The Global Elite Are Hiding 18 Trillion Dollars In Offshore Banks

By The Economic Collapse Blog

Global Research, January 04, 2013

The Economic Collapse Blog

Theme: Global Economy

In recent days, the fact that Mitt Romney has millions of dollars parked down in the Cayman Islands has made headlines all over the world. But when it comes to offshore banking, what Mitt Romney is doing is small potatoes. The truth is that the global elite are hiding an almost unbelievable amount of money in offshore banks.

According to shocking research done by the IMF, the global elite are holding a total of 18 trillion dollars in offshore banks. And that figure does not even count any money being held in Switzerland. That is a staggering amount of money. Keep in mind that U.S. GDP in 2010 was only 14.58 trillion dollars. So why do the global elite go to such trouble to hide their money in offshore banks? Well, there are two main reasons. One is privacy and the other is low taxation.

Privacy is a big issue for those that are involved in illegal enterprises such as drug running, but the biggest reason why people move money into offshore banks is in order to avoid taxes. Some set up bank accounts in foreign nations because they want to legally minimize their taxes and others set up bank accounts in foreign nations because they want to illegally avoid taxes. You would be absolutely amazed at what some large corporations and wealthy individuals do to get out of paying taxes. Unfortunately, the vast majority of the rest of us don’t have the resources or the knowledge to play these games, so we get taxed into oblivion.

So why do they call it “offshore banking”?

Well, the term originally developed because the banks on the Channel Islands were “offshore” from the United Kingdom. Most “offshore banks” are still located on islands today. The Cayman Islands, Bermuda, the Bahamas, and the Isle of Man are examples of this. Other “offshore banking centers” such as Monaco are actually not “offshore” at all, but the term applies to them anyway.

Traditionally, these offshore banking centers have been very attractive to both criminals and to the global elite because they would not tell anyone (including governments) about the money that anyone had parked there.

These days some governments (particularly the U.S. government) are trying to change this, but we certainly will not see the end of offshore banking any time soon.

The amount of money that goes through these offshore banks is absolutely astounding.

It has been estimated that 80 percent of all international banking transactions take place through these offshore banks. $ 1.4 trillion is being held in offshore banks in the Cayman Islands alone.

One article in the Guardian estimated that a third of all the wealth on the entire globe is being held in offshore banks, and others believe that as much as half of all the capital in the world flows through offshore banks at some point.

Obviously, all of this tax avoidance means that governments around the world are missing out on a whole lot of money.

It has been estimated that the U.S. government is missing out on $ 100 billion a year because of these offshore banks. Others would put that figure significantly higher.

Avoiding taxes is a game that the global elite have mastered. They are playing a whole different ballgame than you and I are. They don’t just sit there like idiots and get blasted with taxes. Instead, they hire the best experts and they employ every trick in the book to hold on to as much money as they possibly can.

These days, taking advantage of offshore tax havens is not that complicated to do. The following is from arecent Politico article….

A plausible scenario plays out like this: I hire an accountant. Doing her job, my accountant tells me that if I sign a few legal documents and route my money through a small Caribbean island, I could keep more of my paycheck and pay a lower tax rate. I may have earned my money in the United States, but legally I can claim that it was, in fact, earned in a tax haven.

If it is legal, perhaps more of us should look into this.

After all, if playing these kinds of games is good enough for Mitt Romney, then why isn’t it good enough for all the rest of us?

During a campaign stop recently, Romney said the following….

“I can tell you we follow the tax laws”

I certainly believe him when he says that. But it is what he said next that is troubling….

“And if there’s an opportunity to save taxes, we like anybody else in this country will follow that opportunity.”

I certainly believe him when he says that too.

ABC News recently revealed that Bain Capital has established an astounding 138 different offshore funds in the Cayman Islands.

Something has got to work pretty well to want to do it 138 times.

But Bain Capital was also very busy over in other offshore banking centers as well.

One of the largest shell companies that Bain set up down in the Caribbean was called Sankaty High Yield Asset Investors Ltd. It did not have an office in Bermuda and it had no staff in Bermuda. But it helped clients of Bain Capital avoid a whole lot of taxes.

The following comes from a 2007 Los Angeles Times article….

In Bermuda, Romney served as president and sole shareholder for four years of Sankaty High Yield Asset Investors Ltd. It funneled money into Bain Capital’s Sankaty family of hedge funds, which invest in bonds and other debt issued by corporations, as well as bank loans.

Like thousands of similar financial entities, Sankaty maintains no office or staff in Bermuda. Its only presence consists of a nameplate at a lawyer’s office in downtown Hamilton, capital of the British island territory.

“It’s just a mail drop, essentially,” said Marc B. Wolpow, who worked with Romney for nine years at Bain Capital and who set up Sankaty Ltd. in October 1997 without ever visiting Bermuda. “There’s no one doing any work down there other than lawyers.”

The amount of money being funneled through Sankaty today is absolutely stunning….

Today, Bain Capital manages $ 60 billion in assets, according to a spokesman. The total includes $ 23 billion in Sankaty debt and credit funds. Half a dozen Sankaty affiliates now are active in Bermuda, corporate registry records show.

The Sankaty debt hedge funds are organized as partnerships in Delaware that produce taxable business income by investing in fixed-income bonds and other debt instruments. Under tax law, even tax-exempt U.S. institutions may face a 35% tax if they invest directly in such hedge funds. By investing instead through a Bermuda corporation, the taxes are legally blocked, experts say.

Of course all of this is perfectly legal.

So nobody gets into trouble for any of this.

By keeping money offshore, even those managing these kinds of funds can avoid being taxed.

Victor Fleischer, a tax professor at the University of Colorado Law School, recently explained how this works….

“The idea behind some of the Cayman Island strategies was that the income that the fund managers receive for managing the money would be kept offshore in the Cayman Island — and the chief benefit is that you can defer when you recognize that income until a later date and you can reinvest the money from the Cayman islands and none of those reinvested funds get taxed until you bring them back either”

So was Romney doing this?

We may never know unless he shows us his tax returns.

What we do know is that Romney has millions of dollars of his own personal wealth invested in offshore tax havens.

The following comes from ABC News….

In addition to paying the lower tax rate on his investment income, Romney has as much as $ 8 million invested in at least 12 funds listed on a Cayman Islands registry. Another investment, which Romney reports as being worth between $ 5 million and $ 25 million, shows up on securities records as having been domiciled in the Caymans.

But Romney does not just have money invested down in the Cayman Islands. Apparently his money is invested in a whole host of offshore tax havens.

The following quote comes from a Reuters article….

Bain funds in which Romney is invested are scattered from Delaware to the Cayman Islands and Bermuda, Ireland and Hong Kong, according to a Reuters analysis of securities filings.

So is there anything wrong with this?

Well, it depends on how you define “wrong”.

What Romney is doing is perfectly legal.

But it also stinks. Washington lawyer Jack Blum recently told ABC News the following about Romney’s finances….

“His personal finances are a poster child of what’s wrong with the American tax system”

So now we may have a few hints as to why Romney may not want to release his old tax returns.

But as noted above, what Romney is doing is just small potatoes compared to what the ultra-wealthy do.

The U.S. Congress has been trying to clamp down on offshore banking, but the ultra-wealthy are always two or three steps ahead of them.

The ultra-wealthy will go to just about any extreme in order to avoid paying taxes.

In fact, the Washington Post has reported that an increasing number of wealthy individuals are actually deciding to renounce their citizenship rather than face the wrath of the IRS.

The ultra-wealthy aren’t really concerned that much with national citizenship anyway. If they want to influence an election, they can have far more influence by donating a few million bucks to a “Super PAC” than they can by casting the few votes that they have.

In a previous article, I described how the ultra-wealthy use offshore banks as a “shadow banking system” that plays by rules that most people don’t even know exist….

It is a shadow banking system that most Americans don’t know anything about. Most Americans don’t have the resources to be able to set up shell companies in half a dozen different countries so that they can “filter” their profits. Most Americans don’t know a thing about complicated tax avoidance plans that tax lawyers use such as the “Double Irish” and the “Dutch Sandwich”. Most Americans would have no idea how to eventually have most of the money that they make end up in Bermuda so that it can avoid taxes.

Most among the global elite simply do not care that U.S. debt is climbing into the stratosphere. All they care about is keeping as much of their own money in their pockets as they possibly can.

Of course there are always exceptions to this rule. Warren Buffett recently wrote a check to the U.S. Treasury for a little more than $ 49,000 to help pay off the national debt.

But considering the fact that the U.S. national debt is increasing by more than 100 million dollars an hour, that didn’t exactly do much to help.

Our system is deeply broken and the global elite are getting away with bloody murder. Over the decades, they have carefully crafted the rules so that as much wealth as possible is funneled into their pockets, and they have carefully crafted the rules so that as much wealth as possible stays in their pockets.

Of course if we got rid of the personal income tax and the corporate income tax entirely and replaced them with a completely new system we could get rid of all of this game playing once and for all.

But what do you think the odds are of that happening?

http://www.globalresearch.ca/the-global-elite-are-hiding-18-trillion-dollars-in-offshore-banks/5317691

3 Huge Myths About The Trillion Dollar Coin Plan To Save The Economy

Joe Weisenthal|Jan. 3, 2013, 11:47 PM|21,515|83

en.wikipedia.org

The hottest idea to save the economy from another debt ceiling fight (and a potential default) is the Trillion Dollar Platinum Coin.

In order to understand how it works, we first need a very quick lesson in how the government spends money.

This is a super-crude version of it, but here’s the gist:

The Treasury Department has a bank account at The Federal Reserve, specifically the New York branch of the Federal Reserve. When the Treasury writes a check to a company (say a defense contracted owed $ 100 million) that check is “cashed” at the Fed. When the Treasury needs money (which is all the time) it sells bonds in an auction. The proceeds of those bonds go into the account.

Okay, now there’s this thing called the debt ceiling, which sets a maximum cap on the amount of debt that the US can carry at one time. Every time we come close to hitting it, the US has to ask Congress to raise the limit. In recent years, since the rise of the Tea Party, what used to be a mildly frustrating event has grown into a systemic economic threat.

So where does the Trillion Dollar Platinum Coin fit in?

In the section of the law which specifically relates to the Treasury’s ability to create money (coins and bills) section K says this:

(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

In other words, when it comes to platinum coins, the Secretary (who is currently Tim Geithner) has discretion on the designs, specifications, quantities, and denominations of platinum coinage.

So let’s say, Tim Geithner decided to stamp out a $ 1 trillion coin. What does that accomplish?

The idea is that after it was created, Geithner could walk it over to the Federal Reserve, and deposit it in the Treasury’s bank account. Then the Treasury, rather than having to issue new debt (because remember, Congress hasn’t raised the limit) can make sure its checks clear against this money.

Voila, crisis averted!

Now, that sounds all nice, but people have all kinds of objections upon hearing this idea. So we’ll address them here.

MYTH #1: This will cause massive hyperinflation.

This is an understandable fear, because the idea of creating new money out of thin air to pay our debts brings to mind situations like Weimar and Zimbabwe, and trillion dollar bills being tossed about it in the streets.

But this is not about using the coin to pay back our debts, it’s staying within the law, while avoiding the technically nonsensical debt ceiling.

Think about the mechanics, the trillion dollar coin goes to the Fed, but in terms of the real economy, government spending takes place exactly as normal. Now it is true that the Treasury might not be doing bond purchases at this time, and that this could leave more money in the system, that could heat up and cause inflation, but this is easily remedied, because the Fed has a gigantic pile of Treasuries it’s sitting on that it could sell back into the open market to “sterilize” the government spending.

The bottom line is: Because this trillion dollar coin isn’t being used as “helicopter money” (money dropped directly into the economy) you don’t get the inflationary effects you’re used to seeing when you hear about governments creating money in large denominations.

This is purely a technical fix for a bad situation.

MYTH #2: The trillion dollar coin will destroy the dollar!

This is pretty much the same as the first argument. What would destroy the dollar is if the government just started printing $ 1 trillion bills, declared them legal tender, and then dropped them from a helicopter onto cities. Soon, the buying power of a single dollar bill would be zilch. But alas, because the coin isn’t a direct injection into the economy, but rather a stopgap that lets the government continue to spend on various services, you don’t have that destructive effect.

MYTH #3: If this idea is so great, then minting a $ 16 trillion dollar coin could just solve our debt problem!

This line of reasoning ignores the point completely. People who say this (or say we should print a $ 100 trillion coin) are mistakenly thinking that the point of this exercise is to pay off our debts and get out of the hole.

That’s not it. Our debts are plenty manageable at current levels, and with interest rates the way the are. The point is to stay within the law, while getting around the technical problem of the debt ceiling. So there’s no point to the $ 16 trillion coin or the $ 100 trillion coin, or anything else so absurd. This is not about having money to spend. This is about avoiding a legal crisis where the government had obligations to much (such as on its debt) but didn’t have the authority to borrow and spend money.

And furthermore, if we actually did try to eliminate our debts just by creating a coin, we would create the aforementioned inflation problem (via a massive expansion of money) and it would result in buyers less inclined to buy dollar assets.

BOTTOM LINE: This won’t create hyperinflation, and it’s not the solution to all of our economic problems. It’s just a way to stay within the law, while avoiding the debt ceiling nonsense.

Is it silly? Of course it is. But what’s sillier is a rich nation having a debate on whether it will pay what it owes, which is what the debt ceiling fight is all about. So in the face of such silliness, this unfortunately may be required.

Read more: http://www.businessinsider.com/3-huge-myths-about-the-plan-to-save-the-economy-with-a-trillion-dollar-platinum-coin-2013-1#ixzz2H64YxJpm

US strike on Iran to cost world USD1.7 trillion in 1st 3 months: Report

A logo of the Federation of American Scientists (FSA)

Sun Nov 18, 2012 2:20PM GMT

If there is an attack on Iran, with the expected counterattacks the price of oil could quite easily go to 250 dollars or higher. This could push the US right back into a recession.”

Paul Sullivan, a professor of economics at Georgetown University

The Federation of American Scientists (FSA) has warned that a US military strike against Iran, in its first three months, would cost the global economy up to USD1.7 trillion in losses.

“The study’s findings suggest that there are potential costs to any number of US-led actions and, in general, the more severe the action, the greater the possible costs,” Mark Jansson, FAS’s special projects director, was quoted as saying in a special report relayed by the Inter Press Service (IPS).

“That being said, even among experts, there is tremendous uncertainty about what might happen at the higher end of the escalation ladder,” added Jansson, a co-author of the report.

The FSA, however, noted that a US move to “make concessions” over Iran’s nuclear energy program would result in USD60 billion in benefits for the world’s economy.

Paul Sullivan, a professor of economics at Georgetown University, warned that military strike on Iran would dramatically drive up the oil prices.

“If there is an attack on Iran, with the expected counterattacks the price of oil could quite easily go to 250 dollars or higher. This could push the US right back into a recession,” he said.

“The main effects to the US if there is escalation is through the price of oil and increased military and other national security costs,” warned Sullivan.

The US and Israeli officials have intensified their anti-Iran war rhetoric in recent months to put more pressure on the country over its nuclear energy program.

Iran has promised a crushing response to any military strike against the country, warning that any such measure could result in a war that would spread beyond the Middle East.

http://www.presstv.ir/detail/2012/11/18/273084/attack-on-iran-costs-usd17-trillion/

Economy 101: US debt eclipses economy, reaching $ 16 trillion. Chimps in Charge r Clueless of what hit them then Claim that IQ lower than 70 makes them Innocent by reason of Idiocy
http://rt.com/usa/news/us-debt-eclipses-economy-295/

Published: 04 September, 2012, 03:55
Edited: 05 September, 2012, 08:12

US debt eclipses economy, reaching $ 16 trillion this week
TAGS: Crisis, USA, Economy

The US government has announced its $ 16 trillion debt, a landmark number that has more than tripled during the last two presidencies. At 104 per cent of the nation’s gross domestic product, the debt is now larger than the US economy itself.

The data released by the Treasury Department on Tuesday showed that the government debt has surpassed $ 16 trillion for the first time in American history.

The news comes as Republicans and Democrats formally nominate their presidential candidates, and the official announcement comes on the first day of the Democratic National Convention.

“This is a grim landmark for the United States. Yet the president seems strangely unconcerned,” said Sen. Jeff Sessions of the Senate Budget Committee.

Each day, the debt grows by roughly $ 3.5 billion, or about $ 2 million per minute.
Twelve years ago, before the election of George Bush, the debt stood at $ 5.6 trillion. In the months before President Obama took office, the debt was $ 9.6 trillion. During the last presidency, it has increased by $ 6.4 trillion – two-thirds of its 2008 amount. The current president has overseen the largest debt explosion in US history.

This year marks the fourth consecutive year with a $ 1 trillion budget shortfall.
A top adviser to President Obama said the commander in chief had a “plausible plan” to stabilize the debt – without reducing it.

“You can’t balance the budget in the short term because to do that would be to ratchet down the economy,” adviser David Axelrod told Fox News on Sunday.
About 30 per cent of the total public debt is intragovernmental holdings, including money borrowed from Social Security’s trust fund.

“The national debt is certainly a ticking time bomb. There’s no question that if we don’t do something about it, it’s going off,” said Robert Bixby, the executive director of the Concord Coalition, an NGO promoting a balanced budget. “We’re spending about $ 200 billion on interest now. That’s much more than we’re spending on operations in Afghanistan, more than we’re spending on Medicaid.”
As the US debt makes history, the first group of baby boomers is now retiring and relying on government entitlements to get by.

While presidential candidate Mitt Romney, gave his speech at the RNC last week, a national debt clock ticked behind him to fill the convention’s attendees with fear of a looming financial catastrophe.
The DNC is unlikely to feature a similar exhibit – but the federal government will likely announce its $ 16 trillion debt during the heat of the convention in North Carolina.

My NOTES:

True Debt……………..
http://www.truthinaccounting.org/
True Unemployment……………………
http://www.shadowstats.com/alternate_data/unemployment-charts

Official info on GDP…………….
http://4.bp.blogspot.com/–8hkKDXQdss/TjKtqVy-VKI/AAAAAAAABa8/bVO4yDlAaLo/s1600/us-debt-as-percent-of-gdp.gif

Under Usurper and Fraud, Empty Suit, Empty Chair, War Criminal and Nobel Peace Prize Laureate Barack Hussein Obama, the US debt increased from $ 10.7 trillion in 2008 to $ 15.5 trillion by February 2012…………………………. look it up……. This happens when you put monkeys in charge of your country……………… it is as simple as that!!!!!!!!!!!

Under Usurper and Fraud, War Criminal –Drone by Shooting Murderer and Nobel Peace Prize Laureate …Barack Hussein Obama,.. the US debt as % of GDP also increased

in 1995 US debt as a % of GDP was 67%……………………
in 2008 US debt as a % of GDP was 68%……………………
in 2011 US debt as a % of GDP was 97%……………………. so baboon within 3 years was able to do far more damage than Clinton and Bush combined within 16years ! It is time to “slap the monkey” yanks!

True GDP………………..
USA’s GDP is far lower than you are being told!!!

Susan N. Houseman, a good but previously obscure economist with the Upjohn Institute, has discovered a problem in the statistical data that produces phantom US GDP. Phantom GDP results when cost reductions achieved by US firms shifting production offshore are miscounted as US GDP growth. Phantom productivity increases occur when gains from moving design, research and development offshore are counted as increases in US productivity.

Obviously, production and productivity that take place abroad are not part of our domestic economy.

Business Week’s June 18 cover story by Michael Mandel The Real Cost Of Offshoring explains the problem identified by Houseman. Economist Matthew J. Slaughter, a proponent of offshoring, says: “There are potentially big implications. I worry about how pervasive this is.”

Business Week says the implications are big. The cover story estimates that 40% of the gain in US manufacturing output since 2003 is phantom GDP.

40% Lie!!!!!!!!!!!!!!!!!!!!!
………………

The Blueprint to Destroying Your Country………………………

First you send your manufacturing jobs to People’s Republic of China, then you outsource your services to India, then you increase immigration of low IQ-Obama-origin-folks and Mexican Indians promptly placing them in ghettos on welfare ( stepping-stone factory jobs are sent to china, remember?). You fill the remaining well paid jobs with people Imported from India on LB1 or student visas, you pay those Indians 033% of that what white person is making. All that should decrease your taxation base (government income) by 90%!

Now, on the expenditure side you start a few wars for the benefit of Globalization and Global Banking Jewish Elite ( who just sent your jobs to China/India) and for security of Israel and Jewish people at large. Jews everybody hates for what they just did.. That should bring nice debt in since you pay a lot of $ for things which usually explode. Killing Pakistanis and other brown people, who live on 1$ a day, with $ 1 Million Tomahawk Missile is very expensive enterprise.
Lastly, you Hire a Clueless Chimp of IQ 80 as a CEO to run your country.

THAT SHOULD DO THE TRICK!

Here you have it folks: a road-map to HELL!

Last but not least

IQ by Country ………IQ and Global Inequality.. The People are the most Important ..This is the People who create Culture and not viceversa

http://en.wikipedia.org/wiki/IQ_by_country
http://en.wikipedia.org/wiki/File:National_IQ_Lynn_Vanhanen_2006_IQ_and_Global_Inequality.png

Obama People have IQ around 65, as you can see from the above