Saturday, May 31, 2014

EPJ Week In Review - Week Ending 5/30/14

Below you'll find everything that has been published on EPJ for the week ended Friday May 30, 2014. The hottest posts for each day are highlighted in red.

Released This Week!!

Friday 5/30/14

Thursday 5/29/14
Wednesday 5/28/14
Tuesday 5/27/14
Monday 5/26/14
Sunday 5/25/14
Saturday 5/24/14


  1. Why The State Might Prefer a Purely Digital Form of Fiat Money

    I think Janet Tavakoli 'hit the nail on the head' with this recent letter she sent to The Financial Times with regard to Kenneth Rogoff's proposals for purely digital money. It was of course a nonsensical piece, but one might ask themselves why such a thing would be put forward now in this manner.

    Here is an excerpt from the letter. You may read the entire piece at the link provided below.

    It seems to me Kenneth Rogoff’s commentary, “Paper money is unfit for a world of high crime and low inflation” (May 28), is less about deterring crime and the problems of “low” inflation – food consumers in the US know double-digit inflation – than it is about eliminating the zero bound on interest rates and preventing people from bailing into cash.

    In other words, Mr Rogoff proposes to machinegun one of the lifeboats by eliminating paper currency as an alternative to unlimited digital currency..

    His specious argument about the anonymity of paper currency facilitating tax evasion and crime is propaganda..."

    Janet Tavakoli
    Tavakoli Structured Finance
    Chicago, IL USA

    Read the entire letter at The Financial Times

    'Negative interest rates' are a hightoned euphemism for systematic confiscation, a highly regressive form of bail-in.

    I could not have said that better myself. When money is purely digital, the state obtains a significant control over all money everywhere, no matter what 'security' and 'algorithms' are said to be built into it. Digital anything requires a exceptional amount of trust in what those who manage the system do while no one is watching. And I would like to think that we are well beyond that point by now.

    1. Rogoff’s Proposal Would Fail Because He Ignores Control Fraud

      Rogoff claims that electronic currency would be a powerful anti-crime reform. “[Governments] would gain revenue by making tax evasion more difficult. There would also be savings from crime reduction.” Because he ignores control fraud, however, he falsely assumes that anonymous currency is required to obtain and move fraud proceeds. The CEOs of our largest, fraudulent banks could move their fraudulent proceeds anywhere they wished without any difficulty without anonymous transactions. Even drug dealers would simply have to move drug proceeds through corporate or real estate investments run by control frauds in order to generate fictional income and launder their funds.

      Rogoff’s Proposal Would also Fail Because He Ignores the Race to the Bottom

      Rogoff’s proposal to ban anonymous currencies (paper and electronic) would also fail because of the powerful incentives created by the international “race to the bottom” among jurisdictions. The real nations that aid money laundering (who are not on FATF’s list of purportedly non-compliant nations) and the real banks (HSBC) that aid the world’s most violent drug gangs launder huge amounts of money will continue to have powerful incentives to offer anonymous currency.

  2. Count the Caymans: Part Deux

    PEUReport readers may recall a past challenge of counting the Cayman Island subsidiaries of The Carlyle Group, a private equity underwriter (PEU) with $199 billion in assets under management.

    This challenge becomes more meaningful knowing U.S. parent corporations made $51 billion in Cayman profits, while the Caymans had a mere $3 billion in gross domestic product.

    This year's subsidiary list is included in Carlyle's 10-k filing with the SEC. One could count Carlyle's subs in each of the dozen tax haven countries. Enjoy!