For generations and maybe centuries, if you wanted to deposit excess cash, gold, etc a tax haven such as Switzerland was the place to go. The banks loved money and the government encouraged once the money was deposited into an account, it was off limits to any other country. During World War I and War II, the country remained neutral which meant both sides went to Switzerland to deposit assets. The growth of tax havens around the world were modelled on Switzerland.
If you think about countries around the world, some have been well run for the mythical average person and some the leaders have used the treasury as their personal bank accounts, much of the money headed to Switzerland, it was safe, secure and the laws meant the other country would have a very difficult time to receive the money back. It was a surprise to Russia and the world, the Swiss government has a line in the sand.
In an article by Nick Cumming-Bruce of the New York Times News Service, Switzerland noted it was departing from its usual policy of neutrality because of the unprecedented military attack by Russia on a sovereign European state. Switzerland cherishes a reputation for neutrality that has established Geneva as home to the United Nations, including the UN Human Rights Council and as a place where countries around the world can negotiate peace in their conflicts.
Swiss national bank data showed that Russian companies and individuals held assets worth more than $11 billion in Swiss banks in 2020. As a hub for the global commodities trade, Switzerland also hosts numerous companies that trade Russian oil and other commodities.
Linking to dividend paying stocks, Russia, China and the US are the three most powerful countries in the world which means they have both military and economic activity. When in comes to taking sides, for most of the world it is very hard because it is important to have economic activity with al the countries. Goods and services flow, In the war with Russia and Ukraine people have to take sides and causes pain on both sides. Often times, people do not have to take sides and hope for peace as economic activity continues. Do you have a line in the sand for your investments outside of not making profits or paying dividends?
There are more questions than answers, till the next time – to raising questions.