Archive - Sep 30, 2012

Lucha.....Libre!

One by one all the money-laundering loopholes in a broke world are coming to an end. First it was Swiss bank accounts, which for centuries guaranteed the depositors absolute secrecy, and as a result saw money inflows from all the wealthiest savers in the world, who felt truly safe their wealth (obtained by legal means or otherwise) would not be redistributed forcefully. In the ecosystem of finance, Switzerland was the depositor bank. Then 2008 happened, and starting with the US, shortly to be followed by every other insolvent country, demands were issued for a full list of people who had used Zurich and Geneva bank vaults to avoid the risk of asset taxation, capital controls and confiscation on their own native soil. The result was the end of the Swiss banking sector as the ultimate target of all global money laundering. In the ensuing power vacuum, others have sprung up to take its place, most notably Singapore, but its days as a tax-haven are numbered by how long it takes China to fall face first into a hard landing at which point no saving on the Pacific seaboard will be safe.

Now, it is the turn of real estate.

This is just the second time in three days that China's province of Guangdong is being discussed on Zero Hedge. On Thursday we wrote that the mega city of Dongguang, once Guangdong richest, is now on the verge of bankruptcy as China's hard landing begins to take its toll. Today, we learn that instead of the rivers running red once all hell breaks loose in China, the color will be soapy white. Specifically, following a chemical spill in Xintang, in the provine of Guandong, the result was a 50 foot tsunami of foam which was swept down a river by heavy rainfall, causing widespread panic and evacuations. It also caused the following brilliant explanation from a Chinese spokesman: "People are right to be cautious but it is harmless. It made very large bubbles when it went over a waterfall, but apart from one or two dead fish, it is harmless." We can't wait to hear Chinese justifications of mushroom clouds: "aside from one or two billion dead people, they give you a healthy green afterglow"?