 1977 Insider's Banking and Credit Almanac.