There is little financial news today; markets in America were closed for the 4th of July weekend.

So, we begin our week with a quote from our favorite philosopher: Yu Faz.

“The rich man’s heart breaks…just like the poor man’s. For all his money, he cannot buy another one.”

Yu should know. He was exiled after he had a liaison amoureuse with one of Genghis’ concubines.

Pity poor Yu! Pity the poor rich…! Here at The Daily Reckoning, as long-term DR sufferers know, we always take the part of the underdog. We almost never saw a lost cause that we didn’t want to join. We admire die-hards…and we like the company of scalawags.

So, today, we take up the banner of one group that is all these things…a group that is widely despised and routinely persecuted…the ‘untouchables’ at the top of the economic pyramid: the rich.

“Switzerland at war with the rest of the world,” begins an update from colleague, Cecile Chevre, in Paris.

The Swiss usually manage to stay out of wars. They do it by being heavily armed. Even the yodelers have softened up lately, but until recently every able-bodied man was required to serve in the Swiss Army. He had to keep his rifle at home…and each year he had to prove that he knew how to use it.

During WWII, the Germans considered invading Switzerland. According to legend, a top German general met with Switzerland’s top military man on the border.

“We have twice as many men on the border as you do,” said the German. “What would you do if we launched an attack?”

“The answer is very obvious,” replied the Swiss general. “I would tell each of my men to shoot twice.”

But now Switzerland is up against even worse odds. Switzerland has long been a haven for people with money. And life is getting tougher for the rich…as well as for those who defend them.

In the first place, getting rich is not as easy as it used to be. Gone are the days when you could just put your money “in the market” and come back 10 years later with 10 times as much. If you had invested $70,000 in Dow stocks in ’82 and let it grow, you’d have been a millionaire by 2007… Even after inflation, investors came out way ahead.

Gone too are the glory days in real estate, too. How many fortunes in America were built on dirt? Thousands of them…maybe millions. Especially, in places such as California, Florida and Las Vegas…a steady immigration over decades produced a bonanza for property owners. A fellow of modest means was able to mortgage his house and buy more properties. He might begin with the house across the street…and then buy four condo units down the road…and then move on to major apartment buildings and commercial property too. After a couple of decades, he could easily have parlayed a few thousand of original equity into millions worth of property assets.

But how do you do that when prices are falling? And when lenders no longer want to give you credit? We received a letter recently, from a fellow with a string of properties in Las Vegas. He had bought wisely and now enjoyed positive cash flow – after all costs, including financing. Still, he couldn’t find a lender willing to roll over his debt.

The last couple of years have been a bad time to be rich. The capitalists’ capital is capitulating. It’s giving up and dying.

Meanwhile, governments are looking to “the rich” to finance their bailout programs, their wars, their pension programs and giveaways. Where else can they look? They need money. Like Willie Sutton, they know where the money is.

A few years ago too, the rabble-rousers made the news by pointing to the “uneven distribution of wealth” in America. Eighty-five percent of the wealth in the country was owned by only 20% of the people What got people chafed was that the rich were getting richer. The percentage of total wealth owned by the rich had gone up from 81% in 1983.

What happened in the years ’83 to 2004 to make the rich so much richer? Financial assets rose in value.

And then what happened? Financial assets fell in value in ’07-’09. The total amount lost, according to the latest number we saw, is about $13 trillion. Roughly, both houses and stocks are down about a third. Who took those losses? The poor? Ha ha. The nice thing about being poor is that you don’t have to worry about losing money in a downturn. No, dear reader, the poor are scarcely poorer because of the slump. They had nothing when it began; they still have nothing. The rich, on the other hand, were big-time losers. They must have borne 85% of the losses – or a total of about $10 trillion. If that’s correct, the rich must now own a smaller piece of the pie than anytime in the last 25 years.

We feel a tear forming in our right eye. There…it wells up…and rolls down over our trembling cheek. The poor rich!

The rich in America may have lost $10 trillion so far…but their losses are just beginning. Who’s going to pay the expenses of bailing out the banks…the economy…the states…Detroit…?

You do the math yourself. The United States functions as a popular democracy. Politicians get elected by winning votes. The idea is to get as many votes as possible. Do you get the most votes by appealing to the few people with money – the 20% “rich”? Or do you appeal to the masses – the 80% of the population who don’t have much wealth?

Well, you can do the math later.

How do you get the masses to vote for you? You offer them something. What? Well…Medicare…pensions…bridges…tax credits…wars – whatever they seem to want at the moment. And how do you pay for it?

Okay…now we’re putting 2 and 2 together: you have to take the money from the ‘rich.’

Of course, it’s not that simple. Because you also need money from the rich to “get the word out” about what a great guy you are. And if you lose the race for the House of Representatives, you want to make sure you have a cushy chair somewhere to rest your fat behind. No point in going to the masses for those things. You need friends among the rich.

So, you favor some of the rich – with special subsidies and credits – while making the rest of them pay. And since you’re competing with other politicians who have gotten their support from other groups of rich people…at the end of the day, by the time the votes are counted, it’s hard to know exactly who the real winners and losers are. One rich family gets millions in subsidies. Another has his business protected from competition. Another benefits from an obscure amendment to an almost unknown little section of the IRS code. Rivals get wind of these boondoggles and make a stink about it in the press. Pretty soon, the masses think the ‘rich’ are ripping them off…not realizing that, as a group, the rich pay for 80% of the costs of government.

And now, as the official federal debt goes to $12 trillion, who’s really going to pay it? Just apply the 80/20 rule… the ‘rich’ will have to pay 80% of it – at least. That’s $9.6 trillion that will be borne by 60 million citizens. No, wait…of those 60 million…you have to take out those who are too young…or too old. Each household may only have one person earning a living…say, only about 20 million real taxpayers.

Now, divide $9.6 trillion by 20 million – you get a debt burden of $480,000 for each one.

But that’s just the “official” national debt, which is bad enough. But what about Social Security and healthcare obligations…and obligations to soldiers who’ve lost their legs in Iraq? Are you going to forget about these people? Who’s going to support them?

According to the Petersen Foundation, there’s a “financing gap” of about $47 trillion between what the government is obliged to pay out and what it expects to get in tax revenues. Now, let’s put that burden too onto the only place it might be shouldered – the same 20% of the population who have the money – the “rich people.” That’s another $2.35 million per taxpayer!

And now you see why Switzerland is “at war” with the world. Almost all the world’s governments are running large deficits; all are squeezing the rich. Switzerland is the place ‘rich’ people turn to when they want to protect their money from greedy politicians. It got its start in the 17th century, back when Louis XIV revoked the Edict of Nantes. Suddenly Protestants weren’t allowed to live in peace in France. Many fled to England, America and the Low countries. Others sent their money “offshore” to Switzerland, where it would be safe from confiscation. Thus did Switzerland develop its banking industry – to help protect people from their own governments.

And thus do people turn to the Swiss once again, as they see their own governments sharpening their knives and tightening their borders. In order to preserve its role as a protector of foreigners’ money, Switzerland has been forced to resist these measures. Major Swiss banks, for example, announced that they would no longer be available to American clients. Too much paperwork; too much disclosure. And since Swiss law prevents bankers from divulging details of their clients’ accounts, the Swiss are in a jam. If they failed to report to the United States, they’d be breaking US law. If they did report to the US, they’d be breaking Swiss law.

Swiss bankers just sent a letter to their French clients…asking for permission to pass along information about their accounts to the French government.

“What sort of Frenchman would give his okay?” asks Cecile. “‘Sure, denounce me to the French taxmen…rat me out, go ahead.’ But the banks were forced to send out the letter in order to comply with French demands.”

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.