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US Freezes $30 Billion In Libyan Assets (The Bulk Of Which Originated In The US And Europe)

Tyler Durden's picture





 

The US crackdown on its former business partner continues, with the US Treasury announcing it has "located and frozen" at least $30 billion in Libyan assets " as it seeks to deprive embattled leader Moammar Gadhafi of access to
government and personal accounts, a department official said." Unclear is what the source of the funds was, where they were held, and whether any US banks would be impacted as a result. Also unclear is whether the US Treasury, which has to rely on a Ponzi check kiting game with the Primary Dealers to fund itself, and, of course, on the Fed to monetize its debt issuance, would confiscate any of this amount. "This is the largest blocking under any sanctions program ever,” said
David Cohen, acting undersecretary of Treasury for terrorism and
financial intelligence, during a conference call. “These blocking
actions … are depriving Col. Gadhafi access to these assets and
safeguarding them for the Libyan people." Since the bulk of the money came from the US and its European allies in the first place, it was supposedly not that difficult to track down.

From the WSJ:

On Friday evening, the White House announced  it froze all assets under U.S. jurisdiction linked to Gadhafi, five of his children, Libya’s central bank and its sovereign wealth fund.

Cohen declined to name the institutions where the $30 billion was being frozen, nor did he break down the sources of the funds when pressed by reporters.

He said the U.S. believes that Gadhafi has significant assets in Europe that will be affected by sanctions originating in Europe, the United Nations and elsewhere, but did not estimate how much there was parked outside U.S. jurisdiction.

Over the weekend, the United Nations unanimously approved a resolution sanctioning Libya, and the U.K. announced its own measures following the U.N. guidelines. Monday morning, the European Union announced its own measures that extended the U.N. sanctions to 20 additional individuals.

The justification of the action, and accompanying sanctions enforced over the weekend by the world's most worthless organization, the UN: reverse Mutual Assured Destruction (bear with us):

Reacting to the executive order, Larry E. Christensen, a sanctions
expert at Washington, D.C.-based law firm of Miller & Chevalier,
said in an interview that the objectives of the sanctions are prevent
further bloodshed, secure state assets for the benefit of Libyans when a
future government begins to operate, and to cause Gadhafi to leave
power.

So the next time you wonder what that great sucking sound is: it is noise made by all dictators of "troubled" countries, who had previously been on preferred nation status with the US, suddenly realizing their money is no longer safe when parked with JPM and the likes, in advance of their own personal revolutions. Whether or not they convert the resultant proceeds into precious metals remains to be seen.

 


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Mon, 02/28/2011 - 17:04 | Link to Comment Guy Fawkes Mulder
Guy Fawkes Mulder's picture

Isn't this the same shit they pulled to save Rockefeller's Chase Manhattan after the Iranian Revolution?

Mon, 02/28/2011 - 17:09 | Link to Comment The Count
The Count's picture

Ahem... US banks have been not only laundering drug billions for years (and if caught get a 'fine') but also are the banking system of choice (right after Switzerland) for all dictators on our payroll.

Mon, 02/28/2011 - 17:21 | Link to Comment Zero Govt
Zero Govt's picture

So the US Govt is chasing its own tail (funding for despots) running circles around the tyrant it supported... such integrity!

Aren't there international laws, police and agencies to stop criminal flow of funds? ...so how does the US Govt get its own funding for tyrants and terrorists to usurp democratic Govts, arming them and training them past all this policing then? 

Mon, 02/28/2011 - 17:10 | Link to Comment Mark Schiavo
Mark Schiavo's picture

Mysterious UK buyer found.....ZH was correct.  http://www.marketwatch.com/story/chinas-treasury-holdings-revised-up-by-...

Mon, 02/28/2011 - 17:19 | Link to Comment IrishSamurai
IrishSamurai's picture

Exactly as has been stated by many people smarter than me.

As the U.S. stated to China when we started this prisoner's dilemma:

http://www.youtube.com/watch?v=lwx2ce_AyOE

Mon, 02/28/2011 - 17:17 | Link to Comment Hondo
Hondo's picture

Those funds belong to the people of Lybia....I don't see how the US government could take them......of course corrupt governments begets corrupt governments.

Mon, 02/28/2011 - 17:23 | Link to Comment SilverRhino
SilverRhino's picture

Oh look, yet another reason to stockpile PM's out of control and out of reach of a corrupt government.  

Admittedly Khaddafi and the Libyan people are embroiled in a civil war.   When did that become a crime and how exactly are we (the USA) justified in restricting capital movements of a sovereign government in which we are not engaged in warfare with?

Mon, 02/28/2011 - 17:25 | Link to Comment Stuck on Zero
Stuck on Zero's picture

Exactly how can Khadaffi .. ghadaffi ... qadaffi ... quadaphi ... Kadaffi ... gaudaffi ...  whatever, hire all the Mercenaries he wants to fight his people if we take his money away?

Mon, 02/28/2011 - 17:28 | Link to Comment LongSoupLine
Mon, 02/28/2011 - 17:36 | Link to Comment Tense INDIAN
Mon, 02/28/2011 - 18:01 | Link to Comment vast-dom
vast-dom's picture

Well instead of paying down the cause of all of this ie QE 1 & 2 rest assured this $30b in frozen assets will help fund QE 3 ;p

What an ingenious most circuitous grand chessboard strategy!

 

Mon, 02/28/2011 - 18:24 | Link to Comment AUD
AUD's picture

Are these 'assets' marked to market?

Mon, 02/28/2011 - 18:33 | Link to Comment pappacass
pappacass's picture

Ok being a natural dumbass I figured Daffy = bad, Libians = poor and feudalised etc etc

And then you come across something like this

http://davidrothscum.blogspot.com/2011/02/world-cheers-as-cia-plunges-libya-into.html

And far be it from me to say but maybe he sounds 'plausible'?

I'll be terribly shocked if I'm being lied to by MSM...

Mon, 02/28/2011 - 18:46 | Link to Comment walküre
walküre's picture

Well, if you believe in fairy tales...

Lybians are revolting because they too want to participate in the wonderful American super recovery that will bring unprecedented wealth and growth to the US economy.

No money, no credit, bad credit, no job, no economy, no problem. It's all good.

Mon, 02/28/2011 - 18:35 | Link to Comment Miles Kendig
Miles Kendig's picture

Would be nice if the Obama administration revisited the Bush administration decision to relieve Libya of the need to pay compensation to victims of Pan Am 103 and other acts of terrorism committed by QuackDaffy

Tue, 03/01/2011 - 03:06 | Link to Comment StychoKiller
StychoKiller's picture

We're still in the early innings...

Mon, 02/28/2011 - 18:36 | Link to Comment walküre
walküre's picture

Who do you trust with your money?

This is bearish for banks, very bearish. Let's face it, most large depositors are crooks on some level. It is what it is. At some point the government(s) will find a reason to seize the assets in the banks.

I'm not a fan of Gaddafi or other despots and crooks, but the ease with which a corrupt government takes charge over anyone's money is frightening.

What are they trying to accomplish? No, really.

If they piss off the Colonel Gaddafi even more, he's going to pull a Saddam on the oil fields.

Don't think for a minute that every other oil rich guy from that region isn't going to consider a major withdrawal from his accounts in the US and Switzerland.

Heck, this could start the biggest fucking bank run in the history of mankind.

Mon, 02/28/2011 - 19:15 | Link to Comment SilverRhino
SilverRhino's picture

>>This is bearish for banks, very bearish.

I'm glad someone else is seeing this.   I have a raft of friends that thinks this is the greatest thing to happen since sliced bread since the USA is going after "the bad guy" with no effective due process or respect for property rights (not withstanding the Hague International Court "accusations" that none of us voted to be bround by).  

They dont seem to realize that if the US can do it to a dictator with tanks, poison gas and soldiers loyal unto death, they sure as shit can do it to YOU.

>>Heck, this could start the biggest fucking bank run in the history of mankind.

Anyone want to guess how much the Saudis, UAE, African warlords, Kuwaiti have deposited in "Western" banks??   We just might get to find out.  

** This is insanely bullish for portable stores of wealth that men with guns can guard.

Tue, 03/01/2011 - 08:55 | Link to Comment trendybull459
trendybull459's picture

Excellent,this what we need,the USA in greed for small money will loose all money the foreigners trusted and play at us markets,i agree that from this hole FED system will be kicked off and markets must start otcontract and bank must default as it is in default,but on the government air pump,good news,this is Revolution,USA has not rights to put its fingers into suverein of any person or country,all they want is world big prison and us working in it for their corporations,fight with us against FED:

http://trendybull777.blog.com/2011/02/21/hello-world/

 

Mon, 02/28/2011 - 21:17 | Link to Comment ziggy59
ziggy59's picture

do frozen ASSets ever show as profits and losses on the country's "statement" who freezes those assets?

 

-just askin

Mon, 02/28/2011 - 21:44 | Link to Comment YHC-FTSE
YHC-FTSE's picture

"Cohen declined to name the institutions where the $30 billion was being frozen, nor did he break down the sources of the funds when pressed by reporters."

So the usual transparency we can expect from the land of the free.

The specified UN sanctions are not against Libya as such but only applies to the Gaddafi family and upper echelon in defense/intel. But considering the complete lack of any data, I guess you are fucked if you are a Libyan business with investments in the US. Good luck getting any of that soon-to-be worthless cash back, Libya. You've been screwed by the biggest gangsters on the planet. 

Tue, 03/01/2011 - 09:00 | Link to Comment trendybull459
trendybull459's picture

This is gave very strong cards to Kadafi's,now he can take good speech pointing how USA used him or can use any one who planning to run government in any near by countries and how his assets or powers could be invaded,this will build very negative momentum against USA,specially Chineese will be very very worry or just prepair of military respond,this is opens the gate to many small dictator like countries prepair the war regims and be ready to fight USA or to build any unions,this is leading us to the War

Tue, 03/01/2011 - 02:10 | Link to Comment Whats that smell
Whats that smell's picture

Things might get crazy down in Crawford TX if Gaddafi gets asylum, BenLadin and him do not get along I hear.

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