Showing posts with label John Ward. Show all posts
Showing posts with label John Ward. Show all posts

Sunday, November 23, 2014

VIPaedophilia and the trutholith

Fossilised dino-dung (pic source)

Why read autobiographies or newspapers? In most cases, we get the truth when it no longer stinks and has no viable DNA to connect it to current life. Jurassic Park explodes only if somebody turns off the electric fence - as when  the enigmatic Matthew Parris outed Peter Mandelson on Newsnight (27.10.1998).

Even then, the response is spin, cover-up and emergency relationship repair:

Mandelson spinning for himself: “I had been outed by the News of the World some ten years before in 1987 and had long since got over it and got through it."

"The BBC memo said: “Under no circumstances whatsoever should allegations about the private life of Peter Mandelson be repeated or referred to on any broadcast.”...

Paxman's letter: "I'm sorry that Matthew Parris mentioned your name on `Newsnight' last night. In the heat of the moment, he rather caught me out, and I tried to brush over things as soon as possible afterwards."...

The gay intelligence network will have known this - and much more about many more - far longer; it's when it hits the mainstream that it's news. Mandelson may have tried to present it as old hat, but on Newsnight it was certainly news, as evidenced by the urgent reactions.

The law and public attitudes have changed with respect to homosexuality; but not to child abuse. So in an effort to protect VIPs we have, claims John Ward, been treated to a deluge of distraction, including celeb show trials, and, if pushed, reluctant admissions regarding VIP deadies.

Yet there is enough DNA in the story to permit contagion - who still alive did what, knew what and when? Like Watergate, the cover-up could be what destroys the Establishment. An explosive in a sealed container is far more lethal.

The Mail on Sunday - with its over 4 million readers - is now lifting the lid, with yesterday's piece by Guy Adams, which includes allegations of a crime that will not stale: murder.

Some material is based on the investigative website Exaro. No wonder there are moves to "regulate" the Net. (And so much for Private Eye's sustained attempt to tar the internet community - its rivals - with the brush of their illiterate and ill-informed fringe - "From The Messageboards", started in 2008. PE itself was the amateur blog of the Sixties, cut and Gloyed together in Willie Rushton's bedroom.)

That "regulation" in the old days came officially as the D-Notice - now broadened from specific prohibitions to standing "guidance" in five areas, the last of which is: "DA-Notice 05: United Kingdom Security & Intelligence Special Services." Aka, to the cynic, not only anything potentially dangerous but also anything embarrassing.

And now even the cover-up is covered-up, as The Guardian reports (htp: Michael Krieger):

"Two newspaper executives have told the Observer that their publications were issued with D-notices – warnings not to publish intelligence that might damage national security – when they sought to report on allegations of a powerful group of men engaging in child sex abuse in 1984. [...]

"Now it has emerged that these claims are impossible to verify or discount because the D-notice archives for that period “are not complete”.

"Officials running the D-notice system, which works closely with MI5 and MI6 and the Ministry of Defence, said that files “going back beyond 20 years are not complete because files are reviewed and correspondence of a routine nature with no historical significance destroyed”.

"No historical significance.".. nice.

Understanding English: "a shred of evidence"

Actually, historical context is important. Watergate came at a time when, among other things, the Vietnam War had changed attitudes to power and authority. And the fallout from the Great Financial Crisis of 2008 (which has its roots in recklessly loose monetary policy dating back at least as far as the early 1970s and particularly in the "Conservative" 1980s and 1990s) - a fallout which hasn't yet had anything close to its full devastating effect, and one I constantly wonder how to avoid - means that we are in a mood once again to take on the Establishment.

We still wait for the findings of the Chilcot enquiry, while Tony Blair trots about the Middle East in the guise of peacemaker; but he is young and healthy enough to live to see the truth extracted live from the hermetic amber of official records.

And while there is some legal hemming and hawing about the prosecution for old cases of child abuse - see the Parliamentary briefing paper "Limitation period in sexual abuse case
Standard Note:  SN/HA/4209" - liability for murder has no end date.


Will there be an explosion? And what will the the aftermath for the rest of us, if the Establishment is in disarray?


 
A Mills Bomb (pic source)

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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Sunday, November 02, 2014

Scotland's independence: like I said... (2)

"Labour is paying a heavy price for leading the recent campaign against independence, and persuading the Scottish people they’d be better off voting ‘No’. Its core voters in cities such as Glasgow and Dundee felt betrayed by the party standing on a platform with the hated Tories.

"Having done so, Labour is now held accountable for delivering the cross-party promises of further devolution made in that frantic fortnight before the vote. Every day those promises remain undelivered, the clamour grows that Miliband’s party has deceived Scotland into rejecting independence.

"Accusations of treachery and trickery have a special potency in Scottish history, from the betrayal of William Wallace to the massacre at Glencoe. Now, however unfairly, Scottish Labour finds itself cast as the perfidious enemy within, and its poll ratings have plummeted. On the latest projections, at least three-quarters of Labour MPs in Scotland would lose their Westminster seats to the SNP if the Election were held tomorrow – the equivalent of the Conservatives losing every one of their MPs in Essex and Kent.
 
"That would eliminate any chance of a Labour majority, and – one way or another – it would guarantee a second referendum on Scottish independence, which next time the SNP would comfortably win. Goodbye Union. Good luck, Scotland. And goodnight Labour."
 
- Damian McBride in today's Mail on Sunday

"I think it's coming anyway. The panic last-minute promises from HMG are a gift to the Yes camp, who can say, "Would they have offered these concessions if they didn't think we'd leave; will they keep their promises if we don't?"

"Then later, if the promises aren't kept, it'll be let's vote again, now we know; and if the promises are kept, then it'll be like one of those I-need-some-space "trial separations" that end in divorce proper.

"Salmond's done it, with the assistance of an incompetent and negligent Westminster."


- Sackerson, "Salmond has done it!" (9 September)



(Source: The Independent, 30 October 2014)

(Hat-tip for the heads-up to John Ward.)


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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Saturday, October 18, 2014

France - the supposed hell where we'd love to live

The Daily Mail flashes its richman fangs at strike-hit France - such an awful place, eh? That would explain why the late Sir Stuart Bell MP spent more time there than in the UK, I expect.

Time for some stats:

WHO, 2013 - from Wikipedia
 
World Bank, 2011-2013 (via Wikipedia)

Source: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality
 
World Bank, 2009-2013

World Bank, 2009-2013
 
Total public and private debt owed to non-residents
Source: Wikipedia

Perhaps that's why, less than five years ago (and, like the temperature of the oceans, things don't change that fast), the Daily Mail was reporting this:

Daily Mail, 7 January 2010

As Slog-blogger John Ward - now based in France - is fond of saying, IABATO - which as he is also a Hellenophile, may be derived from the Greek expression "ιαβατω!" ("I smell bullsh*t!").


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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Thursday, August 14, 2014

Is your money safe in the bank? - revisited

John Ward reports that some South African bank savers are now having their accounts raided to shore up a different bank, African Bank Investments Ltd. Even more disturbingly, the example he quotes is of a customer whose SA bank is part of the international Barclays group, so the link stretches back to the UK itself.

Almost exactly seven years ago, and over a year before the global banking crisis of 2008/9 hit us, I warned British readers that protection for their savings was limited. At that time (August 2007), you were guaranteed 100% of the first 2,000 in your account, and only 90% of the next £33,000. So the maximum compensation in the case of a bank wipeout, even if you had millions, was £31,700.

Now, and as a result of the crisis (and more importantly, to prevent a system-destroying general run on the banks) the "guarantee" has been increased to 100% of the first £85,000 per person (see FSCS here). That's per bank group, so if you have more than one bank account make sure they're not part of the same group.

But why is a guarantee needed in the first place? Surely the money you have deposited is yours, same as if you'd asked them to look after your house deeds.

Not at all. Here is the law as explained by Toby Baxendale on The Cobden Centre website in 2010:

The Current State of the Law


The key case is Carr v Carr 1811 (reported in Merivale (541 n) 1815 – 17). A testator in making his bequest said “whatever debts might be due to him…at the time of his death”, the key question in this case being whether “a cash balance due to him on his banker’s account” passed by this bequest. The Master of the Rolls, Sir William Grant held that it did. He reasoned that it was not a depositum; a sealed bag of money could be, but this generally deposited money could not possibly have an ‘earmark’. Grant concluded on this point, “when money is paid into a banker’s, he always opens a debtor and creditor account with the payor. The banker employs the money himself, and is liable merely to answer the drafts of his customers to that amount.” For the legal scholars among you, Vaisey v Reynolds 1828 and Parker v Merchant 1843 both affirmed this position.

In Davaynes v Noble 1816 it was argued in front of Grant that a banker is a bailee rather than a debtor. Rejecting that argument, Grant said “money paid into a banker’s becomes immediately a part of his general assets; and he is merely a debtor for the amount.”

In Sims v Bond 1833 the Chief Justice of the Queens Bench Division affirmed in judgement “sums which are paid to the credit of a customer with a banker, though usually called deposits, are, in truth, loans by the customer to the banker.”

The House of Lords, then the highest court in the land, had its say on the matter in Foley v Hill and Others 1848, duly reported in the Clerk’s Reports, House of Lords 1847-66 (pages 28 and 36-7). In summary, the appellant in 1829 opened a bank account with the respondent bankers. Two further deposits we added in 1830 and in 1831 interest was still added. In 1838 the appellant brought proceedings against the respondent bankers seeking recovery of both the principle and interest. The counsel cleverly tried to argue that it was the duty of the respondent bankers to keep all the accounts up to date at all times and thus there was more to this relationship than that of debtor and creditor.

The Lord Chancellor Cottenham said the following in judgement

Money, when paid into a bank, ceases altogether to be the money of the principal; it is by then the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him when he is asked for it. The money paid into a banker’s is money known by the principal to be placed there for the purpose of being under the control of the banker; it is then the banker’s money; he is known to deal with it as his own; he makes what profit of it he can, which profit he retains to himself, paying back only the principal, according to the custom of bankers in some places, or the principal and a small rate of interest, according to the custom of bankers in other places. The money placed in custody of a banker is, to all intents and purposes, the money of the banker, to do with it as he pleases; he is guilty of no breach of trust in employing it; he is not answerable to the principal if he puts it into jeopardy, if he engages in a hazardous speculation; he is not bound to keep it or deal with it as the property of his principal; but he is, of course, answerable for the amount, because he has contracted, having received that money, to repay to the principal, when demanded, a sum equivalent to that paid into his hands.
That has been the subject of discussion in various cases, and that has been established to be the relative situation of banker and customer. That being established to be the relative situations of banker and customer, the banker is not an agent or factor, but he is a debtor.

Thus the settled position of the law is that when you deposit, the bank becomes the owner of the money deposited and you become a creditor to the bank.

We have now established that you shouldn't have more than £85,000 in any group of banks.

Strictly speaking, it's not the government's guarantee, it's the FSCS's: "The Financial Services Compensation Scheme (FSCS) is backed by government" (my italics). The FSCS runs a fund and pays claims out of money it levies on UK financial institutions. In a bad - not the worst possible - situation it can borrow from the Treasury, and has done so, as this official attempt to reassure us says:

What if a giant goes bust? Is there enough cash?

The FSCS has paid out more than £26bn and helped more than 4.5m people since 2001. We are funded by the industry, but the FSCS can borrow money from the Treasury if the compensation costs of a major failure are more than the industry can meet. That is what happened when banks failed in 2008.

So consumers can be reassured the FSCS will always have the money to pay compensation. No-one has ever lost a penny of protected deposits and no-one ever will.

What about "bail-ins", like the case referred to by John Ward above?

For example, in the event of a building society's insolvency, depositors' claims used to rank below other unsecured creditors and so were more likely than the latter to be required to accept something other than their money back. This is now changing:

"...the BRRD has been agreed and will require us to introduce a slightly different form of depositor preference. It will require a two tier preference, where:
  • eligible deposits from natural persons and SMEs have a higher priority ranking in insolvency than the claims of ordinary unsecured creditors
  • covered deposits have a higher priority ranking in insolvency than the part of eligible deposits from natural persons and SMEs that exceed the coverage limit
Covered deposits are defined as those that are protected by the FSCS, up to its limit of £85,000. Eligible deposits are defined as those which qualify for FSCS protection, without any limit on the amount (and deposits from such natural persons and SMEs that are made through foreign branches of EU institutions). Following these changes, if an individual had £100,000 deposited at a building society that is a member of the FSCS, £85,000 would be a “covered deposit” and have a higher priority ranking than the remaining £15,000 which in turn would have a higher ranking than ordinary unsecured creditors.

We anticipate that the Directive will come into force by May 2014. The transposition deadline is 1 January 2015."

The Government's general guiding principle is to reassure depositors that they won't be fleeced in a crisis:

"Section 60B [of the Banking Act] requires the Treasury, when making these regulations, to have regard to the desirability of “ensuring that pre-resolution shareholders and creditors of a bank do not receive less favourable treatment than they would have received had the bank entered insolvency immediately before the coming into effect of the initial instrument” (the first instrument made by the Bank in the resolution)."

Why are they doing this? Well, here's Oz comedy pair Clarke and Dawe on the effect of the Cyprus bank bail-in:




Still:

(a) I don't see anything that limits the power of the FSCS and others to alter or suspend their guarantees, if they feel they have to;
(b) a leading barrister has given his views (in 2011 on CityWire) on the potential case against the FSCS's fund-raising powers;
(c) the Emergency Powers Act of 1920 allows the Privy Council to do pretty much whatever it likes in the short run, if it determines that there is an emergency*;
(d) anything can happen, and in a very bad situation some of those things could be beyond the Government's power to control;
(e) theft by inflation is always a threat, and despite a long campaign by me my MP has so far refused to stand up at Prime Minister's Question Time and ask when the Government is going to restore National Savings Index-Linked Certificates.

Where does the Cabinet hold their own families' cash? Be useful to keep that under observation, maybe. It might not just be the Russians or tax-dodgers who want to shift money out of the UK, and Europe in general. And why is the Chinese government encouraging its citizens to hold gold?

_________________________
UPDATE: *I'm a bit behind the curve here - we now have what seems a much further-reaching and potentially sinister provision: http://en.wikipedia.org/wiki/Civil_Contingencies_Act_2004

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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Saturday, July 06, 2013

France: John Ward on DIY, "Deliverance" and dog days


We’ve reached that time down here where the very ground beneath you pulsates with heat. Being alone here this year, I’ve taken now and then to dropping into the local Bar Portuguese for a beer. It’s full of swarthy latins – as always cheerful – discussing what they now see as an unavoidable disaster for their homeland. I can walk in and – with my hair and eyes – easily be mistaken for a German. There is an awkwardness, until they realise I’m British – and then everything changes: I am bought obscure Portuguese liquor, and given the sort of welcome usually reserved for Eusebio forty years ago, or Ronaldo today. I mention my passion for Manchester United, and more rounds are bought.

The main problem this consumption could pose is how I get home again. But luckily, there is a short-cut back to the house: I can use it to weave unsteadily back there legally on foot…unless under French law you can be found drunk in charge of yourself. I’d imagine you can’t be.

When it gets this hot and water is in short supply, more make do and mend comes into play. I collect all my bottled water packs and chop off the top and bottom. The main residue is then wrapped around new tree stems, and thus protects them from the attentions of deer…who are buggers for rubbing up against the bark and nibbling at it. If they nibble all the way round, then the young sapling dies in short order.

The top bit of the plastic bottle can be inverted to create a simple channel by the side of herbs and vegetables, and so massively reduce wastage of the water being applied to keep them going. The chopped-off bottom I fill with any stale beer knocking about. Snails are born beerheads and can’t resist it. They get legless, and then drown. Not that they have legs anyway. It’s a figure of speech.

At the top eastern end of the property is the real (as opposed to metaphorical) Slogger’s Roost. There I recycled a couple of pallets from the roof renovation two years ago, using them to create raised beds of flat-leaf parsley the rabbits can’t reach. I’ve also been gradually planting lavender, a rose, and a few shrubs up there. These represent a hopeful attempt to give some fragrance to an area whose main advantage is that first, it’s a long way from the house and offers me peace in which to write; and second, it is sheltered from the wind that can bite in mid-Spring and late Autumn here.

The main point of my little respite is that I achieved an aim in making it: to do so without spending one centime. Everything that went into its creation was recycled and reformed in a new role. But just before midday today, I noticed my least likeable farming neighbours using a crane-grab and chainsaw to slash back the high hedge behind the Roost. To one side of the site I’ve constructed a permanent windbreak out of old tongue and groove we ripped out when renovating the upper floor. In their enthusiasm, the chain saw artists looked about to massacre one of my better creations.

This farming family is, to say the least of it, a bit odd. None of the locals here like them. They have that beaky-nosed, eyes close together appearance of the sinister hillbillies in Deliverance, and there’s a very good reason for this: they’re the product of incest. Try not to be shocked: it’s more common in remote rural areas than you’d imagine. Their mum killed herself five years ago; I remember being horrified when I asked the Mayor why, and he replied with a shrug meant to be self-explanatory, “She drank”.

It’s amazing how often our species thinks that an observation of a symptom is somehow a diagnosis. It didn’t seem to occur to the Mayor that maybe she drank because of depression, or guilt about the incestual sex, or both. But either way, it was with some trepidation that I legged it up to Slogger’s Roost to see if her sons knew of my tongue and groove genius. Yes, they did was the answer…and then five minutes later they demolished the right-hand end of it.

It didn’t take long to fix, so I shouldn’t make a drama out of it. But deepest darkest France consists of far more than the starry-eyed bollocks you see on A Place in the Sun.

Tonight, the Andy Murray syndrome was at work again. The Wimbledon authorities closed the Centre Court roof – after to a lot of Polish whine. It was a fearsome struggle afterwards, but Murray came through in the end. Here by contrast, it is now cooling a little. The fire of late afternoon has dimmed to a mid-evening kissing the skin rather than burning it. The sun makes love to you here in a hundred different ways throughout the day. I’m always grateful for its variety…as every appreciative lover should be.

I may well have to pay in a future life for the good fortune of having a place like this. But as I have grave doubts about reincarnation, I’m not about to get upset about that. I did work very hard to get the house; but then, I know lots of equally talented folks who worked even harder, and didn’t. Humility in such matters is never a bad thing.

By John Ward. Republished by kind permission of the author.

All original material is copyright of its author. Fair use permitted. Contact via comment. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy.

Saturday, May 18, 2013

John Ward: "THE SATURDAY ESSAY: What else are they manipulating?"

Answer: FOOD PRICES

creosote

Too much food costing too much money is killing people
 
Sector by sector, the truth is at last trickling out: ICAP, Libor, Gold, Currency values, oil…..none of them are natural markets, all of them are being ‘directionalised’….as in, manipulated for the good of the few – and never for us. But the most important commodity we have probably represents the most criminal scam of the lot.

The ‘price’ of gold plunged another $33 net yesterday. As usual, the drop made no sense. As usual, it took place on a Friday. As usual, the two steep declines happened when the London and New York markets opened. Those who have spent half a decade or more presenting clear signs pointing to manipulation of everything from fiat currencies to interbank rates have in the last year gone from fringe conspiracy theorists to vindicated commentators.

If it can be manipulated to the advantage of those in charge, then it will be. One thing big business can’t manipulate is the weather. And the weather is behaving strangely at the moment. The Italian Giro Cycle Race director Mauro Vegni confirmed to Agence France Presse yesterday that snow and winter-like temperatures on the upper flanks of the Col du Galibier may force Giro officials to remove the historic climb from this Sunday’s 15th stage. Yesterday was the 17th of May. Multiple freezes in U.S. hard red winter wheat country have further reduced the expected size of this year’s crop – after drought screwed up the region last autumn and during the winter.

So it makes sense that the wheat futures are suggesting high prices, right? Er no actually, it doesn’t: global cereal production will increase 6% to 2.708 billion tonnes in 2013 from the previous year, said the usually definitive Food & Agriculture Organisation (FAO). For while Asia is consuming more wheat now, to meet that demand more countries around the globe are growing it.

Yet the very same FAO yesterday pointed out that World food prices rose during April…for the second straight month. Now obviously, there’s more to ‘food’ than wheat, but let’s get this into some kind of perspective. Here in South West France, for example, we have had a cold and wet Spring: but every tree I can see is heavily laden with fruit. We are going to have a bumper harvest. Indeed, wholesale food prices should fall this year, according to the world’s large agricultural trading houses – like Glencor, which expects bumper crops in the US and South America. USDA says 125m more bushels of corn will remain in silos before harvest, an estimate that should see prices tumble.

But world food prices still rose for the second month in a row. In Brazil, for example, the price of tomatoes has gone through the roof. “I’ve had this restaurant for 48 years and this has been the worst price rise I have seen,” said Walter Taverna, whose restaurant Conchetta is a fixture of São Paulo’s historic Italian district, Bixiga. Where I live in France, not far from me is Marmande – Europe’s biggest producer of tomatoes. I go to the markets and supermarkets to buy fresh almost every day: my observation is that tomatoes have gone up by a good 25% year on year. In India, wholesale onion prices rose 50-60% in December and are up sixfold from a year ago. But the Government admits there is no crop-failure reason for this.

The fact is that there are umpteen ways to manipulate the price of food: it’s done by governments, by agribusiness, by Wall Street speculation – and then by supermarkets. (It’s also done indirectly via oil-price manipulation, which affects the cost of using machinery to crop, clean and prepare everything from apples to prunes. But we did that story already).

Many governments around the world depend on big cash crops to balance their deficits and amass foreign exchange. Argentina has had money problems forever, and there is blatant evidence to show that big farming there, hand in glove with government, has been hoarding soya beans given that the price has been depressed for a while now. Although Argentina isn’t a major-league heavy hitter in the global soyabean market – it accounts for about 10% of world production – its warmer temperatures allow it to crop early… and meet demand from huge net importers like China – until the US starts harvesting in the second half of the year. They’re hoarding the crop right now, and so prices are rising.

The last fifty years have seen a decline in the numbers of small to medium-sized farms across the world. Last year, deep in the constipated bowels of Brussels, a committee set up to find out this sort of thing came up with a frightening statistic: only 6% of European farmers are under 35. Farming is going out of fashion. Or rather, family farming is: agribusiness is going from strength to strength. Or from bad to worse, depending on your moral outlook. In 2004, the market share for the Big Four agrochemical and seed companies reached 60% for agri-chemicals and 33% for seeds. Seven years earlier, the figures were 47% and 23% respectively. The concentration continues – again with help from Big Government. The European Union is currently trying to slip through a law making it illegal for home growers to trade in seeds.

Today, it is impossible to separate the dominance of agribusiness from the power of hedge funds. The United Nations special rapporteur on the right to food Jean Ziegler recently indicted multinational companies for badly aggravating the food crisis and raising food prices. Speaking in Geneva, Ziegler told journalists, “Until early March, prices of many food articles followed the demand and supply forces. But since then there has been an explosion in prices which is largely due to the role of big corporations and hedge funds.” These big agri-corporations, he said, had huge stocks and, aided by hedge funds, had indulged in speculative activities so that “food access decreased for poor people while the profits of these companies were inflated”.

I’ve never met Mr Ziegler, but his empirical data clearly reflect my shopping experiences since February. The US Department of Agriculture (USDA) agrees that there will be food-price inflation in 2013: it forecasts a 2.5 – 3.5% increase for all wholesale and retail food prices in 2013. But the snag with this USDA forecast is that such an increase is way, way below what we’re seeing on the ground.
Some of this reflects the concentration in turn of food retailing into the five main UK multiple giants, the four in France, the five in Germany and so on. They all have form when it comes to screwing both farmers and consumers on price to lift their margins: the UK’s main shops nearly killed off the entire lamb farming sector some years back, and both milk and eggs have seen farmers in poverty while shoppers pay through the nose. Not only does this exacerbate the trend towards large agribusiness, it also lets the Tescos of this world look dirt cheap on, say, pork products in order to pile more margins onto other foods and thus end up making more money.

But the most damning evidence points the finger clearly at Big Business and Wall Street. According to a report in January 2013 from the World Development Movement, Goldman Sachs made about $400 million betting on food prices last year. (In 2010, they made a billion doing it). But using the word ‘bet’ implies that Goldman took a risk. In fact, the firm has a track record of buying long and in bulk to artificially push up prices…..and making a quick exit before the late price drop then inevitably occurs. By this time, of course, the folks who need the food to be cheap may well be dead. But Lloyd Blankfein is doing God’s work, so we mustn’t get in his way.

As always, the banks and hedgies have an answer for the anti-speculation lobby most obviously represented by Oxfam: they (Deutsche Bank and Allianz being prime movers here) argue that there “is no evidence that price rises are to do with anything beyond population growth and rising demand”. It’s a Jeremy Huntesque answer, because most of the evidence in fact points the other way. Indeed, other banks are clearly sensitive on the issue: Oxfam’s Belgian office has targeted KBC Bank and Dexia’s exposure to agricultural commodities, and has had some success in France by getting Credit Agricole and BNP Paribas to drop their food ETFs. In the UK, Barclays too has withdrawn from food commodity trading. This last, of course, is yet more backwash from the Bob Diamond era, and on message with being a nice clean rather than nasty cheating bank.

These are, however, small victories in the scheme of things. If pro-speculation people say price rises are solely to do with demand, then they need to explain this: the market for hedge betting and speculation in global food prices began to take off big time around 2007. Up until then, there had been considerable success in reducing the percentage of malnourished humans and deaths from starvation. But as a recent FAO report shows, ‘Since then, global progress in reducing hunger has slowed and levelled off….the undernourishment estimates do not fully re flect the effects on hunger of the 2007–08 price spikes or the economic slowdown experienced by some countries since 2009, let alone the more recent price increases’. It’s not necessarily causal, but it is correlated. It requires a better answer than “there is no evidence”.

But the most damning data of all come from those with no agenda beyond stating the problem clearly. The fact is that 867 million people are woefully malnourished, yet there is enough food in the world today for everyone to have the nourishment necessary for a healthy and productive life. One in eight humans on planet Earth do not get enough food, making hunger and malnutrition the number one risk to health worldwide – greater than AIDS, malaria and tuberculosis combined.

There are myriad reasons why this is. But among these are definitely (1) The decline in smallholding farms that produce foods cheaply and locally, (2) the globalisation of food pricing putting the cost beyond the reach of the poor (3) hoarding by governments and agribusiness to wait for the best price, and (4) deliberate price-directionalisation by speculators.

Frederick Kaufman, author of Bet the Farm: How Food STOPPED Being Food told The Daily Ticker last October that the price of global grains tripled from 2002 to 2012…..after decades of stability, and just two years after deregulation allowing derivatives food trading was applied. “Something new has come to this market and we’re seeing absolute levels of volatility that we’ve never seen before,” Kaufman said, “the exponential growth of commodity derivatives. U.S. derivatives trading in wheat alone has surged from $10 billion to $300 billion in less than a year….speculators are completely overwhelming the commodity futures market, subverting a market that worked so well for over a hundred years.”

Again, it’s a seriously accusatory correlation. And as one finds so often with the financial community, all attempts to reverse the deregulation of the trade are met with a wall of lobbying cash. Call me suspicious, but common sense suggests pretty strongly that this means they’re making a bundle out of it. Throughout 2011, efforts to do re-regulate within the Dodd-Frank Financial Reform Bill were met by massive Wall Street lobbying of everything from Congress to the Commodity Futures Trading Commission (CFTC) and the Security Exchange Commission. Goldman Sachs alone spent $1.08bn protecting the trade. Now, you can’t make a turn by directionalising a sector downwards. Sure, you can win a bet by backing a fall in prices, but then that would mean shafting global agribusiness on occasions. And there are two chances of that happening.

Finally – and probably conclusively – we have to recognise that since 2008 the major part of the commercial world has been either heading for, in, or just limping out of recession. To suggest a boom in food demand when money is tight simply doesn’t make marketing sense….any more than Gold trackers falling in price while bullion roars ahead makes for the remotest iota of sanity. Certainly, there are specific factors of real importance: the Japanese Tsunami raised seafood prices, 2012 crop damage (especially in Australia) meant a spike in vegetable prices, biofuels have reduced the percentage of grain used for food, Chinese and Indian consumers are turning to wheat, and drought weather can ruin most crops before too long. Also some trends do have genuinely unforeseen consequences: it’s more profitable to sell grain to China than give it to laying hens…so that puts the price of eggs up, as laying hen numbers fall. But almost all of even these are the direct result of having globalised the food business: whether the troughers like it or not, market-driven global trade in food extends the length of the food hugely, creates concentration that increases the impact of one failure, and pushes up prices even without speculation.

But far too many factors cited by the greedy few are excuses: nothing more, nothing less. In a piece last year, Forbes magazine totted up the ten big factors impacting on food prices, and guess what? Speculation and derivatives were nowhere on the list. But even that article had to concede that food inflation early in 2011 (at the height of the recession) was the highest for 36 years – despite interest rates being close to zero. Ultimately, it cannot make sense for those from poor economies to pay the same prices as Sherman McCoy in Manhattan….but that is increasingly happening. The real impact of artificially expensive food is felt by the global poor. In places like Tajikistan, for example, the average family spends almost 80% of its income on food now. Price spikes in such regions can mean the difference between life and death.

The problem is globalisation of the food business, too much power held by big agribusiness, and financial provider speculation/directionalisation. Such ‘betting’ screws the price of gold, raises the price of oil, fixes the interbank lending rate, dilutes the value of a citizen’s currency….and raises food prices.

It is yet another reason why The Slog’s mantra remains tediously consistent: we should make regional self-sufficiency the goal of economies in general and farming in particular, and only trade in natural surpluses. This would reduce unemployment by putting people back on the land, secure the food supply with a far greater spread of risk, reduce national deficits, feed the Third World more cheaply…..and reduce both shareholder returns and financial centre profits. So we won’t be doing that then.

The neocon business model is mad, globalist mercantilism is a crock, and permanently high unemployment in the West and elsewhere is not a social price worth paying so that institutions can get their returns and keep us all in savings growth and pensions…..not. Lest we forget, until the late 1950s virtually no big financial providers anywhere were even in the stock market: the stock market was there to finance business – which is what it should be for.

None of this is fluffy Leftie bollocks: it’s common sense and common decency. But the Mr Creosotes keep trotting out their feeble defences, getting away with it, and then laughing until they wet themselves. The size of the task faced by those who would like to make the world a better place without violence never looked bigger than it does in 2013.

This piece is reproduced with the kind permission of the author. The original is at The Slog blog here.

Monday, April 08, 2013

UK: Money-movers play catch-me-if-you-can


The global financial crisis is also a local issue for the UK, dubbed the 'global capital of money-laundering' in a Private Eye magazine investigation by Richard Brooks (August 2012).

The role of the financial sector in Britain ballooned in the years before the breakdown: this 2011 report by the Bank of England (pdf) shows that its annual growth was 6%, twice that of the economy as a whole.

That's why we need it. But why does the rest of the world need it to be in London?

In part the answer is that, as David Malone explains below, our system is particularly good at handling money without asking too many awkward questions. Shell companies make it hard to track down who is running businesses.

Moreover, unless money is definitely proved to have come from illegal activities, the authorities are unable to treat money transfers as criminal "money-laundering". Malone's only censored post to date, from which he quotes sections here, was a detailed investigation for Reuters into alleged money-laundering in Cyprus; but his original piece fell foul of that (perfectly logical, of course) lack-of-predicate-crime rule.

In this context it's worth remembering that the UK is also known as the "libel capital of the world", with potentially big payouts for plaintiffs if the defendant cannot prove his allegations (up to three years ago, it could get much worse than a civil court case: there was such a thing as criminal libel, punishable by imprisonment - this was what caused Private Eye's then editor Richard Ingrams to throw in the sponge when Sir James Goldsmith pursued him in July 1976).

And now, following the Leveson inquiry into abuses by mainstream journalists, bloggers may find themselves at risk of high financial penalties, without having the legal and financial resources of the conventional Press to help defend themselves.

I also reproduce here a piece by France-based blogger John Ward, reporting on the vast quantities of cash held in offshore banks that might (if captured onshore) otherwise contribute up to a trillion pounds to the UK economy.

In a digitised world, capital can zip around the globe far faster than leaden-footed regulators and tax authorities. Cyber-money is also very useful for dodging attempts by local banks to grab it to shore up their reserves, as we are seeing in Cyprus - and this article on Charles Hugh Smith's site goes further, implying that EU banks may have influenced a delay in the European Central Bank's enforcement action against the island, to allow them time to extract most of their cash before the shutters went down.

Finally, delay can help bosses as well as the banks they run: there is much noise being made at the moment about "examining powers to take legal action" against three directors of HBOS who were on watch when billions were lost by their company; but the Financial Services Authority has a strict time limit of three years to take disciplinary action against individuals, and that deadline has come and gone. A cynic might wonder why exactly the FSA missed it, but the fact remains that we have to obey the law as it stands, so I don't expect any retrospective ruling against these people, who are far from the only ones to have (allegedly) overseen significant losses in the banking sector.

My sincere thanks to David Malone and John Ward for permission to reproduce their posts.
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Making the Truth Illegal – revisited


“Making the Truth Illegal” is the title of the only post I have ever removed from this blog.
I removed it because I was threatened with legal consequences if I did not. (Plus, I would like to add, some of the way I had written the blog post was stupid and could have hurt someone who had helped me.)

The post concerned an article I had written for Reuters which they decided they could not/would not publish. Reuters pulled the article because they and I had been threatened, by a major European Bank, with legal consequences if they did not. The title of the article was “Cyprus, Magnitsky and the truth about Money Laundering.”

Although I cannot publish the article I can show you how it began and tell you how it is, that the truth it contained was made illegal.

The article began:
Money laundering is the life blood of organized crime. Without it crime would simply not pay. But who does the laundering? The easy and obvious answer is criminals. But that is completely wrong and is at the root of our inability to stop it.

Criminals are the people who need money laundering. They are the clients. But they do not, themselves, know how to launder money. The only people who do know, and who are in positions to do it, are those whose day jobs are the many professional services which make up laundering: the accountants, lawyers, company registration and management agents, account managers in banks and company directors in companies that have no reason to be, other than to pass hot money through an endless spin cycle. In organized crime, criminals provide the crime but professionals provide the organization.
Of course we could get jesuitical about it and say, but those professionals who launder are criminals. Which would be fine, except that we do not treat them as criminals. Criminals break laws. Professionals do not, they have ‘failures of compliance’. One is considered an active, purposeful ‘doing’ of something, for which punishment is de rigeur. The other is excused as an unfortunate and unintentional ‘not doing’; an oversight, omisssion or failure to do, for which one and one’s employer get admonished to ‘do’ better. And as long as you promise you will, all is considered fine and finished. There may be a small fine but nothing to lose your bonus over. No one senior ever goes to gaol.

Criminals are investigated – by police. Professionals are ‘regulated’ – usually, and rather conveniently, by themselves or colleagues. People who rob banks have legal problems. People in banks, who rob people, or help others to rob them by laundering their money for them, they have regulatory issues. One is serious the other is a joke. How many bankers actually went to prison from Wachovia or Citi or HSBC?

All this might seem rather sweeping. But it is not. It is just that usually we do not get to hear about the people and businesses who do the actual laundering nor what happens to them afterwards. When money laundering is reported it is usually the lurid details of the clients of the money laundering, the drug cartels and terrorist organization, who get all the headlines. Hardly ever do we hear of the launderers themselves. And that is because, as already noted, they are never ‘guilty’ of having ‘done’ anything. But events in Cyprus have recently given us a rare opportunity to lift the sewer’s cover, peer inside and see at least some of the people who failed to act; who by omission, oversight, laziness or complicity, intentionally or otherwise, ‘helped’ to launder money.

As the philosopher Edmund Burke famously noted, “All that is necessary for the triumph of evil is that good men do nothing”.
As you can see the purpose of the article was not simply to prove, what everyone already knew, that Cyprus had indeed been laundering dirty Russian money, but to say something about WHO actually does the laundering. The point was to finger the launderers themselves not their clients. Of course that meant naming companies, lawyers, company directors, company registration agents, and last but not least, the banks and individuals in them. These are, of course, people who are not used to the idea that they can be named, take grave exception to being named and who have the power, I discovered, to make sure they are not.

The article also did one further thing. When you added it all together and told the whole tale in all its detail, with all the names, dates, places and amounts, one further conclusion jumped out. The lawyers, accountants, company directors and bankers, who did the laundering, are also the people who the anti money-laundering system relies upon to police the system and stop the laundering. The inescapable conclusion is that the anti-money laundering system not only does not work, but seems expressly fashioned to make sure it does not work.

It is possible – it happened in the Magnitsky case – for a criminal to buy a bank and be granted a bank license. Yet the law says it is the directors of such a bank who will be relied upon to contact the authorities about suspicious transactions. Criminals don’t often turn themselves in, yet in every country this is the non-system our leaders and financial experts maintain. In the UK the law is set up so that a company can be set up without any due diligence at all being done to determine the character let alone the actual identity of the owner. Because of this ‘loophole’ as the authorities coyly refer to it, the UK is home to tens of thousands of shell companies set up by criminals and used for criminal purposes. This may sound like a fantastic charge and one I cannot possibly substantiate. Yet almost every major case of fraud or money laundering will involve UK shell companies. Follow the Magnitsky money and you will see it pass thorough UK shell companies. The same goes for the $64 billion of state money stolen from Kyrgyzstan much of it then passed through UK shell companies. Or the on-going case of money laundered out of Ukraine by means of a fake oil rig purchase. That money too passed through UK companies.

I could give you plenty of other examples but the important point is that NO ONE in authority can offer a shred of evidence to show that I am wrong no matter how many criminal companies I claim there are likely to be, for one simple reason. THEY HAVE NO IDEA WHO OWNS THE COMPANIES. The system is set up so no one knows. Companies register owners but they can be other companies in other jurisdictions. And it is easy to set up a company in such a way so that no one checks on the owner at all, ever. That is the system we maintain.

Every minister who has ever had the power to change this state of affairs has been aware of this but they have all chosen to leave it that way.

In short we have a system which is conveniently designed so it does not stop money laundering but does make sure no one will be prosecuted. It serves to shield the guilty not stop them.

I realize these are statements that can still be dismissed as ‘conspiracy’. Without the 8000 words of detail the article contained, without the references to over a hundred pages of bank transfers and company records, I am left with just what I know to be the case without being able to show you what convinced me.

All I can do, as promised, is show you the final ‘shell’ which surrounds everything else and which allows the rest of the corrupt system to exist and do its job. The last shell is a legal one and I had not understood its importance, nor its power, until it did its job and stopped me publishing.

This is how it works.

First a few facts. In the Magnitsky case $230 million was stolen from the Russian state. That money was then laundered in a scheme that involved five deaths, a lorry load of bank records that exploded, eight banks, numerous shell companies and complete, abject and total regulatory failure. It is called the Magnitsky case after Sergei Magnitsky who was found dead, handcuffed on the floor of a cell in a Russian prison. His body, photographed at the time, was covered in bruises.

Mr Magnitsky had been arrested and then held without charge or trial in the custody of the Russian Interior Ministry for nearly a year. He had been detained shortly after he had named in official testimony Interior Ministry officials and certain tax officials as the criminals behind the theft. The men he named were the ones who arranged his detention.

BUT, the Interior Ministry held its own investigation. What it found was that although the money had indeed ‘gone missing’, none of the officials Mr Magnitsky had named were, according to their official investigation, guilty of anything other than being ‘tricked’ by person or persons unknown. The Ministry did try to suggest several culprits but two of them died mysteriously of heart attacks a thousand kilometres from their homes before they could testify, while another had, rather embarrassingly, died before the crime he was accused of had even been committed. The Ministry looked silly even by Russian standards and no case was brought.

Eventually the Russian officials accused the deceased Mr Magnitsky of being the mastermind behind the crime he had been investigating. At one point the Russian state said it was going to put him on trial posthumously. So far it has not. And thus the case rests with the conclusion that there was no crime, only a ‘trick’ with no one found guilty.

It was also decided in Mr Magnitsky’s absence that despite the photographic evidence of his beaten body, he had died of natural causes and no crime had been committed there either. Case closed. And that ‘Case closed’ is what it is all about.

In the end it doesn’t matter what actually happened nor what evidence is to hand. As long as some official body does its own ‘investigation’ from which it concludes nothing happened, then nothing did, and the case can be closed. Not only that but if anyone should try to look for themselves at the evidence they cannot refer to anyone or any bank as being involved in criminal behaviour of any kind. Because there wasn’t any.

If no money was stolen – and none was because the Russian said so – then no one could have laundered any. How can you launder money that was not stolen?

The Russian decision meant, in legal parlance, that there was no ‘predicate’ crime – no crime from which other crimes followed. Which means, if one authority says there was no crime, every other authority in every other country, should it want to, can point to this judgment and say, ‘why should we investigate anything if there was no crime in the first place?’

This meant when an official complaint was sent to the Cypriot authorities in 2008 alerting them to the Magnitsky affair, right at its beginning, they could ignore it. And they did. The Cypriot police were sent an official complaint in 2008, and to this day they have never replied to it nor even questioned the people, even Cypriot people, named in it.

In fact even when the Cypriot Authorities were sent another much more detailed complaint in 2012, which gave them dozens of leads and lines of enquiry they wrote back saying,
“…it is important that we firstly obtain information from the Russian authorities about the predicate offence or offences committed in Russia.
Thus we plan to contact the Russian authorities in order to obtain information…”
And of course there was no predicate crime. Not officially. Even though companies were stolen and hundreds of millions did ‘go missing’.

Similarly, in 2010 another complaint was sent about the Magnitsky affair, this time to the Austrian authorities. The complaint alleged that the very large and powerful Austrian bank Raiffeisen, had handled much of the money that had ‘gone missing’. The Austrian authorities opened an investigation which concluded Raiffeisen had done nothing wrong at all. Case closed.

The Russians found no crime had been committed on their patch. The Austrians found nothing on their patch either.

This is despite the fact that Raiffeisen did handle the money. But you see handling is NOT laundering. Laundering requires the money be illicit AND that Raiffeisen knew, or reasonably could have known, the money was illicit. And the Austrian regulator concluded that Raiffeisen could not have known there was anything wrong with either the money it was handling, nor the bank from which it came nor the owner of that bank. The owner we are talking about here is the criminal – a convicted criminal who owned his own bank – mentioned earlier. According to Raiffeisen and the Austrian regulator the criminal past of the owner of the bank Raiffeisen was doing business with, could not have been known till a later date.

Now I find this judgement to be difficult to understand since the man in question had been convicted in Russian court in 2006. There are court transcripts of his admission of guilt which I have read. Yet Raiffeisen was handling the money in question in 2008.

BUT it doesn’t matter if I or you find this odd. The only FACT that is important, is that the Austrian regulator looked and found Raiffeisen NOT guilty of any crime. And so they are innocent. Case closed.

This is how you can end up, as I did, compiling facts and dates, evidence of bank transfers subpoenaed in court, which lead you to a conclusion that you are nevertheless not allowed to make public. You can present all the evidence but you must contrive to do it without ever mentioning the name of a crime, nor suggesting any illegal activity in the piece. And of course you certainly cannot conclude in writing what the evidence suggests. If you try to , as I found, you are threatened with the law.

And that is how you make the truth illegal.

If this was just one case it would be horrible but isolated. But it is not. This use of official and legal judgements to squash the truth is exactly what happened in the case of Jonathan Sugarman and UniCredit. He found evidence that UniCredit was very seriously breaking the law. He got an outside company to check and they agreed. The Irish regultor however, said, ‘There’s nothing to see here move along’. And Jonathan was threatened with leagal action if he did not go quietly away and hide.
What does all this mean for money laundering?

Here is how I concluded the article I cannot publish.
People love to talk about the ‘risks to banks and companies’ from money laundering. What risks? Think of the notorious cases of money laundering before Magnitsky: Citi., Wachovia, HSBC. No one was gaoled. No one senior even lost their job. Fines are a joke. Wachovia, for example handled or laundered over $370 billion of dirty or suspect money out of Mexico. They were fined one two thousandth of that amount, just $160 million. As a percentage of the direct financial benefits accrued to Wachovia, from having the dirty money flowing through their books, fines for money laundering are vanishingly small and better thought of as a tip pressed into the palm of a compliant doorman.

In reality, simply looking at the facts of what it has cost the banks in gaol time, fines or even something as intangible as their standing with their regulators and governments, it is very much worth it to launder. As for ‘standing’ or reputation – being guilty of huge money laundering did no harm to Citi when it came to bailing them out. Nothing untoward has happened to Wachovia or HSBC. In short – on a cost benefit analysis I would say it is of huge benefit and virtually no risk, for any bank large enough to be able to launder money, to do so.

And what of all the many companies and professionals, the company agents, lawyers and accountants, who do the jobs which make up the bulk of the work of laundering? Are there any real risks for them? I would say there are few because our system simply does not investigate what they choose to do. Instead it is very careful to only ask them to fill out forms, to self regulate and to ‘comply’.

I think the questions we need to ask ourselves and our politicians is why is it that the financial world is ‘regulated ‘ while we, ordinary citizens, are policed? Why do they have regulations to observe, while we have laws to obey? Why are they asked to merely assess themselves while we are investigated by officers of the law? Who profits from this careful double standard?

When you boil it all down, anti-money laundering is about asking criminals and the law abiding, both, to write reports about themselves. Needless to say the criminals lie. But we pretend not to notice, and so in every country all the paperwork says there is no money laundering going on. Yet hundreds of billions is laundered every year.
 
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Now, John Ward's post:

THE EVADERS: British banks control enough tax evasion to almost pay off our National Debt at a stroke

A story goes global, and damns the self-styled elite

UKgdpdebt
UK debt versus GDP…would be transformed if tax evaders paid their way
 
The amount of tax-haven monies controlled by British banking is estimated to be £1.26trillion. That is six NHS budgets, twenty defence budgets, eighteen welfare budgets, and five UK State pension budgets planned for the UK’s 2014 fiscal year. The evasion total is the same size as the entire public sector pension fund, and only slightly smaller than Britain’s total national debt.

Last Friday, every French newspaper’s front-page from the Rightist Le Figaro to the Leftist Liberation led with the series of offshore tax haven scandals now threatening to overwhelm President Francois Hollande. In the UK, the Virgin Islands name-and-blame game has put David Cameron very seriously on the back foot. And the obvious connection between Tory newspaper The Daily Telegraph’s ownership and the Sark tax-evasion scandals there has shaken many from their torpor of bland acceptance. Throughout Europe’s citizenry this morning, there is a growing feeling that – far from being a tiny minority – rich-businessman tax evasion is the norm.

The Irish Times last Saturday threw up a staggering statistic: over 30,000 Irish firms have directors registered in offshore jurisdictions. Furthermore, in Sark specifically – population 600 – there are more than 11,000 bank accounts of directors registered to Irish firms – 18 for every island resident. There are roughly 560,000 business enterprises in the Irish Republic, of which no more than 240,000 could be described as turning over enough to make directors’ offshore holdings worthwhile. Thus an incredible 1 in 8 of the country’s business élite is stealing from the taxman.

This isn’t going down well among Ireland’s poorer classes – not least because Enterprise Ireland’s own data showed that over a thousand of its business members received government funding in 2010, with a total of 86 receiving commitments for financial support in excess of €100,000 for significant R&D projects. Life is a thing of give and take, but for Ireland’s top earners it seems to be all take and no give.

Coming in the wake of similar behaviour over the last five years from the West’s bankers and the Greek econo-political class, there is something about offshore – and the Virgin Islands story in particular – that seems to have completed a synapse connection….thus allowing the penny to drop at last: the ordinary folks are being gang-raped by greed on all sides.

As many of us always suspected, the insouciant wealth-accumulation obsession of frontal-lobe afflicted bankers is what joins them at the hip with the top earners in business – regardless of which country or culture one surveys. The ever-unpleasant HSBC’s Guernsey operation was last November shown to be shielding £699m in 4,388 accounts in Jersey – with one investor holding £6million. The average balance is £337,000. Equally, the true extent of American and German fat cat tax-evasion has been unearthed by the German Federal Intelligence Service. It is conducting a widespread investigation into Lichtenstein banking – and that of Luxembourg – where tens of thousands of US and Bundesrepublik tax evaders are hiding massive amounts of cash.

A 2012 study of 60 large US companies found that they deposited $166 billion in offshore accounts during 2012, sheltering over 40% of their profits from U.S. taxes. Yet Wolfgang Schäuble has invested a great deal of spin-time trying to suggest that Cyprus shielding the wealth of crooked Russians was atypically evil enough to warrant Berlin’s snaffling of the island’s potential energy economy. This is now shown to have been bollocks not just as a rationale, but also in its alleged uniqueness. And some of Wolfie’s mates appear to be up their eyes in similar operations around the world.

But the burgeoning scandal is more embarrassing for David ‘Legup’ Cameron than any other leader because, as the Guardian for once reported accurately at the weekend, ‘one nation in particular has ties to offshore havens everywhere. It’s a veritable nexus of offshore influence, related to havens in the Caribbean, and much closer to home. That nation is, of course, the United Kingdom.’

As so often happens today, without the leaking of more than 2m offshore files to the International Consortium of Investigative Journalists (ICIJ), the extent of this three-faced hypocrisy would be unknown to us still. So while George Osborne talks a good game about “all being in this together” – and Cameron witters on about “not wanting to associate with” tax evaders – the reality is their administration and bankrolling ranks are crammed with some of the worst offenders and facilitators. Lord Green ran HSBC for years, Jeremy Hunt is an aggressive tax-avoider, the Barclay Brothers run Sark, Boris Johnson is a particular favourite of the Sarkist-Banking fraternity, and numerous large Tory donors are among the wealthy ripping off Sovereign revenue offices: more than 175,000 UK companies have directors in offshore jurisdictions.

The ICIJ’s project uncovered a network of empty holding companies and names essentially rented out to fill out boards of non-existent corporations, including a British couple listed as active in more than 2,000 entities. This is a mirror image of the tiny survey conducted by The Slog last week into the identity of those who were early departees from the Cyprus depositor haircut.

For me, however, it is a calculation of the totals involved globally that change these revelations from being just another “it’s the rich what gets the sorrow” yarn into something that just might – we live and hope – finally get Middle England off its sofa and angry enough to demand justice.

A 2012 report from the Tax Justice Network (a UK company) estimated that between $21 trillion and $32 trillion is sheltered from taxes in unreported tax havens worldwide. Tax havens have 1.2% of the world’s population and hold 26% of the world’s wealth – including 31% of the net profits of United States multinationals. We are indeed talking about ‘a tiny minority’ here – the usual suspects – but also a colossal percentage of the money that should have been paid in Sovereign taxes. Financial opinion leaders I asked last week for an estimate of the percentage of offshore monies administered by British banking thought the number to be between 40 and 60%.

Being kind to the perpetrators and assuming (a) the lower end of those estimates and (b) lowest assessments of global market size and (c) a net tax rate of 15% being evaded, the Government of the United Kingdom knowingly loses almost exactly a trillion pounds in tax revenue thanks to the havenism endemic in the banking system it is supposed to regulate.

That is six NHS budgets, twenty defence budgets, eighteen welfare budgets, and five UK State pension budgets planned for the UK’s 2014 fiscal year. The evasion total is the same size as the entire public sector pension fund (itself a disgrace of illegal embezzlement) and only slightly smaller than Britain’s total national debt.

It is a mind-boggling 70% of United Kingdom GDP.

But here’s the final brass-necked irony: stand by for an attempt by the Global Looters to use this tax evasion reality as the excuse for stealing the savings of everyone with over £100,000 in a bank account that isn’t offshore….and represents the life-savings of a law-abiding taxpayer.
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Saturday, March 09, 2013

France: John Ward back up and fighting


Major UK blogger John Ward has just moved from Devon to south-west France, and is bringing the farmhouse up to scratch. But he still finds time to continue his furious examination of the worlds of finance and politics, which are so interlinked, corrupt and disastrous that he reflects on the survivalist advantages of his new home:

Over the last few days, it has become unnecessary here to have the main log-burner on 24/7, while sporting thermal underwear in bed at night. Today I didn’t actually light the fire at all until 7pm, and even now at 10 pm it is bubbling along without bashing out too much heat. The winters here are fierce, but short. This one has been longer than most, but it is at last releasing its frigid grip: buds are budding, winds are warming, and daffodils are flowering. You never know, it just might be Spring.

I’m still fixing things up. The last and most truculent floodlight has finally given up its resistance to my efforts to make it work, and is as I speak shining a light towards the old pig-sties down at the bottom of the front garden. There was an anxious moment when I had to figure out how to chisel a route through the door-jamb minus available chisels, given I lack a three-foot drill to go through the walls. But a steady hand and a hammer applied to a knackered old screwdriver did the trick. There was an even more stressful moment when – having rewired the obstinate little bastard – just prior to screwing it into the external masonry – it decided not to work. But then the kitchen lights flickered back on again, and I realised we’d had a power cut without me noticing. So all is well.

My neighbour Ange came up yesterday. He’d heard the gossip about Jan and I, so was keen to know what was what. One thing that never ceases to stagger me about apparently rigid old French agrarians is how – when you go through the “sh*t happens” explanation of life – far from offering sour disapproval, they seem keen to sympathise, to help, and to discuss the philosophy of marriage, emotions, or indeed anything else you care to bring up. On a day-to-day basis I have very little in c0mmon with the local French farmers, but beyond tractors and seed costs you can (with perseverance) plug into deeper concerns. Ange’s wife Michelle, for instance, is a keen fan of certain French writers. Once I’d discovered her passion for Georges Simenon and Molière, we never looked back. Five years ago an undiscovered Dumas novel was unearthed, and so it was my great pleasure to give Michelle an internet link to the prose. We have also prepared melons together for charity dinners in aid of Mali, but perhaps I should draw a discreet veil over that.

Tomorrow the replacement dishwasher and the serviced/repaired tractor mower are due to make an appearance. I rather fancy that soon after this point, things will return to something approaching normal. Window boxes will be filled and watered, windfall kindling gathered up, water retainers reinstigated, and guests prodded to confirm arrival dates.

Of course, in the macro boulevards of all those financial centres beyond Slogger’s Roost II, things will continue to be perversely abnormal. The Dow will go up instead of down, Gold will go down instead of up, silver up instead of down, the euro up against Sterling and down against the Dollar, and the US, UK and Eurozone debts up and up and up and up. But to the folks down here, none of it really matters. One of the undeniable things about France is that it has the biggest land area per head of population and highest proportion of cultivable in-use land in the entire EU. So if every currency, bond, bank, and bourse goes tits up, the French will still have more than enough to eat.

Should we feel resentful about this? No of course we shouldn’t: rather, we should feel anger about our own UK élites’ inability to understand such basics. With careful thought, Britain could’ve continued to make things and poured investment into those people who wish to grow things. France still makes cars and exports them very profitably. It still plans crops to produce cheap bread – and produces enough milk, meat, fruit and wine to keep everyone cruising along nicely. It still has the best cheeses in the world.

There are major bits of French culture (for example, pharmacy advice and the tax system) that continue to confuse and worry me. But when it comes to the price of lunch, bread, beer, wine, fresh veg, wonderful tomatoes and magret de canard, down here in the South West it is hard to fault the way they live. The sense of community, the familial glue and the lack of crime all bear witness to an achievement which, let’s face it, Britain cannot even begin to imagine.Will the British ever be true Europeans? Within the confines of the EU, I very much doubt it. We are an island seafaring race obsessed with the idea that we might still have some major global role to play.In the banking sector, we do. But is that a role we should want to embrace? I would emphatically say no: the UK’s future prosperity lies in making high-quality items and then knowing how to market them in an equalising world. My instinct is to stay close to Britain, but my insight tells me that Britain has forgotten how to stay close to itself.

This post originally appeared here and is reproduced with the kind permission of the author. John Ward's current blog is here and the archives of his previous one (Not Born Yesterday) are here. Writing since 2006, John is prolific, sparky and always informative.

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