Grubstakers - Episode 188: Offshore Money

Episode Date: August 27, 2020

A short overview of the system of offshore money that allows the rich and powerful to skirt laws and pick and choose the jurisdictions that apply to them. Learn how to set up a shell corporation, hide your assets, and buy a passport as well as a few facts about a notable Hollywood actor. The main source for this episode was the book "Moneyland" by Oliver Bolloughs: https://www.goodreads.com/book/show/39979237-moneyland The paper Steve mentions is here: https://publications.iass-potsdam.de/rest/items/item_3259914_4/component/file_3259926/content

It's the kind of thing that makes the average citizen puke. I look at this system and say, yeah, you know, what's going on? I don't know anything about this man except I've read bad stuff about him. And I don't like, you know, I don't like what I read about him. We are more than just one coin. We create the world around this coin. Come. Invention. Come. Come. In 5, 4, 3, 2, the evil has gone.

Welcome back to Grubstakers, the podcast about billionaires. Thank you for being with us today. My name is Sean P. McCarthy, and I'm joined by all of my co-hosts. Andy Pollard. Steve Jeffers. Yogi Poliwal. And so this week, we wanted to do a special episode for you. We wanted to give just kind of a basic overview of the international offshore money

system. And the reason for that is, you know, usually we profile a different billionaire every week. Well, almost every billionaire we mentioned on this podcast uses the offshore money system. We know this from these leaks like the Panama Papers and the Paradise Papers. And we just thought hopefully this app will be a good reference point. So you know, any billionaire we talk about, if we mentioned the offshore money system, you can come back here and kind of have some understanding of what they're doing to both, you know, hide their money and avoid taxes and all of that stuff. I read this book called Moneyland by Oliver Bullough. It's a very good book. I recommend it a lot. Kind of gives you a very easy to read

overview. I'll kind of give a summary of that book and some of the things in it. Though I do want to make a note that I did invite the author onto this podcast. I shot him a message on Twitter and he responded and he asked, quote, could you tell me a bit more about the podcast? Thanks. And then I did tell him a bit about our podcast and I sent him a link to our SoundCloud and then he never responded. So if nothing else, you know the author has good judgment.

Dog, why did you send him the SoundCloud? You got to send him the website. That looks fucking crystal clear. That would have been a fucking perfect example of what the show is supposed to be like yeah if i want to get like respectable authors i have to be like yeah so our soundcloud's kind of down right now so i can't i can't actually send you an episode to listen to but you know usually it's it's there it's just we're having problems with the server. You know, I like the fact that this author could see that the show was not to be taken seriously because it proves that the CIA is not going to murder us anytime soon.

Any of the agents would log on and be like, you know what? I don't think we have to take these guys seriously. They've been talking about alligator blood a little too much for us to think that they're a serious threat. Maybe if we want them to think we're professionals, we should link to the Patreon and tell them to pay us. The NSA agent assigned to our case is just presenting on us. And he's like, I wouldn't use them as a direct agent, but maybe as a patsy or something. Yeah, I like to think that he listened to an episode and was like, I just don't want to get grilled about ass eating. That's my one weakness. This is what i'm hiding from the world he's like i can't let people know that mouths don't belong

there but also uh yogi and andy i know you watched i know you watched the movie the laundry bat on netflix with meryl streep and that's, I've seen it as well. I don't really remember it that well. But I remember it had a decent kind of overview of the offshore system. So we'll provide a little review of that in addition to giving a summary of the book. But what were your thoughts on the movie, I guess? My first thought, I think, is Antonio Banderas. Man, that guy fucks.

Have you seen that man before? He's fucking gorgeous, all right? That's a man who doesn't need to eat ass his ass is constantly being eating okay he's just a beautiful beautiful human being i don't know why we don't pay him more respect in the financial uh offshore money uh a universe we all live in after watching this movie my only take was that it could have used more uh meryl street posing as the Statue of Liberty. Yeah, I think for the most part, the movie was pretty good in showing you exactly how large and mischievous the offshore money laundering system really is. And opened my eyes to just how sinister the entire vehicle of offshore money truly is i thought um you know larry

wilmore was very good at it but uh he's kind of underutilized he doesn't once pose as the statue of liberty yeah kind of my main complaint with the book moneyland is at no point when i was reading it did i think about how sexy antonio banderas is which you know you need a little sugar to make the medicine go down come on that's right that's right but yeah to kind of like explain the mechanism of this offshore system i think um again in the book moneyland which i do recommend uh oliver bolo kind of comes up with a very good saying. And I think the central theme of the book is that money flows freely, flows internationally, but laws do not. So the entire way offshore finance works is that, you know, money can be sitting in an account in wherever, you know, it's just completely

abstract. Money can be used in London or whatever, but for legal purposes, it's in the Cayman Islands or it's wherever. And the idea is that you can play different jurisdictions off with each other and just kind of arbitrage until you get your money to legally be considered wherever there is the least regulation, the least oversight. Oliver Bullough gives the example that under British law, if you own a piece of property, you have to declare who owns that property however if you own a piece of property in britain but that piece of property is owned by a corporation that's incorporated in the east african nation of uh meretrius you do not have to

disclose who actually owns this uh this piece of property so you know this is like obviously with like condo buying in Manhattan or Toronto or wherever, you see all of this, but there's a whole bunch of different advantages that you get through this system. But one of them is just privacy, you could just like set up this little offshore LLC, and have it, you know, own your stuff. And then it's very hard for people to actually figure out what assets you own and what you are doing with your money. Do you think more of the money that goes offshore via these practices is used to finance

shit that's illegal or to hide things that are illegal that they don't want to pay taxes for? That's a good question, Yogi. It's like, what's the breakdown of it hiding assets versus financing activities right and like the panama papers and the paradise papers show the hiding assets part and hiding income but they don't shed as much light on the financing activities and like we'll get into that side a bit later with like offshore uh offshore banking which is uh doing what banks do onshore but offshore this time and creating

deposit accounts and when they lend to to give people credit money to do things outside of the normal legal jurisdiction yeah and um you know in terms of it's not just privacy, like there's a bunch of different, when we say legal arbitrage, there's a bunch of different aspects of that. Like another one, an example that's given in the book is that, you know, Syrian refugees are subject to visa restrictions, but rich Syrians can buy a passport from Cyprus or, you know, St. Kitts and Nevis or a half dozen other countries that basically sell passports, and suddenly they can enjoy visa-free travel. Or another example is Ukrainians live under a very corrupt government. You know, there's tons of corruption in the

Ukraine. The judiciary is corrupt. You're not going to get a fair legal trial, but a rich Ukrainian can structure their asset ownership so that all of their legal disputes, all of their holdings are governed by British law. So suddenly they get access to like a comparatively impartial judiciary or a less corrupt judiciary. So the entire idea is like, I mean, obviously it's not a new revelation, but globally there are two sets of rules for the rich and the non-rich. Right, right. Yeah, the offshore system is almost entirely rich people.

Perhaps there would be some utility for people to have more involvement in creating an offshore money system, like with a digital fiat currency or something that you could use more portably. But we just foreclose on that whole opportunity by the rich are just hoarding it as a means of tax avoidance and financing stuff on the sly yeah absolutely and like to just talk about the scale there's like the thing is also it's it's very hard to estimate you know because a lot of a lot of government investigations into crimes

run into these like kind of you know uh russian nesting dolls of llc's we'll talk about a bit but because a lot of this is, you know, drug money, and just money people are obviously trying to hide, it's hard to estimate the scale. But in the book Moneyland, there are a couple different estimates that I can just kind of share with you in terms of the scale of this, like, one estimate is that 8% of all the world's financial wealth was held in tax havens as of 2014. So the statistic is that of global wealth of 95.5 trillion U.S. dollars, about 7.6 trillion of that was offshore in tax havens.

But there was another estimate that actually put it closer to 21 to 32 trillion in 2010. So, you know, we don't know whether it's you know 30 percent of all money is offshore or eight percent of this total wealth is offshore it's a vast scale of just the amount of wealth that is currently legally stashed offshore even though you obviously like a condo in manhattan is in manhattan but legally it's in bahamas or cayman islands or whatever one other statistic from here and again this just shows you the range one estimate estimates that 20 billion to 1 trillion u.s dollars is stolen per year from the developing world so that the range of that between 20 billion20 billion to $1 trillion. Yeah, fuck. That is fucking insane.

Yeah, there was another very depressing Oxfam study. Do they really need it over there? Yeah, they don't really know what to do with money. I don't know why they're not giving all of their money to us. I think that that's the fair play, if we're honest with ourselves. Yeah, the best banks are over here. Clearly, they know how to get you the best return on your dollars.

This is just economic efficiency. I mean, if they didn't want to be third world, they probably should have held onto their money better. You know what I mean? I just feel like they just don't have a good grip on things. They don't speak English. They're just not really smart. Oh yeah, and there's one other depressing

study from Oxfam. It was done in 2000. They came up with another number that was $50 billion annually stolen from the developing world. $50 billion US dollars. That statistic of $50 billion stolen annually was at the time identical to the amount of aid given by Western nations to the developing world.

So every single dollar of aid given to the developing world by that study is stolen back out of the developing world and then stashed offshore by various kleptocrats. And, you know, and the book talks about, of course, the property market. Oliver Bullough is an English writer, So he talks a lot about England. London, of course, is a big hub of this stuff. But he says across England and Wales, more than 100,000 properties are owned offshore, as many as half of the new builds at the top end of the market are empty the majority of the time. He also gives the statistic in Manhattan, 30% of condo sales in large, condominium sales in large-scale developments

have gone to foreign buyers since 2008. The vast majority pay full price up front. And he, of course, talks about how something we have also talked about on this show and probably we'll address a little bit later in this episode is there was just a big spike in this offshore money going into condominiums and properties in Manhattan, London, Toronto, Miami, etc. In the 90s, this accelerated in the 90s with the collapse of communism and the rise in flight capital. So you see these huge spikes in property prices in Manhattan, London, all these destinations, because all this offshore money is being squirreled out and stashed in a bank account that is, you know,

functionally a one-bedroom apartment in Chelsea. Right, right. So it's kind of like white flight, but instead of white, it's green flight. They're just flying to where the money is slightly greener. I mean, I don't even need slightly like so with this process i mean they're avoiding you know massive uh costs on taxes and stuff but like does it take the amount of money they're saving by doing this process down to zero sean do they get to keep essentially all the money by doing this shit yeah i mean like you can dodge taxes and there have been you know various, various regulatory attempts to reign this in in various nations.

But kind of what I want to get out of the theme of this is I think a lot of people look at, you know, whether it's Russia or, you know, Congo or Angola or, let's say Brazil, any nation you want to pick that's quote-unquote developing and where they have kind of a corrupt elite that is funneling money offshore, it's, I think, very easy for Westerners to judge them. But the crux of the issue is that bankers, lawyers, and accountants in the West make their money doing this shit. Like this wouldn't happen if it wasn't so profitable for guys in New York and guys in London to help these- And women, Sean, let's be honest here.

Since the 90s, guys and women, but before the 90s, just guys, to help these fucking kleptocrats loot their countries. And so we'll talk about that but i think that is the crux of the issue is that this is a western problem this is we are allowing the worst people to loot their countries and we're making a healthy profit doing it and so we'll talk more about the mechanics of the system but i did want to kind of go back and start with a brief history, a brief overview, because people should kind of understand, I guess, this current era we live in

of just money being able to go everywhere. Like, it wasn't always like this. Actually, at the end of World War II, there was a global agreement that set up the Bretton Woods system, which did have some sort of capital controls. So this is kind of like a recent history. And I guess we can kind of go back to Bretton Woods and then describe a little bit of what happened since then. But Steve, you had a bit of research on Bretton Woods, or you could maybe just give the listeners a brief overview of it. Sure. So like Sean said, after World War ii or actually during world war ii before it was done uh several hundred delegates 730 delegates from 44 allied nations gathered at

in bretton woods it's a town in new hampshire that's why that's why it's called the brettonwood system and they met there for a couple weeks in july 1944 and they basically planned the international monetary system that would exist for the the post-war world so like these 730 people had like immense power basically and it was lawyers lawyers accountants bankers um scientists yeah like a bunch of functionaries were unelected people were basically deciding the entire international monetary system and what they what they decided on basically was the world system will be run through a convertibility of gold to dollars at a fixed exchange rate and the u.s insisted that they use both gold and dollars because well number one we were the only source of dollars

and then number two we have two-thirds of the world's gold supply in the Federal Reserve Bank in New York and Fort Knox. It's the kind of thing that happens when you win a war. Right. So it's going to be based on two things, not just one. We have both of them, one in infinite amounts, the other two-thirds of it. Yeah, it's like if I won a wrestling match at the podcast and i decided we all get paid in magic the gathering cards yeah so they that's the gist the gist of the system they arrived at initially

and all these don't get signed on to was a direct convertibility of U.S. dollars to gold. And then all of, so the dollar would be the reserve currency. And then the other member countries' currencies would be pegged to the dollar at a rate that their central banks would endeavor to keep largely stable. So it was a fixed exchange rate regime. And that meant central banks suddenly become a lot more important and they start having whole huge departments devoted to buying and selling currencies and sovereign debt so that the market for those things stays close to the agreed upon ratio if that makes sense so that system that they just called the bread and wood system that was in existence from 1945 all the way to 1971 and it

broke down in 1971 when nixon took the u.s off of the bread and wood system i.e off of the Bretton Woods system, i.e. off of direct convertibility from USD to gold and let it float freely. They were the reserve currency, so the other countries attempted to scramble to say, okay, someone else is going to be

the reserve currency now for a while. But that didn't work, so it just kind of collapsed. And they went into a system like a new system emerged that was okay everyone's going to have floating fiat currency and if you want you can peg your currency based on like side agreements but there's not going to be one system anymore there's going to be informal agreements here and there but generally we'll still have the central bank supplying liquidity but it's going to be informal agreements here and there but generally we'll still have the central banks supplying liquidity but it's going to be a floating fiat system now and that's what we live in now a lot of times though the international monetary system as it like its evolution is sort of there's like this false dualism that people present between like well in brettonwood system there was order and everything

was nice and like there's capital controls no funny business and then now it's like the wild west and it's really not like that so during brettonwoods and arguably before that there were there was financialization going on where some of the largest banks and some law firms were inventing new financial products that allowed them to skirt the capital controls of Bretton Woods. And they invented something called the euro dollar in 1963 where it was basically a way to have offshore money creation uh like they called it euro dollar because it was um european it was a dollar that european banks were creating outside of the u.s on a credit basis so they're just taking credit accounts denominated in dollars and that was like the real innovation and it's called the euro dollar

and there's there's euro yen too there's there's euro anything basically now in the sense that you can have like yen denominated deposits and do offshore banking with that but what everyone actually wanted though was euro dollars so that they can because it's still the reserve currency even though bretton woods broke down right it's the most widely accepted so they use euro they use the euro dollar to uh skirt the bretton woods system and it became like a really important part of international finance. So it was a way to have the beginnings of what's called today shadow money, which is what sometimes gets thrown around when people talk about the financial crisis in 2008. things uh and get around capital controls for countries and uh like legal district legal restrictions on financing so like there's there's quite a lot of literature in um the modern the modern monetary theorists have all like uh they do an excellent job of explaining onshore money creation through private banks, where through the process of lending, private banks ultimately end up creating most of the money that the U.S. uses domestically.

So the government creates some money when it passes spending bills and whatnot but the vast majority is through private lending through commercial banks and that's that's all well and good but what about in the international monetary system of today so that euro dollar system and the offshore money creation uh devices that they innovated they're still. And they get used in the same way as banks domestically creating money through lending when they create a deposit. And then they give that to a borrower. And then they get all of that back, they hope, plus interest over time. They're doing the exact same thing on a purely credit basis for offshore accounts. So there's dollars being created essentially offshore.

And there has been for decades now, but it's much more sophisticated now. And it ties into the Panama Papers and the Paradise Papers stuff. Those papers revealed, whereas those papers revealed hidden assets that were there for tax avoidance purposes, the dollar creation stuff is to hide offshore financing. Those are the flows. The balances of settled funds that people hide and that were revealed in the Panama Papers is one thing, and that's incredibly important. It's a miracle that we know about it through some excellent journalism.

But there's plenty of financing that goes on totally outside of the control of the U.S., and yet it's still denominated in U.S. dollars and poses a financial risk to people so in one one case when this actually happened was in the during the 2008 financial crisis 2008-9 all of these people who had dollar denominated offshore uh credit accounts they um okay they're denominated in dollars, but it's more difficult to settle them and get back to something more liquid if you're just out in the Cayman Islands or something. So they all tried to convert those credit balances over to federal funds balances by re-onshoring it.

So they all tried to onshore it once, and it just wasn't able to settle through the offshore system alone and it caused uh problems for securities markets back in the u.s whose values were somewhat tied to these offshore instruments because like suddenly people can't move suddenly the financing in the offshore realm has has seized up the credit markets and that affected values of securities back home. But it's almost like a run on a bank, right? Where they're all trying to redeem these offshore assets back on shore and there's not enough dollars, basically? There's not, yeah, there's not enough actual dollars to settle the outflows from all of

these dollar denominated accounts that people want to get back into actual dollars. And so what they really want is to get back into the onshore system because it's backed by the FDIC and it's insurable, those deposits. Whereas in the offshore, you could get private you could get private uh deposit insurance if you wanted to but it's very costly but if you can onshore then you can get back into the fdic system man finance is fucking wild dog i like i like understood most of that but shit i had no idea it went that fucking deep yeah so that's like uh it's just an area that you don't really hear as much about but it's um it's no less important i think sure as far as like the amount of crimes that can be done with it and um you know there's nothing wrong there's nothing wrong in principle with um

there being offshore credit instruments in that like that they conceivably could help countries get imports that they need. Sure, sure. If you're in a developing country and you need a capital good in order to build a farm or something that you can't make yourself, you're probably going to need to go get U.S. dollars to buy it. So you could conceivably do that more easy if you were able to afford a credit account that's denominated in dollars to pay for that. So that would be one good use for it. But we don't see that, though, because it's just too expensive, and it's really geared towards more of the shadow money angle.

The bank run analogy just got me thinking about like a Jimmy Stewart of a bank at the Bahamas going, now look, I'll have your money next week. Just, I need a week. I need a week, Steve. You know me. He's wearing a Hawaiian shirt. You know, I don't know if you guys remember, but at one point, Pizza Hut did a thing

where any pizza from them was $10, and they like sprung it on people like right before New Year's Eve, and I remember my brother and I ordered a pizza, and we went into the, I went into the joint,

and the guy was like behind two counters, and I walked in, and he's just on the phone, and he goes, I don't know if you understand, but I don't have any fucking tomatoes.

Fucking Issaquah's out of tomatoes, Redmond's out of tomatoes. I don't have any fucking tomatoes fucking isaac was out of tomatoes redmond's out of tomatoes i don't have any tomatoes and we got orders piling up because i guess people were just ordering a whole bunch more pizzas but it makes me it reminds me of that and then like a banker just like i don't know where the fuck we're gonna get all this money and none of these banks have any fucking money everybody tries to onshore their tomatoes at once they have the tomato denominated accounts but they cannot they can't actually convert it so turns out every tomato is owned by an llc in gibraltar and it's a big issue when you actually want to get a tomato but yeah i mean like steve was saying there the breton woods system you know the analogy oliver bullo uses uh is that it's like a it was like an oil tanker for capital you can decide whether or not you agree with them but

essentially you have these different compartments of an oil tanker and capital can kind of there's at least for a time there was some amount of regulation as it flowed between. And then more and more with these kind of euro dollars, you get more and more of the legal arbitrage we see today, where initially, of course, the US Treasury can regulate dollars in banks in New York, but they cannot regulate dollars in banks in London. And at this time, you know, the government in Britain didn't really have an interest in regulating dollars there. So you would have these banks in London that, while they would have, you know, reserve requirements and limits on interest rates, if they made loans in British pounds, they had zero of those things if they made loans in U.S. dollars. So they would end up with these like two accounts one for

british pounds one for u.s dollars and in addition like uh the book describes this this market as being kind of sleepy at first but really what makes it take off is the creation of what's called the euro bond um around like 63 a little after 63 uh basically you know obviously you need bonds to rebuild europe because of all the uh the war damage you know so you uh raise money through these bond issues and what they come up with there's a banker named sigmund warburg a london banker he works with some other london bankers and some swiss bankers and they come up with these euro bonds that when i say legal arbitrage they choose different regulations so like you know i'm paraphrasing the book here but if the euro bonds had been issued in britain there would be a four

percent tax on them so the bonds were formally issued from an airport in the netherlands uh if the if the bonds had been um if the interest on the bonds you know the um the coupon the amount of payment you get for for buying the bonds if the interest had been paid in britain that would also be taxed so instead the interest is paid to you in luxembourg um and despite this he persuades the london stock exchange to list the bonds so these like you know bonds that are both in the netherlands and luxembourg but you can buy them on the london stock exchange um he made deals and the only way this happened was you had to essentially to a degree capture the governments and convince them to go along with this he uh made deals with

the central banks in france sweden britain the Netherlands, Denmark. Another thing was, he pretended the borrower for the bonds was asked was Otto's trade, it was the Italian state motorway company. Instead, it was IRI, a state holding company. And just like this kind of legal fiction allows you to avoid one more tax. And so they come up with all these different, you know, regulatory arbitrages. These instruments are able to be sold in London, and these are bearer bonds. So it doesn't matter who you are, it doesn't matter how shady you are, if you have this piece of paper, you own this asset. And why this really makes it explode is because up until this time, people have been stashing their assets

in, you know, Swiss bank accounts. Of course, famously, a government in Germany was doing that with their own particular proceeds they didn't want to declare the origins of. But you know, lots of people just like standard tax evaders. That was the Merkel government. Yes. You know, also just tax evaders, people who just want to hide their money, of course, drug people, people who just want a little privacy. You just stick it in a numbered Swiss bank account. You can hide it from authorities in your own country. But until the Euro bond was invented, there wasn't much you could do with it. It was just sitting in a Swiss bank account. Whereas because the Euro bond is a bearer bond that anybody can buy and anybody can redeem anywhere that is completely untaxed, all this offshore money that's sitting in

Swiss bank accounts suddenly has like, now I can get, you know, 4% interest a year or whatever the actual amount is. So all of this money starts flowing into Euro bonds, and throughout the 60s, this kind of, particularly in London, but also throughout Europe, this kind of market explodes. And then when the collapse of Bretton Woods comes in 1971, you get further kind of regulatory arbitrage where you have countries like Cyprus orprus or panama or the british

virgin islands or of course the cayman islands where these are kind of like small relatively poor countries some of them have just achieved independence but they need a source of revenue you know the government needs revenue they need to pay the bills so they say okay we will be the most permissive on this offshore system and then all of this money that's now flowing freely throughout the international system, it'll park here and we'll be able to get a small taste of it. Yeah, it adds to that. It's also, it gives them revenue, but it specifically gives them dollars in order to buy things that they can't or refuse to make themselves. Like as imports. So basically for a little over 50 years, this problem has been doing what it's been doing and getting worse over the last five decades?

Or is this an issue that had other loopholes before 1971 and it only exacerbated the problem when the bretton woods thing occurred i mean in the book the argument oliver bullo makes is essentially from the period during bretton woods there was of course um people trying to dodge taxes offshore all that stuff was going on but it was more of a fair fight where you know regulators like there were regulations there were like governments that were kind of if not evenly matched at least it was a close fight but what happens with the collapse of bretton woods is all this stuff gets unleashed on the developing world so you know of course in the united states or united kingdom or pick a rich country they have a relatively by the standards

of the world sophisticated judiciary judiciary, sophisticated investigators, you know, sophisticated banking systems, sophisticated regulators. But, you know, a nation that's just declared independence and been devastated by civil war, they just do not have those things. They're not capable of, you know, doing these tax investigations, investigating the offshore system, and also all of the lawyers, all of the accountants and the bankers in the West are going to be facing off against them in order to get a taste of the money. So essentially, you just have the developing world completely looted by this offshore system, and the national actors within these nations who are getting looted are completely mismatched against the people doing the looting.

Yeah, it's like an army of arrows and spears fighting tanks. Yeah, and so, you know, it gets worse with the collapse of Bretton Woods, but I think it really accelerates in the 1990s with the collapse of the communist countries, and we've talked about how they just got looted dry, but that's kind of the world we've been living in ever since the 1990s. But to talk about the actual mechanism of how this all works, and if you the listener are interested in avoiding litigation for your initial coin offering scam, I would pay close attention to kind of how we're going to tell you how this is actually done. The internet is also another thing that's changed it a lot.

We'll mention that. But we mentioned earlier company formation agents. So the book Moneyland talks about, you know, there's a five-story house at 29 Harley Street in London where 2,159 companies are incorporated. So, you know, obviously it's a five-story building.

None of these companies have any employees there. This is just a- It must get pretty crowded at the water cooler. Yeah. It was immediately shut down as a coronavirus hazard. Just impossible to practice social distancing. But yeah, so, I mean, this is a legal fiction. This is just a post office

where you say, my company is incorporated in this building, send your mail there. But really, they have no idea who the fuck you are. They just took some money from you and said, yeah, we'll say your address is here, and we'll receive your mail. But so this address, 29 Harley Street, it's the home to Formations House. That's the name of the company. It's a company formation agent. There's hundreds of these in the United Kingdom. The standard for a limited company, if you want to set up an LLC and say this is the address, you pay them about 95 British pounds.

However, they also sell deluxe names like you can get Apple LTd or sec or sex ltd for a hundred thousand pounds so you know if you want to do a really next level scam and pretend that you're the apple corporation cost you about a hundred thousand pounds um but you can also pay more this is the the standard registration is 95 pounds you can pay more for a company that's already set up with a bank account and a VAT registration and everything else you need to go into business to be good to go. Apparently, this company, Formations House, has created more than 10 million companies in 16 years. So these 10 million LLCs just created by this one company, Formation.

And it's not just this address in London, they have an address in Seychelles and one in Delaware. And the book goes through a couple, a couple like elaborate Nigerian Prince style scams where like one guy goes out to Las Vegas and convinces some rich British dude that like, yeah, I just need the deposit and then we can build this like bitching property. And you know, he sells it, pretends he's like obviously very well-dressed. He appears aristocratic, all that bullshit.

And then, you know, they wire him the 400,000 or whatever the deposit was. And then, oh, I cannot find this man anymore. Where did he go? And then you go to 29 Harley Street and they're like we've we've never heard of this guy we make you know thousands of companies here he uh you know didn't leave us any contact information except for like you know some phone number that doesn't work or whatever

and and that's just like how it is used these llcs are used to perpetuate various scams like the uh the movie the laundrom I think, talks about how there's an insurance fraud situation that they can't resolve because the LLC is offshore and nobody has any idea what's going on. Yeah, in the movie, the Meryl Streep character's husband dies out of a freak boat accident. And their insurer has been, the insurer of the boat company was bought by another company is what they suppose but really it was fake insurance being sold by some guy in houston who had done a shell company scheme as well to swindle people out of money and that is kind of how the movie opens her husband crashed a speedboat into the staten island ferry because he was so in awe of the Statue of Liberty.

He was like, he was distracted looking at the statue like, is that holding a hairbrush? I don't think that's actually a torch. I think that's a hairbrush. The movie's like, it's okay. It is a good look at how sinister Money Laundry is, but it's not, you know a good look at how sinister money laundering is, but it's not, you know,

Meryl Streep's not getting an Oscar for this piece. And it is funny to see reviews of it that just trash it because it's like, okay, so you're, you got, you have money laundering in your bones. Nobody needs to talk this much shit about this okay movie. Yeah, Yogi, I think Meryl Streep's not getting an Oscar because the guy who got her Oscars it got me too yeah that's a fair point it's considered bad form to give a statue to someone who played

a statue yeah it's definitely a movie faux pas if you will but you know what's another movie faux pas Anton Antonio Banderas, okay? That man is gorgeous. And the fact that more people aren't talking about how fuckable he is at this age, insane. Oh, every sense he has is beautiful. His fucking taste buds, his eyes, his ears, his nose. Oh, man, I bet his ass tastes like fresh enchiladas watch some watch some of his spanish his spanish films yeah are they good yeah he's in some good ones i'll check them out i liked how as

soon as you as soon as yogi finished his sentence i'm like yeah i know why we're not interviewing the author of this book right now and we're just kind of summarizing it as best we can that would be funny if after that long run about antonio banderas then when steven said watch some of his spanish films he would just be like i don't care for subtitles yeah i'm not a sub guy more of a dub man myself i don't i don't i want to be looking at antonio i don't want to be looking at words. But so in addition to, you know, the collapse of communism, another thing that has really fueled this since the 1990s is, of course, the Internet. Because it used to be you had to go in person to these company formation agents. Like if you wanted to get a fake LLC in the Cayman Islands, you had to go to the Cayman Islands.

Or, you know, you had to go to 29 Harley Street in London or whatever. You could just do all this bullshit online now. So these structures are like, they're very complicated. But if you have money, you can just pay somebody to set this all up for you. You don't have to like go here, here and here and create, you could just say, here's my money, set all this up for me, and they'll do it. So that's why like, you know, a lot of even just kind of these low-level Bitcoin scams or whatever, they have a half dozen offshore LLCs in like a Russian nesting doll kind of formation. And it's actually gotten very difficult for investigators to untangle these things. attaching a bank account to your shell company because you know you have the shell company that kind of hides your assets it you know protects them to an extent but once you have a bank account attached to that shell company you're allowed to spend them so you have you know a pan a panama shell company that has a bank account in london and you know paris and wherever else and you can

that allow that is what allows you to move your money around. That's really what gives you the freedom, you know, to take your, in the case like the daughter of the former president of Uzbekistan, she had like this bank account where, so in Uzbekistan, we talked about this on the IKEA episode, the government forces children to pick cotton and then it sells the cotton like it enslaves children child slavery to pick cotton and then it's sell and then they sell the cotton back to the government which in turn sells the cotton for a profit to companies like ikea you

know literal human slavery and then if you're the daughter of the former president of Uzbekistan you have a little LLC with a bank account where you dump your slavery cotton profits and then you can go to a Chanel store in Paris and buy whatever you want with it you know yeah the moment you said like pick cotton is like slaves there's no

there's no free people who pick cotton in this world, it seems. You know what I'm wondering is, what kind of freaks listen to our podcast to feel better right now? Every episode, it's fucking child slavery, union busting. It feels better to understand it. Yeah.

And I hope we help people do that it is kind of like funny like just doing a podcast about billionaires how we'd have to scrape the bottom of the barrel to come up with how do we do like an uplifting episode for people where we would just be like okay so we know everybody's like really depressed because the lockdowns and the coronavirus so today we've got something really happy and inspiring. We're going to talk about the billionaire Vladimir Putin poisoned to death because he was a threat to the government. And this is like one of the rare stories we have with a happy ending.

I think what we should do is instead of what we originally planned, which was each episode is a title of a Friends episode, and we call it the Friends Recap recap but really just talk about billionaires instead we say we're going to talk about a new billionaire but it's just a recap of a friends episode that we just recently watched this is the whole reason I've been

a part of this podcast I just want to talk about what Joey's been up to David Schwimmer was in the movie The Laundromat and that entire time I was like man this fucking podcast could have gone a different way and honestly we probably would have been a lot more profitable had we called each episode you know the one where rachel gets pregnant and really it's about fucking bill gates and and the corruption that follows it is true had we decided to uh name the episodes of our billionaire podcast after episodes of the tv show friends

that would be the equivalent of stashing this podcast offshore and making it completely indetectable for the the authorities all the reviews would be like yeah they don't i mean they do talk about friends but not nearly as much as you think they would all the reviews would be three reviews from our friends saying hey it's a great podcast i love it five stars and it's like one of those things where it's like okay you review mine i'll review yours right we get the five stars that bumps it up in the itunes someone has to describe it it's like it's probably about half friends and discussing the episodes and then half international finance and offshore money. We don't even try, but our podcast

just exists on the dark web because it's impossible to Google. Imagine covering Epstein but through the lens of friends. Okay, so it's like Rachel's boss and Gunter, but in a person whose penis looks like Gunter. Could this island be

any more suspicious? But so I was mentioning the Russian nesting doll corporation formation. I should just kind of mention how that actually works. So this is one New York-based attorney describing it. I'm going to paraphrase the quote that he gives to the book, how this actually works. You set up company A, and you usually set up company A in like a non-suspicious jurisdiction,

you know, maybe Delaware, maybe not even Delaware. Company A is owned by company B, which is owned jointly by companies C and D. And your party owns all of or the majority of shares of companies C and D. And then, you know know oliver the author he interviews a u.s agent in i believe the department of homeland security and he talks about how half of his time investigating is just spent untangling ownership of these various llcs because if it's offshore u.s agents have to send mutual legal assistance treaties to whatever country it's based in, whether it's Cayman Islands or wherever, places like the Seychelles. And then they have to wait months and kind of rely on U.S. diplomats there to make sure their requests are followed through on.

So this, you know, he says the amount of time investigations take is doubled because of this and especially since the 90s because of the internet basically even every small-scale fraud uses this system of kind of these these nesting corporations and when i say earlier about how you know western accountants and lawyers benefit from this system i want to kind of illustrate that a little bit in 2016 global witness they published the results of a sting operation where they uh they sent a sting on 13 different new york law firms uh where they posed as an advisor to an african politician seeking to bring clearly suspect funds into the united states like clearly stolen money i'm trying to embezzle it into the United States. They go to 13 different New York law firms. Only one of the 13, only one turns them down flat.

All of the others are like, here's how to set up these trusts. Here's how to set up these Russian nesting doll corporations. And here's the kicker. That quote that I just read to you about the New York attorney describing company A is owned by company b is owned jointly by company c and d uh then you own the shares that was at the time the president of the american bar association telling global witness how to steal funds on behalf of this african diplomat so there's not just any attorney the literal president of the american bar association was knee-deep in like how do i make money helping people launder and steal money offshore like how we talk about ukraine like oh man they are just looting their people blind

meanwhile the head of the american bar association is doing the same shit right yeah i think my only complaint about the laundromat was that it was so focused on, like, corruption via Russians and Chinese and a few other countries. But, like, I mean, the end of it was, like, the most of this shit's happening in Delaware still. But there was a slant of, like, look at these evil countries and the crimes they're committing instead of, like, no, this is just all rich people. And, like, we did an episode, a three-part episode on Citigroup, you know, obviously a very corrupt American bank.

And the book Moneyland also mentions Citigroup or Citibank, as it was called in the 90s, was like a big player of this kind of stuff where they had accounts for the president of Gabon, the African nation, as well as, you know, accounts for two sons of the president of Gabon, the African nation, as well as accounts for two sons of the president of Nigeria. And just like paraphrasing from the book here, in the 90s, Citigroup employees calculated the president of Gabon was receiving about 8.5% of Gabon's GDP for personal use annually so the employees and you know he had uh he had city group or city bank accounts in paris london bahrain jersey switzerland etc these are typically

managed in the name of a bahamanian shell company but the city bank employees calculated that he this guy the president was putting 8.5 percent of the gdp every year directly into his city bank account he's like one individual person is an important industry in the country oh yeah i mean you can disagree with his policies but he won fair and square he's a job creator so you can disagree with his policies but how dare you question his patriotism? That's fucking nuts. Yeah, but you just imagine like you're the Citibank account. You know, you're Citibank.

Somebody's putting 8.5% of the GDP into their account with you every year. You could just imagine the fees they're clearing. It's millions of dollars. So of course, the Citibank employees, they cover this up and, you know, the book and you can find all sorts of instances of Citibank employees or any bank that does this, which is basically all of them, just not doing the due diligence, you know, not filling out necessary paperwork, always cutting corners, because at the end of the day, it's just very profitable to look the other way. And, you know, clearly, we've seen the judiciary and regulators are not actually going to hold them accountable

with any teeth. So no one's getting arrested over this shit. Like everything you're describing seems to be commonplace, criminal, you know, professional misconduct over the last handful of decades and it's not something where there there's nobody that's clean everyone's got fucking dirt on their hands and the people are turning their cheeks at the right moment to make sure that this continues well yogi you say nobody's getting arrested but uh let me tell you about this uh little thing online called q anon our president he's setting up a sting operation. Oh, really? Yeah.

It's kind of interesting where, you know, actually the book Moneyland, it talks a lot about Paul Manafort. Paul Manafort has been like doing these offshore scams since the 80s. Paul Manafort was a consultant for the overthrown president of the Ukraine. He stole at least 75 million U.S. dollars out of the country, Paul Manafort did. He stashed it in all these offshore accounts, you know, these London LLCs and Panama and wherever else.

I think the reality is Paul Manafort would never have gone to jail if he didn't get caught up in the Russia investigation. Oh, really? Because, you know, as part of the Mueller investigation, they went through, you know,

Paul Manafort stealing all this money offshore, and he did actually end up doing a prison sentence. But it's just kind of the reality that I don't want to say the majority, but a ton of players in the US political system are doing exactly what Paul Manafort did, you know, stashing all this money offshore and, you know uh having these kind of corrupt consulting practices for very shady characters and you know lobbying the u.s government or whoever on behalf of them and uh putting this money in the into the offshore system but it just the people who go to jail are usually just the ones who get way too much media attention it's just the vast majority they keep their fucking mouth shuts and uh they just don't go to jail or face any consequences for what

they're doing yeah the mean i mean one of the main uh perpetrators in the panama papers league mosak fanseca they none of their leaders went to jail i don't think they had to shut down for economic reasons they weren't shut down for legal reasons yeah in the laundromat it said that two people would serve three months jail time yeah I don't know if anything else happened but I mean

fucking three months the worst thing that the tragedy that befell them is that they just weren't able to get clients afterwards but they uh i guess other than the three-month sentence of i don't know not the top people but someone right i don't think anyone went to jail and to just to kind of continue with some of the other examples of legal arbitrage we should just mention there are countries that sell citizenship. You can buy a passport from Malta or Cyprus, Dominican Republic, Antigua. And they have like a salesman, you know, like there are in addition to company formation agents, there are

companies that sell passports. Moneyland quotes one of them who says something, you know, they give these presentations to rich people in London or wherever, quotes one of them saying, Your money is offshore already, and once you have a new passport, you are effectively offshore yourself, beyond the reach of your home country's law enforcement. You always have the option of dropping everything, getting on a plane, and getting out. So, you know, like after the sanctions were put on, they sold a lot of passports to various Russian oligarchs and other such people. And actually there's a U.S. reform we'll talk about in a second here where some people, some rich people, have been renouncing their U.S. passports and getting these other passports because the U.S. system has actually set up that if you are a U.S. citizen, it doesn't't matter where you are the government still has a right to tax you that's why tom hanks and his wife went to greece they got greece citizenship now too but like and then even a level beyond buying passports you can actually if you're a rich person buy diplomatic immunity what and there's so there's a fascinating story from this

book and i do want to talk about a rare billionaire who had a dude's rock moment uh and that was uh saudi billionaire waleed al-jafali he died in 2016 but before he died he had a wife and he cheated on his wife and then he bought an ambassadorship uh got diplomatic immunity and divorced her in order to hide his assets from his wife under diplomatic immunity uh and like the the thing is he so yeah he like uh he goes to the island of saint lucia again this is a saudi billionaire flying out to this like random island um he promises to spend several million dollars bringing a diabetes medical research facility to the island

and then they agree to appoint him an ambassador to london where his divorce was taking place and so you know he divorces or he divorces his wife and then says you don't have any claim to my assets i have diplomatic immunity and this is actually like the thing is they he eventually has to pay his wife 75 million uh pounds but they only throw it out on a technicality uh the british courts come up with this technicality that he was already living in london at the time of his ambassadorship so an ambassador in order to get diplomatic immunity has to like take up residence after the posting so the thing is this legal precedent still exists and you can if you can if you have enough money you can just find a poor nation and buy diplomatic immunity that's like the the ultra deluxe passport of uh avoiding uh alimony and

family court like an ultimate get out of jail free card depending on what country you're in but it's but it literally exists that's fucking bananas totally patriarchal only available to males that this is known as the dude's rock principle in legal circles. And, you know, and this whole history started with like the island of St. Kitts and Nevis started selling passports for about $50,000 in 84. As of the 2010s, they sell about 2,000 or so passports a year. Our old friend Jolo had a passport there, and I would imagine he still does. And so with the time we have left, I wanted to go through one more illustrative example and then talk briefly about kind of what's going on today, what the recent reforms in, you know, money land, offshore money are all about. And the recent example I want to give is, I think, one of the most prominent in terms of

understanding the world today, which is Russia in the 1990s. You know, of course, if you watch TV, if you look on Twitter, you see this obsession with, you know, Vladimir Putin controlling Donald Trump, this obsession with Russia as an enemy, our number one, you know, global enemy and all this stuff. And there's no way of understanding that without understanding what happened to Russia in the 1990s. I should say, if you look at the statistics of excess deaths in Russia, you know, from I think 92 or 91 through the turn of the century compared to what deaths had been the previous 10 years, you get between two and a half to three million excess deaths in the 1990s, whether it's from alcoholism or suicide or, you know, these deaths of despair that you're seeing in the United States, but two and a half to three million excess deaths. You know, that's, I mean, that's, that's a genocide. There's, there's no way around that. And, you know, yeah, it's caused by this massive crunch in GDP,

this massive unemployment shock, that is, of of course known as shock therapy this is the collapse of the soviet union the privatization of everything you know no more state health care no more state provides you a job and an education no more state provides you a house everybody's just on their own and these excess deaths and the tragedy of that era are, of course, what allow Vladimir Putin to rise. And the thing is, the West is responsible for that. Because in addition to, you know, encouraging these horrible policies, we are the ones, you know, our lawyers and accountants and bankers and all this shit who made money allowing all of the wealth of Russia to be privatized and sold and then stashed offshore.

And so the book Moneyland goes through briefly a story about kind of what happened there. There was in Russia a prosecutor named Yuri Sakuratov. That was a Russian prosecutor. He alleges in, I believe, 1998 that the Russian state bank, the Russian central bank, passed $37.6 billion U.S. dollars to an offshore shell company registered in the island of Jersey

called FIMACO, F-I-M-A-C-O, from 93 to 1998. So over those five years, the Russian Central Bank dumped about 37.6 billion US dollars offshore. He believes the vast majority of this money was IMF loans. So all of these IMF loans to Russia were being taken by the Russian Central Bank and dumped offshore. And it's worth noting that in 1999, the Russian Central Bank had a staff of 86,000 employees, compared to about 3000 at the Bank of England and 23,000 at the US Federal Reserve. So basically, what happened in the 90s was the Russian Central Bank became a giant patronage network, where every connected political person, you know, obviously

it's a jobs program, so they want to protect the people within it. But of course, you know, the politically connected insiders, the very powerful, of course, President Yeltsin, whoever else is in his circle, they have access to all this money, you know, this big pot of gold, this $37.6 billion. Everybody who has power you know this is just a giant uh treasure chest for those with power so they're looting the country blind well two and a half to three million people are dying and then the story of this prosecutor uh yuri sakuratov is that within a year after his investigation in 1999 russian state tv broadcasts a tape of somebody who looks like him uh in a hotel room naked with two girls uh and this is this is broadcast on russian state

tv a few days later uh president yeltsin suspends him and then the parliament sacks him and all investigation into this is shut down but um it's believed some people alleged that vladimir putin set up this honey trap for him they don't even know for sure it was him in this video but you know this has never been investigated this has never been resolved nobody went to jail for this this 37.6 billion in uh stolen imf loans but it was just shut down. It was just, we have a tape of the prosecutor with some maybe prostitutes or something, and we just have to fire him and shut down the investigation. And, you know, there's plenty more that happens in terms of, you know, Russian organized crime and all that, but I think that gives you an understanding of

what happened to Russia in the 90s. I'll just add real quick that the IMF is one of the creations of the Bretton Woods Conference. Oh, wow, really? Yeah. That and also the International Bank of Finance and Reconstruction, which later became the World Bank. Gotcha. That was another example of kind of like the Bretton Woods system kind of contained the seeds of its own destruction type thing.

And like the thing and like the thing is the other thing the prosecutor alleged is that the russian central bank was engaged in a massive obviously massive money laundering scheme but they were using all these money all this money to make like stock market trades so they were just like using massive imf loans to make investments make stock market trades but But not only that, they were using the offshore system to avoid paying taxes on their own trades in Russia. So you have the central bank dodging taxes. And then not only that, they were using their position to make money from Russian government-issued debts and, of course, take all

that money and stash it offshore and avoid paying taxes. So it's just like you have these central bankers who are just entirely trading on their own book rather than trying to, you know, manage the money of the nation. And that's what kind of happened. And that's why, you know, Russian voters don't love Vladimir Putin, but a lot of them remember the 90s, and he remains popular because he, to an extent, was able to bring that situation under control like he's still corrupt but he fixed the massive collapse in gdp and living standards

or he brought it back a little bit and then one other fact from the book that should be noted is that russian money makes about half of all illicit cash flows into the United Kingdom. So, you know, like, why is London so rich? Why is their trading desks so profitable? Russian money. It's just this massive theft. And this is kind of why the West, I think, is ultimately culpable for it. Because, you know, we're the ones who pretend we're so much more virtuous and incorruptible. But the reality is, like, so much of our white-collar professions, so much of the money that flows into it is just stolen, illegal money, looted from the people of places like Russia.

Yeah. And so, in terms of what's going on today, I do want to mention that in 2010, the US Congress passes the Foreign Account Tax Compliance Act, or FATCA. It comes into effect in 2015. And basically, this sets it up so that if a foreign financial institution declines to reveal the identity of American clients, the US government can impose a 30% tax on any investment income they make in the United States. And so of course, you know, the United States is essential for the global financial system, this is like a major incentive to comply. So Americans now do have much more difficulty, to an extent stashing their money in other jurisdictions, because the US government can go find it. And you know, find the identities. However, this has created another loophole in our offshore system,

maybe intentionally, maybe not, where, though these other countries are required to share information with the United States, the United States is not required to share information about citizens in the United States. So you know, if Germany, if there's a US citizen who has an asset in Germany, they have to respond about that. But if there's a German citizen with an asset in the United States, there's no requirement that the United States respond. And so kind of what's happened as a result of this is U.S. trust law has been growing as a vehicle for offshore. So it's, I mean, it's all the legal fiction where we call this offshore, but a lot of this money is now being stashed in the United States. And to kind of briefly go through this, under common law inherited from England initially after the revolution, the United States, you could not put property in a trust forever. You were limited to a period of 21 years after the death of anyone alive at the creation of the trust. The idea of being, of course, I think very sensibly,

that the living should not be governed in perpetuity by the property wishes of the dead. This has since been repealed in the United States. A 1986 law in the United States created dynasty trusts. In many states, you can hold a trust forever. In Nevada, a trust can last 365 years. Hell yeah. And to understand the thing about Nevada, Nevada in particular is like a big growing market for this.

In Nevada, as long as two years have passed since you put your assets into a trust, they are protected from all creditors, no matter who they are, they cannot get access to the trust. And then even better in Nevada, you can be beneficiary of your own trust. You don't even have to pretend this is going to my kids. You're just saying, I'm just sticking my assets here and nobody can touch them under the law of Nevada. So so cool i know and so like you know it's it's big in nevada but also of course delaware uh south dakota wyoming are making the best states yeah these states are

making good money off these trusts people you know mainly foreigners stashing their money there they have no reason to to crack down and then kind of like one more time on the legal arbitrage, the ultimate way to do it is a foreign U.S. trust. And Moneyland quotes, you know, an attorney who sets these up. He says the easiest way to do it is you give one foreign person, one non-U.S. person, a laundry list of powers within the trust, such as you give the foreign person the right to remove and replace the trustee. Now it's a foreign trust. If it's a foreign trust for U.S. tax purposes, the U.S. can't give information about it to foreign governments. If it also has a U.S. trustee, then it is immune to the provisions of the common reporting standard, the global

information sharing about, you know, offshore money and such. It's immune to the provisions of the common reporting standard. It doesn't have to exchange information with a foreign government, such as, you know, a rich Chinese person can hide assets from the Chinese government in Nevada or whatever. And essentially, again, with this, it is foreign for U.S. law purposes. It is U.S. for foreign law purposes. It's the perfect vehicle. And just like to give you some idea of the scale of this, one estimate is that there are $226 billion in assets and trusts in South Dakota in the United States as of 2016. This is a total of $261 million per resident of South Dakota. What? And look, it's good for tax evasion, but it's also just good for giving your wealth anonymous because

or keeping your wealth anonymous because we mentioned they just don't legally because it's both foreign and u.s they just don't have to share information about assets put in these trusts and it's good that there was some reform but you just can't help but see it's like the united states by doing reform actually managed to steal a bunch of business from places like the Cayman Islands and bring it back home and bring a little taste of that back here onto our own shores. Yeah, and the narrative is that we're so much more pure than the Russian oligarchy. Right. And yet we have these gaping holes in the system. You know, gaping hole, I wouldn't mind licking.

Antonio Banderas, I want to make that man sing. I was setting that up. I like to think there are like some listeners who are like only suffering through the Antonio Banderas stuff

to get to the financial information. And then there are some listeners who are only suffering to the financial information and then there are some listeners who are only suffering through the financial information to get to the antonio bandera's sexuality yeah when they when they heard uh gaping holes they became that gif of a like chubby little kid going oh boy and like to just give you like two last facts to close this out um from the book uh 22 percent of the state of delaware's revenue comes from company formations you know these company formation agents we mentioned earlier where 10 000 companies are in one building that makes up 22 percent of the

delaware state budget and uh would you And would you guess where the guy who's about to be president is a senator from and what he may or may not end up doing to fix this system? And then one more statistic. I think this one really drives it home about just like how insane all this is. Per the Government Accountability Office,

the U.S. Government Accountability Office as of 2017, the U.S. government accountability office as of 2017, the U.S. government has no idea who owns approximately one-third of all buildings leased by the General Service Administration for high security purposes. Because these things are all fucking owned in, you know, Panama LLCs

that have shareholders in a Delaware LLC and et cetera, et cetera, and Russian nesting dolls. Because all these buildings are owned that way, one in every three buildings leased by the federal government for like, Department of Homeland Security or like CIA safe house where they, you know, set up the next assassination if a Kennedy decides to run for president again. They just don't know if it's just some fucking guy with a podcast in Brooklyn. They have no idea who actually owns the buildings. They're chilling it. Yeah, it seems like with a lot of money scams, one big move is to just blur the lines between what is real and what isn't so much that any person that's supposed to regulate is like, dude, I can't fucking look through all this shit. But so if you're listening to this, I think that's the goal, is to just kind of use your Patreon to buy a building that will eventually be leased to the CIA

and put some recording devices in it and stash it in a Panamanian LLC and we're going to catch the bastards. We just got to be patient, that's all. But I think to summarize this episode, the reality of this system is all of the global elites, all of them take advantage of this legal arbitrage and this kind of different set of rules where there is a class when we talk about the 2,000 billionaires or WealthX, the organization estimates that in 2016 there are 226,450 individuals in the world with assets greater than 30 million u.s dollars they call them ultra high net worth people those 200 some thousand they are citizens of a different country you know all of us

the rest of us wherever you may be you know here we're citizens of the United States, some people in Europe, some people in Russia or Japan or wherever. Yeah. There are 200,000 know, the least regulation, always be subject to the most permissive laws, and always be afforded, you know, the greatest degree of legal privacy. And these people can be understood as an entirely separate global class that I think, globally, we all have an incentive to hopefully come together and do something about. Right. To them, being with Antonio Banderas isn't a fantasy it's a it's a very very clear

reality that they live in yeah it's it's it's a small minority that gets to live that world but they exist and it's one of the perks of diplomatic immunity is uh you get to get up in that ass that's right that's right did you know that an Antonio Banderas is actually owned by an LLC incorporated in Liberia? Oh, no. He actually set it up so that the Liberian corporation owns his right nutsack, and then that's owned by a corporation, the Seychelles, that owns his left nutsack. And he's a shareholder in both of those corporations man i just want them dividends

but any other closing thoughts you guys uh for the offshore dollar creation stuff i i got most of my research for that from this really excellent paper by uh scholar stephen morau who's at boston university aoc's alma mater it's titled offshore dollar creation and the emergence of the post 2008 international monetary system and we'll link that in the description but we hope this has been a good basic overview of the offshore money system again the, the book is Moneyland by Oliver Bolo. I do recommend it a lot, and I encourage you to do your own research. And again, I hope this episode remains a reference for our future episodes because every billionaire we talk about from here on out, every billionaire we've talked about in the past episodes, they're all using this system and they're all taking advantage of it. Like, it just came out, Robert Smith, we did an episode on the Patreon. He's being investigated for an offshore tax scam using this system and they're all taking advantage of it. Like, it just came out, Robert Smith, we did an episode on the Patreon, he's being investigated

for an offshore tax scam using this system. So, you know, they're all doing it. And open invitation to Oliver. If you want to come on the show and talk Antonio, let us know. We're always here for you. And with that, this has been Grubstickers. I'm Yogi Poyol. I'm Andy Palmer.

I'm Steve Jeffers. I'm Sean P. McCarthy. Check us out on the Patreon. Thank you. Good night.